In testimony before the U.S. House Natural Resources Committee, Randall Luthi, president of the National Ocean Industries Association (NOIA), said that members of his organization “stand ready to provide information, expertise, and self critique of offshore operations, equipment, procedures and practices.” Luthi went on to note that the offshore energy industry is assisting the investigations to determine the cause of and respond to potential effects of the BP spill in the Gulf of Mexico.
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Sen. Mary Landrieu (D-LA) is urging the Obama administration to end the shallow-water component of the recently issued moratorium on oil drilling in the Gulf of Mexico. Sen. Landrieu argues that "[t]he inspections and regulations [for shallow-water drilling] need to be different than [for] deep water." She also introduced a new bill (the RESPOND Act) that would begin revenue sharing with energy-producing Gulf states immediately. Such revenue sharing, which redirects offshore drilling royalties from the federal treasury to state coffers, has been a hot topic in recent months. For more information, see yesterday's E&E GreenWire [subscription required].
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Ohio Governor Ted Strickland announced today that the Lake Erie Energy Development Corp. has reached an agreement with General Electric Co. to purchase five wind turbines for a $100 million demonstration wind project in Lake Erie. Each of the turbines would generate 4 megawatts of electric power, making them the largest in the U.S. The project, which still faces significant regulatory and financing hurdles, is step one of a 10-year plan to build more than 200 turbines generating a total of 1,000 megawatts in Lake Erie by 2020.
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Noting that “America’s need for domestic energy has not changed and OCS development remains a vital part of our overall national energy picture,” National Ocean Industries Association Chairman Burt Adams urged members of Congress to proceed with caution regarding any legislation on offshore exploration and production activity.
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According to the Daily Press (Newport News, VA), the Department of Defense is trying to section off approximately 2 millions acres off Virginia’s coast from offshore drilling in an attempt to preserve the Navy’s training operations in the area.
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The proposed Cape Wind offshore wind farm cleared another regulatory hurdle yesterday when the Federal Aviation Administration (FAA) ruled that the project does not pose a significant threat to airplanes or radar. The FAA clarified that its ruling is contingent upon the turbines being adequately marked and lighted once constructed. Previously, the project (which is designed to have 130 wind turbines, each at approximately 285 feet in height) was believed to pose a “presumed hazard” to aircraft. However, as part of the FAA’s ruling, Cape Wind agreed to supply the FAA with funds to modernize and enhance a radar facility at Otis Air Force Base near the project. Project opponents plan to file a petition against the FAA decision, which they are allowed to do until June 16, 2010. For more information, see today's E&E ClimateWire [subscription required].
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FERC announced today that it signed a Memorandum of Understanding (MOU) with California for the coordination of procedures and schedules for the review of hydrokinetic projects off the coast of California. FERC has previously signed similar MOUs with Washington, Maine, and Oregon. FERC Chairman Jon Wellinghoff stated that this agreement with California “shows FERC’s continuing commitment to work with the states to ensure American consumers can enjoy the environmental and financial benefits of clean, renewable hydrokinetic energy.”
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The six U.S. senators from California, Oregon, and Washington have proposed a bill called the West Coast Ocean Protection Act that would prohibit oil and natural gas exploration and production on the U.S. OCS off the coasts of California, Oregon, and Washington. The senators sponsoring the bill include Sens. Barbara Boxer (D-CA), Diane Feinstein (D-CA), Jeff Merkley (D-OR), Ron Wyden (D-OR), Maria Cantwell (D-WA), and Patty Murray (D-WA).
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Yesterday a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled that MMS “has met its obligation” in reviewing Shell’s proposal to drill exploratory wells offshore Alaska. NASDAQ provides more information.
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On May 13, 2010, Senators David Vitter (R-LA) and Jeff Sessions (R-AL) introduced the Oil Spill Response and Assistance Act (S.3375), which seeks to increase the liability cap for economic damages under the federal Oil Pollution Act. Under this bill, such liability would be capped at either $150 million (double the current cap) or an amount equal to a responsible party's profits over the last four quarters, whichever is greater. "Under our bill," announced Sen. Vitter, "the bigger companies would be liable for more than the $10 billion cap others propose.” Senate Democrats attempted a unanimous voice vote to pass their proposal to raise the cap to $10 billion on Thursday, but Sen. Lisa Murkowski (R-AK) objected.
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Politico reports that legislative language that would expand oil and gas exploration into the eastern Gulf of Mexico has been removed from the American Power Act, an energy and climate bill released today by Sens. John Kerry (D-MA) and Joe Lieberman (I-CT). The Washington Post also reports that the bill includes a provision that would permit a state to “opt out” of drilling projects that are located within 75 miles of the state’s shores.
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The Obama Administration announced yesterday that the Minerals Management Service will be reorganized into two agencies. According to Secretary of the Interior Ken Salazar, one entity will be responsible for approving oil and gas leases and managing the federal royalties program, and a second body will have responsibility for safety in exploration and production operations. The Washington Post provides further information.
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Last week National Grid PLC entered a power purchase agreement ("PPA") for power produced by the Cape Wind offshore wind farm project planned for the Nantucket Sound offshore Cape Cod. National Grid PLC, the local utility, agreed to pay 20.7 cents per kilowatt hour starting in 2013 for half of the power produced by the planned 130-turbine project, to increase by 3.5 percent annually to account for inflation. The PPA, which was filed with the Massachusetts Department of Public Utilities ("DPU") yesterday, represents a significant step in the development of the $2 billion project. The DPU must approve the PPA before it can be finalized.
Although the Cape Wind project recently obtained federal approval from the U.S. Department of the Interior, the PPA may face resistance at the DPU both because it would translate to increased electricity costs for National Grid consumers (consumers are currently paying about nine cents per kilowatt hour), and because of continued local opposition. Earlier this year a PPA between National Grid PLC and Deepwater Wind, a wind project previously planned offshore Rhode Island, was rejected by the Rode Island Public Utilities Commission because the Commission found the PPA's high costs were commercially unreasonable.
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The Center for Biological Diversity (CBD) has filed a formal notice of its intent to sue Secretary of the Interior Ken Salazar for not evaluating the environmental impact that could result from an oil spill off Alaska’s northern coast. In late 2009, Secretary Salazar approved Shell’s plan to drill in the Beaufort and Chukchi seas. The CBD argues that the Endangered Species Act requires Secretary Salazar to re-evaluate the validity of Shell’s drilling permits.
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The U.S. Department of Interior's Mineral Management Service announced today that its previously scheduled public meetings regarding the analysis of potential environmental impacts of OCS Lease Sale 220 have been cancelled.
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Following his letter to President Obama, Senator Bill Nelson (D-FL) introduced two bills in response to the Gulf of Mexico offshore rig spill incident. The first bill, S. 3308, seeks to halt the Department of the Interior’s five-year plan to expand offshore drilling. A companion bill has been introduced in the House by Representative Kendrick B. Meek (D-FL), who also is running for U.S. Senate. Senator Nelson’s second bill, S. 3305, seeks to retroactively amend the Oil Pollution Act of 1990 to increase the liability limit for economic damages from spills from offshore facilities from $75 million to $10 billion. Representative Rush Holt (D-NJ) introduced a similar bill in the House.
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On May 3, 2010, California Governor Arnold Schwarzenegger (R-CA) withdrew his support for expanding offshore drilling off the coast of California. According to the Governor, "If I have a choice between the $100 million and what I see in the Gulf of Mexico, I'd rather just figure out how to make up for that $100 million." Governor Schwarzenegger previously had supported drilling off Santa Barbara County.
Virginia Governor Bob McDonnell (R-VA) has taken a different stance. According to Gov. McDonnell, "what we do as Americans is we find out what went wrong and how can we do things better." Governor McDonnell is still looking to drill off Virginia’s coast by 2012.
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Last week the New York Times reported that despite the recent federal approval of the Cape Wind offshore wind farm project, residents of Cape Cod do not expect to see wind turbines offshore anytime soon. Although many residents generally approve of renewable energy projects, they do not support the proposed location for the wind farm project and anticipate several more years of litigation and debate. Residents pointed to the fact that the battle over the proposal has lasted nine years, and many are skeptical that one decision will resolve the issue.
Meanwhile, the MMS has released an Environmental Assessment of the Cape Wind Energy Project, available here.
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DOE announced it will host a webinar on Monday, May 17 from 3-5 p.m. EST on a recently announced $38.6 million funding opportunity for the advancement of marine and hydrokinetic energy technologies. For more information, click here.
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The Associated Press reports that Fisherman's Energy launched an environmental monitoring buoy from a dock in Atlantic City on Thursday, which will gather environmental and wind conditions data. Fisherman's Energy hopes to eventually develop 66 wind turbines off the shore of New Jersey. Jeff Tittel, the director of the New Jersey Sierra Club, lauded the launching of the buoy, characterizing it as an important step forward. "We have a choice between windmills or oil wells off our coast ... Given the oil spill disaster that struck the Gulf of Mexico, we say 'Wind, Baby, Wind. ' "
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Senator Bill Nelson (D-FL) has sent a letter to President Obama asking for a moratorium on test wells and exploratory operations in coastal waters pending an investigation into the Gulf of Mexico offshore rig spill incident. "Until we learn what happened," Nelson wrote, "I'm asking that you also call for an immediate halt to test-wells and all other exploratory operations in coastal waters." Senator Nelson also plans to introduce legislation to prevent the Department of the Interior from promoting offshore drilling.
Senator Nelson's office has published a copy of the letter to the President .
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