Federal Agencies Clarify Offshore Renewable Energy Roles

Secretary of the Interior Ken Salazar and Federal Energy Regulatory Commission Chairman Jon Wellinghoff signed an agreement that clarifies their agencies' jurisdictional responsibilities for leasing and licensing renewable energy projects on the U.S. Outer Continental Shelf.

The Memorandum of Understanding clears the way for generating power from wind, sun, waves, tides and ocean currents in U.S. coastal waters.

"President Obama is committed to a comprehensive energy plan that will generate millions of clean energy jobs, break our dependence on foreign oil and reduce the threat of deadly pollution," Secretary Salazar said. "This agreement will spur the development of clean, renewable energy - the growth industry of the 21st Century."

The agreement establishes a streamlined process by which Interior's Minerals Management Service and the FERC will lease, license and regulate all renewable energy development activities on the Outer Continental Shelf, including hydrokinetic energy sources.

Hydrokinetic energy generation is based on the movement of water such as waves, tides and ocean currents.

"By removing all the regulatory barriers to the development of hydrokinetic energy in the Outer Continental Shelf, this agreement will advance the development of a promising renewable resource that in the end will benefit consumers," said FERC Chairman Jon Wellinghoff.

Under the agreement, the Minerals Management Service will control the production, transportation, or transmission of energy from non-hydrokinetic sources, such as wind and solar.

MMS also has exclusive jurisdiction to issue leases, easements, and rights-of-way for hydrokinetic projects on the Outer Continental Shelf and to conduct any necessary environmental reviews for those actions.

Two tidal turbines await placement in New York's East River for Verdant Power's prototype tidal energy project. April 2007. (Photo courtesy Verdant Power)

The Federal Energy Regulatory Commission will issue licenses and exemptions from licensing for the construction and operation of hydrokinetic projects on the Outer Continental Shelf and will conduct any necessary environmental analyses related to those actions.

FERC agrees to involve relevant federal land and resource agencies, including the Department of the Interior, in the licensing process.

FERC will not issue a license, exemption or preliminary permit for an Outer Continental Shelf hydrokinetic project until the applicant has first obtained a lease, easement, or right-of-way from MMS for the site.

In all leases, easements, and rights-of-way for hydrokinetic projects, MMS will require that construction and operation cannot begin without a license or exemption from FERC.

Under the agreement, the two agencies will coordinate to ensure that hydrokinetic projects meet the public interest, including the adequate protection, mitigation, and enhancement of fish, wildlife, and marine resources.

Both agencies may inspect authorized hydrokinetic projects on the Outer Continental Shelf to ensure compliance with the terms of leases, easements, rights-of-way, licenses or exemptions.

FERC may choose to become a cooperating agency with MMS in the preparation of an environmental document for the lease, easement and right-of-way for any Outer Continental Shelf hydrokinetic project.

Likewise, MMS may choose to be a cooperating agency with FERC in the preparation of FERC's environmental documents for the license or exemption of any Outer Continental Shelf hydrokinetic project.

"If MMS becomes a cooperating agency, it will not conduct 'off-the-record' communications relevant to the merits of the Commission's licensing or exemption proceeding, including such communications with staff of other non-cooperating DOI agencies," the agreement states.

In addition, MMS's participation as a cooperating agency in a FERC environmental review of a hydrokinetic project shall not preclude the Interior Department from intervening, on the behalf of other DOI agencies such as the U.S. Fish and Wildlife Service, the National Park Service, and the Bureau of Indian Affairs, in the licensing or exemption of that project.

The agencies will coordinate to ensure that any licenses or exemptions issued by FERC, and all operations regulated by FERC, are consistent with the provisions of the Outer Continental Shelf Lands Act, the Federal Power Act and other applicable laws.

Interior Secretary Salazar has made offshore wind, solar and hydrokinetic energy a top priority, and he expects to issue a final regulatory framework for Outer Continental Shelf renewable energy development in the near future.

Since April 2007 Verdant Power has been running a prototype tidal power project in the East River between Queens and Roosevelt Island in New York City, the first major tidal-power project in the country.

Last September, the U.S. Department of Energy selected 14 research teams to receive grants of up to $7.3 million for wave, tidal, and current driven hydro power projects.

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