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Obama, Salazar Open OCS to Wind; Atlantic Projects First in Line

Offshore wind power advocates received a firm gust in the right direction on Earth Day after President Obama and Interior Department Secretary Ken Salazar revealed guidelines aimed at clearing the way for the development of major offshore wind power projects on the U.S. Outer Continental Shelf (OCS).

Last Wednesday's announcement was heralded as bringing wind power more into the mainstream energy discussion, with the federal government's backing no less. The action was seen as setting out a clear process for moving ahead with major offshore wind projects and paving the way for a new offshore wind energy industry.

During an Earth Day speech at a wind turbine tower manufacturing plant, Obama said the long-awaited framework establishes a program to grant leases, easements and rights-of-way for orderly, safe and environmentally responsible renewable energy development activities, such as the siting and construction of offshore wind farms on the OCS.

"It is fitting that on Earth Day President Obama is taking this bold step toward opening America's oceans and new energy frontier so that we can wisely build a clean energy economy that will create millions of new jobs across the country," Salazar said. "This new framework will enhance our energy security and create the foundation for a new offshore energy sector that will employ Americans developing clean and renewable energy."

The program also provides methods for sharing revenues generated from OCS renewable energy projects with adjacent coastal states. Additionally the framework will enhance partnerships with federal, state and local agencies and tribal governments to assist in maximizing the economic and ecological benefits of OCS renewable energy development.

Wind energy projects proposed off the coasts of three Mid-Atlantic states are likely to be the first to receive renewable energy leases under the Minerals Management Services' (MMS) framework for renewable energy development on the Outer Continental Shelf (OCS), MMS officials said Thursday.

"As we go forward our priorities are going to be to proceed with the issuance of renewable energy leases in those areas where planning and proposals are most developed," said MMS Acting Director Walter Cruickshank. "At this time we view proposed wind development offshore New Jersey, Delaware and Rhode Island to be farthest along in terms of planning and in terms of state support for these initiatives, and we intend to start our leasing process in those areas first."

In addition to as many as five wind projects proposed for offshore New Jersey and one offshore Delaware, MMS officials said they expect to receive applications for OCS leases from Rhode Island and Massachusetts. An application is also likely to come from Long Island Power Authority and Consolidated Edison, which are partnering to develop a wind farm in the Atlantic approximately 13 miles off New York's Rockaway Peninsula, MMS said. Wind proposals in the Pacific offshore Oregon and Southern California employing new technologies for deepwater development, as well as hydrokinetic projects off the Atlantic coast of Florida and off the Pacific coast could all step in line as well, they said.

"That's what we know now," said Maureen Bornholdt, MMS renewable energy and alternate use program manager. "Who knows who will come in and apply to us once the program framework is final and open for business in June?"

Chris Wissemann, managing partner and founder of Deepwater Wind, which is currently developing wind projects offshore Rhode Island and New Jersey, among other places, said Wednesday's action by the MMS was crucial for offshore wind power.

"This is fantastic news," Wissemann said. "This long-awaited rule will create a new framework to develop ocean renewable energy that can serve the country's most populated coastal regions."

The American Wind Energy Association (AWEA) applauded the final regulations. "Secretary Salazar's announcement today of the final rule governing offshore 'alternative' energy is a welcome step forward," said AWEA CEO Denise Bode. "Offshore wind energy companies and states, among others, are anxious to embark on the still-complex leasing and permitting process. The rule clears the way so that offshore wind projects can begin to move ahead. This and other recent actions by the Department of the Interior demonstrate a strong, strategic commitment to accessing our domestic renewable energy resources."

Civil Society Institute President and Founder Pam Solo and Clean Power Now Executive Director Barbara J. Hill called Wednesday's action a landmark decision. "The step announced today by President Obama and Secretary Salazar represents the biggest federal step forward to date for clean energy in the United States," Solo and Hill wrote.

The duo noted that with the framework now in place, perhaps the government could move forward on approving the 420 MW Cape Wind project in Nantucket Sound. Solo and Hill said, "The Department of Interior and its Minerals Management Service did an exemplary job conducting the regulatory review process that issued the final environmental impact statement on Cape Wind. Now it's time for the Obama Administration to take the next step and issue a record of decision on Cape Wind as soon as possible so we can begin to move aggressively to exploit the abundant offshore wind energy potential with a shovel-ready project."

The two claim Cape Wind has the support of more than 86% of Massachusetts residents and two out of three people living on the cape and islands. Earlier this month, 78 members of the Massachusetts legislature said in a letter to Salazar that they supported the project.

The MMS said Wednesday the Cape Wind project has been undergoing review independently of the rulemaking process and no decision is being made on the project at this time. If approved, it will be subject to the terms of the final framework announced Wednesday, the government agency said.

MMS officials said two types of leases will be offered: commercial leases authorizing the production of energy over the long term (25-30 years), and limited leases authorizing data collection and technology testing activities over a shorter term (five years). All of the leases will be offered on a competitive basis unless it is determined that there is no competitive interest.

The Energy Policy Act of 2005 granted MMS the authority to regulate renewable energy development on the OCS, but no action had been taken under that authority until now. Since taking office, Salazar has made it a priority to finalize the rules that will govern offshore renewable energy development. The Interior Department and the Federal Energy Regulatory Commission (FERC) cleared the way for the publication of these final rules by signing an agreement earlier this month that clarifies their agencies' jurisdictional responsibilities for leasing and licensing renewable energy projects on the OCS.

Under the agreement, the MMS has exclusive jurisdiction with regard to the production, transportation or transmission of energy from nonhydrokinetic renewable energy projects, including wind and solar. FERC will have exclusive jurisdiction to issue licenses for the construction and operation of hydrokinetic projects, including wave and current, but companies will be required to first obtain a lease through MMS.

FERC Chairman Jon Wellinghoff last week said major changes to the nation's energy infrastructure -- including transmission lines to move hundreds of gigawatts of energy from wind farms offshore and in the Midwest and from the solar-rich Southwest to the nation's load centers -- must be planned in the next three to five years (see related story).

The 579-page final framework has been submitted to the Federal Register, and is available on the MMS website at www.mms.gov/offshore/AlternativeEnergy/PDFs/AD30RenewableEnergy04-22-09.pdf.

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