The Evolving Regulatory Scheme Applicable to Offshore Renewable Energy Facilities in the United States
Authors: Daughdrill William Houston , Higgins Megan 
Published: May 2011

On April 29, 2009 the U.S Department of the Interior, Minerals Management Service (now renamed Bureau of Offshore Energy Management, Regulation, and Enforcement --BOEMRE) published comprehensive new regulations in the Federal Register applicable to renewable energy and alternate use of facilities on the United States (U.S.) Outer Continental Shelf (OCS). The final rule (Title 30, Code of Federal Regulations (CFR), Parts 250, 285, and 290) defines a new process for offshore renewable energy facilities to apply for and obtain U.S. Government authorization to build and operate offshore renewable energy facilities on the U.S. OCS. These new regulations apply to offshore renewable energy projects such as proposed wind farms, wave farms, or ocean current energy extraction devices located in federal waters of the OCS. The new regulations also describe a complementary role for the Federal Energy Regulatory Commission (FERC) regarding licensing of hydrokinetic energy devices on the OCS. This paper describes how this new regulatory process has evolved and what it means to developers of offshore renewable energy projects on the OCS. This paper will discuss the progress that has been made in defining the regulatory framework and some of the regulatory issues that continue to present challenges in obtaining timely permitting decisions from U.S. federal regulatory authorities. In particular, a number of specific issues related to the potential environmental impact of offshore renewable energy projects will be explored. A well defined, efficient, and predictable regulatory process is critical to successful development of offshore renewable energy projects on the U.S. OCS.

Introduction

Shifting public sentiment and policy regarding the effects of carbon dioxide emissions from burning fossil fuels on climate change have increased the overall level of public support for low and no-carbon sources of energy production. The nascent offshore renewable energy industry in the United States stands to benefit from these changes. While the positive shift in public sentiment may be helpful to project proponents, creating and refining predictable state and federal regulatory permitting schemes persists as a key ongoing requirement of the emerging offshore renewable energy industry in the United States (U.S.). Several recent developments at the federal level have worked to clarify the applicable regulatory scheme for offshore renewable energy projects. These developments are discussed in the paragraphs that follow.

Each of the state and federal project permitting processes includes requirements to assess the potential environmental impact of the proposed prototype or full-scale project. Possible environmental impacts of offshore renewable energy projects have been categorized in several recent studies by the U.S. Department of Interior, Minerals Management Service (MMS) [1] and the U.S. Department of Energy [2]. It should be noted that in 2010, following the Deepwater Horizon oil spill in the Gulf of Mexico, the MMS was reorganized and has been renamed the Bureau of Offshore Energy Management, Regulation, and Enforcement (BOEMRE). This paper will use the acronym MMS to describe those regulatory activities that occurred prior to the reorganization of the agency, and BOEMRE to discuss those activities that occurred subsequent to the reorganization.

The federal permitting scheme for offshore renewable energy projects on the U.S. Outer Continental Shelf (OCS) has been evolving over the past few years. Initially, the permitting scheme was the subject of a jurisdictional dispute between the MMS and the Federal Energy Regulatory Commission (FERC). Each agency claimed exclusive permitting authority for selected offshore renewable energy projects. The jurisdictional dispute centered on those projects that used hydrokinetic energy, essentially the movement of water via waves or currents, to produce energy. This jurisdictional dispute was ultimately resolved in April 2009 with an agreement that both agencies would share jurisdiction over hydrokinetic energy project on the OCS and MMS would have exclusive permitting authority over non-hydrokinetic energy projects (e.g. wind and solar energy). The resolution of this federal agency jurisdictional dispute is discussed in greater detail in the next section.