Regulation and Policy

Minerals Service challenges FERC jurisdiction over ocean projects

The Department of Interior’s Minerals Management Service is challenging the authority of the Federal Energy Regulatory Commission to issue preliminary permits and licenses to study, build, and operate wave energy projects on the U.S. Outer Continental Shelf.

The Interior Department agency raised the question of jurisdiction for the first time Jan. 30 in a protest filed in FERC proceedings for a preliminary permit application for the 300-MW Coos County Offshore Wave Energy project (No. 12752). AquaEnergy Group Ltd. wants the permit to study the feasibility of a site several miles off the coast of Oregon.

MMS said portions of the Coos County Offshore Wave Energy project would be located outside Oregon’s seaward boundary of three nautical miles. Generally, a state’s seaward boundary is three nautical miles from its coastline, although Texas and the gulf coast of Florida have greater seaward boundaries. Therefore, MSS said, parts of the Oregon project would be situated on the OCS subject to federal jurisdiction and control pursuant to the Federal Outer Continental Shelf Lands Act.

MMS said its protest is broader than simply a dispute of FERC’s authority to issue permits and licenses for wave energy projects on the OCS. It said it has serious environmental and ocean management concerns about FERC’s regulatory scheme under Federal Power Act Part I as applied to such technologically distinct projects on the OCS.

MMS raises three points in its protest. First, it claims FERC’s jurisdictional authority under FPA Part I does not extend to projects outside the traditional three-mile boundary of U.S. territorial sea. Second, MMS argues it has federal regulatory authority over wave energy projects sites on the OCS. Third, MMS states FERC’s existing regulatory scheme for hydroelectric licensing is inappropriate for wave energy projects on the OCS.

Permitting and licensing of ocean energy projects on the OCS are to be expressly authorized and regulated by the MMS, the service said.

�Accordingly, MMS asks that the commission reject this permit application and, furthermore, cease processing all similar types of permit applications for wave energy projects proposed on the OCS,� MMS concluded.

The Interior Department’s Office of Environmental Policy and Compliance filed comments and recommendations Jan. 30 for terms and conditions for any preliminary permit for the Coos County Offshore Wave Energy project. It expressed concerns about environmental effects of issuance and exercise of the preliminary permit, and for potential project-related effects, should a license for project construction and operation eventually be pursued.

Minerals Management Service considers rulemaking

In December 2005, MMS issued an advance notice of proposed rulemaking on alternative energy-related uses of the Outer Continental Shelf (1010-AD30). At that time, the service sought comments on the development of a regulatory program to implement authority granted by the Energy Policy Act of 2005. In responding to the call for comments, FERC staff asserted jurisdiction under the Federal Power Act over the development of ocean wave hydroelectric projects on all navigable waters, including oceans up to at least 12 nautical miles offshore.

MMS said it anticipates publishing a notice of proposed rulemaking and draft programmatic environmental impact statement in spring 2007. The EIS will assess the environmental effects of alternative energy projects on the Outer Continental Shelf, including wave energy projects such as the proposed Coos County project, MMS said.

The issue of FERC’s authority over ocean energy projects, and the commission’s relationships with other federal agencies, was raised at a 2006 technical conference on new hydro technologies. (HNN 12/8/06) MMS was invited to that conference, but did not attend, FERC said. At that time, the facilitator of the meeting said the matter of jurisdiction remained to be worked out.