The Federal Energy Regulatory Commission has issued a new policy to speed up licensing of wave energy projects while ignoring widespread recent calls that it engage in a full scale public process called “rulemaking.”
Public comments will be accepted until Friday, Dec. 14 on the new policy FERC announced last Friday — surprising even some in other federal agencies with its pro-industry approach.
The policy, modeled on that used by FERC for natural gas pipelines, allows wave energy and other “hydrokinetic” projects to go forward before agencies such as the U.S. Fish and Wildlife Service complete their analysis of whether there may be violations of laws such as the Endangered Species Act. Actually putting the devices into the water won”t be allowed until all such permits are completed, the filing states.
“FERC has been flexible with its regulatory abilities with respect to hydrokinetic projects so that these new projects can move forward as quickly as possible,” FERC Chairman Joseph T. Kelliher said in a press release. “Today”s policy statement continues that tradition and provides regulatory certainty to developers.”
Critics” concerns
Critics say FERC shouldn”t be talking about certainty in a process that nobody understands yet and could do harm to the ocean, whales and the fishing industry. There are still no working commercial wave energy plants in the United States.
Wave energy now costs 20 to 30 cents per kilowatt hour but needs to cost less than 10 cents per kilowatt-hour to compete.
FERC is now combining dam and natural gas licensing methodologies, rather than do what critics have asked and create a new process for wave, tidal and in-stream energy projects. Critics say the agency is going too far off into uncharted and highly specialized terror ties, a move which could end up creating a lengthy legal tangle that would defeat the idea of moving faster.
“FERC is pushing what they claim to be their own direct federal jurisdiction in an obvious effort to speed up the industrialization of the near shore waters of Mendocino County, where the profits of an electrical utility are being promoted over the longstanding rights of local communities and the fisheries management authority of the State of California,” said Richard Charter, an activist on behalf of offshore resources.
“An orderly and sequential planning process would make more sense and better protect existing uses and economic interests, instead of following the obsolete regulatory model for onshore gas pipelines now being promoted by FERC on our North Coast.”
Inter-agency conflict
A majority of commenters to FERC, ranging from federal agencies to Pacific Gas & Electric, had asked the federal agency to engage in an extensive public process called rulemaking, all prior to last Friday”s policy statement.
The federal Minerals Management Service recently announced rulemaking for the areas of the ocean it controls, which means it will be nearly a year of rulemaking before applicants can even seek licenses.
The Minerals Management Service controls waters more than three miles from shore but has been having a heated behind-the-scenes turf war with FERC, according to articles in law publications.
Elizabeth Mitchell, a retired National Oceanic and Atmospheric Administration attorney who now lives in Fort Bragg, said the Minerals Management Service is complying with the law, while FERC is breaking the law by avoiding rulemaking.
Three major offshore renewable energy companies have asked Congress to resolve the dispute between FERC and MMS over who should oversee their projects, the journal Energy Law reported.
In a letter to the ranking members of the U.S. Senate Committee on Energy and Natural Resources, Finavera Renewables, Inc., Ocean Power Technologies, Inc., and Verdant Power encouraged Congress to remove any jurisdictional uncertainty between the two agencies, Energy Law reported. The private developers want FERC to maintain its leading role.
The dispute between the two federal agencies began after the passage of the Energy Policy Act in 2005, when the Minerals Management Service implemented a program to manage renewable energy projects in the federal waters of the Outer Continental Shelf, which stretches from 3 to 12 miles offshore.
FERC responded by saying the Federal Water Power Act of 1920 gave it the authority to license water-powered energy projects in all federal waters out to 12 miles, according to Energy Law.
Mitchell personally filed a request last week with FERC, adding to the agencies and companies asking the agency engage in rulemaking. She said locals should worry about FERC which operates by its own game plan, more outside of public scrutiny than other federal agencies.
“Over the years many constituents have complained that FERC”s decision process is a black box,” she said.
Mitchell fears that could have a serious impact on what coast residents have most sought from energy development — local control.
“Occasionally, they will voluntarily live up to their legal responsibilities, but then they revert to form again. Basically their preferred MO is the Wizard of Oz operating behind the curtain.”
No comment from FERC
FERC spokeswoman Celeste Miller explained how the new process worked but issued the following statement to questions about rulemaking.
“No comment at this time.”
Some critics saw the new ruling as an indication that FERC is going full steam ahead without rulemaking, while the Minerals Management Service is taking a more cautious and public approach.
“What Friday”s FERC action means is anybody”s guess,” said Mitchell.
“They seem to be attempting to exempt themselves (and the projects) from complying with the National Environmental Policy Act. They are also probably trying to shift the political burden for slowing down the projects by actually complying with the law to other agencies besides themselves,” she said.
Miller said the new policy allows expediting of a new fast track pilot project process and the conventional licensing process, but has no effect on the preliminary permit process. PG&E has been waiting on a preliminary permit for nine months, while FERC ruminated on how to create policies for the brand new field of ocean energy.
The preliminary permit is a non-mandatory first step in getting a license to do wave energy. It allows the utility to hold the area off Fort Bragg for three years while it studies and while wave energy technology matures.
PG&E will invite wave-energy companies to submit project proposals for the utility”s WaveConnect initiative for three years in an area 17 miles north to south by 4 miles wide, starting about one half mile offshore and extending more than 3 miles offshore during the preliminary permit process.
The new FERC pilot project process, combined with last Friday”s expediting, could allow the utility to get devices into the water in as little as six months after getting the permit and to complete the commercial licensing in five years.
Mitchell is still a member of the bar in the state of Washington but says she has no client in wave energy. She moved to the area partly to take on FERC out of concern for the ocean resource being developed in secret.
“I believe that FERC”s action on Friday suffers from the same legal defects as its pilot project licensing process — namely it violates the federal Administrative Procedure Act, the National Environmental Policy Act, and other applicable laws,” said Mitchell. “I will continue to file comments and petitions in the administrative proceedings, and hope that FERC will fulfill its legal responsibilities to initiate rulemaking and comply with NEPA.”
FERC”s new approach
FERC seized control of the wave energy permitting process beginning with the 2001 proposal by an Indian tribe in Washington to develop wave energy off their shore in a national marine sanctuary.
Because the idea was so new and crossed so many jurisdictions, FERC took over and soon was considering permits all up and down America”s coasts. Ground zero for wave energy turned out to be the state of Oregon, with Humboldt and Mendocino counties also being picked by developers working together behind the scenes, unknown to local governments.
The Indian tribe is the beneficiary of the first and only FERC-pending license, which is about to be issued. There are no other pending licenses for wave or tidal energy.
One baffling aspect for critics has been that FERC has used the process for regulating new dams for wave, river and tidal energy projects.
FERC now seems committed to the improbable linking of dams and energy produced in the ocean and in-stream. The newly filed document combines the two technologies.
“Estimates suggest that new hydrokinetic technologies, if fully developed, could double the amount of hydropower production in the United States, bringing it from just under 10 percent to close to 20 percent of the national electric energy supply. Given the potential benefits of this new, clean power source, the Commission has taken steps to lower regulatory barriers to its development,” the FERC announcement states. The move applies only to these new forms of energy, the filing states.
“The goal of this action is to shorten the regulatory process and speed the development of meritorious hydrokinetic projects.”
Mitchell talked to current NOAA employees who said the agency was surprised by FERC”s new approach, especially the use of the Natural Gas Act, which many viewed as having been written by Big Oil through the Republican Congress.
“The new policy statement was completely unexpected and surprising and incorporates a model — the Natural Gas Act — which has not heretofore even been mention in the proceedings involving (wave) energy,” she said.
Mitchell planned to file legal documents this week seeking clarification of last Friday”s action.
Charter said FERC should not be “characterizing state and federal environmental laws as something to try to circumvent or prejudge, as this new FERC ruling proposes.”
“NEPA — the National Environmental Policy Act, and the Endangered Species Act, have proven effective in protecting our ocean ecosystems and marine endangered species for over 20 years,” said Richard Charter, an activist for Northern California offshore resources.
Comments on this policy statement are due by Friday, Dec. 14. Comments must refer to Docket No. PL08-1-000, and must include the person”s name, the organization they represent, if applicable, and their address, FERC”s filing states.
