FERC Says That A Buoy Is a Powerhouse; Enters the Jurisdictional Fray

On February 20, 2003, the Federal Energy Regulatory Commission (FERC), an agency charged with administration of private hydroelectric development on the nation's rivers and streams issued an order in AquaEnergy Project No. DI02-3 claiming jurisdiction over AquaEnergy's proposed Makah Bay Pilot ocean energy project, to be sited three miles off the coast of Washington state, in the Olympic Coast National Marine Sanctuary in Makah Bay. (We'll post a link to the order when it's published). The proposed pilot project consisted of four floating buoys attached to the seabed, each containing electricity generating turbines powered by pressurized seawater. Project power would be delivered ashore via an underwater transmission line to a power station located on the Makah Indian reservation (the tribe is one of the project's greatest supporters)for conditioning and sent on to the grid.

By way of simple background, under the Federal Power Act, FERC only has the power to license hydroelectric projects which the Act defines as consisting of a "dam, reservoir, conduit, powerhouse" and related facilities. Well, AquaEnergy's project clearly did not have a dam, conduit or reservoir (unless FERC wanted to claim that the ocean is a reservoir, but it didn't go quite that far). That left the question of whether the project included a "powerhouse." Notwithstanding its eighty years of administering a hydro program, FERC needed to resort to an ordinary dictionary to define powerhouse. The dictionary in turn stated that a powerhouse is "a building where electricity is generated." FERC then changed the word "building" to "structure" and concluded that: "Buoys are structures with equipment for generation of power so they are powerhouses" for purposes of the statute.

In the absence of FERC jurisdiction, Aqua Energy had planned to apply to the Corps of Engineers, NOAA (which administers the sanctuary) and myriad other state agencies for requisite permits. As many of these permits are not preempted by the Federal Power Act, FERC's announcement of jurisdiction will add another layer of regulation before the project can get in the water. Sure, a court might overturn FERC's order, just like a court will eventually work out whether the Corps has jurisdiction to permit the Cape Wind project. But court proceedings are time consuming and no substitute for some real guidance about which agency controls the process. So state tuned as this newest saga unfolds.

A Push for Sanctuary Status at the Capewind Site

Another update on the Cape Wind saga, this time from a
piece by James Kinsella in The Inquirer and Mirror, (2/21/03), reporting on Congressman William Delahunt's (D-Mass) continued efforts to declare the site for the Cape Wind Project a national sanctuary. According to the article:

Delahunt, D-Mass., is using a report released last week by the Center for Coastal Studies to bolster his quest to make Nantucket Sound a marine sanctuary, a designation that could bar a proposed wind farm from being constructed there.

Last Monday, Delahunt and Peter Borelli, director of the Provincetown-based Center for Coastal Studies, met the press in Hyannis to discuss the report and its ramifications.

The report doesn’t include new scientific investigation of the sound, but summarizes previous research. It also includes a copy of a 1980 state nomination of the federal waters in the sound as a national marine sanctuary. In 1983, the entire sound and nearby areas were nominated as a sanctuary.

The federal government didn’t designate the sound as a sanctuary, at the time although it subsequently did designate Stellwagen Bank north of Cape Cod Bay as one of 14 national marine sanctuaries. In doing so, fishing stocks in the area are protected.

“Nantucket Sound contains significant ecological, commercial and recreational resources that have been at the heart of several past nominations for enhanced environmental protection and conservation policies in the region,” the report states.

The upshot of the report, at least to Delahunt is to demonstrate that the perception of Nantucket Sound as a special place “is not a matter of recent invention. Over the past 25 years, Massachusetts has been trying to make the sound a sanctuary.” So then, is it just a coincidence that efforts to revive a movement for classifying the Nantucket sound as a sanctuary just happen to coincide with the proposal of the Cape Wind project?

Another Offshore Wind Project on the Horizon

There's another newcomer to the offshore wind scene in the United States - this time in upstate New York on Lake Ontario as described here in "Company proposes windmill for Lake Ontario," Newsday.com, February 20, 2003. The article reports that the project is off to a good start, with plenty of community support and a state policy promoting renewable development:

Braginton-Smith has already begun the site approval process. Last week, he met with members of the Army Corps of Engineers, which manages the breakwater.
Lake Ontario can bring as much as 250 inches of snow to Oswego annually. Those winds, combined with the county's existing electricity transmission infrastructure, make it an ideal location for wind energy production, Braginton-Smith said. Oswego County is already home to three nuclear plants. "They were all very excited and were very supportive of the concept," Braginton-Smith said. "There was a general consensus that this shouldn't have any serious obstacles in front of it." Assuming the approval process continues smoothly, the only major hurdle is to gather the $6 million to $7 million needed to erect the first two turbines. Braginton-Smith said he is not worried about financing. In his recent state of the state address, Gov. George Pataki announced a policy of supporting renewable energy projects. By 2013, he wants 25 percent of all electricity produced in the state to come from renewable sources. That would require at least 2,000 megawatts of new capacity from wind, solar or other renewable sources, according to Tom Collins, spokesman for the New York State Energy Research and Development Authority.

We'll be monitoring this process to assess whether this offshore wind project might provide a blue rint for future projects to follow.

Bush's Environmental Policy

Here's an article entitled "On Environmental Rules, Bush Sees A Balance," Critics a Threat by Douglas Jehl, New York Times (2/23/03) that provides a good summary of the Bush Administration's record on the environment in several areas, including clean air, clean water and energy. Renewables merit only a short mention in the article in the from of a brief quote from critics that
the White House should do far more to encourage a switch to renewable fuels, like wind power. Given that the article devotes a sentence to renewables, however, is a pretty good indication of their importance to the Bush Administration's environmental policy.

Hydrogen Powered Car Proposal Not As Environmentally Friendly as One Might Think

In this op-ed piece in the New York Times (2/15/03), Robert J. Kennedy questions whether Bush's proposal to invest in technology to develop hydrogen powered cars is as environmentally sound as it might appear. Kennedy criticizes the Bush proposal as follows:

Certainly, fuel cells that use renewable resources like wind and solar power to extract hydrogen from water promise America a safe, clean energy solution. However, in a sop to the energy industry, the White House wants to extract hydrogen instead from coal and natural gas (without controlling carbon emissions), thereby increasing global warming and fouling our landscape. Worse, the president wants to build a new generation of nuclear power plants specifically for hydrogen production.

The president's hydrogen plan will further reduce our national commitment to renewables by cutting our already anemic financing for research into wind, solar and other energy-saving technologies.

Is some action such as the hydrogen plan better than nothing? And does hydrogen production hold more promise for improving air quality and reducing dependence on foreign oil than other renewables like wave and wind? Let us know what you think.

Update on Offshore Power Off Long Island

Kim Acevedo has an
article in Herald online entitled "Winds of Change to Power Long Island" (2/13/2003) reports that since the release of the Long Island Power Authority RFP seeking a developer for an offshore wind farm, various groups in the area have expressed interest in the proposal. The article reports that:

The wind turbines would be located at least 2.5 nautical miles -- 2.875 statute miles -- offshore. The hum they produce would rarely, if ever, be audible from shore, officials said. "This site has been chosen very carefully," Lowndes said. The height of the wind turbines, with one blade straight up, would be approximately 360 feet to 428 feet above the surface of the water. They might be visible from shore on a clear day, Lowndes said. The park would have between 25 and 50 turbines that would produce a total of 100 to 140 megawatts of electricity on an optimal day.

The described location of the proposed wind projects within three miles of shore places them in state waters (which extend three miles from shore) and thus, avoids the jurisdictional, "who owns the land" squabble jeopardizing the Cape Wind Project off Nantucket as we've described in other posts. More information on the RFP is available here at LIPA's website.

Wind and Wave Surpass Nuclear in UK Energy Strategy

An article from the Observer by Mark Townsend (2/16/03) reports that the UK's energy policy may soon be nuke-free. According to the article:

No more nuclear power stations will be built in the foreseeable future as the Government turns to wind and wave energy to provide Britain's future electricity needs.

In a seismic shift in policy, Ministers have agreed to back renewable energy as the best way of meeting the UK's targets to reduce carbon dioxide emissions.

The long-awaited energy white paper will plunge the nuclear industry into fresh crisis by rejecting demands to build new plants.

Until now, government support for renewables has been patchy due to concern that Britain would not meet its carbon emissions targets.

The white paper, which sets out the UK's future energy strategy, will be unveiled by Patricia Hewitt, the Secretary of State for Trade and Industry, later this month.

Sources who have seen its final draft - agreed by cabinet Ministers last week - confirmed that nuclear power had been superseded by renewables as the Government's preferred way of providing power in the future.

'What is clear is that the Government does not want to build a new generation of nuclear power stations if renewables and energy efficiency can deliver,' said one.

More Confusion Generating About Regulatory Authority

Yesterday, we had one post regarding questions of whether the Corps or the Secretary of Interior have primary regulatory authority over the Cape Wind project. Here's what the Corps has to say on the issue, at least initially. By way of background, back on January 30, 2003, the Corps published a notice of Winergy's permit application to the Corps of Engineers to install, operate and maintain a fixed tower seven miles southeast of Nantucket to collect data on wind resources. The permit applications and proceedings can be accessed from theCorps' Northeast Office Website . Interestingly, review of the materials there indicate that the Corps also found it necessary to issue a "clarification of its jurisdiction" in response to inaccuracies reported in the media. The Corps' clarification states:

Under its jurisdiction under Section 10 of the Rivers and Harbors Act, the Corps does not lease sites to a permit applicant. The Corps does not secure sites. A permit applicant does not secure a site nor offer exclusive rights to an applicant.

Now, if an applicant were constructing a project in state waters, it could seek a lease from the appropriate state authority. But how, then does an applicant secure rights to construct a project on the outer continental shelf? Does the Department of Interior have the power under the Outer Continental Shelf Act, as now drafted, to grant such leases? Or does an applicant even need to lease the OCS at all - even where the project will occupy a substantial area of the OCS. The mystery remains...and either Congress or the appropriate agencies (to the extent their enabling legislation permits) must resolve these questions for offshore renewable development to proceed unobstructed.

Still on the topic, opponents of the Nantucket Capewind project have been able take advantage of uncertainty to stall development (as I predicted in my piece Regulatory Uncertainty). This article from the Environmental News Network by Bipasha Ray (2/13/03) reports that:

The seabed of Nantucket Sound belongs to the federal government, Attorney General Tom Reilly said Tuesday, refuting an assertion by the Army Corps of Engineers, which has permitted preliminary construction of the nation's first offshore wind farm in the waterway.

Reilly filed a friend of the court brief in U.S. District Court Tuesday, favoring an environmental group and fishers who are suing the Army Corps and a private developer, challenging the legality of a test tower for the proposed Nantucket Sound wind farm.

The Army Corps, which approved the initial data-collecting tower, argued that the federal government did not own the seabed, and therefore the Corps could permit a private developer to build on that land, Reilly's office said.

Reilly wrote in the brief that the Army Corps' position leaves the seabed "wide open to promoters and developers of all stripes and schemes.

"We have not gotten a satisfactory answer to the question of how the federal government can allow a private party to occupy federal land with only a permit from the Army Corps," Reilly said in a statement, adding that a 1986 Supreme Court decision had already established federal ownership. "It is ironic that the United States has demanded that we pay for the use of Nantucket Sound seabed and is now attempting to let private parties use it for free," he said.

.The battle goes on and on....