- The Washington Times - Thursday, March 12, 2009

EXCLUSIVE:

Bureaucratic infighting is holding up one of the Obama administration’s top goals in renewable energy - the construction of wind turbines off the Atlantic and Pacific coasts that would generate clean electricity and create “green” jobs.

At the center of the fight are two obscure but powerful federal agencies, each of which claims the ability to approve new wave and tidal energy projects along the outer continental shelf. The Federal Energy Regulatory Commission (FERC) and the Minerals Management Service (MMS) each says it has the sole authority to issue permits and licenses, and neither is willing to budge.

The result: Thousands of megawatts of wind-produced energy, considered a top priority by President Obama, are blocked.

Industry insiders say the standoff has the unintended consequence of stopping an Interior Department proposal to open offshore energy projects, including wind turbines. Although Interior Secretary Ken Salazar has pledged to finalize the rules this year, it is anybody’s guess whether or when the administration or Congress will be able to force a resolution.

“It’s already holding up the rule,” said Laurie Jodziewicz, manager of siting policy at the American Wind Energy Association, the trade group for wind energy producers.

“Until there’s clarity, companies are not going to be very excited about moving forward with their offshore projects,” said Michael Olsen, a former Interior Department official now with the law firm Bracewell & Giuliani, which represents a potential developer of offshore projects.

The tiff is causing ripples on Capitol Hill. On Wednesday, five lawmakers led by Sen. Thomas R. Carper, Delaware Democrat, wrote to Mr. Salazar to urge him to resolve the issue and expedite offshore development regulations.

In the meantime, Sean O’Neill, president of the Ocean Renewable Energy Coalition - which represents companies hoping to tap tide, wave and underwater current energy - said the delay is hurting the investment climate for all kinds of offshore energy projects.

“It has a very chilling effect. We need regulatory certainty, and right now, we have terrible uncertainty,” he said.

Mr. Salazar insists there is huge potential off the coasts for renewable energy production, particularly off the Atlantic coast.

“The scientists tell me that when you look at the wind energy potential off the Atlantic, it may be greater than we have onshore,” Mr. Salazar told the Associated Press. “But what we don’t have in place at this point is the rules to move forward with energy offshore.”

The solution could come in energy legislation expected later this month from the Senate Energy and Natural Resources Committee and the House Energy and Commerce Committee. Energy and Natural Resources Chairman Jeff Bingaman, New Mexico Democrat, “never likes to see turf battles between agencies,” his spokesman Bill Wicker said.

The fight has been brewing since passage of the 2005 Energy Policy Act. FERC is an independent hydropower licensing agency that handles nonfederal electricity-generating dams. MMS, which is part of the Interior Department, manages energy leases and royalties on publicly owned lands, both onshore and offshore.

Although the law gave MMS authority over all offshore hydropower licensing, FERC has asserted, in effect, that the Federal Power Act trumps the 2005 law. It says “hydrokinetic” offshore projects that seek to capture wave, tidal and underwater current energy are technically in the same class as hydropower dams, which it oversees. MMS, it says, is limited to managing the leasing of the underwater land rights.

Efforts by the Interior Department and FERC to come to a resolution last year failed, and the dispute has gone so far that both agencies are writing competing regulations for prospective offshore projects.

The nonpartisan Congressional Research Service (CRS) says a lack of clarity will stymie the marketplace for private investment in offshore energy, even as Mr. Obama hopes to ramp up renewable energy and reduce carbon dioxide emissions.

“The uncertainty over lead regulatory status on the OCS is an important issue that may discourage investors in this developing industry,” the CRS said in a report last fall about the dispute.

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