U.S. declare truces on offshore energy

The Interior Department and the Federal Energy Regulatory Commission, or FERC, announced today that they would resolve a turf battle over offshore alternative energy that threatened the Obama administration’s push for wind farms off the Atlantic and Pacific coasts.

The deal was not specific about how FERC and the Minerals Management Service, or MMS, would handle the permitting and licensing of alternative power stations on the Outer Continental Shelf. Both agencies claim authority to license the projects, and their conflict that stood in the way of Interior Secretary Ken Salazar’s pledge to issue federal regulations for all offshore alternative energy projects this year.

A joint statement issued by Salazar and FERC Acting Chairman Jon Wellinghoff indicated final licensing would remain with FERC, while acknowledging that MMS was given authority under the 2005 energy bill to issue preliminary exploration leases. Salazar, at an appearance before the Senate Energy and Natural Resources Committee, said more work needs to be done, but that “we will work out something that will be satisfactory to both FERC and us.”

FERC Commissioner Philip Moeller, who appeared before the committee as well, said in prepared testimony that the two sides drafted a memorandum of understanding two years ago that offers a workable solution. He said it is similar to the licensing and siting processes FERC uses for projects on lands controlled by the U.S. Forest Service, the Bureau of Reclamation, Bureau of Land Management and the U.S. Army Corps of Engineers.

He told the committee later that he sees FERC retaining overall licensing authority with MMS keeping its leasing authority, though other issues, presumably preliminary exploration permits, remain to be discussed on a case-by-case basis between the two agencies.

Committee Chairman Sen. Jeff Bingaman, D-N.M. told Moeller he was skeptical. “I’m just not exactly sure this is going to be a streamlined process for the developer that wants to put in one of those projects,” Bingaman said. He and Sen. Lisa Murkowski of Alaska, the committee’s ranking Republican, pressed Moeller to say why the committee should not mandate a solution in its upcoming energy bill.

“I don’t think we need a legislative fix,” he said, noting FERC’s cooperation with other agencies. “I think we can handle it with a memorandum of understanding.”