Well, folks, the jurisdictional smackdown between FERC and MMS that I first posted about over two years ago has finally ended. Following threat of Congressional intervention, on April 9, 2009, both agencies finally signed off on a Memorandum of Understanding divvying up each agency's respective jurisdictional responsibilities on the OCS. FERC agreed to give up authority to issue preliminary permits on the OCS and dismissed the Gray's Harbor preliminary permit applications, which brought the MMS-FERC issue to a head (by way of background, Gray's Harbor filed several permit applications for hybrid wave-wind technologies, several on sites that had already been identified by state energy offices as potential locations for offshore wind projects). MMS will issue leases for marine renewables project on the OCS - something which was always required, as I've previously pointed out. But MMS will give FERC responsibility for licensing and oversight of marine renewables on the OCS. As for treatment of hybrid wind-wave projects or projects that straddle the OCS, the MOU leaves those issues open for future resolution.
From my own perspective, the MOU doesn't clarify much that wasn't fairly clear before. Before the MOU, MMS always needed to issue leases for FERC projects and that hasn't changed. And though pre-MOU, FERC had the power to issue a preliminary permit, there was nothing to stop MMS from issuing a lease for the lands within that permit to a competing developer. After all, a permit doesn't convey property rights. So even though FERC could issue a permit, a developer relying on that permit for priority rights wouldn't have been on very strong grounds, thereby vitiating the practical value of the permit anyway. Unfortunately, the MOU still leaves open the tough questions such as whether a developer who begins a project on one side of the OCS will be able to access lands on the other side of the OCS for a possible build out. And if a wind farm goes through an extensive, Cape-Windesque permitting process before MMS and a few years later, decides to add a wave energy component, will it need to go through a full blown FERC process as well?
The best part of the MOU, however, is that it finally cleared the way for MMS' long awaited rules governing alternative energy on the Outer Continental Shelf, which finally issued on April 22. At 579 pages, there's plenty to digest (stay tuned for a summary), but at least development can begin to proceed on the OCS.
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