US proposes offshore oil and gas leasing expansion

The Trump administration is taking steps that could ultimately lead to a significant expansion of U.S. outer continental shelf acreage available for oil and gas leasing.

Under federal law, the U.S. Bureau of Ocean Energy Management is charged with administering site leasing for energy development on the outer continental shelf. The Outer Continental Shelf Lands Act requires the Secretary of the Interior, through BOEM, to develop a five-year national plan for oil and gas sales in federal waters. The law requires the Secretary to balance criteria including environmental impacts, energy needs and resources, and adverse effects on the coastal zone.

On January 4, 2018, Secretary of the Interior Ryan Zinke announced a new Draft Proposed Program. He described its release as "an early step in a multi-year process to develop a final National OCS Program for 2019-2024," and as consistent with an April 2017 Executive Order implementing an "America-First Offshore Energy Strategy."

The Draft Proposed Program includes 47 potential lease sales -- the largest number of lease sales ever proposed for the National OCS Program’s 5-year lease schedule.  The plan includes 19 sales off Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region. Some of these areas have not seen leases sold in decades; for example, there have been no sales in the Atlantic since 1983 and there are no existing leases.

By contrast, the draft program includes 8 Atlantic lease sales between 2020 and 2024, covering federal waters offshore Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Delaware, Virginia, North Carolina, South Carolina, Georgia, and Florida. The Pacific leases would similarly be the first sold in that region since 1984.

According to the press release announcing the draft's release, "Inclusion of an area in the DPP is not a final indication that it will be included in the approved Program or offered in a lease sale, because many decision points still remain. By proposing to open these areas for consideration, the Secretary ensures that he will receive public input and analysis on all of the available OCS to better inform future decisions on the National OCS Program."

Even if an area is offered in a lease sale, it may not draw commercial interest; even if leased, an area might not actually be used for exploration and production. But the draft plan significantly expands the acreage that would be available for leasing -- according to the Secretary, "the current program puts 94 percent of the OCS off limits," while the proposed program "proposes to make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development."

BOEM has solicited public comment on the draft plan, which will inform several further rounds of proposals and comment, before a Proposed Final Program (PFP) is considered. In the meantime, until a new program is finalized and adopted, the present 2017-2022 Five Year Program remains in effect.

US considers Arctic offshore oil exploration

U.S. regulators are evaluating an application by a company seeking to explore for oil in the Arctic.

On June 12, the federal Bureau of Ocean Energy Management or BOEM announced that it had deemed Eni US Operating Co.'s exploration plan (or EP) to be submitted, and invited public comment on the plan. The company is a subsidiary of the Italian gas and oil company Eni S.p.A.

Under federal law, an Exploration Plan describes all exploration activities planned by the operator for a specific lease or leases, including information on locations, timing, drilling processes, and actions to be taken to meet safety and environmental standards and to protect access to subsistence resources. 

According to its Exploration Plan for the Nikaitchuq North Project dated March 2017, Eni proposes to drill into submerged lands on the Outer Continental Shelf beneath the Beaufort Sea, from its existing Spy Island drillsite which is located in Alaska state-jurisdictional waters.  Eni has secured federal leases for the "Alaska – Harrison Bay Block 6423 Unit".

BOEM's decision to deem the Exploration Plan as submitted triggers various deadlines:

• BOEM has opened a 10-day public comment window to provide information on issues that should be examined in the application's Environmental Assessment.  This window closes at midnight Eastern Time on Thursday, June 22.
• BOEM opened a 21-day public comment window for comments on the Exploration Plan itself.  This window closes at midnight Eastern Time on Monday, July 3.
• BOEM has 30 days within which it must evaluate the Exploration Plan, including a site-specific Environmental Assessment under the National Environmental Policy Act. By the end of the 30-day period BOEM may approve the EP, require modifications to the EP, or disapprove the EP.

While the Obama administration placed an indefinite hold on further leasing in much of the Beaufort Sea and other U.S. Arctic waters in December 2016, the Trump administration has expressed interest in reversing this decision in favor of expanded U.S. Arctic oil exploration and production.  The Arctic Ocean is home to significant fossil fuel resources, but environmental and logistical concerns have recently proved challenging. 

Whitestone hydrokinetic license surrendered

Despite efforts to offer a streamlined regulatory path for some demonstration hydropower projects, earlier this year the holder of a hydrokinetic pilot project license for a project proposed for the Tanana River in Alaska surrendered its license due to an inability to find financing. The case of the Whitestone Poncelet River-In-Stream-Energy-Conversion (RISEC) Pilot Project No. 13305 illustrates the Federal Energy Regulatory Commission’s hydrokinetic pilot project licensing process, the difficulties of testing and developing new hydropower technologies, and how the Commission handles pilot license surrender.

Whitestone Power and Communications, an assumed name of the Whitestone Community Association, had proposed the project as a 100-kilowatt demonstration of its proprietary hydrokinetic prototype technology. It was to be located on the Tanana River at its confluence with the Delta River, about 90 miles southeast of Fairbanks. A Poncelet undershot waterwheel and generator unit mounted on a floating platform, seasonally installed and moored to a cliff. Power produced would be supplied to the Golden Valley Electric Association grid.

The Federal Energy Regulatory Commission granted WPC a five-year pilot project license on October 19, 2012. In processing WPC’s application, the Commission used a hydrokinetic pilot project licensing process derived from from its Integrated Licensing Process. According to the Commission, the hydrokinetic pilot project licensing process was designed “to meet the needs of entities, such as Whitestone, who are interested in testing new hydropower technologies while minimizing the risk of adverse environmental impacts.” The Commission describes the goal of the pilot licensing process as “to allow developers to test new hydrokinetic technologies, to determine appropriate sites for these technologies, and to confirm the technology’s environmental and other effects without compromising the Commission’s oversight of the projects and limiting agency and stakeholder input.”

As outlined in a white paper prepared by Commission staff, a hydrokinetic pilot project should be: (1) small; (2) short term; (3) located in environmentally nonsensitive areas; (4) removable and able to be shut down on short notice; (5) removed, with the site restored, before the end of the license term (unless a new license is granted); and (6) initiated by a draft application in a form sufficient to support environmental analysis. After finding the WPC project met these standards, the Commission issued it a license in 2012. Article 301 of the license required the licensee to commence construction of the project works within two years from license issuance, i.e., by October 19, 2014.

Despite winning a license, the project was never built. In 2014, WPC asked for and received a two-year extension of the start-of-construction deadline, “due to unforeseen setbacks in obtaining the necessary financing to begin construction.” But in that order, the Commission reminded the licensee that, pursuant to section 13 of the Federal Power Act, the deadline for starting construction may only be extended once, for a period not exceeding two additional years. Therefore, the Commission noted its inability to grant any further extensions of time for the commencement of project construction.

But in September 2015 WPC applied to the Commission for surrender of its license. In its surrender application, WPC stated that it was unable to obtain the funding necessary to construct the project and had not constructed any project facilities.

In April 2016, the Commission granted WPC's surrender application without condition, citing the facts that the licensee had not commenced construction and that the project site remained unaltered.

The Whitestone project was among the first to use the Commission’s hydrokinetic pilot project licensing process. But despite receiving expedited regulatory treatment in licensing, financing challenges led the licensee to surrender its license before the project could be constructed. Some other proposed hydrokinetic projects have been canceled or put on hold, following licensure; earlier this year, the Commission accepted license surrender for a Washington tidal power project licensed as a 10-year pilot project, after the public utility district proposing it found it economically infeasible. Another project -- an ocean wave energy farm off the Oregon coast -- surrendered its pilot license
 in 2014.

Alaska tidal permit surrendered

Five years after applying for and receiving a preliminary permit to study a proposed Alaska tidal energy project, the project developer has surrendered that permit.

At issue is ORPC Alaska 2, LLC's proposed East Foreland Tidal Energy Project.  The developer first applied to the Federal Energy Regulatory Commission for a preliminary permit under Section 4(f) of the Federal Power Act on August 2, 2010. 

That application described a project site in middle Cook Inlet, a marine waterway of the northern Pacific Ocean. The proposed hydrokinetic project would lie offshore of the East Foreland, near the west coast of the Kenai Peninsula by Nikiski, Alaska.  The application described the site in middle Cook Inlet as offering a maximum tidal range of up to 9.20 meters, with geomorphology favorable to strong currents.  The application described the developer's intent to install a pilot or commercial project in a phased approach.

The FERC issued a first preliminary permit for the East Foreland project by order dated March 11, 2011.  As permitted, the East Foreland project would include a series of 150-kilowatt TideGen and/or 150-kW OCGen turbine-generator modules developed by ORPC, with a combined capacity between 5 megawatts (MW) and 100 MW, with an average annual generation between 13 and 340 gigawatt-hours.

Over the ensuing years, the permittee studied the site and the project and filed periodic reports to the Commission. The preliminary permit required the permittee to file a notice of intent and draft pilot license application within two years of the permit date, but ORPC requested and received a six-month extension. 

On March 3, 2013, the permittee filed a request for a successive preliminary permit for the East Foreland Tidal Energy Project.  The Commission granted a successive preliminary permit on June 16, 2014, describing a project with a combined capacity of no more than 5 megawatts.  Study and reporting activities continued.

But on December 11, 2015, the permittee filed a request for acceptance of its surrender of the East Foreland Tidal Energy Project's preliminary permit.  In that request, the permittee described its "significant progress in evaluating the feasibility of a tidal energy project at East Foreland, Alaska, over the past several years."

Yet the surrender request also described the headwinds that stalled the project:

Nonetheless, the strength of the conventional energy market in Alaska precludes timely integration of new technology, like tidal energy systems, and advancement of the Project at the pace established by the original Schedule of Activities. As a result, public and private funding sources have sought nearer-term market impact from their investments. This in turn has negatively affected ORPC’s ability to expeditiously gather site data during Alaska’s limited field season window and maintain pace with FERC milestones.

As a result, the request describes the permittee's decision to surrender the East Foreland tidal project's preliminary permit and "to continue our focus and dedication of resources towards technology optimization and development of near term market opportunities that are available to ORPC and its power system technology."

FERC requires licensure of Alaska hydropower project

What happens when federal hydropower regulators discover an unlicensed project subject to their jurisdiction?  A recent case involving a dam at a remote Alaskan fish hatchery ended with an order requiring the project owner to pursue licensure.

At issue is the Hidden Falls Lake Project, located within the Tongass National Forest on Kasnyku Bay on the eastern shore of Baranof Island near Sitka, Alaska.  The project is owned by the Alaska Department of Fish and Game, who installed a 250-kilowatt generator and related equipment in 1982 to power its Hidden Falls fish hatchery.  (A nearby larger Kasnyku Lake project contemplated by the federal government in 1969 never came to fruition.)

Most non-federal hydropower projects in the U.S. must be licensed by the Federal Energy Regulatory Commission.  Under section 23(b)(1) of the Federal Power Act, a non-federal hydroelectric project without a still-valid pre-1920 federal permit must be licensed if it:

(a) is located on a navigable water of the United States;
(b) occupies lands or reservations of the United States;
(c) utilizes surplus water or waterpower from a government dam; or
(d) is located on a stream over which Congress has Commerce Clause jurisdiction, is constructed or modified on or after August 26, 1935, and affects the interests of interstate or foreign commerce.

Part of the Hidden Falls Lake project -- the intake, penstock, 250-kW hydroelectric generator, powerhouse, and distribution lines -- are located on U.S. Forest Service lands. The Forest Service’s documentation states that a minor license application for the Hidden Falls Lake Project was filed with the Commission in 1981, but the Commission said it did not have any records of this application or of any subsequent Commission jurisdictional determination for this project.

But FERC did apparently know about the project.  In 1989, seven years after the project's generator was installed, the Commission initiated an investigation into the jurisdictional status of the project, suggesting it was "unlicensed" or "unauthorized."  Yet that unlicensed hydropower project investigation docket then went dormant until 2015.  Last year, the Forest Service informed the Commission that it had identified the project while conducting environmental reviews in support of a renewal of the Alaska agency's special use permit for the hatchery.  Thus the investigation resumed.

The Commission issued its final order in the case on January 28, 2016.  Because the project intake, penstock, hydroelectric generator, powerhouse, and distribution lines occupy public lands of the United States, the Commission concluded that the Alaska agency must obtain a license for construction, maintenance, and continued operation of the Hidden Falls Lake Project.  The Commission ordered the Alaska agency to file within 90 days a schedule for submitting a license application within 36 months.

If a small hydropower project on a remote Alaskan island is subject to FERC licensure, how many other unlicensed hydropower projects might be out there?  How many other unlicensed hydropower projects might there be on Forest Service or other federal lands?  While FERC investigations of unlicensed hydropower projects are relatively rare, with most years seeing only a handful of public active investigations, could there be other existing projects like the Hidden Falls Lake Project?

Federal grants support microgrids

The U.S. Department of Energy has awarded over $8 million in funding for 7 microgrid projects.  Will microgrids play an increasing role in the U.S. electricity industry?

Solar photovoltaic panels can serve as distributed generation for microgrids.

Microgrids -- localized grids capable of operating as energy islands using distributed generation, energy storage, and distribution wires, as well as able to connect to the broader utility grid -- can offer participants and society at large significant value.  These benefits can include increased reliability against storm damage and infrastructure damage, reduced emissions of carbon and other pollutants, and reduced costs.

The Energy Department runs a portfolio of microgrid activities ranging from direct research and development to building community support.  Most recently, the Department announced over $8 million in grant funding to support 7 microgrid projects.  The Department selected these projects based on their ability to develop advanced microgrid controllers and system designs for microgrids less than 10 megawatts:

• ALSTOM Grid, Inc.: about $1.2 million to research and design community microgrid systems for the Philadelphia Industrial Development Corporation and the Philadelphia Water Department, using portions of the former Philadelphia Navy Yard. 
• Burr Energy, LLC: about $1.2 million to design and build a resilient microgrid to allow the Olney, Maryland Town Center to operate for weeks in the event of a regional outage, and a second microgrid for multi-use commercial development in Maryland. 
• Commonwealth Edison Company (ComEd): about $1.2 million to develop and test a commercial-grade microgrid controller capable of controlling a system of two or more interconnected microgrids, serving civic infrastructure including police and fire department headquarters, transportation and healthcare facilities, and private residences. 
• Electric Power Research Institute (EPRI): about $1.2 million to develop a commercially-viable standardized microgrid controller that can allow a community to provide continuous power for critical loads. 
• General Electric Company (GE): about $1.2 million to develop an enhanced microgrid control system in Potsdam, New York, by adding new capabilities, such as frequency regulation. 
• TDX Power, Inc.: about $1.2 million to engineer, design, simulate, and build a microgrid control system on remote Saint Paul Island, an island located in the Bering Sea off mainland Alaska. 
• The University of California, Irvine (UCI): about $1.2 million for the Advanced Power and Energy Program at UCI to develop and test a generic microgrid controller intended to be readily adapted to manage a range of microgrid systems, and supporting the development of open source industry standards.

Each project also includes an awardee cost share ranging from 20 percent to about 50 percent.  Will the DOE funds lead to better and more widely adopted microgrids?

Hydrokinetic energy projects in 2014

Hydrokinetic energy projects generate electricity from moving water, capturing the power embodied in tides, waves, and currents without the use of dams.  Hydrokinetic energy resources are estimated to have a tremendous power potential -- according to one U.S. Department of Energy study, approximately 1,420 terawatt-hours per year, or approximately one-third of the nation's total annual electricity usage.  The technologies required are relatively new, do not have decades of operational experience, and remain relatively expensive.  Nevertheless, federal records show growth in hydrokinetic project development.

The Federal Energy Regulatory Commission regulates most hydrokinetic energy projects under its hydropower jurisdiction pursuant to the Federal Power Act.  Project developers may seek preliminary permits granting the right to study a particular site and priority to apply for a project license. 

Relatively few projects have received licenses to date.  In 2012, the Commission issued a pilot project license for the Roosevelt Island Tidal Energy project in the East River near New York City.  Last month, the Commission issued a pilot project license to the Public Utility District No. 1 of Snohomish County for a 600 kilowatt tidal project in Puget Sound, Washington.

As of last month, six projects have been issued preliminary permits that remain in effect:

• Ecosponsible, Inc.'s Niagara Community project, a 1.25 megawatt inland project proposed for the Niagara River in New York
• Ecosponsible, Inc.'s Niagara Community #2 project, a similar 1.25 megawatt inland project proposed for the Niagara River in New York
• Iguigig Village Council's Iguigig RISEC project, a 40 kilowatt inland project proposed for the Kvichak River in Alaska
• The Town of Edgartown, Massachusetts's Muskeget Channel Tidal Energy project, a 4.94 megawatt project proposed for the Muskeget Channel off the island of Martha's Vineyard
• Turnagain Arm Tidal Energy's Turnagain Arm Tidal project, a 240 megawatt tidal project proposed for Cook Inlet, Alaska
• Resolute Marine Energy, Inc.'s Yakutat project, a 750 kilowatt wave project proposed in the Gulf of Alaska

 As of March, another 15 applications for preliminary permits were pending before the Commission.

Renewables dominate new electric generating capacity

In September 2012, the United States added 433 megawatts of new utility-scale electric generating capacity - and according to a federal report, it all came from renewable resources.

The Federal Energy Regulatory Commission's September 2012 energy infrastructure update provides a summary of recent developments of natural gas, hydropower, electric generation, and electric transmission facilities.  For electric generation, the report provides a breakdown of newly installed capacity by resource type.

According to the report, 5 wind projects came online in September, totaling 300 megawatts of capacity:

• EDF Group’s 140 MW Phase 1 Pacific Wind in Kern County, California
• Forsyth Street Advisor LLC’s 57.6 MW Phase 1 Horse Butt Wind Farm in Bonneville County, Idaho
• KODE Novus I LLC’s 80 MW Phase 1 Novus Wind Farm in Texas County, Oklahoma
• Fire Island Wind LLC’s 17.6 MW Phase 1 Fire Island Wind Project in Anchorage Borough, Alaska
• Kodiak Electric Association’s 4.5 MW Phase 2 Pillar Mountain Wind project expansion in Kodiak Island Borough, Alaska

Additionally, 18 solar projects came online in September, totaling 133 MW of capacity.  Among these are a number of projects earning "largest" ranks:

• NRG Energy & MidAmerican Renewables, LLC’s 50 MW Phase 5 Aqua Caliente Solar Project expansion in Yuma County, Arizona came online.  The expansion brings the Aqua Caliente Project's operational photovoltaic capacity to 250 MW, making it currently the largest photovoltaic facility in the country.
• Zongyi Solar America’s 20 MW Tinton Falls Solar in Monmouth County, New Jersey, the largest photovoltaic project in New Jersey
• Southern Sky Renewable Energy LLC’s 5.6 MW Canton Landfill Solar Project in Canton County, Massachusetts, the largest solar facility in New England

The report indicates that no fossil fuel-fired generation came online last month.  The growth in renewable energy may be due to a variety of factors, including a rush to get wind projects built before the federal production tax credit expires at the end of the year, state renewable portfolio standards, and future projections about the cost of traditional fuels.  Nevertheless, wind and solar remain relatively small players in the nation's energy mix, with 4.43% of the nation's total generating capacity coming from wind and only 0.29% coming from solar.  Still, the growth of these resources illustrates recent investment's focus on the renewable power sector.

Commercial fishing and solar energy

Commercial fishing businesses tend to consume significant amounts of energy, but may be able to offset their energy expenses by turning to solar panels and other distributed electric generation.

The winter fishing fleet of Northeast Harbor, Maine.

According to the National Marine Fisheries Service, the U.S. commercial fishing sector landed $5.3 billion in seafood last year.  Alaska led the nation in total catch value in 2011, landing $1.9 billion in fish and shellfish.  Massachusetts came in second at $570 million, with Maine coming in third at $426 million.

Catching this seafood comes at a price.  Diesel and other marine fuels account for a significant fraction of commercial fishermen's expenses.  Onshore, electricity powers stationary facilities like freezers, refrigerators and pumps for holding tanks, with seafood processing operations consuming even more power.

The location of many commercial fishing businesses -- typically located on the coast, often on a pier or wharf exposed to the sun and wind -- may create an opportunity for fishermen to offset their energy costs by producing their own electricity.  One Maine lobsterman recently added a 10-kilowatt solar array to his wharf in Harpswell. Funded in part by an $11,750 grant through the U.S. Department of Agriculture's Rural Energy for America Program, last month Potts Harbor Lobster added 44 solar panels to two roofs on the Reversing Falls Lobster wharf in South Harpswell.

In addition to USDA REAP grants, additional incentives are available that may shorten the payback period for distributed generation projects at commercial fishing facilities.  For example, Maine's net energy billing law allows consumers to use solar or other distributed generation to effectively spin their electricity meters backwards.  Consumers in almost every state can use similar net metering programs to sell excess power back to the grid, offsetting their electricity bill.  Other states, like Massachusetts and New Jersey, allow consumers to produce and sell solar renewable energy credits (sometimes called SRECs) from grid-connected solar photovoltaic panels.  These SREC sales can create a significant revenue stream for people and businesses who develop qualified renewable power projects.

Not every site may be well-suited for distributed generation projects.  Given relatively high capital costs for many small renewable power projects, payback periods may be too long for some businesses to make the investment.  However, as the cost of electric transmission increases across the country, the traditionally self-reliant fishing industry may increasingly turn to solar energy and other distributed generation technologies.

Shell's US Arctic oil drilling starts, stops

Arctic waters are believed to be home to significant oil reserves, prompting Royal Dutch Shell PLC this week to start drilling the first new oil well in U.S. Arctic waters in more than 20 years -- but encroaching sea ice forced the drill ship off the site just a day later.

Despite its remote location and harsh climate, the Arctic is relatively rich in energy and mineral resources.  U.S. Arctic drilling occurred in the twentieth century, but no new wells have been drilled in the last two decades.  Shifting trends, including relatively high oil prices and a warmer Arctic climate (as evidenced by this summer's record low sea ice coverage in the Arctic), have increased the pressure on oil companies to expand Arctic production.

For the past six years, Shell committed about $4.5 billion to exploration for oil and gas reserves under the Outer Continental Shelf off Alaska.  Shell believes the region may host the largest untapped oil-bearing formation in the U.S., perhaps holding about 26 billion barrels of oil.  Environmental lawsuits and concerns over how any oil spill could be responded to have delayed Shell's drilling plans, but last month Shell obtained a permit from the federal Bureau of Safety and Environmental Enforcement to start preliminary drilling activities.  While the BSEE has not yet certified Shell's oil spill response barge, the preliminary permits allow the company to begin drilling pilot holes.

Last Sunday, crews aboard the Noble Discoverer began drilling at a site known as the "Burger" prospect in the Chukchi Sea about 70 miles off the Alaskan coast.  (Shell posted a Youtube video of the drill bit entering the water.) 

But even in a low-ice year, the Arctic climate is forbidding.  Yesterday, drilling stopped as sea ice approached the Noble Discoverer.  Reports indicated that a pack of ice about 12 miles wide, 30 miles long and up to 82 feet thick was about 105 miles away from the drill ship and drifting closer.  It may take several days for this ice pack to pass.

According to Shell, the Noble Discoverer will resume drilling once the ice moves on.  As the Arctic winter approaches, more and more ice should form in the Chukchi Sea.  Will Shell find the oil it expects?  Can it produce the oil safely in the icy Arctic?

Alaska proposes large new dam

The Alaska Energy Authority has filed key documents with federal regulators giving formal notice of its intent to build the proposed 600 megawatt Susitna-Watana Hydroelectric Project.  If this project is approved and built, it will be the largest hydroelectric project developed in the U.S. since 1966.

Plans to develop a large-scale hydropower project on the Susitna river have been considered for decades.  In 2010, the Alaska Legislature established a goal of providing half of the state’s electric power from renewable sources by 2025.  The Alaska Energy Authority, a public corporation of the state whose mission is to use Alaska's natural resources to produce electricity and lower costs, concluded that Alaska could not meet the 50% renewable goal without building a major new hydroelectric project.

On December 29, 2011, the Alaska Energy Authority filed a notification of intent to file an application for a hydroelectric license and a pre-application document with the Federal Energy Regulatory Commission.  FERC docketed the project as No. 14241.  (You can read these documents in FERC's eLibrary here.)

In those documents, the Alaska Energy Authority described the project as located about 180 miles north of Anchorage.  The dam itself would be large: 700 to 800 feet in height, and with a crest length of over 2,700 feet.  The dam would impound a 39-mile-long reservoir, flooding 20,000 acres and capable of storing about 2,400,000 acre-feet.  The Authority plans to install three 200 MW turbine-generator sets for a total installed capacity of 600 MW, but is considering up to 800 MW of capacity.

The Authority expects the FERC hydropower licensing process to take up to 6 years.  The size and impacts of the project make it attractive to some yet controversial to others.  Public comments are already being filed in the FERC docket.

Alaska's Susitna hydro project revived

A large hydroelectric project proposed by Alaska's public power authority is moving closer to reality.  With over 600 megawatts of electric generating capacity, the Susitna-Watana Hydroelectric Project would be the largest dam built in the U.S. since 1966, when the Glen Canyon Dam was built on the Colorado River in Arizona.  If built, the Susitna project would represent a return to both mega-scale hydro and state-backed hydroelectric development in the United States.

The Susitna River project has been under consideration for nearly 50 years, although environmental concerns and the relatively low cost of oil dampened interest in the project for much of that time.  Increasing fossil fuel costs, renewable energy targets, and interest in exploiting the state's sovereign resources have now led to a revival of the project.  In 2011, Alaska state legislators unanimously approved funding for the Alaska Energy Authority to pursue the project.

The Alaska Energy Authority (AEA) was created by the Alaska Legislature as a public corporation of the state, albeit with a separate and independent legal existence.  AEA's missions include reducing the cost of electricity in Alaska, and constructing, acquiring, financing, and operating projects that utilize Alaska's natural resources to produce electricity and heat.

Renewed interest in the Susitna project comes partly in response to Alaska's renewable portfolio standard law.  In 2010, the Alaska Legislature enacted House Bill 306, creating a goal that the state receive 50% of its electric generation from renewable and alternative energy sources by 2025.  The project could also produce low-cost electricity, with generation costs projected to be lower than natural gas over the life of the project, possibly significantly lower once the project's financing is paid off.


AEA now plans to follow the traditional process for licensing hydroelectric projects through the Federal Energy Regulatory Commission.  AEA is expected to file its pre-application document with FERC on December 29, 2011, with the license review process expected to take up to six years.


If the Susitna project is built, it will be a departure from the recent trend of dam removal.  Some observers have argued that the era of building large-scale hydroelectric facilities in the United States ended decades ago, but the Susitna project could reverse that trend.  Moreover, the Susitna project would be built by a sovereign state government, echoing historic federal efforts like the Tennessee Valley Authority and Bonneville Power Authority.

Biofuels power first commercial airline flight

Today marks the first U.S. commercial airline flight powered by biofuels.  United Airlines has selected a Boeing 737-800 for the route from Houston to Chicago.  The plane will be powered by Solajet, a fuel blend of 60 percent petroleum-based jet fuel and 40 percent biofuel produced by California-based algae producer Solazyme.


Biofuels appear poised to play an increasing role in the transportation sector.  Biofuels have traditionally included liquid fuels like ethanol (derived from corn or cellulosic sources) and biodiesel.  Biofuels typically rely on plants or algae to convert solar energy into chemicals that can be refined and modified to produce usable fuels.  The wood (biomass) burned in hearths and stoves around the world represents a very basic biofuel, but today's advanced biofuels can involve significantly more technology.  The U.S. Department of Energy is funding research and development efforts to produce "drop-in biofuels", which can be  used as additives or even replacements for liquid fuels like gasoline, diesel and jet fuels -- without requiring consumers or distributors to modify their engines and fuel distribution networks.

United Airlines is not the only carrier to take its biofuels experimentation live this week.  On Wednesday, Alaska Airlines will fly two commercial flights from its bases in Seattle and Portland, Oregon, to Washington, D.C.  Alaska Airlines' jets will be powered by a fuel blend composed of 20% biofuels from used cooking oil.  Alaska Airlines chose Dynamic Fuels as its supplier; Dynamic Fuels is a joint venture between food product giant Tyson Foods and synthetic fuel producer Syntroleum.

July 13, 2011 - US Senate considers hydrokinetic energy

Hydrokinetic energy -- generating electricity from tides, waves, and free-flowing rivers -- is drawing significant interest in 2011, with about 200 project sites far enough along to seek key federal regulatory approvals.  (For a look at the range of those projects, check out my previous blog entries on hydrokinetic energy.)

Hydrokinetic power in the US may soon get another boost, as the Senate is considering a bill to facilitate hydrokinetic projects.  Senator Murkowski of Alaska has sponsored S.630, also known as the Marine and Hydrokinetic Renewable Energy Promotion Act of 2011.  (You can find the text of the bill here.)

As drafted, the bill includes a Congressional finding that

(1) the use of marine and hydrokinetic renewable energy technologies can reduce contributions to global warming;

(2) marine and hydrokinetic renewable energy technologies can be produced domestically;

(3) marine and hydrokinetic renewable energy is a nascent industry; and

(4) the United States must work to promote new renewable energy technologies that reduce contributions to global warming gases and improve domestic energy production.

Based on these findings, S.630 goes on to provide a variety of support for hydrokinetic projects.  These include the creation of a competitive grant program for marine and hydrokinetic renewable energy technology research, development, and demonstration, as well as another grant program to help commercialize marine and hydrokinetic renewable energy.  Under current law (42 U.S.C. 17282), the US Department of Energy can award grants to support the construction of small hydropower facilities (15 megawatt capacity or less). While this incentive is currently limited to projects in Alaska, S.630 proposes to open it up to projects located anywhere in the country.  The current draft of S.630 includes funding through fiscal year 2014 for these programs.

The future of hydrokinetic energy in the US hinges on a number of variables.  How will S.630 be changed as it moves through Congress?  Will it be enacted into law?  How will new technologies change hydrokinetic project economics?  Depending on the answers to these questions, hydrokinetic projects may soon be helping us keep the lights on.

June 29, 2011 - hydrokinetic energy recap

In the past week, I've taken a look at how the Federal Energy Regulatory Commission regulates the development of hydrokinetic energy projects -- powerplants that produce electricity from the movement of water in forms like waves, tides, or undammed rivers.

A summer day at Preble Cove on Great Cranberry Island, Maine.

 Here's a quick recap of what we saw:

• Intro to hydrokinetics: a description of hydrokinetics, and examples of projects
• Permits and licenses: what kind of federal energy approvals do projects need?
• Issued preliminary permits for inland projects: mostly on the lower Mississippi River, but also Alaska, Arizona, and Michigan
• Issued preliminary permits for marine projects: mostly North Atlantic tidal, some Pacific wave-based
• Pending applications for preliminary permits: almost all for lower Mississippi, but also riverine in NY and NJ, and tidal in NJ and Massachusetts
• Issued licenses for hydrokinetic projects: one riverine project operating, one Pacific wave project surrendered
• Pending applications for licenses: one Pacific wave, one Maine tidal

 Up next: a closer look at what's going on with hydrokinetic energy in Maine.

August 11, 2010 - Damariscove Island; Alaskan gas supply

Uninhabited Damariscove Island, near Boothbay Harbor, Maine.  The ocean waters near Damariscove Island have been selected as a test site for offshore wind energy production.

Alaska is facing a dilemma over how to ensure continued gas supply to the Anchorage area.  For years, gas fields near Cook Inlet have produced enough gas to supply consumers in Alaska's most populous area.  However, production is declining so rapidly that some reports suggest a need for imports within the next five years.  Options include imports from Asia, or pipeline projects from the North Slope southward.  There are two pending international pipeline proposals -- TransCanada and Denali -- but it is not clear that those lines will be built, let alone whether they would include offramps for Alaskan consumers.  Serving Anchorage from a dedicated gas pipeline from the North Slope would be even more expensive for ratepayers.

Tomorrow night may be movie night for those following the Cape Wind offshore energy project.  See this Boston Globe interview with Robbie Gemmel, director of "Cape Wind: The Fight for the Future of Power in America."  Here is a link to his website, which he also calls "Cape Spin".  The movie has a sneak preview Thursday night in Dennis, MA.

The federal Blue Ribbon Commission on America’s Nuclear Future toured Wiscasset, Maine, yesterday, looking for solutions to the problem of how (and where) to store spent fuel and nuclear waste from the former Maine Yankee nuclear power plant.

July 29, 2010 - demand response; Alaska energy advisor challenged

Today's energy related snapshot: a truck hauling wood chips near the Capitol in Augusta, Maine. Woody biomass is one of Maine's major energy resources, and we see thousands of tons of it trucked across the state on a daily basis. After all, Governor Baldacci has called Maine the "Saudi Arabia of biomass".



Put on your policymaker hat and let's talk about the power grid. It is summer, and it is hot. In addition to running businesses and households as usual, people are using a lot of air conditioning. This places a large demand on the electric grid. Specifically, grid planners need to make sure there's enough generation available to cover the region's demand for electricity. Traditionally, this has included both baseload and peaking generation. Baseload generation serves the portion of electric demand that is constant throughout the year, while peaking generation is used less frequently to meet spikes in demand. In some cases, particularly where electric demand has flattened due to loss of industrial load, peaking units might not run even one day per year. (In New England, this generally doesn't disqualify them from receiving payments for the capacity value they provide. In the market makers' view, it isn't the peaking generator's fault that load diminished.)

In recent years, we've found another way to cover peak electric load without having to build an expensive new generator that may only run infrequently: demand response. In essence, demand response means covering electric load by having individuals or companies volunteer not to use power from the grid in response to peak demand conditions. In exchange, these demand response participants should be compensated -- not only for the energy they didn't use, but also for the value of the service they provide to the grid. Generally, this service has a value comparable to the corresponding amount of generation avoided. Demand response thus lowers electric rates and the cost of the electricity that is being provided into the system.

Alaska, like many states, is focusing its government on energy issues. Gov. Sean Parnell named former state senator Gene Therriault (whose district is "North Pole" - no joke) as his energy advisor -- not an unusual move. This occurred at about the same time Senator Therriault stepped down from elected office. However, there is a claim that the position of energy advisor was created during Therriault's term as an active legislator. If so, under the Alaska Constitution and state law, he could not take any state job created while he was in office for one year. An Anchorage Daily News editorial now calls for his resignation.

The Arizona Corporation Commission has adopted a strong energy efficiency and conservation standard. Arizona regulated electric utilities will be required to reduce the amount of power they sell by 22 percent over 2005 levels (adjusted for population growth) by the year 2020 through conservation and efficiency. They can take credit for efficiency projects funded since 2005. The Southwest Energy Efficiency Project led the charge for this measure; they project ratepayer savings of $9 billion over the next ten years. 2% of the savings must come from demand response.

Here's an interesting Time article on underground coal fires -- which are more widespread and emit more pollution than we may know.

In Maine, a $50,000 grant from Time Warner Cable will help fund a new energy efficiency education program at two island schools. The Island Institute is starting its "Energy for ME" program, designed to teach students about energy issues and how -- and why -- they should conserve. About 75 kids on Vinalhaven and North Haven at North Haven Community School and Vinalhaven School are expected to participate in the program next year.

3/16/10

Maine news in brief:
Governor Baldacci names a new LURC commissioner and reappoints 6 current members. LURC is Maine's Land Use Regulatory Commission, which rules on development plans in Maine's unorganized territory -- including the proposed Plum Creek development, and wind-power projects.

University of Maine names a new distance-learning director: Curt Madison, who has served at the University of Alaska - Fairbanks. Curious to see how this fits with the University's broadband plan.

Meanwhile Portland has applied to Google to be a test site for full-penetration super-fast internet.

Maple season is here, with Governor Baldacci tapping the ceremonial first tree.

Elsewhere:
29 governors "demand" a national renewable energy standard (or renewable portfolio standard). 10% by 2012? Many states, such as Maine, are already doing more.