Bye-bye BOEMRE, hello BOEM and BSEE

The federal agency with prime responsibility for ocean energy development has been shuffled yet again.  After just over a year of operations BOEMRE - the former Bureau of Ocean Energy Management, Regulation and Enforcement - has been replaced by two offices: the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE).

This reshuffling is the latest organizational change to the federal oversight of ocean energy development, but it is not the first.  Until 2010, the Minerals Management Service (MMS) regulated both conventional oil and gas production and renewable energy activity.  In the wake of the Deepwater Horizon oil spill incident, and criticism of how MMS operated, U.S. Secretary of the Interior Ken Salazar restructured MMS into BOEMRE.

Now, BOEMRE has been split in two, with the division occurring along functional lines.  BOEM describesitself as “responsible for managing environmentally and economicallyresponsible development of the nation’s offshore resources”.  BOEM’s functions include offshore leasing, resource evaluation, review and administration of oil and gas exploration and development plans, renewable energy development, National Environmental Policy Act (NEPA) analysis and environmental studies.

Under the new paradigm, BSEE is responsible for safety andenvironmental oversight of offshore oil and gas operations, includingpermitting and inspections, of offshore oil and gas operations.  BSEE exercises functions including the development and enforcement of safety and environmental regulations, permitting offshore exploration, development and production, inspections, offshore regulatory programs, oil spill response and newly formed training and environmental compliance programs.

March 29, 2011 - Delaware offshore wind site lease moves forward

Offshore wind in Delaware just got a boost, as the U.S. federal government is moving forward with a site lease with NRG Bluewater Wind.  This represents the first commercial wind lease under the “Smart from the Start” Atlantic Offshore Wind program.  Under that program, the Department of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is charged with streamlining the regulatory process for offshore wind projects.  An early step in the Smart from the Start process is BOEMRE's issuance of a request for interest (RFI) in obtaining commercial leases for the construction of wind energy projects on the Outer Continental Shelf (OCS).  Under the federal OCS Lands Act, before developers can lease sites from the government, BOEMRE must determine if there is competitive interest in developing projects in a particular zone of the OCS.  If two developers’ staked areas of interest fully or partially overlap, BOEMRE will determine that there is competitive interest in the area, triggering a competitive leasing process for that zone.  If developers’ interests do not overlap, BOEMRE may proceed with a simpler noncompetitive lease process.

For the Delaware OCS sites, BOEMRE's April 2010 RFI received only one qualified response: Bluewater Wind Delaware, LLC's proposal to site a project 11 miles east of Dewey Beach.

To see if any other developers were interested in Bluewater's proposed site, BOEMRE published a second notice in January 2011, which did not reveal any additional expressions of interest.  (You can find the public comments here.)  BOEMRE thus determined that there is no competitive interest for commercial wind energy development in this area of the Outer Continental Shelf, placing Bluewater's project on the faster non-competitive track.  This determination will soon be published in the Federal Register.

NRG, which joined with Bluewater in developing the Delaware project, has entered into an agreement to sell power from the project to Delmarva Power, Delaware's largest utility.  Next steps include moving forward with the noncompetitive leasing, which will entail several layers of environmental reviews, other regulatory approvals, and technical engineering for the project.

February 7, 2011 - $50 million more for offshore wind

Offshore wind just got another boost.   Today Secretary of the Interior Ken Salazar and Secretary of Energy Steven Chu released a joint National Offshore Wind Strategy, which bills itself as the first-ever interagency plan on offshore wind energy.  As part of this strategy, the U.S. Department of Energy envisions 10 gigawatts of offshore wind generating capacity by 2020 and 54 gigawatts by 2030.

That's not all: the Secretaries also announced up to $50.5 million in new funding for projects that support offshore wind energy deployment.  The plan includes three solicitations, proposing to award up to $50.5 million over 5 years, to promote offshore wind R&D and eliminate market barriers.  Up to $25 million will be available for technology development for wind turbine design tools and hardware.  Up to $18 million will be available for studies and research to identify and remove market barriers.  Up to $7.5 more million will bne used to fund R&D into wind turbine drivetrains.

The announcement also includes the designation under the "Smart from the Start" program of high priority Wind Energy Areas on the Outer Continental Shelf (OCS) offshore of Delaware, Maryland, New Jersey, and Virginia.  To reduce the burden on project developers, these areas will receive advanced environmental reviews by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).  If BOEMRE's review does not identify any significant impacts, leases could be available by the end of this year.