1. Ocean and Tidal Energy Emerging Technologies: Permitting, Generation and Transmission Cherise M. Oram 2009 Environmental and Land Use Law Section Midyear Meeting and Seminar

2. What are the New Hydrokinetics? Ocean wave, current, tidal and in-stream current –80+ technologies worldwide –20+ being investigated in the United States Ocean wave/current: –West Coast, Hawaii, Alaska, New England –Single and multiple point absorbers –Oscillating water columns, change in pressure drives turbine –Overtopping devices (not favored in US) Tidal energy: –Washington, California, Maine, Massachusetts –Technologies do not rely on impoundments, but operate like submerged wind turbines –Pivot or change direction to take advantage of tide coming in and going out Industry expects 3 wave (on shore, near shore, off shore), 1 current, 1 tidal technology to prevail

3. Wave

5. Yes, it’s really happening Two FERC licenses issued –Hastings, Minnesota project on Mississippi River –Makah Bay project (surrendered but permitting completed) FERC site priority granted for: –11 wave projects –37 tidal/current projects (mostly Puget Sound, Alaska) –126 in-stream projects (Mississippi, Missouri & Ohio rivers)

6. Benefits Clean, domestic, renewable Close to major coastal cities and inland waterways Predictable by days (waves) and years (tides) Could double hydro production from 10% to 20% national supply Conservative estimates: –12,500 MW from in-stream (does not include constructed waterways) –10,000-20,000 MW from ocean wave/current (assumed only 15% of energy can be extracted)

7. Challenges Technology –Survivability: broken turbines, sunken buoys –Performance Costs –Estimated at 6 to 16 cents/kWh depending on technology wind has decreased from 40 to 4-6 cents/kWh over 20+ years Issues raised –installation impacts –shipping and navigation –crabbing and fishing –endangered species –marine mammals –migratory birds –electromagnetic field –recreation and public safety –sediment transfer/erosion

8. Regulatory Environment –Federal Power Act and/or Outer Continental Shelf Lands Act –Clean Water Act (sections 401 and 404) –Endangered Species Act –Magnuson-Stevens Fishery Conservation and Management Act –Marine Mammal Protection Act –Coastal Zone Management Act –National Historic Preservation Act –Migratory Bird Treaty Act –National Environmental Policy Act –Aid to Navigation permit –State water right –State removal-fill permit –State lease –State shoreline permit –State Coastal/territorial sea plans

9. Recent jurisdictional battle on OCS OCS => beyond 3 nm; 9 nm off Texas, Florida FERC claimed jurisdiction in 2003 EPAct 2005 granted MMS authority to lease, but reserved existing authorities MMS claimed “exclusive” jurisdiction MOU signed this month Projects need MMS lease and FERC license on OCS Agencies likely to conduct separate NEPA

10. FERC licensing process Framework for all other environmental approvals 3+ years of pre-application studies, consultations –Must perform reasonable studies requested by federal and state agencies, other stakeholders 2+ years post-application –“Pilot Project” process designed to take 6 months post-application For demonstration projects up to 5 MW Timing doesn’t account for other agency permitting Up to 50-year licenses; 5 year Pilot Project licenses Can get exemptions if under 5 MW License not required if off-grid and grid power not displaced

11. Minerals Management Service leases Final rule issued yesterday Renewable energy leases on Outer Continental Shelf –wind, wave, current, solar, generation of hydrogen Limited lease Commercial lease Financial assurance requirements Per acre and production fees....STILL WORKING ON HOW TO MARRY FERC and MMS PROCESSES

12. Addressing environmental uncertainties Information needs: –Marine mammal impacts Entanglement, migration, noise/vibration, haul out? –Sea birds Collisions, nesting? –Installation Alteration of sea bed? –Effects to shoreline? –EMF? –Fishing, crabbing, recreation?

13. Studies and adaptive management Must have sufficient analysis, description of known impacts or potential impacts to pass muster under FPA, NEPA, ESA, CWA 401, CZMA, etc. Initial projects: robust studies, open-ended adaptive management Use studies and adaptive management to confirm anticipated impacts and make any necessary changes to meet existing authorities Phase projects to grow as we develop information

14. Settlement Agreements FERC process tool Resolve all known issues, agree on studies Create committees or technical teams to adaptively manage FERC incorporates process as term of project license Gets projects in the water based on best available data –Ensures community “buy in” –Neither developer or agencies are “giving up” anything Agencies have no more or less authority Developers are not guaranteeing they’ll agree to changes in the future (preserve right to challenge) –Fosters communication, requires attempt to work together before moving to other options

15. State and local laws FPA preempts state and local laws concerning hydroelectric licensing Exceptions –proprietary water rights –state approvals required by federal law (e.g. 401 certification; CZMA concurrence) FERC may require compliance with state and local requirements that do not make compliance with FERC’s license impossible or unduly difficult. Despite preemption, FERC must consider state and local concerns, and state’s authority under CWA and CZMA is broad

16. Wave and Tidal Energy: Looking forward Technologies are being tested now More demonstration projects and small commercial projects Expect phased approach to installing full-scale commercial projects using adaptive management As we learn more about impacts (or lack thereof): –Developers and stakeholders can agree on more measures, so conditions can be more prescriptive –Continue monitoring, but fewer studies –Everyone gets more certainty

17. Cherise M. Oram (206) 386-7622 cmoram@stoel.com