OREC Comments on The National Energy Supply Diversification and Disruption Prevention Act

Here's another reason to join OREC, if you haven't already.  Last week, OREC learned about this draft legislation, National Energy Supply Diversification and Disruption Prevention Act, sponsored by House Resource Committee Chairman Pombo.  At first blush, the bill didn't seem to be much more than another piece of Katrina-motivated, feel good policy.  But upon closer review, OREC realized that the bill contained several provisions that would help the ocean energy industry.  Specifically, the bill provides for expedited environmental review of renewable energy projects (by streamlining the existing NEPA process), helps fund environmental review of renewable projects (costs which the nascent ocean energy industry cannot bear) and authorizes use of decommissioned oil and gas platforms for offshore wind and wave energy demonstration and development. 

Once OREC realized the import of the bill, we sprang into action.  Within a few hours of learning about the proposal, we'd drafted a letter to the committee with comments and an expression of support.  Today, we've learned that the bill passed in committee.   We'll continue to track the legislation as it goes through the Senate process as well.  But that's the type of service that we provide for our industry.

OREC LETTER TO CHAIRMAN POMBO (9/27/2005)

Dear Chairman Pombo:

The Ocean Renewable Energy Coalition (OREC) submits these comments on the draft version of the National Energy Supply Diversification and Disruption Prevention Act. OREC is a newly formed trade association dedicated to promoting the development and advancement of offshore renewable energy technology such as ocean energy and offshore wind.

To begin, OREC thanks you for recognizing and including ocean technologies in the proposed legislation. The United States is falling behind in the race to capture the rich energy potential of our oceans. While other countries have already deployed viable, operating, power generating projects using the emission-free power of ocean waves, currents, and tidal forces, the U.S. is only beginning to acknowledge the importance of these technologies. We believe that your proposed legislation will benefit the offshore renewable industry by expediting the permitting process for new technologies and providing funding for environmental studies needed to enable federal and state resource agencies to carry out their mandates. Thus, below, we express our support for many provisions of the legislation, but also suggest several clarifications to ensure that all forms of ocean and offshore wind technology will benefit from your proposed bill.

A. Section 635

OREC supports the provisions of Section 635 which should expedite environmental review of offshore renewable projects. Notwithstanding that most ocean energy projects have a small footprint and minimal impacts, they remain subject to rigorous environmental regulation more suitable for larger power plants. This extensive regulation will suffocate emergence of ocean energy projects, which are sponsored by small companies that lack the financing to engage in extensive environmental procedures.

But even potentially larger offshore projects, such as offshore wind, also deserve lighter environmental regulation than conventional, fuel-consuming power plants.  Even large offshore developers cannot bear the cost of extensive environmental regulation intended for dirtier plants. In addition, these renewable resources create net environmental benefits by replacing fossil fuel plants that pollute both air and water. Thus, our nation has an interest in encouraging expedited and cost effective development of larger offshore renewables as well.

OREC is gratified that the definition of “renewable energy project” in Section 635(d) includes a project that uses “tidal forces to generate electricity.” While this definition seems broad enough to encompass all forms of ocean energy, we suggest the following more detailed definition as an alternative:

Ocean energy is defined as follows:

“Wave, current, tidal, and ocean thermal energy projects which utilize:

a. Ocean free flowing water derived from tidal, ocean currents, waves, estuary currents,

b. Ocean Thermal, or

c. Flowing water in rivers, lakes, man made channels and streams”

 This definition includes ocean wave, ocean current, ocean thermal, free flow in lakes (e.g., Great Lake
), rivers, man-made channels (e.g., aqueducts,) and streams, and tidal currents. It intends to exclude conventional hydropower that utilizes impoundments such as river dams, including “incremental” hydropower dependent on impoundments. It also excludes traditional “run of river” facilities. This more detailed definition ensures that the newly proposed regulations will apply not just to ocean based renewable energy but also to river-based projects that use technologies more common to ocean projects.

 B. Section 644

 OREC supports Section 644 which recognizes the considerable costs incurred by resource agencies with respect to review of renewable projects, such as wind, wave, current and ocean thermal on federal onshore and offshore lands. The lack of adequate funding for agencies impedes their ability to expeditiously process development applications while carrying out their respective statutory mandate to protect the environment. Lack of funding also means that many costs of environmental study and review are redistributed to developers, which in the case of ocean energy, are small companies with minimal resources.

 OREC anticipates that Section 644 will give agencies the support they need to review applications for renewable energy development. It will ensure that small developers are not saddled with the cost of environmental studies, many of which benefit the public at large. Thus, OREC wholeheartedly endorses these provisions.

C. Section 672

Section 672(b) authorizes use of decommissioned offshore oil and gas platforms for “any use authorized under section 8(p) of the Outer Continental Shelf Lands Act,” which would include development of offshore renewable projects such as ocean and wind energy. OREC supports this proposal. Offshore oil and gas platforms would provide an excellent test site for offshore renewable development. For example, platforms offer the potential to test hybrid offshore wind and wave systems; to examine the possibility of ocean or offshore wind powered desalinization, aquaculture or hydrogen production. We hope that once the Secretary of Interior adopts a program for use of offshore oil and gas rigs for renewable energy projects that Congress will appropriate funds for demonstration projects and other programs to further advance offshore renewable development in our nation. 

Conclusion

Ocean energy can play a significant role in our nation’s renewable energy portfolio. With the right support, the United States ocean energy industry can be competitive internationally. With the right encouragement, ocean renewable energy technologies can help us reduce our reliance on foreign oil and provide clean energy alternatives to conventional power generating systems.

Thank you for your continued support and leadership in this important matter of our national energy policy. If you would like additional information about offshore renewables or for OREC to provide testimony on the proposed legislation, please feel free to contact us.