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Minerals service OKs ocean energy test leasing off California, Florida

The Department of Interior's Minerals Management Service said July 23 it will proceed with ocean energy test area leasing by two companies at sites off California and Florida.

For another ocean energy site off California and three more off Florida, MMS said it would ask multiple applicants to collaborate, rather than compete, to use the sites on the Outer Continental Shelf for energy data collection.

In response to more than 40 applications for alternative energy research projects on the Outer Continental Shelf, MMS chose 16 potential ocean and wind projects in April, within five areas offshore of California, Delaware, Florida, Georgia, and New Jersey. (HNN 4/22/08) The agency invited additional parties to compete with the applicants to utilize the sites.

Based on responses to that invitation, MMS said July 23 it would proceed with consultation and analyses for non-competitive leasing of one site each in California and Florida where only one company applied to carry out ocean energy data collection and technology testing.

PG&E at California site; Aquantis at Florida site

MMS said it would proceed with non-competitive leasing procedures for Pacific Gas &Electric Co. to develop a wave resources data collection project in the Pacific Ocean off Mendocino County, Calif. No competing applications were submitted for that area. MMS said it would proceed with leasing, while working with PG&E and local stakeholders to refine the area and scope of proposed activities.

MMS said it also would proceed with non-competitive leasing procedures for Aquantis LLC/Aquantis Development Co. Inc. to develop an ocean current data collection project in the Atlantic Ocean off the southeast coast of Florida. No competing applications were submitted for that area.

The limited leases, envisioned under MMS' interim policy for alternative energy research, are to be for terms of five years and will not convey any right or priority for commercial development. They are to enable the lessees to collect information that would be useful for potential commercial projects under an MMS regulatory program.

Competitors asked to collaborate on contested sites

MMS found "overlapping interest" among applicants for one site in California and three in Florida. Due to timing, budget, and staffing constraints, MMS said it would not proceed with competitive auctions for the sites. Instead, it said it would ask competing applicants to collaborate to enable all parties to benefit in information gathering under non-competitive leases.

The contested California site, off Humboldt County in northern California, involved another wave resources testing application by Pacific Gas &Electric as well as an application by Marine Sciences. If the companies agree to collaborate, MMS said it would proceed with a non-competitive leasing process as in the Mendocino area.

PG&E previously obtained preliminary permits from the Federal Energy Regulatory Commission for both California projects, 40-MW PG&E Humboldt WaveConnect (No. 12779) and 40-MW Mendocino WaveConnect (No. 12781). Despite potential jurisdictional conflicts with FERC, the U.S. hydropower licensing agency, MMS issued proposed rules July 8 maintaining MMS is the lead federal agency for regulating energy projects on the Outer Continental Shelf. (HNN 7/10/08)

MMS said three potential ocean energy lease areas off the southeast coast of Florida also drew competing applications. The areas and competitors are: Lease Area 1, Oceana Energy Co. and Vision Energy LLC; Lease Area 2, Marine Sciences and Vision Energy; and Lease Area 4, Florida Power &Light Co. and Vision Energy.

Again, MMS said, it was investigating whether the competing applicants would agree to collaborate on resource data collection activities under joint non-competitive leases.

MMS added it would pursue a non-competitive leasing process for ten wind energy lease areas -� six off New Jersey, one off Delaware, and three off Georgia. Competing applications were not filed for those areas.

When final, MMS' proposed rules for alternative energy projects would govern all future commercial alternative energy activities on the Outer Continental Shelf. The agency said it expects to complete the final rule by December 2008.

The rules would apply to future commercial development in the areas leased under the interim policy. Limited leaseholders wanting to conduct commercial activities would require separate authorization under the final rule, MMS said.

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