The final rule sets the foundation for the off-shore development of renewable resources in the United States.

On April 22, 2009, the U.S. Department of the Interior’s Minerals Management Service (MMS) published a final rule that governs the development of renewable energy generation on the outer continental shelf (OCS) of the United States. The rule sets forth a number of new procedures, including:

  • Establishing a program to grant leases, easements and rights-of-way for renewable energy projects on the OCS
  • Permitting the previously unauthorized use of existing facilities on the OCS for the generation of renewable energy
  • Establishing the methodology by which revenues generated by the program will be shared among nearby coastal states and the federal government

MMS promulgated the rule pursuant to its new authority under the Energy Policy Act of 2005, under which MMS was given discretionary authority to regulate the production, transportation and transmission of renewable energy on the OCS. However, these rules do not regulate sales of electricity on the OCS, transmission of electricity on state lands, or licensing and exemptions for hydrokinetic projects on the OCS, over which the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction.

Specifically, the rules address:

  • The process for issuing an OCS renewable energy lease, including the types of leases the MMS will issue, the bidding and award process, and the lease terms
  • The process for granting rights-of-way, rights-of-use and easements for renewable energy generation and transmission
  • Renewal, assignment, suspension, termination and relinquishment of an OCS renewable energy lease or grant
  • Payments and financial assurance requirements, including revenue sharing and rents
  • Information and planning requirements, including site assessment plans, construction and operations plans, and general activities plans
  • Approval and procedures with respect to facility design, fabrication and installation
  • Requirements for facility environmental and safety management, inspections and assessments, including necessary safety management systems, maintenance procedures, inspection and incident reporting
  • The process for facility decommissioning
  • The rules and procedures for obtaining “Alternate Use Rights-of-Use and Easements,” which permit currently existing facilities to be used in connection with the generation of renewable energy (amongst other purposes)

Until recently, there has been significant ambiguity regarding regulatory and jurisdictional oversight of renewable energy generation on the OCS. The rules come on the heels of the Memorandum of Understanding (MOU) issued by FERC and MMS on April 9, 2009, which clarifies the scope of FERC and MMS’s jurisdiction over such oversight. When taken together, the rules and the MOU set the foundation for the off-shore development of renewable resources in the United States.