In a major development for offshore renewable energy on the Outer Continental Shelf (OCS), Federal Energy Regulatory Commission (FERC) Acting Chairman Jon Wellinghoff and Interior Secretary Ken Salazar today announced an agreement between their agencies to facilitate the permitting and siting of renewable energy projects on the OCS. As outlined in a joint statement, FERC would have the primary responsibility to license hydrokinetic power projects on the OCS, including wave and tidal, while Interior and the Minerals Management Service (MMS) would have permitting authority over wind power projects.. Salazar stated that the agreement “will help sweep aside red tape so that our country can capture the great power of wave, tidal, wind and solar power off our coasts,” while Wellinghoff confirmed that the agreement “will help get renewable energy projects off the drawing board and onto the [OCS].” While this agreement appears to settle this ongoing jurisdictional dispute, the details have yet to be worked out.

The brief joint statement reaffirms Interior’s and MMS’s broad “responsibility for the permitting and development of renewable energy resources on the [OCS] .... [i]n particular, [its] permitting and development authority over wind power projects that use offshore resources beyond state waters.” It also expressly states that “FERC will have the primary responsibility to manage the licensing of such projects in offshore waters pursuant to the Federal Power Act, using procedures developed for hydropower licenses, and with the active involvement of relevant federal land and resource agencies, including the Department of the Interior.”

Wellinghoff and Salazar state they have requested that their agencies’ staffs prepare a short memorandum of understanding setting forth the principles outlined in the joint statement and “which describes the process by which permits and licenses related to renewable energy resources in offshore waters will be developed.” In addition, testifying this morning before the U.S. Senate Committee on Energy and Natural Resources and commenting on the new agreement with FERC, Salazar indicated that he expects the MMS will be able to move forward in the next couple of months to finalize the rules for offshore wind power development on the OCS.

This appears to be a win-win for both agencies. MMS maintains authority over offshore wind power projects and likely will have a cooperating agency role in hydrokinetic projects. FERC will have permitting and licensing authority over offshore hydrokinetic projects. Although there are no details at this point, this regime for hydrokinetic projects appears to resemble the regulatory structure applicable to liquefied natural gas deepwater ports, in which the U.S. Maritime Administration has lead agency authority over the siting and licensing of the projects, and in which MMS is a cooperating agency granting the appropriate leases and rights-of-way.

While this agreement undoubtedly will provide some regulatory certainty for many project developers going forward, how the two agencies actually flesh out their respective authority remains uncertain. In particular, in offshore locations where there are competing offshore wind and hydrokinetic proposals with overlapping land claims, there is no indication at this point how such claims will be resolved.