Alternate Energy-Related Uses on the Outer Continental Shelf, 77345-77348 [E5-8119]

Agencies

• DEPARTMENT OF THE INTERIOR
• Minerals Management Service

[Federal Register Volume 70, Number 250 (Friday, December 30, 2005)]
[Proposed Rules]
[Pages 77345-77348]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-8119]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 285

RIN 1010-AD30


Alternate Energy-Related Uses on the Outer Continental Shelf

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Advance Notice of Proposed Rulemaking (ANPR).

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SUMMARY: The MMS is seeking comments on the development of a regulatory 
program to implement portions of the Energy Policy Act of 2005, Section 
388--Alternate Energy-Related Uses on the Outer Continental Shelf. 
Specifically, MMS is seeking comments regarding energy development from 
sources other than oil and gas and alternate uses of existing 
facilities.

DATES: MMS will consider all comments received by February 28, 2006. 
MMS will begin reviewing comments then and may not fully consider 
comments received after February 28, 2006.

ADDRESSES: You may submit comments on the notice by any of the 
following methods listed below. Please use the Regulation Identifier 
Number (RIN) ``1010-AD30'' as an identifier in your message. See also 
Public Comment Policy under Supplementary Information.
     MMS's Public Connect on-line commenting system, https://
ocsconnect.mms.gov. Follow the instructions on the website for 
submitting comments.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions on the Web site for submitting comments.
     E-mail MMS at rules.comments@mms.gov. Use the RIN in the 
subject line.

[[Page 77346]]

     Fax: 703-787-1546. Identify with the RIN.
     Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Attention: Rules Processing Team 
(RPT); 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please 
reference ``Alternate Energy-Related Uses on the Outer Continental 
Shelf--1010-AD30'' in your comments.

FOR FURTHER INFORMATION CONTACT: Amy C. White, 703-787-1665.

SUPPLEMENTARY INFORMATION:
    Public Comment Policy: All submissions received must include the 
agency name and RIN, ``1010-AD30'' for this notice. Our practice is to 
make comments, including names and addresses of respondents, available 
for public review. Individual respondents may request that we withhold 
their address from the record, which we will honor to the extent 
allowable by law. There may be circumstances in which we would withhold 
from the record a respondent's identity, as allowable by the law. If 
you wish us to withhold your name and/or address, you must state this 
prominently at the beginning of your comment. However, we will not 
consider anonymous comments. Except for proprietary information, we 
will make all submissions from organizations or businesses, and from 
individuals identifying themselves as representatives or officials of 
organizations or businesses, available for public inspection in their 
entirety.
    Background: Section 388(a) of the Energy Policy Act of 2005 (the 
Act) amended section 8 of the Outer Continental Shelf Lands Act (OCSLA) 
(43 U.S.C. 1337) to authorize the Department of the Interior (DOI) to 
grant leases, easements or rights-of-way on the U.S. Outer Continental 
Shelf (OCS) for the development and support of energy resources from 
sources other than oil and gas and to allow for alternate uses of 
existing facilities on the OCS. This authority will be exercised by the 
MMS. MMS is the agency within DOI that manages energy and mineral 
resources on the OCS.
    The Act requires MMS to grant leases, easements and rights-of-way 
on a competitive basis, unless there is no competitive interest. MMS is 
developing a program and regulations to implement certain portions of 
section 388(a) of the Act. Under this authority, MMS may issue leases, 
easements or rights-of-way if those activities:
     Produce or support production, transportation, or 
transmission of energy from sources other than oil and gas.
     Use, for energy-related purposes or other authorized 
marine related purposes, facilities currently or previously used for 
activities authorized under the OCSLA.
    The Act does not supersede any existing restrictions on OCS 
activities, including existing deferrals by Presidential withdrawal or 
congressional moratoria for oil and gas production-related activities, 
and does not apply to areas designated as marine sanctuaries, national 
parks, national wildlife refuges, and national monuments. The Act also 
authorizes the issuance of leases, easements or rights-of-way for 
activities that support exploration, development, production, or 
storage of oil or natural gas and for activities that support 
transportation of oil or natural gas, excluding shipping activities. 
These provisions are not addressed in this ANPR and will not be 
included in this planned rulemaking. MMS will address these activities 
through additional rulemaking, as needed.
    MMS anticipates proposals for various types of energy development 
projects on the OCS from sources other than oil or natural gas and 
alternate uses for the OCS, under the Act. MMS anticipates that the 
majority of the applications received for non-oil and gas development 
projects will be for the development of renewable energy. Possible 
sources of renewable energy include, but are not limited to:
     Wind
     Wave
     Current
     Solar

We also would like comments on types of energy that are considered to 
be alternative energy but not renewable energy.
    Alternate uses of existing facilities may include, but are not 
limited to:
     Offshore aquaculture
     Research
     Education
     Recreation
     Support for offshore operations and facilities
     Telecommunications facilities

Although the Act authorizes MMS to permit alternate uses of existing 
OCS facilities, MMS is not seeking the authority over activities such 
as aquaculture, but only the decision to allow platforms to be 
converted to such uses, if the appropriate agency approves the 
underlying activity.

Program and Regulation Development

    MMS interprets the authority granted in section 388(a) of the 
Energy Policy Act of 2005 to issue leases, easements or rights-of-way 
as also providing MMS authority to regulate or permit the activities 
that occur on those leases, easements or rights-of-way, if those 
activities are energy related. MMS is developing a comprehensive 
program and regulations to manage renewable and other alternate energy 
projects and to permit alternate uses of existing OCS facilities, as 
authorized in section 388(a) of the Energy Policy Act of 2005. 
Objectives of the new program are to provide access to the OCS for such 
projects in a way that balances competing and complementary uses of 
offshore acreage; takes into account the evolving nature of the energy 
industry; and provides a fair return to the United States for access to 
the OCS.
    MMS will require that all authorized operations move from proposal 
to development in a timely manner. MMS regulations will govern projects 
from proposal through the development process, operations, and end of 
life. MMS will monitor and enforce compliance. MMS promotes using the 
best available and safest technology. Contingency planning for 
technology failure, human factors, or extreme offshore events will be 
required.
    MMS will involve stakeholders throughout the program and regulation 
development process. We will coordinate with and consult state 
governors, local government executives, and other Federal agencies 
concerning activities that may affect them. MMS is interested in 
developing processes that are clear to all stakeholders.
    To assist MMS in developing this new program and implementing 
regulations, we are requesting public comments. We will consider these 
comments while developing proposed regulations. To facilitate 
commenting we have identified five major program areas, listed below, 
with coordination and consultation an important aspect of all of the 
program areas. We will discuss each area individually and provide a 
list of general issues followed by specific questions for each program 
area. These lists and questions are not all inclusive, but are intended 
to provide you with ideas and a framework for commenting.

Program Areas

     Access to OCS lands and resources
     Environmental information, management, and compliance
     Operational activities
     Payments and revenues
     Coordination and consultation
    Please indicate which program area your comments address. If your 
comments cover issues outside of the program areas, please identify 
them as ``other.''
    1. Are there regulatory regimes, either in the U.S. or abroad, that 
address

[[Page 77347]]

similar or related issues that should be reviewed or considered as MMS 
moves forward with the rulemaking process?

Program area: Access to OCS Lands and Resources

    Description: There are several methods authorized by the statute 
for providing access rights to the OCS, including leases, easements and 
rights-of-way. All of these methods usually require certain pre-
qualification measures, such as a showing of financial capability to 
carry out the proposed project.
    The MMS will require a defined schedule for action and terms and 
conditions to maintain the interest granted. In addition, approval may 
be contingent on the receipt of certain data and information.
    General issues: Please provide information on how MMS can best:
    A. Provide access for resource and site assessment.
    B. Issue the appropriate instrument (e.g., leases, easements, 
rights-of-way).
    C. Solicit interest for development projects.
    D. Identify terms and conditions of use such as:
    Issuance.
    Duration.
    Assignment of rights.
    Suspensions and cancellation of rights.
    Limitation of rights.
    E. Identify geographical areas of interest for:
    Resource and site assessment.
    Development feasibility.
    F. Ensure fair competition.
    G. Process permits and applications.
    H. Process pre-application resource assessments.
    I. Allow concurrent developments.
    J. Minimize multi-use conflicts .
    Specific questions:
    2. Possible development scenarios include phased access rights, 
which would allow for resource and/or site assessments and research 
prior to securing additional access rights. Rights could be permitted 
on a case-by-case basis. Development rights would be secured by a 
competitive process. An alternative would be to require that interested 
parties secure the access rights to an area prior to conducting 
assessments and research. Please comment on these possible options.
    3. In cases where applicants or interested parties propose 
activities that would foreclose competing future uses, how should MMS 
estimate ``a fair return,'' especially if the competing uses would 
likely be public uses?
    4. What constitutes a geographical area of interest?
    5. What assessments should we require prior to competition?
    6. How should MMS structure the competitive process and the 
application process used to issue OCS access rights? Should MMS auction 
access rights or engage in direct negotiation?
    7. Should MMS take a broad approach to developing a program, or 
should efforts be targeted to specific regions?
    8. How should MMS consider other existing uses when identifying 
areas for access?
    9. How should MMS balance existing uses within an area with 
potential wind and current energy projects?
    10. Should MMS require permits for collecting data from vessels? 
Should we consider this information proprietary? What criteria should 
we use for holding the information proprietary?
    11. What criteria (e.g. environmental considerations, energy needs, 
economics) should MMS consider in deciding whether or not to approve a 
project? What criteria should MMS consider for different competing 
projects (i.e. wind versus current) for the same site?

Program Area: Environmental Information, Management, and Compliance

    Description: Environmental management systems and review will be 
critical components of any activity in the new program. Environmental 
management systems must address all phases of planning and development, 
on-going operations, and removal of facilities associated with the new 
program. The new program will require identifying mitigation measures, 
monitoring programs, developing methods of validation and verification; 
establishing roles and responsibilities; and developing procedures for 
determining mitigation effectiveness, all of which are components of an 
environmental management system. The environmental management system 
will rely on an adaptive management strategy that gathers and uses 
information, including monitoring and evaluation of activities and 
their environmental consequences. Based on the results of this analysis 
and a determination of the effectiveness of the mitigation measures, 
revised or new mitigation measures could be implemented. The new 
regulations will require compliance with all pertinent environmental 
laws and regulations.
    General issues: Please provide information regarding:
    K. Information requirements needed for environmental management 
systems for any project.
    L. Assessments and studies of risks and impacts (site-specific and 
cumulative) associated with offshore energy and alternate use projects.
    M. Examples of best practices for environmental compliance, 
monitoring, and effectiveness being used in the U.S. and elsewhere.
    N. Balancing environmental considerations with national energy 
needs.
    Specific questions:
    12. What types and levels of environmental information should MMS 
require for a project?
    13. What types of site-specific studies should MMS require? When 
should these studies be conducted? Who should be responsible for 
conducting these studies?
    14. What should be the goals and objectives of monitoring, 
mitigation, and enforcement?
    15. What types of impacts are of concern? What are effective 
approaches for mitigating impacts? How can mitigation effectiveness and 
compliance with Federal environmental statutes be assessed?
    16. What regulatory program elements lead to effective enforcement 
of environmental requirements?
    17. How should environmental management systems be monitored (by 
the applicant, the MMS or by an independent third party)? What should 
be the MMS roles versus the roles of industry for ensuring appropriate 
oversight and governance?

Program Area: Operational Activities

    Description: Operational activities address all aspects of the 
program from the application through project assessment, development, 
installation, and production, to end of project life and removal of 
facilities. Inspections, monitoring, and enforcement are conducted 
throughout the entire project life. Risk analysis, engineering, 
studies, and research occur as needed.
    General issues: Please provide information on:
    O. Permitting pilot projects.
    P. Ensuring human health and safety on and adjacent to the project 
site.
    Q. Protecting environmental resources during construction, 
production, and removal.
    R. Identifying design and installation requirements associated with 
new projects and modification of existing facilities.
    S. Identifying production requirements as a component of diligence.
    T. Managing end of life and facility removal.

[[Page 77348]]

    U. Conducting oversight responsibilities (e.g., inspection, 
monitoring, enforcement).
    V. Identifying technology assessment and research needs.
    W. Preventing waste.
    X. Conserving resources.
    Specific questions:
    18. What options should MMS consider as alternatives to facility 
removal? Are there unique issues (such as liability) associated with 
those options?
    19. What engineering challenges should be considered when operating 
in an OCS environment?
    20. What safety issues exist when operating an energy production 
facility on the OCS?
    21. How should operational activities be monitored (e.g. annual on-
site inspections with verification of operating plans)? Is there an 
appropriate role for the applicant and independent third party 
certification agents? Describe existing models that could serve as a 
prototype inspection and monitoring program.
    22. Are there special considerations that MMS should examine in 
developing an inspection program that covers a diverse set of renewable 
production facilities? If so, what are they?

Program Area: Payments and Revenues

    Description: MMS has the responsibility to ensure a fair return to 
the United States for the use of any lease, easement, or right-of-way 
granted. The MMS is required to establish bonus bids, rentals, fees, 
royalties, or other payments to ensure that return. Additionally, cost 
recovery fees may be collected to compensate for the administrative 
costs of providing various services. Developing a payment and revenue 
structure, as well as appropriately designing fiscal terms applicable 
to energy and alternate use projects, requires additional information.
    General issues: Please provide information on:
    Y. Bonus bids.
    Z. Rentals.
    AA. Royalty terms.
    BB. Fees, including cost recovery fees or other payments.
    CC. Assessing value/benefits and impacts, Public, Private.
    DD. Valuing leases, easements or rights-of-way.
    EE. Comparable fiscal systems.
    FF. Surety bonds.
    Specific questions:
    23. What should the payment structure be designed to collect? 
Should payments be targeted at charging for use of the seabed? Should 
payments try to capture the opportunity costs of other activities 
displaced by the activity? Should the payment structure be designed to 
capture a portion of the revenue stream, and if so, under what 
circumstances?
    24. Offshore renewable energy technologies are in their infancy. 
Should the payment structure be designed to encourage the development 
of these activities until the technologies are better established?
    25. What methods are used by the renewable energy industry to 
quantify the risk and uncertainty involved with estimating the size of 
a renewable energy resource, and evaluating its profitability?
    26. What measures of profitability are commonly used as renewable 
energy investment decision criteria? How do bonus bids, rents, 
royalties, fees and other payment methods impact the profitability of 
these projects?
    27. Are there economic models available to calculate the 
profitability of renewable energy proposals?
    28. Increased reliance on renewable energy offers both economic and 
environmental benefits. What are the public benefits to society and do 
they differ from market driven benefits?
    29. In section 8 (p) of the OCSLA as amended by Section 388 of the 
Energy Policy Act, the Secretary must require the holder of a lease, 
easement or right of way granted under that subsection to furnish a 
surety bond or other form of security. What options should MMS consider 
to comply with this requirement?

Coordination and Consultation

    Description: Section 8(p) of the OCSLA, as amended, includes 
several provisions relating to coordination and consultation with 
interested and affected parties. Those provisions call for coordinating 
and consulting with state governors or local government executives 
concerning activities that may affect them, developing and implementing 
regulations in consultation with certain Federal agencies and the 
governors of affected states, and ensuring that activities are carried 
out in a manner that provides for coordination with relevant Federal 
agencies. MMS views these requirements as essentially covering all 
aspects and phases of the non-oil and gas energy and alternate use 
program established by the Energy Policy Act of 2005.
    Questions relating to coordination and consultation:
    30. While MMS considers this ANPR an appropriate start at 
consultation with interested and affected parties, what other efforts 
could be undertaken at this early stage of program development?
    31. Should a broad approach be taken to developing a program or 
should efforts be targeted to specific regions with commensurate 
coordination and consultation?
    32. Would the establishment of Federal/state cooperatives for 
targeted areas be useful? Similar to the process for OCS oil and gas 
program formulation, should we solicit comments on which areas of the 
OCS should be included or excluded from the program? After establishing 
where there is consensus in support of program activities, should 
coordination and consultation efforts be directed to those areas? 
Conversely, should such efforts be curtailed or abandoned for areas 
recommended for exclusion?
    33. What are the critical stages (e.g. site evaluation, 
application, competitive sale) for consultation with affected parties?
    34. Should procedures for consulting with interested and affected 
parties be codified in the regulations? In general? In detail?
    35. What processes can MMS use to provide for balance between 
consultations and the time and burden to the projects?
    36. Are there specific aspects of the new ROW rule issued by the 
Bureau of Land Management that should be reviewed by MMS for 
consideration in its rulemaking?
    MMS seeks responses to the questions, and comments as to which 
option(s) may be considered the most effective and efficient. After 
analyzing the comments received from this notice, MMS will determine 
how to proceed. MMS encourages all interested parties to respond to 
these questions and to provide comments on any aspect of this program.

    Dated: December 7, 2005.
Walter D. Cruickshank,
Acting Director, Minerals Management Service.
[FR Doc. E5-8119 Filed 12-29-05; 8:45 am]
BILLING CODE 4310-MR-P