Looming sequester threatens to slow progress on permitting
BOSTON – The Obama Administration's renewable energy program has authorized dozens of renewable energy projects on public lands and will hold the first-ever auctions for commercial wind development in the Atlantic this year, Secretary of the Interior Ken Salazar told offshore wind stakeholders at a conference in Boston today. Salazar noted that the rapid progress – as well as conventional oil and gas development on federal lands and waters – could be stymied by potential cuts under sequestration.
“We have made impressive gains, approving dozens of utility-scale solar, wind and geothermal projects in the West and transitioning from planning to commercial leasing for offshore wind,” Salazar told about 300 industry leaders in a keynote address at the Offshore Wind Power USA Conference. “The potentially devastating impact of budget reductions under sequestration could slow our economy and hurt energy sector workers and businesses.”
Salazar said he elevated renewable energy development to a departmental priority and Interior worked with industry, state, tribal and local partners to approve 34 projects on public lands in western states and to build an offshore regulatory framework in the Atlantic. The 18 utility-scale solar facilities, 7 commercial wind farms and 9 geothermal plants Interior green-lighted onshore would provide 10,400 megawatts when built, enough to power 3.4 million homes. The developers estimate that these projects would support 13,000 construction and operations jobs.
Mandatory budget cuts under sequestration, however, could delay Interior's ability to issue permits for new development, plan for new projects, conduct environmental reviews and lease new federal lands for future development – both for renewable and conventional energy. Delays in offshore oil and gas permitting in the Gulf of Mexico, for example, could affect more than 500 exploration plans and development documents that are anticipated for review this year.
Onshore, nearly 300 oil and gas leases issued for public land in western states could be threatened under sequestration, delaying prospective production and deferring payments to the states and the U.S. Treasury. Delays in coal leasing could defer $50-60 millions of dollars in revenue sharing among states and the Treasury. Sequestration could have serious consequences for the emerging domestic renewable energy industry. The cuts would mean fewer studies, fewer opportunities to obtain meaningful stakeholder input, and delays in identification of potential use conflicts. The result could be a slower pace in identifying and leasing wind energy areas in federal waters, adversely impacting Interior's ability to address offshore renewable energy management in a timely manner.
Under a ‘Smart-from-the-Start' strategy, Interior has identified six Wind Energy Areas along the Atlantic coast that contain the greatest wind potential and fewest conflicts with competing uses. Interior has already issued two non-competitive commercial wind leases, one off Massachusetts and another off Delaware, and is moving forward with the first-ever competitive lease sales for Wind Energy Areas off Virginia and Rhode Island/Massachusetts, which will offer nearly 278,000 acres for development. The areas proposed could support more than 4,000 megawatts of wind generation – enough electricity to power 1.4 million homes. Salazar also signed a lease and approved a Construction and Operations Plan for the 130-turbine Cape Wind project, the first commercial wind development slated for federal offshore waters.
Calling 2013 a pivotal year for the industry, Salazar said Interior's Bureau of Ocean Energy Management (BOEM) will propose additional commercial lease sales this year for Wind Energy Areas offshore New Jersey, Maryland and Massachusetts and is working to determine industry interest in three areas off North Carolina. BOEM also is processing a lease request from a company with Department of Energy funding to develop cutting-edge floating wind turbines in federal waters off Maine. Other demonstration projects are proposed off Virginia and Oregon.
In addition, BOEM is considering a mid-Atlantic wind energy transmission line that would 7,000 megawatts of wind turbine capacity to the grid. This Atlantic Wind Connection would run from southern Virginia to northern New Jersey, collecting power produced by wind facilities off New Jersey, Delaware, Maryland and Virginia and bringing it ashore.