E8-8387. Notice of Nominations Received and Proposed Limited Alternative Energy Leases on the Outer Continental Shelf (OCS) and Initiation of Coordination and Consultation

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Announcement of nominations and processing priorities, inquiry on competing nominations for proposed limited alternative energy leases, and request for comments from interested and affected parties.

SUMMARY:

On November 6, 2007, the Minerals Management Service (MMS) published in the Federal Register (72 FR 214, pp. 62673-62675) a request for information and nominations of areas for leases authorizing alternative energy resource assessment and technology testing activities pursuant to subsection 8(p) of the OCS Lands Act, as amended.

We received over 40 nominations of areas for limited leases authorizing such activities relating to wind, wave, and ocean current energy resources on the OCS. The MMS has considered the nominations in light of relevant criteria for proceeding with the issuance of leases. As required by subsection 8(p), MMS must issue such leases on a competitive basis unless we determine after public notice that there is no competitive interest. Subsection 8(p) also requires MMS to coordinate and consult with relevant Federal agencies and affected State and local governments concerning the issuance of OCS alternative energy leases. This Notice provides the required public notice of proposed leases by announcing the nominations that MMS has decided to process as a priority and inquiring as to the existence of any competitive interest in these nominated areas. Also, with this announcement we intend to inform all interested and affected parties of these nominations and invite comments and information—including information on environmental issues and concerns—that will be useful in our consideration of the nominated areas for the issuance of limited alternative energy leases.

DATES:

The MMS requests any competing nominations and relevant comments and information by May 19, 2008. As it pertains to nominations, this is a strict deadline, and nominations received after the deadline will be not be considered by MMS for the purpose of determining competitive interest in the areas originally nominated. Other comments may be submitted within 60 days.

ADDRESSES:

You may submit your comments by one of two methods:

(1) Federal eRulemaking Portal: http://www.regulations.gov. Under the tab “More Search Options,” click “Advanced Docket Search,” then select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2008-OMM-0020 to submit public comments and to view supporting and related materials available for this rulemaking. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. The MMS will post all comments.

(2) Mailing your comments to the following address: Minerals Management Service, Offshore Minerals Management, Alternative Energy and Alternate Use Team, 381 Elden Street, Herndon, Virginia 20170-4817.

FOR FURTHER INFORMATION CONTACT:

Ms. Maureen Bornholdt, Minerals Management Service, Offshore Minerals Management, 381 Elden Street, Mail Stop 4080, Herndon, Virginia 20170-4817, [phone].

SUPPLEMENTARY INFORMATION:

Public Comment Policy. Before including your address, phone number, e-mail address, or other personal identifying information in your submission, you should be aware that your entire submission—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

Background. Under the interim policy described in the November 6, 2007, Federal Register Notice referenced above, MMS stated its intention to issue limited OCS alternative energy leases for a term of 5 years that would authorize resource assessment and technology testing activities, subject to specific terms and conditions. That Notice invited respondents who wish to acquire limited OCS alternative energy leases to nominate areas of interest by January 7, 2008. On December 14, 2007, MMS published in the Federal Register (72 FR 240, pp. 71152-71157) a Notice of new information collection that presented a proposed “Lease of Submerged Lands for Alternative Energy Activities on the OCS” and requested comments by February 12, 2008.

In addition to the nominations submitted by prospective lessees, MMS received numerous comments from proponents of OCS alternative energy development, including industry associations. Several of those comments stated that the interim policy should be revised to provide a right to commercial development for those who acquire leases for resource assessment and technology testing. As MMS stated in the November 6, 2007, Federal Register Notice, the interim policy is intended to permit the collection of resource assessment and technology testing data in support of future development activity without any priority right for future commercial development. It is designed to begin the process in the acquisition of needed information about a variety of OCS conditions under a relatively simple authorizing process. Conveyance of full commercial development rights would entail a much lengthier and complicated process than MMS is willing to undertake at this time under the interim policy.

Therefore, MMS reiterates and reaffirms its interim policy as originally formulated and proposed. Further, in the absence of promulgated rules, MMS does not plan to revise the interim policy or adopt a new policy to authorize commercial development of OCS alternative energy. We will continue to defer consideration of commercial OCS alternative energy projects until regulations governing alternative energy activities on the OCS are in place, except with respect to the two proposed projects that are the subject of the savings provision of section 388 of the Energy Policy Act of 2005.

Prospective lessees, both the original nominators and those responding to this Notice, must show that they are qualified to hold an OCS lease before MMS will consider their proposals. The qualifications for holders of OCS oil and gas leases set forth at 30 CFR 256.35 provide useful guidance in this regard to prospective limited alternative energy lessees. Limited alternative energy lease holders must also comply with all terms and conditions of their lease (see the December 14, 2007, Federal Register Notice of the proposed lease form). As stated in the November 6, 2007, Federal Register Notice proposing the interim policy, a limited lease will grant the lessee the exclusive right to conduct the activities identified in the lease on the designated lease area. Acquisition of a limited lease will not grant the lessee any rights with respect to the future acquisition of commercial development rights for the leased site.

Nominations. We received nominations on the Atlantic and Pacific Coasts. Most of the Atlantic Coast nominations are for meteorological and oceanographic data collection facilities that would support wind energy projects off of the coasts of Massachusetts, New York, New Jersey, Delaware, Maryland, Virginia, South Carolina, and Georgia. There also are nominations for areas off of the coast of Florida focused on ocean current information collection and technology testing. On the Pacific coast, the main interest is in wave energy, and nominations were received for areas off California, Oregon and Washington.

The MMS has decided to give priority consideration to issuing limited leases for: (1) Data collection activities relating to wind resources off of the coasts of New Jersey, Delaware, and Georgia; (2) data collection and technology testing activities relating to current resources off of the coast of Florida; and (3) data collection and technology testing activities relating to wave resources off of the coast of Northern California. These locations of proposed OCS alterative energy limited leasing are described as follows:

Adjacent state	Official protraction diagram	Block(s)	Resource
1. New Jersey	Hudson Canyon NJ 18-03	6451	Wind.
2. New Jersey	Wilmington NJ 18-02	6936 and 7131	Wind.
3. New Jersey	Wilmington NJ 18-02	6931	Wind.
4. New Jersey	Wilmington NJ 18-02	6738	Wind.
5. New Jersey	Wilmington NJ 18-02	7033	Wind.
6. Delaware	Salisbury NJ 18-05	6325	Wind.
7. Georgia	Brunswick NH 17-02	6074	Wind.
8. Georgia	Brunswick NH 17-02	6174	Wind.
9. Georgia	Brunswick NH 17-02	6126	Wind.
10. Florida	Bahamas NG 17-06	7103	Current.
11. Florida	Bahamas NG 17-05	7040 and 7090	Current.
	Bahamas NG 17-06	7001, 7002, 7003, 7004, 7005, 7006, 7007, 7051, 7052, 7053, 7054, 7055, 7056, 7057, 7104, 7105, 7106, and 7107
12. Florida	Bahamas NG 17-06	6702, 6703, 6704, 6705, 6706, 6707, and 6708	Current.
13. Florida	Miami NG 17-08	6040	Current.
14. Florida	Bimini NG 17-09	6001	Current.
15. California	Ukiah NJ 10-02	6405, 6455, 6456, 6504, 6505, 6506, 6554, 6555, 6604, 6605, 6654, 6655, 6704, and 6705	Wave.
16. California	Eureka NK 10-10	6031, 6032, 6033, 6080, 6081, 6082, 6083, 6130, 6131, 6132, 6133, 6179, 6180, 6181, 6182, 6229, 6230, 6231, 6232, 6279, 6280, 6281, 6330, and 6331	Wave.

The above locations refer to areas identified on the Official Protraction Diagrams that are available from each MMS regional office and online at http://www.mms.gov/​ld/​Maps.htm,, and the areas are identified as OCS blocks that are generally nine square miles in size. The nominated areas may be located on those maps or on a map viewer maintained by MMS at http://www.mms.gov/​offshore/​RenewableEnergy/​WebMappingViewer.htm.

The MMS reviewed in detail all nominations we received and established our priority areas for initial leasing in light of considerations such as technological complexity, timing needs, competing use issues, and relationships to relevant state-supported renewable energy activities, as well as considerations relating to limited available MMS staff and budget resources for processing and managing limited leases. We also took into consideration the desirability of authorizing the advancement of activities relating to each of the alternative energy resource types cited in the nominations—wind, current, and wave.

We chose proposed leasing locations off of the New Jersey and Delaware coasts primarily because the installation of data collection facilities relating to wind would support the concurrent efforts by those States to foster commercial development of wind power on the adjoining OCS. We also selected the area off of the coast of Georgia as a site for limited leasing related to wind because of the ongoing efforts of Southern Company and the Georgia Institute of Technology Strategic Energy Institute to acquire wind data to determine the technical and economic feasibility of locating an OCS wind energy project off of the coast of Georgia. Their efforts include the use of existing U.S. Navy meteorological and oceanographic data collection platforms and other lower elevation facilities for several years. They now propose to gather critical data at a substantially higher height.

We chose proposed leasing locations off of the coast of Florida, because the data collection and technology testing activities relate to ocean currents. The State of Florida has supported ocean current research through the Florida Atlantic University Center of Excellence in Ocean Energy Technology, which includes several academic, Federal Government, and private industry participants.

We chose two proposed leasing locations off of the coast of Northern California, specifically offshore Humboldt and Mendocino Counties, because the data collection and technology testing activities relate to ocean wave activities. The areas were nominated to conduct alternative energy resource assessment and technology testing with respect to the WaveConnect Projects proposed by Pacific Gas and Electric Company in each area. The Pacific Gas and Electric Company has sought or obtained permits from other Federal agencies and has applied to the California Public Utilities Commission for funds to conduct studies related to these projects.

It is important to note that MMS has not made any final decision to award leases in the areas identified in this Notice. We have identified these areas as our priorities for potentially authorizing limited leases under this interim policy, and through this Notice we are soliciting comments to determine if competitive interest exists in these areas. Nominations that were not selected for processing as a priority, as well as additional nominations received in the future, may be processed by MMS at a later date. We have chosen to process a lease or group of leases relating to each type of alternative energy resource in accordance with our staff and budget resources and associated timing considerations. Many of the nominations that were not selected for priority processing appear to entail complex technology (e.g., new deeper-water designs) or environmental or conflicting use concerns that would make processing them more difficult and time consuming.

Request for Competing Nominations. As stated above, the areas that have been nominated for proposed alternative energy limited leases are identified as blocks on the OCS Official Protraction Diagrams. While we received some nominations for areas smaller than OCS blocks, we have decided that the minimum size for limited leases issued under the interim policy will be a block or aggregation of blocks but will not be smaller than a block. Upon acquisition of such a lease, a lessee may contract the original lease area by relinquishing aliquot parts of the lease, a part as small as 1/16 of a block.

We request respondents who wish to compete for limited leases for the areas identified in this Notice to submit a nomination identifying the block(s) in which you are interested, the resource(s) you want to assess (e.g., wind, current, wave) and the technology you want to test. Also, provide a general description of the type and number of installations or technologies you would use and a project schedule for the activities you propose. Your nomination of an area must be consistent with the type of alternative energy resource identified for that area (e.g., a nomination off of the coast of New Jersey must pertain to data collection activities relating to wind resources). A nomination that is not consistent with the resource identified for a specific area will not be considered. The block(s) you wish to nominate should be identified using the information on Official Protraction Diagrams available as described above. Also, if you submit such a nomination, please provide the name, telephone number, and e-mail address of an individual for the MMS to contact.

With this request MMS is inviting nominations from parties who have not previously submitted nominations for the areas identified in this Notice and are interested in acquiring leases only for one or more of the blocks listed above. Those who have already submitted nominations for these areas should not resubmit the same nomination. A nomination received in response to the November 6, 2007, Federal Register Notice will be considered active unless the original nominator notifies MMS in writing that the nominator is no longer interested in obtaining a lease for the area originally nominated. If an original nominator is interested in competing for a lease area identified in this Notice and it was not the original nominator of that site, it must submit a new nomination for that lease area as provided in this Notice. If you have not already submitted a nomination and wish to submit one for an area listed above, you must submit by the deadline stated above. Late submissions will not be considered.

MMS Analysis of Nominations. The MMS will consider the nominations received in response to this Notice along with the original nominations. We will determine that there is competitive interest for any proposed lease area that receives more than one nomination and that there is no competitive interest for any area that receives only one nomination. In instances where our analysis determines that there is competitive interest, we will contact the competing nominators to explore options for collaboration or refinements of proposals before considering options for proceeding with a competitive auction. If we receive a competing nomination that only partially overlaps a multiple-block original nomination, we may determine that there is no competition, because in such a case the proposed lease area subject to competition would comprise the entire multiple-block original nomination. However, based on the information we receive in response to this notice, MMS may decide to issue a subsequent public notice requesting expressions of interest in the partial area where the competing nominations overlap separate from the remainder of the multiple-block area proposed for lease.

In instances where our analysis concludes that there is no competitive interest in a previously nominated area, we will contact the nominators and proceed with noncompetitive lease issuances as time and resources allow. However, we may first choose to explore options for collaboration in the interest of optimizing efficiency. The MMS will publicly announce the results of its analyses to determine competitive interest and its intentions to proceed with the issuance of leases.

Coordination and Consultation

The MMS invites all interested and affected parties to submit comments and information pertaining to the nominated areas listed above. We believe such input would be useful as we consider these areas for limited leasing, and we especially welcome information concerning geographic characteristics and environmental resources, as this will assist us in our environmental review processes. We seek information on the nominated areas relating to other ocean and seabed uses, relationships to onshore energy markets of the nominated areas, and applicable State and local laws and policies. We also request comments and suggestions on how we may best coordinate and consult comprehensively and efficiently to comply with applicable Federal, State, and local laws and policies. Officials of MMS intend to contact Federal, State, and local government counterparts during the comment period to discuss the nominations and the process for issuing limited OCS alternative energy leases under the interim policy. Such discussions may explore methods to foster intergovernmental coordination, including whether to establish intergovernmental task forces with Federal, State, and local entities for this purpose.

Dated: April 2, 2008.

Randall B. Luthi,

Director, Minerals Management Service.