2011-3515. Renewable Energy Alternate Uses of Existing Facilities on the Outer Continental Shelf-Acquire a Lease Noncompetitively

AGENCY:

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior.

ACTION:

Proposed rule.

SUMMARY:

BOEMRE proposes to revise the regulations that pertain to noncompetitive acquisition of an Outer Continental Shelf (OCS) renewable energy lease. We are taking this action because the current regulations governing the noncompetitive acquisition of an OCS renewable energy lease initiated by BOEMRE and a request for a noncompetitive OCS renewable energy lease initiated by an unsolicited request are inconsistent. This rulemaking will make the two processes consistent with each other by eliminating a duplicative and unnecessary step in the noncompetitive leasing process, while continuing to provide for adequate public notice and review of leasing proposals as required by law.

DATES:

Comment Due Date: Submit comments on the proposed rule by March 18, 2011.

ADDRESSES:

You may submit comments on the rulemaking by any of the following methods. Please use the Regulation Identifier Number (RIN) 1010-AD71 as an identifier in your message. See also Public Availability of Comments under Procedural Matters.

• Federal eRulemaking Portal: http://www.regulations.gov. In the entry titled “Enter Keyword or ID,” enter BOEM-2010-0045, then click search. Follow the instructions to submit public comments and view supporting and related materials available for this rulemaking. BOEMRE will post all comments.
• Mail or hand-carry comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Regulations and Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 20170-4817. Please reference “Acquire a Lease Noncompetitively, 1010-AD71” in your comments and include your name and address.

FOR FURTHER INFORMATION CONTACT:

Timothy Redding at [phone].

SUPPLEMENTARY INFORMATION:

Background

BOEMRE originally published the proposed revision for comment as a direct final rule in the Federal Register on November 26, 2010. That document stated that if BOEMRE received a significant adverse comment concerning the rulemaking, it would withdraw the direct final rule and publish a notice of proposed rulemaking. BOEMRE did receive significant adverse comment on the direct final rulemaking and on January 25, 2011, published in the Federal Register a notice of withdrawal and statement of intent to reinitiate rulemaking by publishing this proposed rule.

The regulations at 30 CFR part 285 govern renewable energy leasing and alternate uses of existing facilities on the OCS. This proposed rule would revise the regulations at §§ 285.231 and 285.232. The regulations at § 285.231 address unsolicited requests for noncompetitive leases. The regulations at § 285.232 address the acquisition of noncompetitive leases in response to a Request for Interest (RFI) or a Call for Information and Nomination (Call). The process for awarding leases noncompetitively outlined in these two sections is currently inconsistent.

As currently written, § 285.231 allows the award of a noncompetitive lease after BOEMRE receives an unsolicited request for a noncompetitive lease, provided that BOEMRE determines that there is no competitive interest after publishing a single notice of a request for interest relating to the unsolicited request for a noncompetitive lease.

As currently written, § 285.232 provides that, after BOEMRE publishes an RFI or Call, if a respondent indicates interest in leasing an area for which no other party has indicated interest, BOEMRE may offer a lease through a noncompetitive process. However, the regulations require the publication of a second RFI notice to confirm the absence of competition before proceeding with the noncompetitive process. We believe that this requirement for a second notice is redundant and is at odds with the noncompetitive process prescribed for cases in which a party submits an unsolicited request for an OCS renewable energy lease, where BOEMRE is required to publish only a single notice. Eliminating this discrepancy and requiring only one RFI notice would make BOEMRE's leasing processes more streamlined and efficient while maintaining BOEMRE's obligation to notify the public of areas that may be leased, solicit public input regarding those areas, and determine whether competitive interest exists in acquiring such leases in the proposed area(s).

Accordingly, BOEMRE proposes to revise § 285.231(d)(1) to state that we will publish in the Federal Register a notice that there is no competitive interest. We would also revise § 285.232(c) to refer back to § 285.231(d) through (i) instead of referring back to § 285.231(b) through (i).

Comments on the Direct Final Rulemaking

BOEMRE received a total of eight comments in response to the direct final rulemaking published on November 26, 2010. All of the comments objected to the rulemaking, characterizing its effect as improper rushing by BOEMRE to allow offshore renewable energy leasing and development. Four comments took issue specifically with the direct final rulemaking process itself and called for a proposed rule and comment procedure. Five of the comments stated that the current wording of 30 CFR 285.231 and 232 should be retained. A majority of the commenters appeared to misunderstand the effect of the proposed revision, evidencing a belief that it would remove the requirement for public notice to determine competitive interest altogether. However, one comment, which appeared to accurately understand the effect of the rulemaking, recommended retention of the current wording, stating that, “[t]he current regulations provide an added level of protection by ensuring that the public has adequate notice of any requests for interest relating to proposals to construct offshore alternative energy projects, giving competitive interests the chance to participate and submit alternative bids and the public an opportunity to express concerns and make comments.”

BOEMRE has determined that it received significant adverse comment on the direct final rule, which was defined in the November 26 notice as “a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach or would be ineffective and unacceptable without a change.” It is therefore publishing this proposed rule for public comment.

However, BOEMRE believes that the intent and effect of the proposed regulatory revision were largely misunderstood by most of the commenters. This proposed rule would maintain adequate public notice of leasing proposals and would be sufficient for the purpose of determining whether competitive interest existed, while eliminating unnecessary, inconsistent, and inefficient repetition in the renewable energy leasing process when it is initiated by BOEMRE. BOEMRE will consider the eight comments already received as they relate to this proposed rulemaking unless they are withdrawn by the commenters, and those commenters are welcome to submit additional comments.

Procedural Matters

Regulatory Planning and Review (Executive Order (E.O.) 12866)

This proposed rule would not be a significant rule as determined by the Office of Management and Budget (OMB) and is not subject to review under E.O. 12866.

(1) This proposed rule would not have an annual effect of $100 million or more on the economy. It would not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

(2) This proposed rule would not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. The proposed rule is intended to eliminate redundancy and inefficiency.

(3) This proposed rule would not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients.

(4) This proposed rule would not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866.

Regulatory Flexibility Act

The Department of the Interior certifies that this proposed rule would not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The Department prepared a regulatory flexibility analysis for 30 CFR part 285, and concluded that the regulations will impact a substantial number of small entities, but will not have a significant economic impact on the small entities in comparison to the impacts on large entities. That analysis was discussed in detail in the Notice of Proposed Rulemaking for 30 CFR part 285 published in the Federal Register on July 9, 2008 (73 FR 39376).

The North American Industry Classification System (NAICS) code for the industries affected by this rule is 221119 (Other Electric Power Generation). The definition for this code is:

“This U.S. industry comprises establishments primarily engaged in operating electric power generation facilities (except hydroelectric, fossil fuel, nuclear). These facilities convert other forms of energy, such as solar, wind, or tidal power, into electrical energy. The electric energy produced in these establishments is provided to electric power transmission systems or to electric power distribution systems.”

It is possible that this proposed rule could eventually affect entities that produce hydrogen and fall under NAICS Code 325120 (Industrial Gas Manufacturing). The definition for this code is:

“This industry comprises establishments primarily engaged in manufacturing industrial organic and inorganic gases in compressed, liquid, or solid forms.”

Given the original findings of the regulatory flexibility analysis done for 30 CFR part 285, as well as the minor adjustment to the renewable energy leasing process that is contemplated, the proposed rule would not have a significant effect on a substantial number of small entities.

Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each Agency's responsiveness to small business. If you wish to comment on the actions of BOEMRE, call 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Allegations of discrimination/retaliation filed with the Small Business Administration will be investigated for appropriate action.

Small Business Regulatory Enforcement Fairness Act

This proposed rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq.). This proposed rule:

a. Would not have an annual effect on the economy of $100 million or more.

b. Would not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

c. Would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. The requirements would apply indiscriminately to entities intending to acquire a renewable energy lease on the OCS pursuant to 30 CFR part 285.

Unfunded Mandate Reform Act of 1995

This proposed rule would not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The proposed rule would not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.

Takings Implication Assessment (E.O. 12630)

Under the criteria in E.O. 12630, this proposed rule does not have significant takings implications. The proposed rule is not a governmental action capable of interference with constitutionally protected property rights. A Takings Implication Assessment is not required.

Federalism (E.O. 13132)

Under the criteria in E.O. 13132, this proposed rule does not have federalism implications. This proposed rule would not substantially and directly affect the relationship between the Federal and State Governments. To the extent that State and local governments have a role in OCS activities, this proposed rule would not affect that role. A Federalism Assessment is not required.

Civil Justice Reform (E.O. 12988)

This proposed rule complies with the requirements of E.O. 12988. Specifically, this proposed rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

Consultation With Indian Tribes (E.O. 13175)

Under the criteria in E.O. 13175, we have evaluated this proposed rule and determined that it has no substantial effects on federally recognized Indian tribes.

Paperwork Reduction Act (PRA)

This proposed rulemaking contains no new reporting or recordkeeping requirements; therefore, an OMB submission under the PRA (44 U.S.C. 3501 et seq.) is not required. The PRA provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information and assigns a control number, you are not required to respond. The revisions in this rulemaking refer to, but would not change, information collection requirements in 30 CFR part 285. The OMB approved the referenced information collection requirements under OMB Control Number 1010-0176 (expiration 3/31/2013).

National Environmental Policy Act of 1969

This proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment. BOEMRE has analyzed this proposed rule under the criteria of the National Environmental Policy Act (NEPA) and the Department's regulations implementing NEPA. This proposed rule meets the criteria set forth at 43 CFR 46.210(i) for a Departmental Categorical Exclusion in that this proposed rule is “* * * of an administrative, financial, legal, technical, or procedural nature; or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis * * *” Further, BOEMRE has analyzed this proposed rule to determine if it meets any of the extraordinary circumstances that would require an environmental assessment or an environmental impact statement as set forth in 43 CFR 46.215 and concluded that this proposed rule, being purely procedural, does not meet any of the criteria for extraordinary circumstances.

Data Quality Act

In developing this proposed rule, BOEMRE did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106-554, app. C § 515, 114 Stat. 2763, 2763A-153-154).

Effects on the Energy Supply (E.O. 13211)

This proposed rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required.

Clarity of This Proposed Regulation

BOEMRE is required by E.O. 12866, E.O. 12988, and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

(a) Be logically organized;

(b) Use the active voice to address readers directly;

(c) Use clear language rather than jargon;

(d) Be divided into short sections and sentences; and

(e) Use lists and tables wherever possible.

If you feel that we have not met these requirements, send us comments by one of the methods listed in the ADDRESSES section. To better help us revise the proposed rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

Public Availability of Comments

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can 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.

List of Subjects in 30 CFR Part 285

• Continental shelf
• Environmental protection
• Public lands

Dated: February 9, 2011.

Wilma A. Lewis,

Assistant Secretary for Land and Minerals Management.

For the reasons stated in the preamble, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) proposes to amend 30 CFR part 285 as follows:

PART 285—RENEWABLE ENERGY AND ALTERNATE USES OF EXISTING FACILITIES ON THE OUTER CONTINENTAL SHELF

1. The authority citation for part 285 continues to read as follows:

Authority: 43 U.S.C. 1331 et seq., 43 U.S.C. 1337.

2. Amend § 285.231 by revising paragraph (d)(1) to read as follows:

§ 285.231

How will BOEMRE process my unsolicited request for a noncompetitive lease?

* * * * *

(d) * * *

(1) We will publish in the Federal Register a notice that there is no competitive interest; and

* * * * *

3. Amend § 285.232 by revising paragraph (c) to read as follows:

§ 285.232

May I acquire a lease noncompetitively after responding to a Request for Interest or Call for Information and Nominations under § 285.213?

* * * * *

(c) After receiving the acquisition fee, BOEMRE will follow the process outlined in § 285.231(d) through (i).