Minerals Board Takes the Lead in Reviewing Wind Farm Plans

By IAN FEIN

The regulatory stage for the proposed wind farm in Nantucket Sound has shifted, after a federal environmental agency within the Department of the Interior quietly assumed lead authority over the controversial Cape Wind project.

As part of the recent energy act signed by President George W. Bush, the lead role was transferred to the Minerals Management Service from the U.S. Army Corps of Engineers. The Corps had spearheaded the regulatory review since Cape Wind Associates first announced plans four years ago to build the nation's first offshore wind farm in the shallow waters of Horseshoe Shoal.

Signed in early August, the energy act legislation also granted the Minerals Management Service the authority to lease federal waters for renewable energy projects, a provision that previously did not exist.

It remains unclear what effect the transition will have on the current permitting process for Cape Wind, but both supporters and opponents of the controversial project said this week that the change makes sense.

"From our point of view, this fills one of the bigger holes in the regulatory road map," said Mark Forest, an aide to Cong. William Delahunt, who had previously criticized the lack of a federal policy for offshore renewable energy projects.

Cape Wind officials said that while the shift may result in delays and additional reviews, it should also blunt some of the major criticisms of the project thus far - namely, that the Army Corps was working in a regulatory vacuum and was unsuited to the task at hand. Cape Wind spokesman Mark Rodgers this week praised the Army Corps for its work, but acknowledged that the Minerals Management Service - which already oversees oil and gas projects in federal waters - has more experience in the field.

"We thought the Corps of Engineers conducted themselves in a professional manner and undertook a comprehensive and rigorous review, and we expect the Minerals Management Service will do the same," Mr. Rodgers said. "But I suppose one difference between the agencies is that Corps officials were often quick to admit that they didn't have experience with energy projects, and clearly that's something the Minerals Management Service has."

Army Corps officials involved in the Cape Wind review testified before Congress on more than one occasion that they were uncomfortable with their role.

The Corps authority hinged on the 1899 Rivers and Harbors Act, which granted the organization jurisdiction over structures in navigable federal waters. The Army Corps assumed the lead role in the Cape Wind permitting process because no higher federal regulatory policy existed for such a project.

But with oil prices at an all-time high and energy becoming an increasingly important national issue, Congress this summer developed its first comprehensive, long-range energy policy in more than a decade. The Energy Policy Act of 2005, among many other things, handed authority for offshore renewable energy to the Minerals Management Service through an amendment to the Outer Continental Shelf Lands Act.

The amendment is written in broad and ambiguous language, and it took almost two months for the federal agencies involved to decipher its effect on the Cape Wind process. The Minerals Management Service issued a press release earlier this month with a small paragraph at the bottom that mentioned its new authority over Cape Wind.

Minerals Management Service spokesman Gary Strasburg said the bureau, which for the last four years has been reviewing the project as one of the Corps' cooperating agencies, is pleased with its new lead role.

"We feel like it's a good fit," Mr. Strasburg said this week. "We feel like it's something we can get a hold of and do something good with."

The Minerals Management Service now has until May 2006 to develop regulations to carry out its larger authority over offshore renewable energy projects. It must determine how to identify appropriate sites, seek competitive bids for leases, include other stakeholders in the process and share its lease revenues with nearby states.

Meanwhile, the Cape Wind permitting process has, for all intents and purposes, halted in mid-stream.

The Army Corps stopped reviewing the roughly 4,200 public comments it received last winter about its Cape Wind draft environmental impact statement, and is now transferring those comments to the Minerals Management Service, which will determine what additional information may be needed. The Corps will remain involved in the process with a reduced role.

Mr. Strasburg said Minerals Management Service hopes to streamline the transition and pick up where the Army Corps left off, but he acknowledged that the regulatory shift will result in at least short-term delays to the project, and more supplemental studies could be required.

The draft statement released by the Corps almost exactly one year ago was widely favorable to Cape Wind, but the Minerals Management Service and other Interior Department bureaus - including the U.S. Fish and Wildlife Service, National Park Service and U.S. Geological Survey - were highly critical of the statement.

Dr. Rodney E. Cluck of the Minerals Management Service's Environmental Assessment Branch questioned the objectivity of an early version of Corps' review, and in the Interior Department's official written comments to the Corps last February, other bureaus called the draft statement inaccurate, misleading and inadequate.

In its official comments, the Minerals Management Service also suggested that Cape Wind should have conducted a three-year, year-round study of bird species. Additional bird studies pose one of the longest potential delays to the project's permitting process.

Supporters and opponents of the project are now waiting to see how the Minerals Management Service handles its new role.

"We're anxious to see how they go about the process," Mr. Forest said. "We have received numerous verbal assurances from Department of Interior and the Minerals Management Service that they will be quite judicious as to how they exercise this authority and will act aggressively to be responsible stewards of the marine environment."

Cape Wind officials have said that every day of delay makes their project more expensive and reduces its benefits to residents of the region. The estimated project cost is at least $800 million and growing. Developers estimate the proposed 130 wind turbines would produce enough electricity to power roughly three-quarters of the Cape and Islands.

"We acknowledge there might be a temporary blip on the schedule - it's inevitable in the hand-over from one agency to another," Mr. Rodgers said. "But we're hoping that the Minerals Management Service is going to be able to hit the ground running and eventually reach the point that has been our goal along - where the regulatory agency has all the information needed to make a decision in the public interest," he continued.

"Because we're confident that if we can get to that point, it's going to be a no-brainer."