Looking for retail space in Waikiki? It could cost you $300 per square foot a year.

Ocean floor space between Maui and Oahu? You can lease an entire acre for $3 a year. Your realtor? Uncle Sam.

For the first time, the federal government will charge companies in Hawaii for placing renewable energy projects in its waters, which extend from three miles to 200 miles offshore.

Lease and royalty payments are typically associated with oil and natural gas companies operating in the outer continental shelf off the mainland, such as the Gulf of Mexico or offshore of California or Alaska. In the last 50 years, the federal government has collected $156 billion in payments nationwide, according to a report from the Interior Department.

But now, the federal government is stepping in when it comes to renewable energy projects, too — a result of the Energy Policy Act of 2005, passed under former President George Bush.

The law was designed to manage the anticipated increase in renewable energy projects being placed in federal waters, such as offshore wind farms, and its implications are just beginning to become clear. At the request of Gov. Neil Abercrombie, a task force of top local and federal officials began meeting last week to better understand the rules and how they’ll affect Hawaii.

“Federal jurisdiction was always there, but it was unclear how that was going to be managed or what the full impacts would be,” said Mark Glick, who heads Hawaii’s energy department and sits on the task force. “I think they have made it clear that it will have an impact. But at this stage it looks like it shouldn’t be overwhelming.”

Besides issues with leasing, the act aims to help manage a complicated regulatory framework and provide assistance to states in furthering energy goals, according to John Romero, a spokesman for the Bureau of Ocean Energy Management, which oversees leasing and income from federal offshore lands.

“If we are really serious about looking to the marine environment and resources we need to know where things are — sensitive ecosystems, marine reserves, where are the best resources for wave and wind energy, where are there culturally sensitive areas,” said Romero. “These are the types of things that we are working with the task force on.”

He said that the task force also provides a forum for sharing information on current and past ocean energy projects and jointly identifying information important to environmental analysis and permitting. The federal government could also share in the cost of environmental studies.

Projects in Hawaii that could come under federal oversight include wave energy projects and the proposed interisland cable system. Hawaiian Electric Co. is currently working on putting in place energy projects that can be sited on neighbor islands, with the electricity transmitted through undersea cables to Oahu, where energy demand is highest.

Ocean Thermal Energy Conversion (OTEC) projects, which are currently in the research stage in Hawaii and rely on the temperature differential between cold deep seawater and warmer surface temperature to generate energy, will still be regulated by the National Oceanic and Atmospheric Association, according to Romero. He said that NOAA had prior jurisdiction over these projects, which is not trumped by the 2005 law.

Hawaii hasn’t historically been the most receptive place when it comes to federal oversight. The state Department of Land and Natural Resources is currently objecting to NOAA’s proposed expansion of federal protections for the Hawaiian monk seal in waters around the main Hawaiian islands. And the state has fought the Federal Energy Regulatory Commission’s oversight of local waterways over the years with varying degrees of success — most recently it’s challenged the agency’s oversight of hydroelectric projects planned for Kauai.

But the federal government’s most recent incursion into local affairs, specifically the state’s push to transition to renewable energy sources, could prove beneficial, according to Ed Stern, CEO of Powerbridge, a Connecticut company that is planning to bid on an undersea cable project in Hawaii.

“The federal agencies are helpful and are not an obstacle in that they have dealt with these types of projects before, understand what is appropriate and customary and can be helpful to state agencies with similar missions,” he said by email. “To the extent that there are unique issues in Hawaii, it is good to have federal agencies involved early on.”

Abercrombie and the state energy office are pushing for the interisland cable system, the project most likely affected by the oversight and a cornerstone of the state’s energy plan. But the majority of the state’s energy projects will not be affected, according to Glick, because they’re not offshore. Currently, there are about 40 energy projects in Hawaii at various stages of development, according to the the state energy office.

“It definitely adds a bit more bureaucracy,” said Glick. “But it only exists for projects that go beyond the 3-mile state limit. Obviously, a lot of our agenda won’t be affected by the jurisdictional issues that the Bureau of Ocean Energy Management are reminding us they have.”

Follow Civil Beat on Facebook and Twitter. You can also sign up for Civil Beat’s free daily newsletter.

About the Author

Comments