[SEMCO] [Fwd: Energy Policy Act of 2005]

Mon Aug 22 08:51:31 EDT 2005

National Sea Grant Law Center
Legislative Announcement

August 2005
Energy Policy Act of 2005

On August 8, 2005, President George W. Bush signed into law the Energy 
Policy Act of 2005 (H.R. 6), a
massive bill intended to strengthen U.S. energy production, including 
nuclear, oil and gas, coal, and wind
power. The first comprehensive national energy legislation since 1992, 
the Act contains several provisions of
particular importance to coastal resource management. This fact sheet 
discusses only a few sections of the
Act. The complete text and a summary produced by the Congressional 
Research Service are available at
http://thomas.loc.gov/ .

LIQUEFIED NATURAL GAS
The Act amends 15 U.S.C. § 717(b) and expands the scope of the Natural 
Gas Act “to the importation or
exportation of natural gas in foreign commerce and to persons engaged in 
such importation or exportation.”
The Act also grants the Federal Energy Regulatory Commission (FERC) “the 
exclusive authority to approve
or deny an application for the siting, construction, expansion, or 
operation of an LNG terminal.” LNG
terminals include
all natural gas facilities located onshore or in State waters that are 
used to receive, unload,
load, store, transport, gasify, liquefy, or process natural gas that is 
imported to the United
States from a foreign country, exported to a foreign country from the 
United States, or
transported in interstate commerce by waterborne vessel, but does not 
include—
(A) waterborne vessels used to deliver natural gas to or from any such 
facility; or
(B) any pipeline or storage facility subject to the jurisdiction of the 
Commission under
section 7.
The amendments to the Natural Gas Act do not affect the rights of 
coastal states under the Coastal Zone
Management Act (CZMA), the Clean Air Act or the Clean Water Act. 
Governors are required to designate a
state agency to consult with FERC during the application process on 
State and local safety considerations,
including existing and future populations and land uses near the 
proposed sites. The state agency is also
authorized to issue an advisory report to FERC on a pending application 
within thirty days of the filing of the
application. FERC must review and respond to the issues raised in the 
state’s report before a permit is
issued. States may also conduct safety inspections of terminals upon 
written notice to FERC.

COASTAL ZONE MANAGEMENT
In 2003, the National Oceanic and Atmospheric Administration (NOAA) 
published proposed changes to the
federal CZMA consistency regulations. Final regulations have yet to be 
issued by NOAA. The Energy Policy
Act amends the CZMA and gives effect to some of the NOAA-proposed 
regulations, although Congress
deviates from NOAA with respect to the timeline governing consistency 
appeals. Under NOAA’s proposed
regulations, the record in a consistency appeal would close within 270 
days of the notice of appeal’s
publication in the Federal Register. The Act, however, requires the 
Secretary of Commerce to close the
record of appeal within 160 days. In addition, the proposed regulations 
would require the Secretary to issue a
decision on the appeal (or explain why this is not possible) within 
ninety days of the close of the record. The
Energy Act mandates the Secretary issue his notice in sixty days. 
Finally, under the proposed regulations, if
the Secretary announces that a decision will be delayed, he would get an 
additional forty-five days. The
Energy Act gives the Secretary only an additional fifteen 
days.ALTERNATIVE ENERGY
Section 388 of the Energy Act allows the Secretary of Interior (through 
the Mineral Management Service
(MMS)) to grant a lease, easement, or right of way on the Outer 
Continental Shelf for the production,
transportation, or transmission of “energy from sources other than oil 
and gas.” This provision is important,
since it would allow the MMS to permit wind farms and other alternative 
energy structures to be built in
federal waters. This section of the Act also contains an interesting 
provision that authorizes the Secretary to
grant a lease if the proposed activities “use, for energy-related 
purposes or for other authorized marinerelated
purposes, facilities currently or previously used for activities 
authorized under this Act.” The broad
language could be interpreted as providing the MMS with the authority to 
permit the use of decommissioned
oil rigs for aquaculture production.

COASTAL IMPACT ASSISTANCE PROGRAM
The Act amends the Outer Continental Shelf Lands Act to provide for the 
disbursement of $250,000,000
each year between 2007 and 2010 to producing states and coastal 
political subdivisions. A producing state is
a coastal state with “a coastal seaward boundary within 200 nautical 
miles of the geographic center of a
leased tract within any area of the outer Continental Shelf.” 
Interestingly, the Act excludes from the definition
of “producing state” any coastal state where the majority of the 
coastline is subject to a leasing moratorium,
unless production was occurring on January 1, 2005 from a lease within 
10 nautical miles of the state’s
coastline. Coastal political subdivisions are any political subdivisions 
of a coastal state within the coastal
zone (as defined under the CZMA) on the date of the enactment of the 
Energy Policy Act and not more than
200 nautical miles from the geographic center of any leased tract.
To receive its share of the $250,000,000, a producing state must have an 
approved Coastal Impact
Assistance Plan by July 1, 2008 which describes how the states and the 
coastal political subdivisions will use
the funds. CIAP funds can only be used for one or more of the following 
purposes: projects and activities for
the conservation, protection, or restoration of coastal areas, including 
wetland; mitigation of damage to fish,
wildlife, or natural resources; planning assistance and the 
administrative costs of complying with this section;
implementation of a federally-approved marine, coastal, or comprehensive 
conservation management plan;
mitigation of the impact of outer Continental Shelf activities through 
funding of onshore infrastructure projects
and public service needs.
Funds will be allocated to producing states based on the ratio of the 
amount of qualified revenues generated
off the state’s coastline to the total revenues generated. For cases 
where more than one state is located
within 200 miles of the lease tract, allocations will be “inversely 
proportional to the distance between the
nearest point on the coastline of the producing state and the geographic 
center of the leased tract.” All
producing states will receive a minimum of one percent of the total 
funds available for disbursement. 35
percent of each producing state’s allocation is to be paid to the 
coastal political subdivisions in each state.

GREAT LAKES DRILLING
The Act prohibits the issuance of federal or state permits and leases 
for “new oil and gas slant, directional, or
offshore drilling in or under one or more of the Great Lakes.”
Fact Sheet Provided by:
National Sea Grant Law Center
University of Mississippi
Kinard Hall, Wing E – Room 256
University, MS 38655
Phone: (662) 915-7775
Email: sealaw at olemiss.edu
http://www.olemiss.edu/orgs/SGLC
MASGP-05-036

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