Offshore Energy Projects Run Up Against Feds

U.S. Department of Energy

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.”

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