The Uneven Playing Field for Renewable Energy

Just after the start of the New Year, the 112th Congress came to a close without taking significant action on thousands of legislative proposals.  Among these were H.R. 6154[i] and H.R. 5991,[ii] both of which aimed to address the discrepancies in the regulatory process for energy development on public lands.  Both bills enjoyed bi-partisan support but nonetheless failed to move beyond committee.

The Bureau of Land Management (BLM) manages 245 million surface acres across the United States, much of which is located in the west where solar and wind resources are abundant.  Despite this rich resource, new oil and gas leases vastly outnumber renewable projects on federal lands.[iii]  This is not, however, due to lack of interest, lack of suitable land, or financial infeasibility.  As of June 2008, BLM had received 125 applications for solar projects alone covering almost one million acres with the potential to generate 70 billion watts of electricity.[iv]  By January 2009, this number had increased to 220 applications involving more than 2.3 million acres of land.[v]  Through its Programmatic Environmental Impact Statement (PEIS) for wind development, the BLM identified 160,100 acres that could be economically developed.[vi]  A similar solar PEIS identified 285,000 acres of public land as being well suited to utility-scale solar development.[vii]  At least one source puts the area of federal land with significant solar resources as 23 million acres.[viii]

Some blame these dramatic disparities at least in part on the regulatory process.  All energy development on public lands begins with land use planning by the BLM.  The Federal Land Policy Management Act (FLPMA) requires that BLM develop Resource Management Plans (RMPs), which includes identification of lands available for drilling.[ix]  The development of RMPs also requires compliance with the National Environmental Policy Act (NEPA) by completing an Environmental Impact Statement (EIS).[x]  Since the plans are required regardless of intent to drill or develop the land, many of the RMPs were developed in the 1980s.[xi]  This poses a problem for renewable projects, because most of the RMPs were created or last updated before the viability and desirability of wind and solar development was realized.[xii]  As a result, wind and solar are rarely covered by the existing plan, and a plan amendment is required, which triggers additional NEPA review and prolongs the regulatory process.

Oil and gas development occurs through a competitive commercial leasing process.[xiii]  Companies interested in drilling begin with exploration, followed by full-field development, and ultimately culminating in the Application for a Permit to Drill (APD).  An APD must be submitted for each well and must include information about the location of the drillpad, a surface use plan, and plans for waste disposal and remediation.[xiv]  Site-specific NEPA review to supplement the original EIS completed for the RMP typically takes place at this point in the process.[xv]  Typically, BLM begins by developing a PEIS, which allows the agency to identify areas for development and adopt appropriate procedures for the applicable region.[xvi]  Once a PEIS is in place, the following site-specific EIS can have a much narrower scope by pulling information from the PEIS and reducing the number of alternatives that need to be considered.[xvii]  This process is known as “tiering” saves significant time and money during the site-specific review.

The regulatory process for utility scale solar and wind development is quite different from the process for large-scale oil and gas drilling.  Unlike oil and gas, solar and wind projects do not obtain commercial leases.  Instead, they must follow the procedure required for all other commercial uses and apply for a Right of Way (ROW).[xviii]  Before NEPA review can begin, the project sponsor must submit the application, pay the processing fee, complete a Plan of Development (POD) to verify the project’s technical and financial feasibility, and post a bond.[xix] The highly technical nature of the POD at such an early stage in the process is expensive and difficult for developers to achieve.[xx]  Once the application is filed, the developer is left to wait. BLM does not have the resources to handle the influx of applications, and given the detailed review required, the processing time is lengthy and expensive.[xxi]

H.R. 6154 would have established a commercial leasing program for solar and wind similar to that used for oil and gas.[xxii]  Such a program could allow for NEPA tiering, providing at least some benefit.[xxiii]  In addition, eliminating the ROW process alone could streamline the application process by eliminating the first-come first-served approach to granting ROWs and addressing the backlog of applications.  Unfortunately, as of this writing, no similar legislation has been introduced, and with Congress focused primarily on financial issues, it is unlikely such a measure will be passed anytime soon.

[i] H.R. 6154 112th Cong. (2012).

[ii] H.R. 5991 112th Cong. (2012).

[iii] In the 2009 fiscal year, oil and gas, and geothermal companies received 1,927 new leases, bringing the total to 31,133 leases for 27,800,932 acres of BLM land. See Robert Glennon & Andrew M. Reeves, Solar Energy’s Cloudy Future, 1 Ariz. J. Envtl. L. & Pol’y 91, 112-13 (2010). In contrast, solar received zero permits at that time. Id.  In 2011, BLM approved 1,942 competitive oil and gas leases and 238 non-competitive oil and gas leases.  BLM, Public Land Statistics 2011 at 107, 115 (2012).  In comparison, since 2009, BLM has approved only 25 solar and wind projects. Renewable Energy Projects Approved Since the Beginning of Calendar Year 2009, BLM, (last updated Jan. 14, 2013).

[iv] Public Land and Natural Resources 2008 Annual Report, 2008 ABA Env’t Energy, & Resources L.: Year in Rev. 278, 281 (2008).

[v] Sarah Pizzo, Note, When Saving the Environment Hurts the Environment: Balancing Solar Energy Development with Land and Wildlife Conservation in A Warming Climate, 22 Colo. J. Int’l Envtl. L. & Pol’y 123, 139-40 (2011).

[vi] BLM, Final Programmatic Environmental Impact Statement on Wind Energy Development on BLM-Administered Lands in the Western United States 2-5 (2005). A total of 20,634,000 acres are identified as “potentially developable” but they are not the focus of the study. Id.

[vii] BLM and Dep’t of Energy, Final Programmatic Environmental Impact Statement (PEIS) for Solar Energy Development in Six Southwestern States 2-1 (2012). This development scenario excludes about 79 million acres completely and identifies an additional 19 million acres in “variance areas” that could be developed. Id.

[viii] Pizzo, supra note 3, at 139-40.

[ix] 43 U.S.C. § 1712 (2006); Bruce M. Pendery, BLM’s Retained Rights: How Requiring Environmental Protection Fulfills Oil and Gas Lease Obligations, 40 Envtl. L. 599, 607 (2010).

[x] 42 U.S.C. §§ 4321-4347 (2006); Pendery, supra note 9, at 607. At this stage, NEPA review tends to be very general, and for oil and gas involves analysis of reasonably foreseeable future drilling and development. Karan L. Dunnigan & Holly C. Meyer, Access to Federal Oil and Gas on Public Lands, 2008 No. 1 Rocky Mt. Min. L. Found. Inst. Paper No. 3.

[xi] Rebecca W. Watson et al., Renewable Power Projects on Federal Lands: Wind and Sun and the FLPMA Right-of-Way – Is it Working?, 2009 No. 3 Rocky Mt. Min. L. Found. Inst. Paper No. 10.

[xii] Id.

[xiii] Pendery, supra note 7, at 604-05.

[xiv] Dunnigan, supra note 8.

[xv] Id.

[xvi] David J. Lazerwitz et al., NEPA Process for Energy Projects: Unique Challenges & New Directions, 2010 No. 4 Rocky Mt. Min. L. Found. Inst. Paper No. 11.

[xvii] Domenic A. Cossi, Getting Our Priorities Straight: Streamlining NEPA to Hasten Renewable Energy Development on Public Land, 31 Pub. Land & Resources L. Rev. 149, 165-66 (2010).

[xviii] Watson, supra note 9.

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] H.R. 6154 112th Cong. § 202(a)(2)(A) (2012).

[xxiii] BLM recently completed a wind PEIS and a solar PEIS in hopes of establishing a tiered system of NEPA review similar to that of oil and gas.  However, at least one commentator questioned the ability of programmatic planning to achieve these goals within the current ROW framework.  David J. Lazerwitz et al., NEPA Process for Energy Projects: Unique Challenges & New Directions, 2010 No. 4 Rocky Mt. Min. L. Found. Inst. Paper No. 11.

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