Energy & Environment

Rare rift in green energy movement over Obama leasing rule

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An Obama administration attempt to overhaul management of renewable energy on public land is pitting the wind and solar power industries against conservationists.

The Interior Department’s Bureau of Land Management (BLM) could put out the final rule as soon as this week.

As proposed two years ago, the rule would mandate competitive auctions for companies to put wind and solar facilities on public land. It would also encourage companies to build their projects in places that the federal government has already determined have good energy potential and minimal impacts on wildlife and the land, among other provisions. 

{mosads}Environmental and conservation groups support the rule, calling it common-sense reform to protect natural resources while encouraging development of renewable energy.

But industry groups say the current permitting system has worked and that the new rule would increase uncertainty and costs in highly competitive electricity markets.

Critics say the rule would endanger President Obama’s goal of permitting 20,000 megawatts of renewable energy on public land. It could also make it difficult to meet Democratic presidential nominee Hillary Clinton’s goal of a tenfold increase in renewable energy production on federal land and water. 

Greens have been pushing for a reduction in fossil fuel use and a significant boost in renewable energy use for years, so they have traditionally been close allies to the wind and solar industries, often endorsing the same energy policies. 

But the BLM’s rule is pitting them against each other, with the industries warning of significant new costs and greens calling their concerns overblown. 

“Our companies like the current system, they understand it, they’re able to navigate the various permitting processes, and they know how to factor those costs into their contracts,” said Christopher Mansour, the top lobbyist at the Solar Energy Industries Association (SEIA).

“They like what they’re dealing with now,” Mansour said of federal land managers. 

The wind industry has adopted a similar message.

“We are concerned the soon to be finalized competitive leasing, zoning-based regulatory approach proposed by the [BLM] will further undermine interest in wind energy projects on public lands by making existing barriers even worse,” said Tom Vinson, vice president for federal regulatory affairs at the American Wind Energy Association (AWEA).

“We hope to see improvements in the rule’s workability in the final version, but there will remain challenges with the underlying concept,” he said.

Conservation groups say the opposition from industry groups surprises them because the reforms make sense.

“We’re strong supporters of responsible renewable energy development on public lands,” said Alex Daue, assistant director for energy and climate at the Wilderness Society.

“What this rule would do is institutionalize and codify some of the smart approaches that the Obama administration has put in place over the last eight years.”

Joy Page, policy adviser for renewable energy at Defenders of Wildlife, downplayed the “green versus green” dynamic. She said businesses often have to adjust to policy changes, but this rule would be good for all the parties involved.

“We’ve constantly heard from industry that they’re looking for more certainty and predictability in the way they site. We’ve seen project delays from wildlife conflicts that are unexpected,” she said.

“I think this is just the uncertainty of a new rule coming out.”

Wind, solar and conservation groups met with White House Office of Management and Budget officials in separate June meetings, usually the last chance to lobby on a rule.

When Obama took office in 2009, there were no solar power projects on federal land, and few wind projects.

The policy mechanism now in place is somewhat shoehorned into the BLM’s authority to permit rights of way through public land, usually for electric transmission lines, roads or communications infrastructure. That leasing process is noncompetitive and made on a first come, first serve basis. 

Regulators started an attempt to overhaul the process in 2011 and proposed the rule at issue in 2014. As the final rule has not been released, officials are not revealing what changes, if any, they’ve made to the proposal.

To industry, the most objectionable pieces of the regulation are those aimed at getting taxpayers a better return for the land the public owns — inevitably increasing costs for companies.

As proposed, that would mean requiring a competitive bidding process and changes to the fees on land use and generating capacity.

“We’ve never been excited about the capacity fee, because it sounds like some sort of tax, which we don’t believe the Interior Department has the legal authority to impose,” Mansour said.

Wind and solar companies say that unlike oil or gold companies operating on public land, they aren’t taking away finite resources, so bidding competitions, royalties and similar charges aren’t appropriate.

Conservation groups are pushing hardest for provisions in the regulation that would identify “designated leasing areas” which have low conflicts with wildlife, good energy potential and are near transmission infrastructure, among other benefits.

“It’s about doing the homework you have up front, finding the right places where you can site energy, where it’s developable, you have transmission access, but also represents low conflicts for wildlife,” said Page.

That review process is meant to reduce incidents like birds being killed by wind turbines or turtles losing habitat to solar panels.

Locating a project in those areas would bring beneficial lease terms to companies, like lower fees and bonding costs.

But the wind lobby completely opposes the designations, and the solar group told regulators that the incentive structure is too punitive. 

“We question whether the agency has the resources or expertise to analyze and pick the best sites,” the wind group wrote to regulators.

In the end, the renewable energy companies want the administration’s policies to take account of the environmental benefits of renewable power. The BLM’s proposal doesn’t do that, they argue.

“Let’s make sure that we’re not being too strict on where solar projects can go and what they have to do to function on those lands and what they have to pay,” said Mansour. 

“The current proposal would likely only make development on private land more attractive to wind developers, as well as other renewable energy development,” AWEA wrote. 

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