On January 24, 2012, President Obama proposed several new initiatives to develop American-made energy in his State of the Union address.  The initiatives included:

• Opening more than 75% of America’s potential offshore oil and gas resources;
• Requiring companies that drill for gas on public lands to disclose the chemicals used;
• Promoting clean-energy tax credits;
• Allowing the development of clean energy on public lands;
• Announcing the U.S. Navy will purchase enough clean energy capacity to power a quarter million homes (1 GW); and
• Proposing that Congress pass a bill to promote energy efficiency in manufacturing facilities.

President Obama also directed the Department of the Interior (“DOI”) to develop 3,500 MW of renewable projects on public lands this year.  DOI has stated that this increase in 2012-approved projects would mean that it would meet the Energy Policy Act of 2005’s mandate to site 10 GW of non-hydroelectric renewable energy projects by December 31, 2015.  DOI also recently announced plans for a natural gas lease sale in the Gulf of Mexico.  The sale is expected to take place on June 20, 2012 and will include approximately 7,250 unleased blocks that span nearly 38 million acres.  Federal estimates speculate the region contains 31 billion barrels of oil and 134 trillion cubic feet of natural gas.

Obama’s address renewed his request for Congress to pass a “clean energy standard” that would require electric utilities to obtain 80 percent of their power from natural gas, nuclear and renewable sources by 2035 and a permanent extension of a federal production tax credit for wind power.  The current wind energy tax credit is set to expire on December 31, 2012.  The American Renewable Energy Production Tax Credit Extension Act has been introduced and proposes to grant a four year extension to the wind energy tax credit.  Obama made reference to the Solyndra bankruptcy stating “some technologies don’t pan out; some companies fail.”  (See September 23, 2011 edition of the WER).

On November 28, 2011, Secretary of the Interior Ken Salazar and Assistant Secretary for Indian Affairs Larry Echo Hawk announced the beginning of a major reform of federal surface leasing regulations for American Indian Lands.  The Department of the Interior, as trustee responsible for managing approximately 56 million surface acres in Indian Country, currently processes requests for land leases and subleases without a defined process or deadline for review.  Attempts to engage in lease or mortgage transactions can languish for years. The proposed rule, which was published in the Federal Register on Tuesday, November 30th, was designed in response to scheme changes requested by tribal leaders, and is intended to remove what has become a federal roadblock to economic and renewable energy development on Indian lands.

The proposed rule reform sets out specific processes for the Bureau of Indian Affairs (“BIA”) review of leases and subleases, and for the first time, includes enforceable deadlines.  For commercial and industrial development projects, the BIA has sixty days to review leases and subleases.  If the BIA does not complete review within sixty days, the agreement will automatically be allowed.  Further, under the new rule the BIA will be required to approve the leases unless it finds a compelling reason to disapprove.

For a copy of the proposed rule, click here.

The recently-formed Rapid Response Team for Transmission (“RRTT”), which includes the White House Council on Environmental Quality, the Department of the Interior, the Department of Agriculture, the Department of Energy, the Department of Commerce, the Department of Defense, the Environmental Protection Agency, the Federal Energy Regulatory Commission, and the Advisory Council on Historic Preservation, will work together.  These agencies will: (1) coordinate statutory permitting, review and consultation schedules and processes among federal and state agencies through Integrated Federal Planning; (2) apply a uniform and consistent approach to consultations with Tribal governments; and (3) expeditiously resolve interagency conflicts and ensure that all involved agencies are fully engaged and meeting schedules.

The seven pilot projects are:

1. Boardman-Hemingway Line (Oregon and Idaho);
2. Gateway West Project (Wyoming and Idaho);
3. Hampton-Rochester-La Crosse Line (Minnesota and Wisconsin);
4. Cascade Crossing Line (Oregon);
5. SunZia Transmission, LLC (New Mexico and Arizona); and
6. Susquehanna to Roseland Line (Pennsylvania and New Jersey).

A copy of the White House press release is available here.

For detailed information on the seven pilot projects, click here.