Ocean Thermal Energy Conversion Licensing Program

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 981

[Docket No. 951213299-5299-01]

RIN 0648-AI42

Ocean Thermal Energy Conversion Licensing Program

AGENCY: Office of Ocean and Coastal Resource Management (OCRM),

National Ocean Service (NOS), National Oceanic and Atmospheric

Administration (NOAA), Department of Commerce (DOC).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The National Oceanic and Atmospheric Administration (NOAA) is

proposing to remove Part 981 from Title 15 of the Code of Federal

Regulations (Part 981). Part 981 implements the Ocean Thermal Energy

Conversion (OTEC) Licensing Program, which was established under the

Ocean Thermal Energy Conversion Act of 1980, as amended, (OTEC Act), 42

U.S.C. 9101 et seq. No applications under Part 981 for licenses of

commercial OTEC facilities or plantships have yet been received by

NOAA, and there has been a low level of NOAA activity under the OTEC

Act. During this 15 year period of time, the availability and

relatively low price of fossil fuels, coupled with the risks to

potential investors, has limited the interest in the commercial

development of OTEC projects. Removal of Part 981 at this time will

allow NOAA to evaluate the appropriateness of these, or any other,

regulations at such time as interest in the commercial development of

OTEC projects occurs.

DATES: Comments on the proposed rule are invited and will be considered

if submitted in writing to the address below on or before February 29,

1996.

ADDRESSES: Comments should be submitted to Karl Jugel, Chief, Ocean

Minerals and Energy Division, Office of Ocean and Coastal Resource

Management, National Ocean Service, National Oceanic and Atmospheric

Administration, 1305 East-West Highway, 11th Floor, Silver Spring, MD

20910.

FOR FURTHER INFORMATION CONTACT:

James Lawless, Deputy Director, Office of Ocean and Coastal Resource

Management, at (301) 713-3155.

SUPPLEMENTARY INFORMATION:

I. Regulatory Review

The National Oceanic and Atmospheric Administration (NOAA) is

proposing to remove Part 981 of 15 CFR, pursuant to the Regulatory

Reform Initiative of President Clinton and the Ocean Thermal Energy

Conversion Act of 1980, as amended.

In March 1995, President Clinton issued a directive to federal

agencies regarding their responsibilities under his Regulatory Reform

Initiative. This initiative is part of the National Performance Review

and calls for immediate, comprehensive regulatory reform. The President

directed all agencies to undertake, as part of this initiative, an

exhaustive review of all their regulations--with an emphasis on

eliminating or modifying those that are obsolete or otherwise in need

of reform.

The Ocean Thermal Energy Conversion Act of 1980, as amended, (OTEC

Act), 42 U.S.C. Secs. 9101 et seq., also requires that NOAA

periodically review the regulations that apply to the licensing of OTEC

facilities and

[[Page 2970]]

plantships. The fundamental purpose of the review is to determine if

the regulations themselves impose an adverse impact on the development

and commercialization of OTEC technology.

Comments are solicited from all interested persons on the proposed

removal of Part 981. Comments are in particular invited on whether the

OTEC regulations, or their removal at this time, impose an adverse

impact on the development and commercialization of OTEC technology.

II. Ocean Thermal Energy Conversion Licensing Program

The principle behind Ocean Thermal Energy Conversion (OTEC) has

been validated through experimental projects in the United States and

elsewhere. However, many design and economic uncertainties remain with

regard to a commercial scale plant.

The OTEC Act established a licensing and permitting system for the

development of OTEC as a commercial energy technology. Without a legal

framework, including the site security and predictability it provides,

financing and insuring commercial OTEC operations may have been

impossible. The OTEC Act applies to facilities located in U.S.

territorial waters or connected to the United States by pipeline or

cable. The law also applies to all OTEC plantships owned or operated by

U.S. citizens and all OTEC facilities or plantships documented under

U.S. law. The OTEC Act requires that a person obtain a license from

NOAA in order to own, construct, or operate such a facility or

plantship. The OTEC Act and the implementing regulations provide the

framework for the development of a commercial OTEC industry.

Section 102(a) of the OTEC Act required NOAA to complete issuance

of final implementing regulations by August 3, 1981. Section 102(a)

also established certain criteria that the regulations must satisfy.

NOAA is authorized, consistent with the purposes and provisions of the

OTEC Act, to amend or rescind the OTEC regulations. In particular,

section 117 of the OTEC Act requires NOAA to review the regulations on

a periodic basis NOAA is authorized and directed to revise the

regulations as necessary and appropriate to ensure that the regulations

do not impede the development, evolution, and commercialization of OTEC

technology.

After receiving comments from an advance notice of proposed

rulemaking (45 FR 77038, November 21, 1980), NOAA proposed to issue

minimal OTEC regulations upon considering three other approaches: (1)

detailed regulation of OTEC activities, (2) moderate regulation of OTEC

activities, and (3) no regulations. Under the ``minimum regulation''

approach proposed by NOAA on March 30, 1981 (46 FR 19418-19447), the

OTEC licensing regulations would include only the general guidelines

and performance standards specified in the OTEC Act. Detailed

guidelines and specifications would not be provided in advance in the

regulations. They would be introduced if deemed necessary on a site-

specific, case-by-case basis to prevent significant adverse effects on

the environment or to prevent other results contrary to law. The

information submitted to NOAA with an application would include details

of the proposed site, descriptions of the operating features of the

plan, and assessments of the potential impacts of construction and

operation. Thus, application for a license could be made before

detailed design of the OTEC project was completed. NOAA would examine

the applicant's assessments of the nature and potential magnitude of

the impacts from construction and operation of the proposed project,

and analyze in detail only those impacts that appeared to pose

significant problems.

Under this approach, the incremental administrative costs to NOAA

to process each application would be relatively modest. Maximum

flexibility would be afforded OTEC project sponsors.

Most persons who commented on the proposed OTEC licensing

regulations favored the ``minimum regulation'' approach as the approach

which would best permit the innovation and flexibility necessary in the

early years of implementation of a new technology. See Final Regulatory

Impact Analysis and Final Regulatory Flexibility Analysis for

Regulations to Implement Public Law 96-320, The Ocean Thermal Energy

Conversion Act of 1980, July 1981, U.S. Dept. of Commerce, NOAA, Office

of Ocean Minerals and Energy. NOAA's detailed analysis of potential

regulatory impacts of various licensing regimes, prepared as part of

the regulation development process, confirmed that the minimum

regulation approach was the most cost-effective one that would satisfy

the goals of the OTEC Act. Accordingly, it was adopted as the basis for

the final licensing regulations issued by NOAA. NOAA published final

regulations implementing the OTEC Act in the Federal Register on July

31, 1981 (46 FR 39388-39420). The licensing process developed by NOAA

and specified in the final regulations was intended to provide the

orderly, timely, and efficient review of OTEC proposals envisioned by

the drafters of the OTEC Act.

In 1983 and 1984, NOAA undertook two reviews of the OTEC license

procedures. Beginning with a notice in the Federal Register on May 11,

1983 (48 FR 21154-21156), NOAA reviewed the OTEC regulations to

determine if the regulations themselves imposed an adverse impact on

the development and commercialization of OTEC technology. A second

review of the regulations was conducted by NOAA at the request of the

Office of Management and Budget in accordance with the Paperwork

Reduction Act. Also in 1984, Congress passed amendments to the OTEC

Act. On November 21, 1985, NOAA published a proposed rule (50 FR 48097-

48099) incorporating the 1984 amendments to the OTEC Act. This proposed

rule reflected NOAA's conclusion, as a result of its regulatory review,

that no additional regulatory modifications were necessary. A final

rule was published in the Federal Register on June 10, 1986 (51 FR

20958-20960).

Also in 1985, NOAA published a Guide to Permits and Regulations

Applicable to Ocean Thermal Energy Conversion Projects--Hawaii Edition.

This permit guide was prepared in order to provide OTEC project

sponsors with an overview of potential licenses, permits and

authorizations required by federal, state and local agencies. It was

intended as a reference guide for federal, state and local agencies

processing OTEC permit applications.

No applications for licenses of commercial OTEC facilities or

plantships have yet been received by NOAA, and there has been a low

level of NOAA activity under the OTEC Act. Since FY 86, no

appropriations have been requested by the present or past

Administrations, or provided by the Congress, for NOAA OTEC activities.

NOAA's last significant OTEC related activities were limited to the

completion of two research studies in FY 87, both of which had been

funded and initiated with previous appropriations. One was the impact

of OTEC generated underwater sound on selected marine animals, and the

second study was on the socioeconomic effects of an OTEC plant at Kahe

Point, Oahu, Hawaii. Since that time, NOAA activities have been limited

to responding to occasional requests for OTEC related technical and

regulatory information. The overall availability and relatively low

price of fossil fuels, coupled with the risks to potential investors,

has limited the interest in the commercial development of OTEC

projects.

[[Page 2971]]

Given that a commercial OTEC industry has yet to develop, Part 981

remains unused for the most part. Removal of Part 981 at this time is

consistent with the purposes and provisions of the OTEC Act in that it

will allow NOAA to evaluate the suitability of these regulations at

such time as interest in the commercial development of OTEC projects

occurs. At such time, NOAA will issue a proposed rule appropriate to

the then current regulatory needs. Potential licensees will therefore

be assured that any future OTEC regulations will be up to date, and

will continue to provide innovation and flexibility necessary for an

emerging OTEC industry.

NOAA is mindful of its responsibility for licensing of commercial

OTEC facilities and plantships under the OTEC Act, however, and will

take appropriate steps to review and process an application should one

be made. For particular inquiries into the licensing of OTEC projects

in the interim period, NOAA will provide copies of the provisions of

these OTEC regulations in response to such inquiries. Thus, NOAA will

provide actual and timely notice of applicable procedures and

requirements to particular individuals. See 5 U.S.C. Sec. 552(a).

Accordingly, NOAA is proposing to remove Part 981, the OTEC

regulations, from Title 15 of the CFR.

III. Miscellaneous Rulemaking Requirements

Executive Order 12612: Federalism Assessment

NOAA has concluded that this regulatory action does not have

federalism implications sufficient to warrant the preparation of a

Federalism Assessment under Executive Order 12612.

Executive Order 12866: Regulatory Impact

This proposed rule has been determined to be not significant for

purposes of Executive Order 12866.

Regulatory Flexibility Act

No licenses have been issued for OTEC projects under 15 CFR Part

981. When commercial interest in OTEC projects occurs, NOAA will issue

a proposed rule appropriate to the regulatory needs at that time. For

particular inquiries into the licensing of OTEC projects in the interim

period, NOAA will provide actual and timely notice of applicable

procedures and requirements to particular individuals. See 5 U.S.C.

Sec. 552(a). For these reasons, the proposed removal of Part 981 is not

expected to have a significant economic impact on a substantial number

of small entities, and the Assistant General Counsel for legislation

and Regulation of the Department of Commerce has so certified to the

Chief Counsel for Advocacy of the Small Business Administration. As

such, an initial Regulatory Flexibility Analysis was not prepared.

Paperwork Reduction Act

This rule does not contain an information collection requirement

subject to review and approval by OMB under the Paperwork Reduction Act

of 1980, 44 U.S.C. 3500 et seq.

National Environmental Policy Act

NOAA has concluded that this regulatory action does not constitute

a major federal action significantly affecting the quality of the human

environment. No applications for licenses of commercial OTEC facilities

or plantships have yet been received by NOAA, and Part 981 remains

unused for the most part. When commercial interest in OTEC projects

occurs, NOAA will issue a proposed rule appropriate to the regulatory

needs at that time. For particular inquiries into the licensing of OTEC

projects in the interim period, NOAA will provide actual and timely

notice of applicable procedures to particular individuals. See 5 U.S.C.

552(a). Therefore, an environmental impact statement is not required.

Authority: Ocean Thermal Energy Conversion Act of 1980, as

amended, 42 U.S.C. 9101 et seq.

List of Subjects in 15 CFR Part 981

Administrative practice and procedure, Ocean thermal energy

conversion licensing, Environmental protection, Marine resources,

Penalties, Reporting and recordkeeping requirements.

Dated: January 24, 1996.

W. Stanley Wilson,

Assistant Administrator for Ocean Services and Coastal Zone Management.

Accordingly, for the reasons set forth above, Chapter IX of Title

15 of the Code of Federal Regulations is proposed to be amended as

follows:

PART 981--OCEAN THERMAL ENERGY CONVERSION LICENSING PROGRAM--

[REMOVED]

1. Under the authority of the Ocean Thermal Energy Conversion Act

of 1980, Part 981 is removed.

[FR Doc. 96-1723 Filed 1-29-96; 8:45 am]

BILLING CODE 3510-22-M