New Federal and State Initiatives Promote Increased Regulation of Ocean Resources

Profession:Goodwin Procter LLP

Originally published May 1, 2004

Ms Elise N. Zoli and Aladdine D. Joroff

Responding to an increase in the variety and intensity of uses of ocean resources, and to public concerns about environmental degradation, federal and state authorities are proposing fundamental changes to the framework for regulating commercial activities offshore of the U.S. These proposals include ecosystems management, ocean "zoning" and alternative permitting and fee structures. If approved, they may limit new projects for offshore development, extraction of mineral resources, and power generation from alternative energy sources. Land-based businesses also may be affected, as some proposals call for greater regulation of runoff, particularly from non-point source pollutants, and reductions in greenhouse gases.

The oceans hold substantial promise as a frontier for U.S. economic development. The U.S.'s Exclusive Economic Zone in offshore waters, an area over which the federal government has sole economic and environmental jurisdiction, is approximately 4.5 million square miles - an area 23% larger than the country's land area. According to a federal report, activities that rely directly on the ocean created more than $117 billion in economic value and supported over 2 million jobs in 2000 - an economic output and employment level approximately 2.5 and 1.5 times greater than those from the nation-wide agricultural sector.

The new wave of regulatory proposals responds to technological and market advances in the use of marine resources, and the corresponding recognition that existing U.S. policies are outmoded. Those polices were last examined over three decades ago, before many of today's activities in the oceans were even contemplated. Concerned with preserving marine species and habitats and preventing water and sediment pollution, environmentalists now are calling for a more stringent, pervasive and centralized system of regulations.

This article provides a brief summary of the current management system and the factors creating a demand for change. It then reviews proposals for changing the current system from the federal government and the Commonwealth of Massachusetts. These proposals could impact coastal and ocean-dependent activities, ranging from oil and natural gas facilities, pipelines and fiber optic cables, commercial shipping, marine fisheries, cruise lines and other tourist industries. Entities with economic interests that could be affected should take note of the standards being developed today, both to effectively participate in the regulatory process, and to anticipate the effects of new regulations on their future operations.

Current Regulation of Work in the Oceans

Current ocean-management programs have been described by members of the federal and Massachusetts Ocean Commissions as complex, reactive, "first come, first served" systems that do not have uniform or forward-looking standards for allocating limited natural resources. On the federal level alone, over 60 congressional committees and subcommittees oversee 20 federal agencies and permanent commissions implementing approximately 140 federal ocean-related statutes. For example, the creation of an offshore aquaculture facility must be approved by at least five federal agencies, in addition to state...

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