[Federal Register Volume 82, Number 8 (Thursday, January 12, 2017)]
[Notices]
[Pages 3751-3758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00515]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Notice and Request for Comment on Two New Categories of Special 
Use Permits Related to the Operation of Desalination Facilities 
Producing Potable Water for Consumption

AGENCY: Office of National Marine Sanctuaries (ONMS), National Ocean 
Service (NOS), National Oceanic and Atmospheric Administration (NOAA).

ACTION: Notice; request for public comments.

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SUMMARY: In accordance with a requirement of Public Law 106-513 (16 
U.S.C. 1441(b)), NOAA hereby gives public notice of and requests public 
comment on whether the Office of National Marine Sanctuaries should 
adopt two new special use permit (SUP) categories pursuant to the 
requirements of Section 310 of the National Marine Sanctuaries Act (16 
U.S.C. 1441). The two new SUP categories would be: (1) The continued 
presence of a pipeline transporting seawater to or from a desalination 
facility; and (2) the use of sediment to filter seawater for 
desalination. This notice includes background information on the use of 
desalination in California national marine sanctuaries, ONMS 
regulations applicable to activities that disturb submerged lands or 
discharge into sanctuaries, as well as how NOAA would examine the 
environmental impacts of such activities. While most current 
desalination activity in sanctuaries is occurring in California, the 
SUP categories are intended to apply across the national marine 
sanctuary system.

DATES: Comments must be received on or before February 13, 2017.

ADDRESSES: You may submit comments, identified by docket ID NOAA-NOS-
2016-0027 by one of the following methods:
     Electronic submissions: Submit all electronic public 
comments via the Federal eRulemaking Portal. Go to http://www.regulations.gov/#!docketDetail;D=NOAA-NOS-2016-0027, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
     Mail: Submit all written comments to Bridget Hoover, 
Monterey Bay National Marine Sanctuary, 99 Pacific Street, Bldg. 455A, 
Monterey, CA 93940.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by NOAA. All comments received are a part of the 
public record and will be posted to http://www.regulations.gov without 
change. All Personal Identifying Information (for example, name, 
address, etc.) voluntarily submitted by the commenter may be publicly 
accessible. Do not submit confidential business information or 
otherwise sensitive or protected information. ONMS will accept 
anonymous comments (for electronic comments submitted through the 
Federal eRulemaking Portal, enter N/A in the required fields if you 
wish to remain anonymous).

FOR FURTHER INFORMATION CONTACT: Bridget Hoover, Monterey Bay National 
Marine Sanctuary, 99 Pacific Street, Bldg. 455A, Monterey, CA 93940.

SUPPLEMENTARY INFORMATION: This Federal Register document is also 
accessible via the Internet at: http://montereybay.noaa.gov.

[[Page 3752]]

I. Background

Introduction to Desalination Projects in Sanctuaries

    There is a growing public concern about ensuring adequate water 
resources to support populations along the California coast. 
Communities have been working together to develop strategies for 
addressing the long-term drought California is currently experiencing 
and the resulting water scarcity. In the Monterey Bay area, 
desalination has been identified as one of the essential components of 
water resource portfolios. While NOAA is currently reviewing proposals 
for the construction of desalination plants located in California, the 
management alternatives described in this notice are intended to be 
applied across the National Marine Sanctuary System.
    Desalination is the process by which salts and other minerals are 
removed from seawater or brackish water to produce potable fresh water. 
The installation and operation of desalination facilities near a 
national marine sanctuary may involve access to and use of sanctuary 
resources and include activities prohibited by a sanctuary's 
regulations. One potentially applicable prohibition is for activities 
that cause the alteration of, or placement of structures on or in the 
seabed. For example, installation of certain desalination facility 
structures such as an intake or outfall pipeline on or beneath the 
ocean floor would be prohibited by sanctuary regulations and could only 
occur with sanctuary approval. Another prohibition potentially 
applicable to desalination projects is discharging or depositing any 
material or matter from within or into sanctuaries. The disposal of 
brine effluent, and in some cases other materials, into sanctuary 
waters would be prohibited unless approved by the sanctuary.
    Multiple federal, state and local permits are typically required 
for any construction and operation of desalination facilities near a 
national marine sanctuary. In 2010, NOAA in collaboration with the 
California Coastal Commission, California Central Coast Regional Water 
Quality Control Board, published specific guidelines for new 
desalination plants in a report titled Guidelines for Desalination 
Plants in Monterey Bay National Marine Sanctuary (MBNMS 2010, http://montereybay.noaa.gov/resourcepro/resmanissues/pdf/050610desal.pdf). 
These non-regulatory guidelines were developed to help ensure that any 
future desalination plants in or adjacent to Monterey Bay National 
Marine Sanctuary would be sited, designed, and operated in a manner 
that results in minimal impacts to the marine environment. Although 
they were developed for a specific sanctuary, the guidelines would 
likely apply to potential desalination facilities near any national 
marine sanctuaries. These guidelines address numerous issues associated 
with desalination including site selection, construction and 
operational impacts, plant discharges, and intake systems. The 
guidelines encourage the use of subsurface intake systems and 
associated pipelines, which have less potential to cause environmental 
harm to sensitive marine organisms. Open water intakes have the 
potential to trap organisms on the intake screens (impingement) or 
impact organisms small enough to pass through the screen during the 
processing of the saltwater (entrainment). Subsurface intakes have the 
potential to minimize or eliminate impingement and entrainment impacts 
(Chambers Group Memo 2010). When subsurface intakes are not feasible, 
and a new pipeline for an open water intake is necessary, placement 
should be thoroughly evaluated to minimize disturbances to biological 
resources. In addition, the guidelines encourage co-location with 
existing facilities (e.g., sewage treatment plants) to dilute brine by 
blending it with existing effluent for ocean discharges.
    The guidelines also examine which statutory and regulatory 
authorities would apply to desalination projects located near national 
marine sanctuaries. The guidelines explain that NOAA could potentially 
allow the construction and operation of desalination facilities through 
sanctuary authorization of other state and federal permits, such as the 
State of California's Coastal Development Permit and National Pollution 
Discharge Elimination System (NPDES) permit.

Authorizations vs. Special Use Permit (SUP)

    Depending on the type of activity or project proposed, NOAA has 
various regulatory mechanisms it can use to allow otherwise prohibited 
activities to occur within national marine sanctuaries. Two of these 
mechanisms are authorizations and special use permits.
    Authorizations allow a person to conduct an activity prohibited by 
sanctuary regulations if such activity is specifically authorized by 
any valid Federal, State, or local lease, permit, license, approval, or 
other authorization issued after the effective date of sanctuary 
regulation (15 CFR 922.49). SUPs can only be issued for activities that 
are needed (1) to establish conditions of access to and use of any 
sanctuary resources; or (2) to promote public use and understanding of 
a sanctuary resource (16 U.S.C. 1441(a)). In addition, the activities 
must be compatible with the purposes for which the sanctuary is 
designated and with protection of sanctuary resources (16 U.S.C. 
1441(c)). SUPs must require that activities carried out under the 
permit be conducted in a manner that does not destroy, cause the loss 
of, or injure sanctuary resources. Six \1\ national marine sanctuaries 
currently have regulations enabling them to issue authorizations while 
all of the sanctuaries have authority to issue SUPs.
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    \1\ The following national marine sanctuaries currently have 
regulations enabling them to issue authorizations: Florida Keys, 
Flower Garden Banks, Monterey Bay, Olympic Coast, Stellwagen Bank, 
and Thunder Bay. However, Florida Keys and Olympic Coast NMSs are 
the only ones adjacent to land where desalination facilities could 
be placed.
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    When a desalination project is proposed in or near a national 
marine sanctuary and would involve activities prohibited by national 
marine sanctuary regulations, the project can only occur if NOAA has 
the regulatory mechanism to approve such activities. For example, a 
desalination project may include various activities such as: 
Installation, maintenance, and removal of a pipeline on or within the 
submerged lands of a national marine sanctuary; discharge of brine into 
a national marine sanctuary; presence of a pipeline transporting 
seawater to or from a desalination facility; and use of sediment to 
filter seawater for desalination. A national marine sanctuary that has 
regulatory authority to issue authorizations \2\ would use 
authorizations to consider whether it can approve the pipeline 
installation, maintenance, and removal, and brine discharge within the 
national marine sanctuary, because these activities are prohibited by 
most sanctuary regulations regarding discharges and disturbance of the 
seabed and cannot occur without proper authorization from NOAA. Brine 
discharges would also not be covered by a SUP, but by authorization of 
another permit. However, an authorization would not take into account 
the continued use of sanctuary resources by the pipeline because those 
activities would not violate sanctuary regulations, uses which may 
require continued monitoring and management by NOAA.

[[Page 3753]]

In the case of a proposal for a desalination project, NOAA has found 
that there is a much larger burden on staff to review the environmental 
analysis and process an authorization application for this type and 
scale of project. The National Marine Sanctuaries Act (NMSA) calls for 
a special category of permits (called ``special use permits or SUPs'') 
to establish conditions of use of any sanctuary resources and to 
promote public use of a sanctuary resource (16 U.S.C. 1441(a)). The 
NMSA gives NOAA authority to develop categories of SUP in order to 
assess fees related to issuing and administering permits and for 
expenses of managing national marine sanctuaries (16 U.S.C. 
1441(d)(3)). This includes the processing of applications, preparation 
and review of environmental analysis as well as long-term monitoring of 
the impacts of the activity to sanctuary resources. As such, a SUP 
would be the appropriate mechanism for NOAA to approve the continued 
presence of a pipeline transporting seawater to or from a desalination 
facility and use of sediment to filter seawater for desalination, 
should the proposed project be carried out in a manner that is 
consistent with Section 310 of the NMSA.\3\
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    \2\ A national marine sanctuary needs to have regulatory 
authority to issue authorizations in order to approve construction 
and operations of a desalination facility. This regulatory authority 
is described at 15 CFR 922.49.
    \3\ This management approach has been applied with respect to 
submarine fiber optic cables in a sanctuary where the installation 
of the infrastructure is considered via a separate authorization and 
the continued presence of the infrastructure is addressed through an 
SUP (ONMS 2002).
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    This Federal Register notice proposes to add two new SUP categories 
that could apply to proposed desalination projects. These categories 
are: (1) The continued presence of a pipeline transporting seawater to 
or from a desalination facility; and (2) the use of sediment to filter 
seawater for desalination.
    In May 2013, NOAA clarified that simply being consistent with one 
of the categories does not guarantee approval of an SUP for any given 
activity. Applications are reviewed for consistency with the SUP 
requirements in section 310(c) of the NMSA, as well as the published 
description of the category. Of particular importance, SUPs may only be 
issued for activities NOAA determines can be conducted in a manner that 
does not destroy, cause the loss of, or injure sanctuary resources 
(NMSA section 310(c)(3)). Individual SUP applications are also reviewed 
with respect to all other pertinent regulations and statutes, including 
NEPA and any required consultations, permits or authorizations. NOAA 
would assess whether activities associated with proposed desalination 
projects are appropriate for one or both of these new SUP categories on 
a case-by-case basis, and as part of the federal environmental review 
process required by the National Environmental Policy Act (NEPA). NOAA 
would take into consideration whether the activity can meet the 
findings in Section 310(c) of the NMSA (16 U.S.C. 1441(c)). Under NEPA, 
NOAA would analyze the environmental impacts of the entire proposed 
federal action (i.e., the desalination project) including the issuance 
of any SUPs and sanctuary authorizations.
    While NOAA could conceivably propose new SUP categories for other 
types of pipelines, utility lines, or use of sediment associated with 
activities other than desalination (e.g., sewage treatment, or power 
generating facilities), NOAA selected to limit the focus on these two 
new SUP categories to desalination activities. Desalination is a 
current issue on the West Coast and may become an issue across the 
country in the future. There is enough information on the types of 
activities associated with desalination to make a determination that 
under certain conditions, such as if correctly sited and compliant with 
MBNMS Desalination Guidelines, they are not likely to result in injury 
to sanctuary resources, which is a requirement for SUPs. It would be 
too speculative at this point for NOAA to analyze impacts of other 
types of pipelines, or other project impacts in the absence of a more 
clearly defined need or proposal for such activities.
NMSA Special Use Permits
    Congress first granted NOAA the authority to issue SUPs for the 
conduct of specific activities in national marine sanctuaries in the 
1988 Amendments to the National Marine Sanctuaries Act (NMSA; 16 U.S.C. 
1431 et seq.) (Pub. L. 100-627). NMSA section 310 allows NOAA to issue 
SUPs to establish conditions of access to and use of any sanctuary 
resource or to promote public use and understanding of a sanctuary 
resource. In the National Marine Sanctuaries Amendments Act of 2000 
(Pub. L. 106-513), Congress added a requirement that prior to requiring 
a SUP for any category of activity, NOAA shall give appropriate public 
notice. NMSA section 310(b) states that ``[NOAA] shall provide 
appropriate public notice before identifying any category of activity 
subject to a special use permit under subsection (a).'' On January 30, 
2006, NOAA published a list of five categories for which the 
requirements of SUPs would be applicable (71 FR 4898). NOAA further 
refined this list of categories for which an SUP could be issued on May 
3, 2013 (78 FR 25957), so that it now includes seven categories of SUPs 
as follows:
    1. The placement and recovery of objects associated with public or 
private events on non-living substrate of the submerged lands of any 
national marine sanctuary.
    2. The placement and recovery of objects related to commercial 
filming.
    3. The continued presence of commercial submarine cables on or 
within the submerged lands of any national marine sanctuary.
    4. The disposal of cremated human remains within or into any 
national marine sanctuary.
    5. Recreational diving near the USS Monitor.
    6. Fireworks displays.
    7. The operation of aircraft below the minimum altitude in 
restricted zones of national marine sanctuaries.
    Pursuant to NMSA section 310(d), NOAA may assess three types of 
fees associated with the conduct of any activity under an SUP: (1) 
Administrative costs, (2) implementation and monitoring costs; and (3) 
fair market value (FMV) of the use of the sanctuary resource (16 U.S.C. 
1441(d)). On November 19, 2015, NOAA published a Federal Register 
notice finalizing the methods, formulas and rationale for the 
calculations it uses to assess fees associated with the existing seven 
SUP categories (80 FR 72415).
    NOAA proposes to use the same methods previously established in the 
Federal Register for assessing an application fee, administrative 
costs, and implementation and monitoring costs of these two new SUP 
categories. NOAA would require a non-refundable $50 application fee. 
The labor costs assessed as part of administrative costs would be based 
on a Federal regional labor rate that will be updated every year to 
account for staff changes as well as inflation. Administrative costs 
would include any environmental analyses and consultations associated 
with evaluating the SUP application and issuing the permit; equipment 
used in permit review and issuance (e.g., vessels, dive equipment, and 
vehicles), and general overhead. NOAA may also assess a fee for costs 
associated with the conduct or implementation of a permitted activity 
as well as the costs of monitoring the activity. The latter costs would 
cover the expenses of monitoring the impacts of a permitted activity 
and compliance with the terms and conditions of the permit. Examples of 
implementation and monitoring costs can include the cost of site 
preparation, site examination, and the use of vessels and

[[Page 3754]]

aircraft. Lastly, NOAA can assess a fee for fair market value for use 
of sanctuary resources. NOAA is proposing and seeking public comment on 
specific methods for assessing FMV for the two new categories of SUPs, 
which are described in subsequent sections of this Federal Register 
notice.

II. Summary of Proposed New Special Use Permit Categories

    NOAA proposes to add two new categories of SUPs: (1) The continued 
presence of a pipeline transporting seawater to or from a desalination 
facility; and (2) the use of sediment to filter seawater for 
desalination.
    1. The continued presence of a pipeline transporting seawater to or 
from a desalination facility.
    NOAA is proposing that pipelines transporting seawater for purposes 
of onshore desalination, that have been laid on or drilled or bored 
within the submerged lands of a national marine sanctuary, may, after 
appropriate environmental review, application of best management 
practices, and compliance with MBNMS Desalination Guidelines, could 
remain in place without causing injury to sanctuary resources. 
Therefore, NOAA establishment of a SUP category is appropriate. For 
purposes of this rule, NOAA is using ``transporting seawater to or from 
a desalination facility'' to mean seawater being pumped from a 
sanctuary into a facility and/or concentrated brine water being pumped 
out of a facility through a pipe and into a national marine sanctuary 
(brine discharge is addressed below).
    In order to avoid or minimize impacts to the marine environment due 
to the presence of the pipeline, the best management practices (BMP) 
from the MBNMS Desalination Guidelines will be employed to ensure 
proper siting, sizing, engineering, and configuration of intake and 
outfall pipelines. New desalination pipelines are manufactured with 
high tensile stainless steel to avoid breakage or corrosion in seawater 
and would be monitored annually to evaluate their continued integrity. 
Submerged pipelines should have little propensity for movement or 
shifting. There are many pipelines associated with power plants and 
wastewater facilities that have been in existence for more than 50 
years with no adverse impacts due to their presence on the seafloor 
(MLML 2006; MRWPCA 2014).
    Existing pipelines installed prior to the publication of the final 
Federal Register notice for these two proposed new SUP categories would 
be exempt from this SUP category. Moreover, existing pipelines that 
would not fall under the purview of this SUP category include sewage 
treatment plant, power plant and aquaculture facility pipes.
    2. The use of sediment to filter seawater for desalination.
    Nearly all seawater intake systems carry out initial filtration of 
seawater to remove particulate matter and living organisms. The 2010 
Guidelines for Desalination Projects in Monterey Bay National Marine 
Sanctuary promote the use of subsurface seawater intakes that bring in 
seawater filtered through natural sand beds within a sanctuary. To 
attain in-situ filtration, a pipeline is typically drilled or bored 
from an upland location into the natural sand deposits within submerged 
lands. Latent seawater is then drawn into the pipe and seawater 
collection system, incurring the benefit of natural filtration through 
the in-situ sand deposits. Four types of sanctuary resources may be 
affected by seawater filtration using subsurface intakes: Sand, 
biological resources (marine organisms), water, and minerals. For the 
purposes of this notice, NOAA refers to ``sediment'' as sand, silt, 
clay or any combination thereof that could be used to filter seawater. 
For most coastal desalination facilities the most sought after sediment 
is typically sand.
    Sand is a natural filter media and used in many systems to remove 
particulate matter from water; examples include private swimming pool 
systems to large aquarium filtration systems. Sand is naturally-
occurring in many areas on the ocean floor and, in the right 
conditions, seawater will naturally infiltrate the seabed into 
underlying aquifers. In a 2010 study, infiltration rates at a site in 
Southern California, based on a 30 MGD intake, were calculated between 
5.1 x 10-5 ft/sec to 7.8 x 10-7 ft/sec depending 
on distance from the slant well (Williams, Jenkins 2010). This study 
reported that the ocean would have to become perfectly still in order 
for nano and net-plankton and other freely drifting micro-organisms to 
become impinged or trapped on the seabed by the vertical pull induced 
by the slant well field. This indicates that the substrate would not be 
fouled or degraded by particulate matter traveling through it with the 
seawater. In addition, the California American test slant well in 
Marina, CA was sampled for multiple constituents including Total 
Suspended Solids (TSS) and turbidity. The associated NPDES Start Up 
report indicated that TSS were not detected and the turbidity 
concentration was 1.6 Nephelometric Turbidity Units (NTU).\4\ This 
result confirms very little particulate matter traveling with the 
seawater through the test well (Geoscience 2015). Based on these 
previous analyses, NOAA believes that the use of an in-situ natural 
resource of a national marine sanctuary--the natural sand deposits--may 
take place with no harm to the natural sand deposits (Williams, Jenkins 
2010).
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    \4\ CA Ocean Plan Maximum is 225 NTU.
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    As described above, the subsurface seawater intake methodology 
greatly reduces the incidental intake and mortality of small marine 
organisms including larvae and young life stages of fish and 
invertebrates in a sanctuary's waters. A separate evaluation for a 
project in Southern California reported that benthic organisms 
typically live in the top two feet of the sediment, and most of them in 
the top two inches (Chambers Group 2010). The distance between the 
marine life in the seafloor sediments and the intake of the slant wells 
will most likely be greater than 50 feet. If subsurface intake systems 
are deep enough, there is typically very little biological activity at 
deeper depths in natural sand beds. Thus the impacts to living natural 
resources would not be considered, in general, to be substantial 
(Chambers Group 2010; Geoscience 2010).
    Seawater contains approximately 35 grams of salt to one liter of 
water. To extract salt to make drinking water, desalination facilities 
use a process called reverse osmosis. Permeable membranes are used to 
filter out the salt as they allow only a certain size molecule or ion 
to pass through, thereby creating a freshwater stream and a dense brine 
stream. Most systems are less than 50% effective so the resulting 
effluent is approximately half brine (concentrated salt water) and half 
fresh water. The salt particles would be returned to the ocean in the 
form of brine, resulting in minimal net loss of salt from the ocean. 
The impacts of any ONMS-authorized brine discharge from a desalination 
project would be analyzed pursuant to NEPA as part of the authorization 
required for a discharge. They are not relevant to this notice's 
specific focus on the two new SUP categories, which are not meant to 
encompass brine discharges.
    Water is a vast and vital resource as it provides habitat, 
recreation, sustenance, and transportation to name a few examples. 
Historically, we have believed that water supplies were limitless, 
which may be the case depending on the beneficial use that it provides. 
With the recent drought in California, as well as regulatory decisions 
that remove public water supplies such as dam removal, drinking

[[Page 3755]]

water supplies have been severely restricted, thus increasing the 
interest in desalination. The Northern Pacific Ocean is estimated to 
contain 331,000,000 km\3\ of water (NOAA). Power plants draw hundreds 
of millions of gallons (MGD) of seawater each day for cooling. A medium 
sized desalination plant would extract approximately 20 MGD. In 
reality, over half of the water gets returned to the ocean. For 
desalination projects, approximately 50% or more of the seawater 
withdrawn will be returned to the ocean. Therefore NOAA believes the 
extraction of the ocean water, following appropriate environmental 
reviews, compliance with the MBNMS Desalination Guidelines, and 
application of appropriate BMPS, would not injure sanctuary resources 
and establishment of a SUP category is appropriate.

III. Assessing Fair Market Value Fees for the Two Proposed New SUP 
Categories

    NOAA proposes to use the same methods previously established in the 
Federal Register for assessing an application fee, administrative 
costs, and implementation and monitoring costs of these two new SUP 
categories (November 19, 2015; 80 FR 72415).
    Fair market value (FMV) fees are specific to each category of SUP. 
As such, NOAA is requesting public comment on the following proposed 
set of FMV fees:
    1. The fair market value of the continued presence of a pipeline 
transporting seawater to or from a desalination facility.

Fair Market Value Calculation

    The proposed annual fair market value would be calculated by 
assessing the volume of the pipeline in cubic inches multiplied by a 
value of $0.02 per cubic inch. The annual FMV equation would therefore 
be:

Annual FMV = ((V x $0.02/in\3\) x N)/yr

Where:

V = volume of the pipeline (in\3\) = ([pi] r\2\ x L);
[pi] = 3.14159;
r = radius of the pipeline (in); and
L = average length of the pipeline(in) for the portion within the 
sanctuary.
N = number of pipelines

    FMV costs would be paid as annual rent for the duration of the 
permit. In developing the proposed FMV calculation for this SUP 
category, NOAA examined: A conceptually similar SUP category for the 
continued presence of submarine cables; the California State Lands 
Commission (CSLC) lease process for pipelines, conduit, or fiber optic 
cables; and offset requirements established by CSLC for an open water 
desalination project in Southern California.
    NOAA's FMV calculation for the continued presence of submarine 
cables in a national marine sanctuary uses the overall linear distance 
(length) the infrastructure occupies on or within the seafloor within 
the sanctuary in assessing FMV (``Fair Market Value Analysis for a 
Fiber Optic Cable Permit in National Marine Sanctuaries''; 67 FR 
55201). The proposed FMV methodology to assess a fee for the presence 
of a pipeline uses the volume of the pipeline, which includes both its 
length (linear distance) and area, thus accounting for its total 
presence on or within the submerged lands.
    In addition, NOAA surveyed comparable fees assessed by the State of 
California for the issuance of leases in submerged lands of the state 
for pipelines, conduits or fiber optic cables. The value of $0.02 per 
cubic inch of pipeline would be established because NOAA considers this 
to be a similar metric (i.e., a state lease for allowing pipelines) to 
one of the options the CSLC uses to calculate the cost of the issuance 
of leases in submerged lands of the state for pipelines, conduits or 
fiber optic cables (CCR Title 2. Division 3. Chapter 1. Article 2 CCR 
2003. (Rent and other considerations)(a)(4)). In order to calculate the 
cost, the CSLC uses one of three approaches: a cost based on a linear 
value (cost per diameter inch per lineal foot of pipe, cable, conduit); 
a case by case rate to process an environmental impact report which is 
paid upfront; or 9% of the appraised value of the leased land. In order 
to calculate the FMV of the continued presence of a pipeline, NOAA 
selected to use a mathematical approach based on the size and footprint 
of the project pipelines. Therefore, NOAA's monetary multiplier is 
based on the first approach used by the CSLC.

Example

    In the FMV example provided below, a special use permit for a 
desalination plant project includes one, 100-foot long seawater intake 
pipelines with a 15-inch radius to be bored into the submerged lands of 
a sanctuary.

Annual FMV = ((V x $0.02/in\3\) x N)/yr

V = ([pi] r\2\ x L)
[pi] = 3.14159
r = 15 in
L = (100 ft) x (12 in/ft) = 1200 in
V = 3.14159 x (15 in)\2\ x 1200 in = 848,230 in\3\
N = number of pipelines = 1
Annual FMV = ((848,230 in\3\ x $0.02/in\3\) x 1)/yr
Annual FMV for one, or for each pipeline = $16,964/yr

    This annual cost would be applicable for the length of the permit.
    2. The fair market value of non-consumptive use of sediment 
substrate within the submerged lands of any national marine sanctuary 
for the purpose of in-situ filtration of seawater intake.

Fair Market Value Calculation

    The proposed FMV fee value for this SUP category is based on 
determining the amount of sand substrate within an active filtration 
area surrounding the pipeline. NOAA recognizes there are many factors 
that influence filtration rates, such as grain size and pumping 
distance. For transparency and clarity, NOAA proposes to calculate the 
volume of sand used for in-situ filtration as the area of a trapezoid 
determined by the depth of the pipeline and horizontal length into the 
sanctuary multiplied by a length along the shoreline. This geometric 
form is based on the area within the sanctuary jurisdiction beginning 
at mean high water and extending seaward along the sea floor twice the 
distance of the pipe. As documented in the Geosciences report (2010), 
as the distance increases from the well, the infiltration rate becomes 
slower through the seabed. We used a distance for the base of the 
trapezoid, equaling the average distance from mean high water to the 
terminus of the slant well pipes, and doubled it for the seafloor 
distance to represent the slower infiltration rate the farther you get 
from the well. Because every situation will be different, and there may 
not always be groundwater modeling available, we selected a 
conservative estimate of total volume of sediment that would provide 
the in-situ filtration. The proposed FMV would be calculated by 
assessing the volume of sand substrate within the sanctuary used for 
filtration for a desalination facility multiplied by a value of $0.003 
per cubic foot of sand. NOAA researched the cost of commercial sand and 
learned that cost is primarily driven by processing, packaging and 
especially shipping, due to the weight. The proposed value is based on 
available information and the deduction of these estimated added costs. 
Total FMV costs would be paid on an annual basis for the duration of 
the permit. To calculate the cross section area of sediment used for 
in-situ filtration, NOAA proposes that the shoreward boundary would be 
the mean high water (MWH) mark. The formula to calculate the area of a 
trapezoid is: A = h[\1/2\ x (b1 + b2)], where 
b1 and b2 are the lengths of each base, and h is 
the height

[[Page 3756]]

of the trapezoid. See the following figure:
[GRAPHIC] [TIFF OMITTED] TN12JA17.033

    The height of the trapezoid would be equal to the depth of the 
pipeline below the seafloor within the sanctuary at MHW. The first base 
(b1) would be the horizontal distance from MHW to the extent 
of the pipeline, averaged over the number of pipelines proposed. The 
other base (b2) would be equal to two times that average 
horizontal distance. This is a conservative approach as the filtration 
rate could extend much further seaward. Length equals 200 feet for one 
pipeline. If there were more than one pipeline, length would equal 200 
feet multiplied by the number of pipelines. For multiple pipelines 
closer than 200 feet apart, we would use the actual distance between 
pipelines. In a real world application, the calculation would be 
altered to meet the actual specifications of the individual project. 
Given the above parameters, the annual FMV cost would be equal to:

Annual FMV = L x A x $0.003/ft\3\

L = length (ft) equals 200 ft (100 ft on either side of the 
pipeline) of sand for filtration of seawater. If there is more than 
one pipeline, then L will be multiplied by the number of pipelines.
A = area of the trapezoid (ft\2\) = h[\1/2\ x (b1 + 
b2)]
h = height (ft) = vertical distance from seafloor at MHW to the 
depth of the bottom of the pipeline
b1 = base1 (ft) = horizontal distance between 
MHW to the end of pipeline
b2 = base2 (ft) = (2 x b1)

Example

    A special use permit for a desalination project that includes 
calculations for one pipeline. The calculation is for one pipeline that 
extends 100 feet horizontally into the sanctuary (b1) and 
the well terminates 325 feet below the surface of the seafloor 
calculated at MHW (h).

Annual FMV = L x A x $0.003/ft\3\

Where:

L = 200 ft
A = h(\1/2\(b1 +b2)) = 325(\1/2\(100 + 200)) = 
48,750 ft\2\
h = 325 ft
b1 = 100 ft
b2 = 2 x 100 ft = 200 ft
Volume of sand = 200 ft x 48,750 ft\2\ = 9,750,000 ft\3\
Annual FMV for one, or for each pipeline: 9,750,000 ft\3\ x $0.003/
ft\3\ = $29,250/yr

    This annual cost would be applicable for the length of the permit.
    Using the above example, a configuration for ten pipelines would 
have annual FMV of $292,500/yr (10 x $29,250/yr). This arrangement 
could be used for a desalination facility that would produce 
approximately 10 MGD or 3.65 billion gallons of water per year. Thus, 
the example of the FMV for in-situ sand filtration for 10 pipelines 
within a national marine sanctuary would add a cost of $0.00008/
gallons/yr or 1 cent for every 150 gallons of freshwater produced. This 
figure is obtained by dividing the FMV for in-situ sand filtration by 
10 million and multiplying it by 365, since the examples assume a 10 
million gallon per day capacity. The calculation is: ($292,500/year)/
(10,000,000 million gallons/day)/(365 days/year) = $0.00008/gallons/
year.
    While both SUP categories may or may not be applied to one project, 
the average FMV for a project which does includes both SUP categories 
mentioned above, would be obtained by adding the cost of both examples, 
dividing it by 10 million and multiplying it by 365, since the examples 
assume a 10 million gallon per day capacity. The calculation is: 
($292,500/year + $169,646/yr)/(10,000,000 million gallons/day)/(365 
days/year) = $0.00013/gallons/year.

Cost Comparison for Pre-Treatment for an Onshore Desalination Facility

    As mentioned above, NOAA surveyed fees assessed by other federal, 
state, and

[[Page 3757]]

local agencies for similar activities but could find no other example 
of FMV for the use or value of in-situ sand for filtering seawater. 
Therefore, for comparison purposes to determine a fair market value for 
the in-situ use of sand as a filter for desalination, NOAA used a 2008 
report produced by the Department of Interior Bureau of Reclamation 
(USBR) that analyzed actual costs for land-based reverse osmosis plants 
that produce potable water as the next best alternative to an offshore 
facility (USBR 2008).
    Pretreatment is considered the portion of the filtration where 
water is cleared of impurities in preparation for reverse osmosis. For 
the purpose of finding a comparative FMV with NOAA's in-situ sediment 
filtration, we determined that it would be reasonable to compare the 
FMV of pretreatment at a land-based facility producing 25 MGD with the 
FMV of pretreatment in-situ for a hypothetical 10 MGD facility similar 
to one currently proposed on California's Central Coast. The 
pretreatment cost for the land-based facility is based on annual 
operating and maintenance costs.
    In the land-based example from the USBR study, using the 
microfiltration method with ultraviolet disinfection, the cost of 
annual operations and maintenance for land-based pretreatment for a 25 
MGD facility would be $3.3M as described in the study (estimating a 
cost variation for reverse osmosis of +30% to -15% to reflect the 
confidence interval related to $3.3M). NOAA estimated that this would 
be equal to a cost of $0.0003616/gal/year.
    For the purpose of comparison, NOAA compared the cost of the USBR 
study site to a hypothetical coastal project that produced 10 MGD, 
which seems to be a reasonable scale for a future proposed project on 
the West Coast. The result of this comparison shows that the fees NOAA 
is proposing for FMV for in-situ sand filtration would be 35% of the 
costs of pretreatment for a land based facility ($0.0003616 gals/yr) 
(give or take confidence interval of +30% to -15%), which is the next 
best alternative.

Cost Comparison for Open Water Intake Desalination Facility

    In addition to the comparison method described above for charging 
for the volume of the pipeline in cubic inches, NOAA also looked at a 
similar open water pipeline project in Southern California that uses 
desalination to provide drinking water in order to estimate the 
magnitude of costs of regulatory compliance (not fair market value) 
associated with the permitting of desalination facilities in a real-
world setting. This open water pipeline project was proposed by 
Cabrillo, LLC and Poseidon, LLC and received a permit by the California 
Coastal Commission in 2008. The California State Lands Commission 
required the project to invest in various offset and restoration 
efforts to mitigate the impacts of the facility, such as obtaining 
25,000 tons of carbon offsets for the construction and operational 
impacts. In that project, the average offset price from 2011 to 2016 
was $14.87 per ton of carbon offset, for a total of $371,750. In 
addition, the facility was required to restore a minimum of 37 acres of 
wetlands (up to 55.4 acres) with a non-cancelable deposit of $3.7 
million and to provide a deposit of $25,000 to the CSLC to reimburse 
staff expenses incurred to monitor compliance with the terms of the 
lease. While these costs associated with environmental compliance are 
not directly comparable with the FMV proposed for these two SUP 
categories, they provide context for the scale of costs required by 
various agencies to permit or authorize large coastal projects such as 
a desalination plant.
    3. Conclusion.
    NOAA's application of the alternative methods in this analysis 
ensures fair market value fee proposals do not make the desalination 
method using in-situ sand filtration cost-prohibitive relative to other 
methods. Based on the comparison analysis, the fees that NOAA proposes 
to charge are comparative, not prohibitively expensive, and less than 
the existing reasonable alternatives for sand filtration. For a 
proposed project that would require both SUP category types, NOAA 
considered the annual costs of the proposed fees based on the examples 
presented in this notice, and converted them to a dollar per gallon 
figure that can be applied to future proposed projects of varying size 
and scale. NOAA determined that the total cost of the fair market value 
using both SUP category types would amount to approximately $0.00013/
gal for a facility of a scale similar to the example used in this 
notice (i.e., ten 100-foot pipelines for a 10 MGD facility). As stated 
above, this would be in addition to the potential administrative cost 
associated with the environmental review, and application review of an 
SUP.

IV. Request for Comments

    NOAA is requesting public comments on whether the addition of two 
new categories to the requirements of special use permits pursuant to 
the requirements of Section 310 of the National Marine Sanctuaries Act 
(16 U.S.C. 1441), which would apply to all coastal national marine 
sanctuaries with authorization authority, is the appropriate mechanism 
to allow activities associated with a desalination project. The two new 
SUP categories would be: (1) The continued presence of a pipeline 
transporting seawater to or from a desalination facility; and (2) the 
use of sediment to filter seawater for desalination. NOAA is also 
requesting comments on the proposed methods to calculate the FMV costs 
of the use of sanctuary resources.

V. Classification

A. National Environmental Policy Act

    NOAA has concluded that this action will not have a significant 
effect, individually or cumulatively, on the human environment. This 
action is categorically excluded from the requirement to prepare an 
Environmental Assessment or Environmental Impact Statement in 
accordance with Section 6.03c3(i) of NOAA Administrative Order 216-6. 
Specifically, this action is a notice of an administrative and legal 
nature. This action would only establish the two new special use permit 
categories and the methods for calculating fair market value for 
applicable projects. It does not commit the outcome of any particular 
federal action taken by NOAA. Furthermore, individual permit actions 
taken by ONMS will be subject to additional case-by-case analysis, as 
required under NEPA, which will be completed as new permit applications 
are submitted for specific projects and activities. In addition, NOAA 
may, in certain circumstances, combine its special use permit authority 
with other regulatory authorities to allow activities not described 
above that may result in environmental impacts and thus require the 
preparation of an environmental assessment or environmental impact 
statement. In these situations, NOAA will ensure that the appropriate 
NEPA documentation is prepared prior to taking final action on a permit 
or making any irretrievable or irreversible commitment of agency 
resources. The NEPA analysis would describe the impacts of the full 
project (i.e., both construction (allowed with an authorization) and 
operations (allowed with an SUP)).

B. Paperwork Reduction Act

    Notwithstanding any other provisions of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information subject

[[Page 3758]]

to the requirements of the Paperwork Reduction Act (PRA), 44 U.S.C. 
3501 et seq., unless that collection of information displays a 
currently valid Office of Management and Budget (OMB) control number. 
Applications for the special use permits discussed in this notice 
involve a collection-of information requirement subject to the 
requirements of the PRA. OMB has approved this collection-of-
information requirement under OMB control number 0648-0141. The 
collection-of-information requirement applies to persons seeking 
special use permits and is necessary to determine whether the proposed 
activities are consistent with the terms and conditions of special use 
permits prescribed by the NMSA. Public reporting burden for this 
collection of information is estimated to average twenty four (24) 
hours per response (application, annual report, and financial report), 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. This estimate does not include 
additional time that may be required should the applicant be required 
to provide information to NOAA for the preparation of documentation 
that may be required under NEPA.

    Authority: 16 U.S.C. 1431 et seq.

    Dated: January 3, 2017.
John Armor,
Director, Office of National Marine Sanctuaries.

References

1. MBNMS Guidelines for Desalination Plants in the MBNMS; May 2010, 
online: http://montereybay.noaa.gov/resourcepro/resmanissues/pdf/050610desal.pdf.
2. ONMS Fair Market Value Analysis for a Fiber Optic Cable Permit in 
National Marine Sanctuaries, Aug 2002.
3. NOAA Final Notice of Applicability of Special Use Permit 
Requirements to Certain Categories of Activities Conducted Within 
the National Marine Sanctuary System; May 2013, online: http://sanctuaries.noaa.gov/management/fr/78fr25957.pdf.
4. Moss Landing Marine Lab, Ecological Effects of the Moss Landing 
Powerplant Thermal Discharge; June 2006.
5. Ballard Marine Construction report prepared for Monterey Regional 
Water Pollution Control Agency; 2014.
6. Geoscience Technical Memo; South Orange Coastal Ocean 
Desalination Project--Vertical Infiltration Rate of Ocean Water 
Migrating Through the Seafloor in the Vicinity of the Slant Well 
Intake System; 2010.
7. Geoscience NPDES Start-up Report: Marina Slant Test Well Water 
Discharge to the Monterey Regional Water Pollution Control Agency 
(MRWPCA) Pacific Ocean Outfall; 2015.
8. Jenkins Consulting Memo, Potential Impacts on Wave and Current 
Transport Processes Due to Infiltration Rates Induced by the South 
Orange Coastal Ocean Desalination Project; 2010.
9. Chambers Group Memo: Pretreatment and Design Considerations for 
Large-Scale Seawater Facilities; 2010, online: http://www.mwdoc.com/cms2/ckfinder/files/files/Evaluation%20of%20Potential%20Impacts%20%20to%20Marine%20Life%20by%20Slant%20Wells%20-%20MLPA%20DEIR%20Comment%202010-10-13.pdf.
10. Bureau of Reclamation Report: Pretreatment and Design 
Considerations for Large-Scale Seawater Facilities, online: https://www.usbr.gov/research/AWT/reportpdfs/report137.pdf.
11. NOAA National Centers for Environmental Information Web site; 
Table 1; online: https://www.ngdc.noaa.gov/mgg/global/etopo1_ocean_volumes.html.

[FR Doc. 2017-00515 Filed 1-11-17; 8:45 am]
BILLING CODE 3510-NK-P