Offshore Wind Farms Are Major Sources Of Air Pollution? What EPA’s Air Permit For Vineyard Wind Means For Future Development

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On May 19, 2021, the U.S. Environmental Protection Agency (“EPA”) issued a final Clean Air Act Outer Continental Shelf air permit to Vineyard Wind 1, LLC (“Vineyard Wind”), thereby clearing a major permitting hurdle in advance of commencing construction of an 800-megawatt wind farm that will be the nation’s first major offshore wind project.

The project represents an important step for the country to meet the Biden administration’s goal of generating 30 gigawatts of energy from offshore wind by 2030. While Europe has a network of over 5,300 offshore wind turbines, the United States currently has just seven, and President Biden wants to catch up fast. Vineyard Wind is the first of seven outer continental shelf (“OCS”) wind farms that EPA Region 1 is currently evaluating for combined construction and operation permits.

Given the Biden administration’s goal of fostering rapid development of offshore wind development, it might be surprising that EPA determined Vineyard Wind to be a major source of air pollution and thus subject to the Clean Air Act’s stringent Prevention of Significant Deterioration (“PSD”) and Nonattainment New Source Review (“NNSR”) permitting requirements. In determining the project’s potential emissions, EPA did not limit itself to counting emissions from engines physically on the wind turbines (like backup generators). These emissions alone would not have rendered the project a major source. Instead, pursuant to an OCS-specific provision of the Clean Air Act, EPA also counted certain emissions from vessels used for construction and operation, including when those vessels are en route to or from the turbine construction area and within 25 miles of the project area.

Accordingly, having deemed the project a major source of air pollution, the permit imposes stringent emission limits for the equipment and vessels used to construct and operate the wind farm. Additionally, having triggered NNSR, Vineyard Wind must obtain costly emission offsets for nitrogen oxides (“NOX”) and volatile organic compounds (“VOCs”).

Developers of and investors in OCS wind projects should take note of the Vineyard Wind air permit. EPA’s permit confirms that, in addition to needing to navigate the permitting gauntlet with over a dozen other agencies, OCS wind projects will also be subject to the significant costs and uncertainty of PSD and NNSR permitting.

Regulatory Background

Under the Clean Air Act, no facility with the potential to emit certain threshold levels of specified air pollutants (so-called “major sources”) may be constructed without a permit. The proposed source must obtain a PSD permit if located in an area in attainment with air quality standards, or an NNSR permit if located in an area not in attainment with such standards. PSD permits require the source to apply “best available control technology” (“BACT”), and NNSR permits require the even more stringent “lowest achievable emission rate” (“LAER”).

In the 1990 amendments to the Clean Air Act, Congress extended the applicability of PSD and NNSR requirements beyond major onshore stationary sources. In creating Section 328, Congress gave EPA jurisdiction to regulate OCS sources “located offshore of the States along the Pacific, Arctic and Atlantic Coasts” and in the eastern Gulf of Mexico. 42 U.S.C. § 7627(a)(1).

A key provision of Section 328 is the definition of the term “Outer Continental Shelf source,” which means “any equipment, activity, or facility” that “(i) emits or has the potential to emit any air pollutant, (ii) is regulated or authorized under the Outer Continental Shelf Lands Act, and (iii) is located on the Outer Continental Shelf or in or on waters above the Outer Continental Shelf.” 42 U.S.C. § 7627(a)(4)(C). Importantly, the definition goes on to state:

Such activities include, but are not limited to, platform and drill ship exploration, construction, development, production, processing, and transportation. For purposes of this subsection, emissions from any vessel servicing or associated with an OCS source, including emissions while at the OCS source or en route to or from the OCS source within 25 miles of the OCS source, shall be considered direct emissions from the OCS source.

Id. (emphasis added). EPA’s regulations incorporate the statutory definition and further specify that a vessel will only be an OCS source when: “(1) [p]ermanently or temporarily attached to the seabed and erected thereon and used for the purpose of exploring, developing or producing resources therefrom” or “(2) [p]hysically attached to an OCS facility.” 40 C.F.R. § 55.2.

Thus, while people have long debated whether to count emissions from support vessels docked at an onshore source or in transit to or from an onshore source in determining an onshore source’s potential to emit, Congress has spoken for OCS sources: they count.

However, neither the statutory nor regulatory definitions of OCS source clearly answer whether and to what extent support vessels — whose emissions must be considered as direct emissions from the OCS source in calculating the source’s potential to emit — are themselves subject to BACT or LAER pollution controls. EPA has acknowledged this ambiguity and taken the position that support vessels are generally not subject to BACT or LAER. See Resisting Envtl. Destruction on Indigenous Lands, REDOIL v. U.S. E.P.A., 716 F.3d 1155, 1163–64 (9th Cir. 2013). A support vessel will only be subject to BACT or LAER during operations that render it an OCS source under EPA’s regulatory definition (i.e., when attached to the seabed for purposes of construction or physically attached to an OCS source). See 40 C.F.R. § 55.2.

The Vineyard Wind Permit

Consistent with the foregoing, the Vineyard Wind permit requires BACT or LAER for the following OCS sources:

  1. Engines on the wind turbines (e.g., backup generators), and
  2. Vessel engines, but only while the vessels are operating as OCS sources.

The permit generally requires vessel engines for the project to meet emission standards at a more stringent “tier” than otherwise required by regulation (e.g., the permit requires that certain categories of engines meet Tier 4 standards, even though such engines might otherwise only need to meet the less stringent Tier 3 standards based on model year). However, the permit includes some flexibility. Namely, Vineyard Wind may use engines meeting the next lower tier if:

  1. A vessel with a higher tier engine is not available within two hours of when the vessel must be deployed; or
  2. The total emissions associated with the use of a vessel with the higher tier engine (including emissions from transit to the construction site) would be greater than the total emissions associated with the use of the vessel with the next lower tier engines.

Such flexibility is crucial. Offshore wind remains nascent in the United States, and the country lacks the necessary fleet of vessels capable of constructing today’s massive turbines. For example, in constructing the two pilot turbines off the coast of Virginia Beach, the necessary heavy-duty vessels were brought in from Europe. And due to the Jones Act’s requirement that shipping between U.S. ports be conducted by U.S.-flag ships, the vessels servicing the Virginia Beach project had to be operated out of a port in Canada and commute more than 800 miles each way to the project site. Thus, an installation that would have taken a few weeks in Europe took a year.

Finally, as also required by Section 328, the permit requires Vineyard Wind to purchase emission offsets for NOX and VOCs because the closest onshore area is classified as nonattainment for those pollutants. Notably, while the permit does not require BACT or LAER for vessels while en route to or from the turbines, it does count such to-and-from emissions when calculating the offsets Vineyard Wind must obtain. Neither the Clean Air Act nor EPA’s regulations squarely address the appropriateness of requiring offsets for to-and-from emissions.

Outlook

With more than 90,000 miles of coastline, the United States has plenty of real estate to implement the Biden administration’s goal of 30 gigawatts of offshore wind by 2030. Yet OCS wind projects still face significant legal, economic, and political obstacles. EPA’s permit for Vineyard Wind spotlights one significant obstacle: PSD and NNSR permitting. Thus, whether a proposed OCS project is an offshore crude export terminal or an ostensibly zero-emission project like a wind farm, developers and investors should plan for the additional costs, multi-year lead time, and uncertainty of PSD and NNSR permitting. Moreover, even after a project secures a PSD or NNSR permit, the permit is still subject to direct (i.e., preconstruction permit appeals) and indirect (i.e., Title V operating permit petitions for review) public challenges by those seeking to slow or kill the project.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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