The U.S. Department of Energy (DOE), in partnership with the Department of the Interior, developed the National Offshore Wind Strategy (2012) to help accelerate the commercialization of cost‑effective offshore wind production in federal and state waters and to ensure an environmentally responsible industry. This followed the Bureau of Ocean Energy Management (BOEM) introduction of its Outer Continental Shelf (OCS) renewable energy regulations in 2009, which was authorized by the Energy Policy Act of 2005. As the United States works to obtain energy independence and increased reliance on renewables, the path to success has been challenged by administrative and regulatory frameworks that have slowed down the process. Two major changes have recently been announced by DOE, with the intent to improve U.S. offshore wind development.
Proposed Updates to OCS Policy
Since their introduction in 2009, BOEM’s OCS renewable energy regulations have not been updated. Under these current regulations, BOEM conducted 11 auctions and issued and managed 27 active commercial leases. However, in mid-January, BOEM released “lessons learned” from this experience and sought to correct issues that have occurred during the process. BOEM has announced a plan to comprehensively update its OCS renewable energy regulations to modernize the offshore energy development framework.
BOEM’s notice of proposed rulemaking, released January 10, is designed to streamline the entire administrative process governing offshore renewable energy development while still promoting U.S. climate and renewable energy goals. It is hoped that these changes will decrease the costs and uncertainty of developing offshore wind facilities while saving developers approximately $1 billion over a 20-year period.
The proposed rule outlines eight major reforms:
- Eliminating unnecessary requirements for the deployment of meteorological buoys
- Increasing survey flexibility
- Improving the project design and installation verification process
- Establishing a public renewable energy leasing schedule
- Reforming BOEM’s renewable energy auction regulations
- Tailoring financial assurance requirements and instruments
- Clarifying safety management system regulations
- Revising other provisions and making technical corrections
One of the key changes to these regulations is that BOEM will be required to publish a schedule of anticipated lease auctions and develop a process of maintaining and periodically updating the current 5-year schedule. BOEM first released a 5-year schedule of planned lease sales in October 2021, for the years 2021 to 2025. Every 2 years the schedule will have to be reviewed for changes and updates to allow stakeholders and bidders to plan projects in advance. It is hoped that these changes will reduce risk and provide more regulatory certainty, facilitating investments in offshore wind projects and the local supply chain.
Public comments on the proposed modernization rule are due at the end of March. The proposed modernization rule is subject to further changes at BOEM’s discretion depending on the public comments it receives.
Changes to Safety and Environmental Management
On January 17, the Department of the Interior announced that the Bureau of Safety and Environmental Enforcement (BSEE) will now be responsible for enforcing regulations governing offshore renewable energy activities instead of BOEM. This does not change any current requirements or impose any additional actions for lessees. Instead, it gives BOEM responsibility for lease siting, planning, and conducting environmental analyses, while BSEE will handle offshore wind design, safety, compliance, and decommissioning once the leases are awarded. These changes are intended to streamline activities and improve time to completion, and help to achieve the current administration’s goals of 30 gigawatts of offshore wind energy by 2030 and 15 gigawatts of floating offshore wind energy by 2035.
Gulf of Mexico Leases
BOEM has identified two wind energy areas for the Gulf of Mexico. One is a 188,000‑acre tract off the coast of Lake Charles, Louisiana. The other, a 546,000-acre site, is located south of the city of Galveston, Texas. These two sites, when developed, have the potential to power more than 3 million homes. Some estimate that with development of wind energy in the gulf, there is a potential to generate almost 510 gigawatts of power annually.
Though federal auctions will take place sometime in 2023, the states of Texas and Louisiana have different approaches to offshore wind. In Louisiana, the state legislature has successfully passed an energy plan setting a 5-gigawatt goal from offshore wind installations by 2035. Texas has not proposed or supported offshore wind legislation to date. Regardless, fishing interests and interstate grid permitting are areas of concern for offshore Gulf of Mexico wind leases.
