BOEM | Global Power Law & Policy

BOEM Issues Final Sale Notice for Offshore Wind Lease Areas in Carolina Long Bay

Mar 30 2022

U.S. Energy, Infrastructure, and Resources Alert

By: Stanford D. Baird, Kenneth J. Gish, Jr, Nathan C. Howe, David L. Wochner, Kimberly B. Frank, Ankur K. Tohan

The Bureau of Ocean Energy Management will hold its next offshore wind lease auction on 11 May 2022, for two lease areas in the Carolina Long Bay. The lease areas comprise 110,091 acres off the coast of North and South Carolina. The auction date will occur weeks ahead of a 10-year moratorium on offshore energy leases imposed in 2020 by the Trump administration prohibiting auctions of leases for wind, in addition to oil and gas, off the coasts of North and South Carolina beginning on 1 July 2022.

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D.C. Circuit Affirms That Offshore Wind Lease Does Not Trigger NEPA Review

Jun 03 2021

By: J. Timothy Hobbs, Ankur K. Tohan, Robert M. Smith, David L. Wochner, Natalie J. Reid

The Bureau of Ocean Energy Management (BOEM) does not need to conduct full environmental reviews under the National Environmental Policy Act (NEPA) when granting an offshore wind farm lease, the D.C. Circuit Court of Appeals has affirmed. The decision followed a lawsuit by commercial fishing organizations and seaside municipalities who claimed that BOEM violated NEPA and the Outer Continental Shelf Lands Act (OCSLA) when it auctioned an offshore lease to Equinor (formerly Statoil) without performing an environmental review of the anticipated windfarm project. The decision puts to rest the question of whether a mere lease sale may trigger extensive environmental review under NEPA, potentially streamlining the initial lease acquisition process, but also requiring the investment of significant funds before developers have cleared environmental review.

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Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease

Mar 23 2017

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, Michael L. O’Neill

Following an auction on March 16, 2017, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) named Avangrid Renewables, LLC (Avangrid) the provisional winner of the auction. Avangrid, majority owned by global energy firm Iberdrola, S.A., outbid three other auction participants to secure rights to a 122,405-acre area off the coast of Kitty Hawk, North Carolina. Avangrid and BOEM will now work to finalize the provisional lease and continue to develop the project.

BOEM has not scheduled any other lease auctions for offshore wind projects on the Outer Continental Shelf. However, as this month’s unsolicited bids for offshore Massachusetts and New York demonstrate, businesses remain interested in developing offshore wind projects with or without an open lease application solicitation. Therefore, in addition to submitting unsolicited lease applications, there is an opportunity to advocate at the federal level with the Trump Administration and BOEM to continue the leasing program on the Outer Continental Shelf and to continue advocating for state-level incentives for offshore wind projects.

The Auction Process and the Winning Bid
Following years of preparation, BOEM announced its plans to hold the North Carolina Outer Continental Shelf lease in January 2017. Nine bidders pre-qualified as “eligible bidders” under BOEM’s auction rules. Four companies participated in the March 16 auction:

Avangrid
Statoil Wind US LLC
Wind Future LLC
wpd offshore Alpha LLC (wpd offshore)

The bidding lasted 17 rounds, with Avangrid and wpd offshore both bidding more than $8 million in the 16th round. Avangrid’s 17th round bid of $9,066,650 successfully secured the provisional win for Avangrid.

Next Steps for the North Carolina Lease and Beyond
Part 585 of the Code of Federal Regulations lays out the next steps for finalizing the lease for the offshore North Carolina block. First, the U.S. Department of Justice and the Federal Trade Commission will review BOEM’s auction process. Then Avangrid must execute the lease, file financial assurance, and pay the balance of the “bonus bid” (the difference between the winning bid and the applicable bid deposit) within 10 days of receiving the lease documents.

Once the lease is finalized, Avangrid will have one year to submit its Site Assessment Plan (SAP) to BOEM. The SAP describes the initial activities the leaseholder will undertake to evaluate the lease site (federal guidance available here). If approved, BOEM’s regulations allow Avangrid five years to develop and submit a Construction and Operations Plan for BOEM’s approval, although the plan must be filed at least six months prior to the end of this five-year period. A Construction and Operations Plan outlines the facilities that the leaseholder plans to construct and use for its project, as well as construction activities, commercial operations, and decommissioning plans (additional federal guidance here). Once the Construction and Operations Plan is filed, BOEM will evaluate the potential environmental impacts of the proposed project and reasonable alternatives, as well as solicit public comment. If BOEM approves the Construction and Operations Plan, Avangrid would have a 25-year commercial lease term with the possibility of renewal.

More broadly, the North Carolina offshore wind lease auction was the last pending open auction. BOEM has evaluated potential commercial leasing and received indications of commercial interest in other Outer Continental Shelf areas, such as offshore California, Hawaii, and South Carolina, but the agency has not set a timetable for announcing any further competitive lease auctions. In the absence of an open auction, interested parties may submit unsolicited lease applications in accordance with 30 C.F.R. § 585.230.

There is also an opportunity to advocate for additional competitive Outer Continental Shelf lease auctions with the Trump Administration. President Donald Trump’s “America First: A Budget Blueprint to Make America Great Again” proposes a 12 percent cut to the Department of the Interior’s budget, suggesting that agencies like BOEM within the Department may be de-emphasized under the new Trump Administration. In contrast, Secretary of the Interior Ryan Zinke called the results of last week’s North Carolina auction a “big win for collaborative efforts with state, local, and private sector partners,” so the Trump Administration, as well as legislators in Congress, may be disposed to support continued offshore wind development as this year’s federal budget debate unfolds.

Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York

Mar 16 2017

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, and Michael L. O’Neill

On March 10, 2017, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) posted four unsolicited applications for wind project leases on the Outer Continental Shelf. PNE Wind U.S.A., Inc. has filed three lease applications, two for offshore Massachusetts and one for offshore New York. Separately, Statoil Wind US LLC filed a lease application for offshore Massachusetts.

The developers’ lease requests, particularly the overlapping requests for offshore Massachusetts, indicate continued interest and growing competition in the U.S. offshore wind sector. The quickening pace of activity in the U.S. offshore wind market, including completion of Deepwater Wind’s Block Island offshore wind farm and today’s auction process for offshore North Carolina, suggests that offshore wind projects may become a more important part of the U.S. power generation portfolio in the coming years. In addition, the unsolicited application for offshore New York and the federal government’s response may provide an early indication as to the Trump Administration’s position on offshore wind development going forward. Increased activity and a new administration in the White House present opportunities to engage on this issue and shape the policies that will govern the federal offshore leasing program for the next four or eight years, or beyond. Read More

Another Step Toward North Carolina Offshore Wind: Proposed Offshore Wind Farm Lease Announced

Aug 18 2016

By Stanford D. Baird, David Wochner, Amy H. Fullbright and James L. Joyce

The U.S. Department of the Interior has just announced the next step in the years-long process toward the development of wind energy facilities off the coast of North Carolina. In a notice published in the Federal Register on August 16, 2016, the Bureau of Ocean Energy Management (“BOEM”) proposed the sale of commercial lease rights to develop wind energy facilities on the Outer Continental Shelf off the coast of northeastern North Carolina. The notice can be found at: https://federalregister.gov/a/2016-19552. The area proposed for lease encompasses approximately 122,400 acres, begins about 24 nautical miles off the Outer Banks of North Carolina, and contains 21.5 Outer Continental Shelf blocks. This area is known as the Kitty Hawk Wind Energy Area (“WEA”) and is situated in rough proximity to the Virginia WEA that was leased by BOEM pursuant to an auction process in 2013. A map of the proposed Kitty Hawk lease area can be found at: http://www.boem.gov/Map-Standard-Background/. Public comments to BOEM’s notice, as well as expressions of interest in the proposed lease for the Kitty Hawk WEA, may be submitted during the 60-day comment period that ends on October 17, 2016.

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BOEM Defines Wind Energy Areas Offshore North Carolina

Aug 14 2014

On Monday, the U.S. Department of the Interior announced that the Bureau of Ocean Energy Management (“BOEM”) has defined three Wind Energy Areas off the North Carolina coast for potential commercial wind energy development.

The three Wind Energy Areas cover approximately 307,590 acres, which is a reduction in the area initially considered by BOEM for commercial scale wind power development. The Wind Energy Areas announced Monday include about 122,405 acres off the coast of Kitty Hawk, North Carolina, and two areas of 51,595 acres and 133,590 acres off the coast of Wilmington, North Carolina. A map of the Wind Energy Areas can be found here.

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