Bureau of Ocean Energy ManagementAs a part of President Obama’s Climate Action Plan to promote American leadership in renewable energy, and coupled with the Interior’s “Smart from the Start” wind energy initiative for the Atlantic Coast, the Interior has announced the Nation’s largest offshore wind energy area available for commercial development. The Interior and Bureau of Ocean Energy Management (BOEM) announced on 06/17/14 that more than 742,000 acres offshore Massachusetts will be available for commercial wind energy leasing. By far, this proposed area is the largest in federal waters and will nearly double the federal offshore acreage available for commercial wind energy projects.

The proposed Wind Energy Area is located approximately 12 miles offshore Massachusetts. The Bureau of Ocean Energy Management (BOEM) proposes to auction the Wind Energy Area as four leases. The proposed sale notice triggered a 60-day public comment period ending on August 18, 2014. The end of the comment period also serves as the deadline for any participating companies to submit their qualification packages. To be eligible to participate in the lease sale, the BOEM must first determine that the bidder is legally, technically and financially qualified before the Final Sale Notice is published. The BOEM strongly encourages potential bidders to submit a qualification package as early as possible during the comment period to ensure adequate time for processing.

The Gulf Region will see new lease developments as well. The Gulf Region is preparing for several sales in the Gulf of Mexico occurring in the years 2014-2017 under the Five Year Outer Continental Shelf Oil and Gas Leasing Program. Lease Sale 238, covering the Western Gulf of Mexico, is set for August 2014. This will be followed by Lease Sale 235, covering the Central Gulf of Mexico, and Lease Sale 246, covering the Western Gulf of Mexico in 2015.

 

Guest blogger Krystin Frazier is an attorney in the New Orleans office of King, Krebs & Jurgens focusing on environmental, toxic tort, and oil & gas matters. She is admitted to practice law in Louisiana.

 

Bureau of Ocean Energy ManagementThe Center for Sustainable Economy, a non-profit public interest consulting firm, filed a lawsuit today against the Bureau of Ocean Energy Management (BOEM) in an attempt to halt that agency’s first approved five-year Outer Continental Shelf (OCS) Oil and Gas Leasing Program since the BP oil spill. The Program, which establishes a schedule for 2012-2017 to be used as a basis for considering where and when oil and gas leasing might be appropriate in both the Gulf of Mexico and Alaska, received final approval from U.S. Department of the Interior on August 27, 2012.

The Center for Sustainable Economy contends that the BOEM’s implementation of the Program was a hasty, uniformed, and illegal course of action. In a press release, the Center stated that “[i]ncomplete and flawed economic analysis led BOEM to rush ahead with new offshore leases that may not be economically justified in violation of the National Environmental Policy Act, Outer Continental Shelf Lands Act, and Administrative Procedure Act.”

Industry leaders and GOP members on Capitol Hill certainly are opposed to the lawsuit. E2-Wire, an energy and environmental blog based in Washington D.C., reports that “a number of industry groups—including the American Petroleum Institute and the International Association of Drilling Contractors—have also petitioned the appeals court to intervene in the case on Interior’s side, noting their interests are at stake in the case.” While they believe the Program is too modest and should have made more Outer Continental Shelf areas available for drilling and energy exploration, they recognize that the Center’s success in the litigation would be another setback for an industry still coping with the aftermath of the BP oil spill.

The lawsuit was filed in the United States Court of Appeals for the District of Columbia.

Middelgrunden Wind Plant (HC Sorensen, Middelgrunden Wind Turbine Cooperative, NREL/Pix 17855

On May 14, 2012, the Bureau of Ocean Energy Management (BOEM) announced a finding of “no competitive interest” with regard to a proposed right-of-way grant area off the Mid-Atlantic coast for construction of an offshore wind energy transmission line. While BOEM’s decision represents a key step forward for this federal offshore wind farming project, two fast-moving projects off the coast of Texas suggest that development in waters under state jurisdiction may well have the inside track over federal projects, due to a more streamlined regulatory process. In addition, offshore wind projects along the Gulf Coast benefit from a general population more welcoming to offshore industry, as well as a high concentration of marine and offshore industrial fabricators and service companies that give the Gulf Coast a competitive advantage with lower construction, operation, transportation and maintenance costs.

The Coastal Point Energy project has been licensed for testing by the Texas General Land Office and contemplates installation (planned for the end of 2011 but apparently delayed) of a test wind turbine on a platform in shallow Texas waters of the Gulf of Mexico. Ultimately, Coastal Point plans to spend $720,000,000 on a 300 megawatt wind farm 8.5 miles off Galveston on 12,350 leased acres.  Additionally, the Army Corps of Engineers is developing an environmental impact statement, anticipated to be completed in 2014, for a second project under development by Baryonyx Corporation, Inc.  Baryonyx holds leases in Gulf of Mexico state waters, offshore Willacy and Cameron Counties, and proposes to construct an approximately 300-turbine wind farm.

As the Gulf Coast offshore wind industry continues to develop, it brings with it supply chain manufacturing and related job growth.  An example of the potential for such economic development is the manufacturing facility established by UK-based Blade Dynamics at the Michoud Assembly Facility in New Orleans East.  Incentivized by state tax credits and worldwide demand for wind turbine parts, the company is hiring hundreds of workers. This type of green energy industrial development bodes well for the economic future of a region whose prospects were severely compromised by the Obama Administration’s drilling post-BP spill drilling moratorium and general hostility to the oil and gas industry that traditionally has been the backbone of the area economy.