Trump executive order on domestic energy policy

U.S. President Donald Trump has signed an executive order affecting domestic energy policy.  His March 28, 2017 Presidential Executive Order on Promoting Energy Independence and Economic Growth includes a variety of directives, generally aimed at reducing federal regulations affecting domestic energy production.  Here's a look at his Executive Order targeting Obama-administration climate regulations and other agency actions that potentially burden the development or use of domestically produced energy resources.

The Executive Order includes 8 operative sections.  One provides policy statements; six call for regulatory reviews that could lead to rule changes or revocations, or directly revoke and rescind Obama-era actions.  The final section includes general provisions.

Section 1 includes five policy statements, such as that "is in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."  It also sets a federal policy "that executive departments and agencies (agencies) immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."

Section 2 calls for an immediate review of all agency actions that potentially burden the safe, efficient development of domestic energy resources, "with particular attention to oil, natural gas, coal, and nuclear energy resources."  It directs agency heads to submit a memorandum to the Office of Management and Budget detailing such potentially burdensome actions, and including "specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency actions that burden domestic energy production."  With respect to actions targeted with specific recommendations in a final report, agency heads are directed to "as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law."

Section 3 rescinds or revokes a variety of Presidential actions and reports, including several of President Obama's executive orders regarding climate change, the President's 2013 Climate Action Plan, and the Council on Environmental Quality's 2016 final guidance for federal agencies on consideration of greenhouse gas and climate issues in performing reviews of agency actions under the National Environmental Policy Act.

Section 4 calls for the Administrator of the Environmental Protection Agency to "immediately take all steps necessary to review" the Clean Power Plan governing electricity-sector emissions and related rules "for consistency with the policy set forth in section 1 of this order and, if appropriate, shall, as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules."

Section 5 disbands a working group on the social cost of greenhouse gas emissions, and restricts the ways agencies may account for the monetary value of changes in greenhouse gas emissions resulting from regulations.

Section 6 calls for the Secretary of Interior to lift moratoria on federal land coal leasing activities imposed under a 2015 order, and to commence federal coal leasing activities.

Section 7 calls for review of federal regulations affecting emissions from the oil and gas sector, including 2016 emissions standards for new, reconstructed and modified sources, and a 2015 rule governing hydraulic fracturing on federal and Indian lands, among others.

Section 8 includes general provisions, generally similar to those found in other executive orders.

Kitty Hawk NC offshore wind leasing

The U.S. Department of the Interior has proposed leasing federal ocean space offshore North Carolina for commercial offshore wind development.  On August 12, 2016, the Bureau of Ocean Energy Management announced a proposed lease sale for the 122,405-acre Kitty Hawk Wind Energy Area.  The proposal could lead to leasing of sites offshore North Carolina for one or more marine renewable energy projects.

The path to federal leasing of commercial wind development sites offshore North Carolina began in 2012, when the Bureau of Ocean Energy Management published a Call for Information and Nominations (or “Call”) in the Federal Register, to evaluate industry interest in commercial wind leases in three areas offshore North Carolina and to request comments regarding site conditions, resources and other uses within the Call areas.

In 2014, BOEM announced its identification of three Wind Energy Areas offshore North Carolina, including the Kitty Hawk, Wilmington West, and Wilmington East Wind Energy Areas.

In 2015, BOEM published an Environmental Assessment of potential environmental and socioeconomic impacts associated with issuing commercial wind leases and approving site assessment activities on the lease areas, followed by a revised Environmental Assessment and a "Finding of No Significant Impact."  This so-called FONSI concluded that reasonably foreseeable environmental effects associated with the commercial wind lease issuance and related activities would not significantly impact the environment.

Most recently, BOEM published a Proposed Sale Notice (PSN) and Request for Interest (RFI) for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore North Carolina in the Federal Register on August 16, 2016.  The notice applies to the Kitty Hawk Wind Energy Area. BOEM has rolled the Wilmington East and Wilmington West areas into its planning and leasing process for Call Areas offshore South Carolina, given their proximity and shared attributes.

If a developer is interested in bidding on the Kitty Hawk site lease rights, it must first submit a qualification package to BOEM.  If BOEM finds the developer to be legally, technically and financially qualified by the time the Final Sale Notice is published, the developer is eligible to participate in the lease sale.  Eligible bidders must notify BOEM within the 60-day comment period established by the notice.

BOEM advances California offshore wind leasing

U.S. ocean energy managers are moving closer to leasing sites in federal waters offshore California for wind energy development.  Acting in response to a lease area requested by Trident Winds, LLC, this month the Bureau of Ocean Energy Management (BOEM) issued a Request for Interest in that area to evaluate whether any other developer is interested in competing for a lease.

Trident Winds has initiated development of a commercial scale offshore wind farm off Point Estero, California.  Its Morro Bay or MBO Project would be located in federal waters about 33 nautical miles northwest of Morro Bay; the site features water depths of 2,600 to 3,300 feet.  In light of these site conditions, Trident Winds' proposed project would consist of 100 floating foundations, each supporting a wind turbine generating 7-8 megawatts of energy.  Electricity would be brought ashore via a single transmission cable.

Trident Winds requested a commercial wind lease from BOEM on January 14, 2016, covering a 67,963-acre proposed lease area.  Because BOEM had not previously solicited interest in leasing this area, BOEM treated Trident Winds' request as "unsolicited."  Under BOEM's offshore renewable energy program, when presented with an unsolicited lease request, BOEM first evaluates whether the developer is qualified to hold a lease on the Outer Continental Shelf.  In the case of Trident Winds, BOEM made this determination following consultation with the state of California.

Following this qualification determination, BOEM's next step is to determine whether it is appropriate to issue the company a lease on a non-competitive basis, or whether a competitive process is required.  To inform this competitive interest determination, on August 17, 2016, BOEM published a Potential Commercial Leasing for Wind Power on the Outer Continental Shelf (OCS) Offshore California, Request for Interest in the Federal Register, with a 30-day public comment period.  If BOEM finds competitive interest, it will initiate a competitive leasing process for the California site. If no expressions of interest are received, BOEM will proceed with its noncompetitive leasing process.

At the same time, BOEM is also seeking public comment on the project proposal, its potential environmental consequences, and other uses of the project area such as navigation, fishing, military activities, recreation.   BOEM will also use responses to shape its decisionmaking and to flag potential issues for analysis under the National Environmental Policy Act.

So far, BOEM has awarded 11 commercial wind energy leases for sites off the Atlantic coast, nine of which came from competitive lease sales that generated about $16 million in winning bids.  BOEM has also recently announced proposed lease sales for sites offshore North Carolina and New York.  In the Pacific, BOEM is evaluating 3 unsolicited lease requests offshore Hawaii and has published a Call for Interest in Hawaiian site leasing.

California floating offshore wind project proposed

The U.S. Bureau of Ocean Energy Management is moving toward the prospect of leasing sites for commercial wind energy development in federal waters offshore California.  According to a March 21 release by BOEM, a January 2016 request by Trident Winds, LLC for a lease will now trigger further steps in BOEM's leasing process.

Trident Winds filed its unsolicited lease request on January 14, 2016.  That request proposed a project to be located about 33 nautical miles northwest of Morro Bay.  The lease area proposed covers almost 68,000 acres in water depths of 2,600‐3,300 feet.  The project would generate up to 800 megawatts of power using about 100 floating foundations, each supporting a turbine that could produce up to 8 MW.  The project could be expanded to generate 1,000 megawatts at a later date, if additional transmission capacity and market off-take can be obtained.

On March 21, 2016, BOEM confirmed that Trident Winds is legally, technically, and financially qualified to hold an offshore wind energy lease in federal waters.

Under the agency's leasing process, its next step will be to publish a notice in the Federal Register to determine if there is competitive interest in the area requested. That Notice will also solicit comments and information on site conditions, commercial, military or other uses of the area and potential impacts of the proposed Trident Winds project.  BOEM expects to issue that Notice this summer.

Based on the information and expressions of interest received during the comment period on the Notice, BOEM will determine whether there is competitive interest in the area. If BOEM determines there is competitive interest, it will initiate its competitive leasing process. If no expressions of interest are received, BOEM will proceed with its noncompetitive leasing process.

So far, BOEM has awarded eleven commercial wind energy leases in federal waters off the Atlantic coast, nine of which were issued as a result of competitive lease sales.

NY offshore wind zone announced

U.S. ocean energy regulators are advancing plans to lease sites off New York for potential commercial wind energy development.  The federal Bureau of Ocean Energy Management's designation of a Wind Energy Area could ultimately lead to the development of one or more offshore wind energy projects off Long Island.

While the U.S. still is not home to any operating commercial offshore wind projects, BOEM has issued 11 commercial wind energy leases off the Atlantic coast.  Leases awarded include two offshore New Jersey, two offshore Rhode Island-Massachusetts, another three offshore Massachusetts, one offshore Delaware, two offshore Maryland and one offshore Virginia.

In 2011, the New York Power Authority (NYPA) applied to BOEM for a commercial wind lease.  At that time, the public power authority proposed installing up to 194 wind turbines, each generating 3.6 megawatts, for a total project capacity of nearly 700 megawatts.

In January 2013, BOEM issued a Request for Interest to assess whether any other entities were parties interested in developing commercial wind facilities in the same area.  BOEM's review of the nominations of interest it received in response, including indications of interest from Fishermen’s Energy, LLC and Energy Management, Inc., led the agency to determine that there was competitive interest in the area.  As a result, BOEM initiated its competitive leasing process.

In 2014, BOEM published in the Federal Register a Call for Information and Nominations and a Notice of Intent to Prepare an Environmental Assessment, and has held stakeholder meetings.

The process took a step forward on March 16, 2016, when BOEM announced that it had completed the Area Identification process to delineate a Wind Energy Area (WEA) offshore New York. The wedge-shaped area covers approximately 127 square miles (81,130 acres, or 32,832 hectares), beginning about 11 nautical miles south of Long Beach, and extending about 26 nautical miles southeast along its longest portion.

Next steps in the offshore wind leasing process might include BOEM's publication of a Proposed Sale Notice for public comment, along with environmental assessment (EA) and agency consultations, followed by publication of a Final Sale Notice that announces the date, time, and specific conditions of the auction.  According to BOEM, its environmental review is expected to be completed later this year.

North Carolina offshore wind advances

Federal efforts to lease ocean sites off the North Carolina coast for offshore wind development advanced last week, when the Bureau of Ocean Energy Management issued a report finding that there would be no significant environmental or socioeconomic impacts from issuing wind energy leases in three specific areas.  The determination brings BOEM one step closer to auctioning off leasing rights off North Carolina for offshore wind development.

The Bureau of Ocean Energy Management is part of the U.S. Department of the Interior.  BOEM performs key duties under the Outer Continental Shelf Lands Act, including resource evaluation, planning, and site leasing.  In furtherance of President Obama’s Climate Action Plan, BOEM has auctioned off the rights to lease sites in federal waters for offshore wind development off states including Massachusetts, Maryland, Virginia, and Rhode Island.  Altogether, BOEM has awarded nine commercial wind leases.  Seven of these were awarded through its competitive lease sale process, generating over $14.5 million in high bids for over 700,000 acres in federal waters. 

Federal law prescribes the process BOEM must undertake to lease sites for offshore wind development.  Under the National Environmental Policy Act (NEPA), BOEM must evaluate the environmental and socioeconomic impacts of proposed actions.

For the proposed leasing off North Carolina, in January 2015 BOEM published its Environmental Assessment (EA) of the impacts of granting commercial wind leases and allowing of site characterization and assessment activities on the Atlantic Outer Continental Shelf.  On September 17, BOEM issued a revised Environmental Assessment.  That EA found there would be no significant environmental or socioeconomic impacts from issuing wind energy leases and allowing site characterization activities.  This "Finding of No Significant Impact", or FONSI, enables BOEM to proceed to the next step in the leasing process.

That next step will occur in October, when BOEM will convene a public meeting of the North Carolina Renewable Energy Task Force.  After considering the input from the Task Force, BOEM will publish a “Proposed Sale Notice” in the Federal Register, which will include a 60-day public comment period. That notice would be followed by a lease auction, likely similar to those held for sites off other states.

In addition to its proposed North Carolina activity, BOEM expects to hold a competitive lease sale for sites offshore New Jersey later this year.

Atlantic offshore wind energy targeted

A report released by the National Wildlife Foundation highlights the potential of U.S. states on the Atlantic Ocean to generate electricity from offshore wind -- and calls upon state leaders to take action to promote offshore wind development.

The 24-page report, Catching the Wind: State Actions Needed to Seize the Golden Opportunity of U.S. Offshore Wind Power, describes responsibly developed offshore wind as "a golden opportunity to meet our coastal energy needs with a clean, local resource that will spur investments in local economies."  In particular, the Atlantic coast offers a high-quality wind resource in close proximity to power-thirsty coastal cities.

Key findings in the report include:

• Offshore winds off New England and New York blow consistently during periods of high electric demand, including summer heat waves and winter cold snaps.
• Federal environmental reviews are complete for over 1.5 million acres of Atlantic sea space, with over 16,000 megawatts of potential wind capacity.
• Diversifying states' energy mix with offshore wind can reduce prices and offset volatility, citing a 2014 study showing New England would save $350 million per year in reduced energy costs, or 2%, if 1,200 megawatts of offshore wind is added.
• Offshore wind reduces air pollution, including carbon emissions.
• Offshore wind development creates jobs, and can be done in an environmentally responsible manner.

The report highlights Massachusetts and Rhode Island as leading America's pursuit of offshore wind, followed by Maryland, Virginia, New York, New Jersey, and Delaware, with Maine, North Carolina, South Carolina, and Georgia bringing up the rear.  New Hampshire, Connecticut, and Florida are noted as "states to watch" with no offshore wind planning activities.

The report calls on state leaders to:

• Set a bold goal for offshore wind in the state's energy plan.
• Take action to ensure a competitive market for offshore wind power.
• Advance power contracts for offshore wind.
• Ensure an efficient, transparent, and environmentally responsible offshore wind leasing process that protects wildlife.
• Invest in key research, initiatives, and infrastructure needed to spur offshore wind development.

Will Atlantic states develop their offshore wind resources? 

EnergyOcean International 2012

This week I am attending EnergyOcean International 2012, the ninth annual conference for the offshore renewable energy sector.

This morning's keynote address was delivered by Tommy Beaudreau, Director of the Bureau of Ocean Energy Management. Director Beaudreau gave an overview of BOEM and how its Office of Renewable Energy Programs fits in with other responsibilities like offshore oil and gas leasing and regulation.

Upcoming presentations include a discussion of global offshore renewable energy development, marine spatial planning, best practices for managing interactions between wildlife and offshore projects, an update on what's happening with wave and tidal energy, and a review of successful project finance strategies.

New England offshore wind advances

Plans to generate electricity from offshore winds off the southern New England coast appear to be gathering some momentum, as a series of events unrolling this month favor offshore wind development.

On February 3, the U.S. Bureau of Ocean Energy Management took the initial steps in its process to lease sites for offshore wind projects in federal waters off Massachusetts.  BOEM requested information about uses of an area of sea about about 12 nautical miles south of the islands of Martha’s Vineyard and Nantucket, as well as expressions of interest by developers identifying particular sites.  Responses to the call for information and nominations, as the key document is known, are due in mid-March.

Last week, Massachusetts officials announced a proposed settlement that would allow utilities NSTAR and Northeast Utilities to merge, but only on the condition that the resulting utility sign a long-term contract to buy power from the proposed Cape Wind project.  Cape Wind already has a power purchase agreement with utility National Grid for half the project's output; if the NSTAR deal is approved, Cape Wind would have power purchase agreements in place for 77.5% of its expected output.  Proponents hope that this increased certainty around the project's revenues could enable the project to be financed and built.

This week, Boston hosted a major offshore wind industry conference.  Today, the U.S. Bureau of Ocean Energy Management plans to make an announcement "latest milestone in commercial wind energy planning and leasing in the area of mutual interest offshore of Rhode Island and Massachusetts."

None of these steps alone may be sufficient to spur offshore wind development in New England waters, but collectively these steps illustrate how multiple levels of government are promoting offshore wind.  Will their collective result produce power in the near term?

Feds ok enviro impacts of offshore wind site leasing

Offshore wind development off the mid-Atlantic coast took a step forward today with the release of a federal assessment of the environmental impacts of leasing ocean sites for wind projects.  US Secretary of the Interior Ken Salazar and Maryland Governor Martin O'Malley held a press conference in Baltimore this morning at which the document was unveiled.  The Bureau of Ocean Energy Management's final environmental assessment for mid-Atlantic site leasing (366 page PDF) will allow it to move forward with granting commercial wind leases and allowing site characterization activities on the mid-Atlantic outer continental shelf.  Notably, the document found that leasing sites and allowing developers to study them would not have a significant impact on the human environment. 

Under the National Environmental Policy Act, federal agencies must analyze and document the environmental effects of proposed federal actions such as issuing leases for offshore wind sites.  A final environmental assessment was needed before BOEM could issue more leases, whether for offshore wind generation sites or for offshore transmission facilities.

At the same time, Governor O'Malley is intent on passing legislation that he believes will make Maryland the hub of the mid-Atlantic offshore wind industry.  From the Atlantic Wind Connection offshore transmission network to generation projects in federal waters off Maryland (and Maryland state waters), any offshore wind development will need site leases, and issuing an environmental assessment is needed before issuing site leases. Thus for Governor O'Malley's plan to come to fruition, he needs to show that he (and developers) will have the cooperation of the federal BOEM.  Today's event may have been designed to demonstrate that federal regulators will be cooperative with mid-Atlantic offshore wind projects. This would help the industry by reducing regulatory uncertainty, and would also help Governor O'Malley promote his offshore wind program.

The draft environmental assessment released last summer was generally favorable, if not groundbreaking.  Notably, it did not explicitly make a finding of no significant impact from leasing. Comments on the draft environmental assessment were due in August 2011; these public comments are available through a federal document website.  Today's final environmental assessment was developed partly in response to these public comments.

A final environmental assessment is a key step in developing the offshore wind resource, but it's still one of many steps needed. The environmental assessment in question does not cover any specific projects, nor would it permit the actual construction or operation of any projects. Rather it serves as a blanket assessment to document BOEM's review of the impacts of issuing site leases generally, and of allowing developers to study sites.

Today's finding of no significant impact, or FONSI, allows BOEM to move forward with leasing without preparing a more intensive (and time-consuming) environmental impact statement.  This leasing program is part of BOEM's Smart from the Start initiative. The final assessment will now allow BOEM to award of a non-competitive lease for the wind energy area off Delaware, as well as a competitive process to select developers for sites off Maryland.