(2) the Secretary may not issue a lease for offshore wind development under section 8(p)(1)(C) of the Outer Continental Shelf Lands Act (43 U.S.C.1337(p)(1)(C)) unless— (A) an offshore lease sale has been held during the 1-year period ending on the date of the issuance of the lease for offshore wind development; and (B) the sum total of acres offered for lease in offshore lease sales during the 1-year period ending on the date of the issuance of the lease for offshore wind development is not less than 60,000,000 acres.
Lease Sale 261 was held on 12/20/23. Absent legislative action, no wind leases may be issued after 12/20/24 unless another oil and gas lease sale is held prior to that date. Given that the minimalist 5 year oil and gas leasing plan, which is being challenged, does not propose a sale until 2025, wind lease issuance will likely be suspended at the end of the year. (Note: I wonder if the legislative restriction also applies to lease assignments from existing owners to new owners? Probably not, but that would be very significant given the current state of the offshore wind industry.)
Perhaps the wind program should be required to develop 5 year leasing plans, as is the case for the oil and gas program. This might facilitate a more holistic approach to wind energy development and ease concerns about cumulative impacts.
Offshore facility decommissioning is a frequent target of Federal auditors given the complex financial and regulatory challenges. Unfortunately, the reviews have done little to better protect the public interest. As have previous inquiries, the new GAO report (attached for your convenience) calls for improved regulations and enforcement practices. That, of course, has been the objective for decades, but the problems have only worsened.
While the GAO recommendations are unsurprising, the body of the report is informative. Most notably, GAO (p. 29) raises a significant inconsistency on a key provision in the proposed decommissioning financial assurance regulations published last year:
One of the five criteria BOEM would no longer use under the proposed rule is demonstrated reliability, as shown by record of compliance with laws, regulations, and lease terms, among other factors. BOEM’s June 2023 regulatory analysis concluded this criterion is not a good predictive indicator of default on decommissioning obligations. However, BOEM and BSEE officials we spoke with told us that poor compliance records—such as safety and maintenance issues or delayed decommissioning obligations—can be an indicator of potential decommissioning noncompliance or financial stress.
Why was there such a disconnect between the opinions of BOEM and BSEE officials (who are directly involved with decommissioning) and BOEM’s decision not to include a company’s compliance record among the factors to be considered in determining the need for supplemental financial assurance? As pointed out here and here, safety performance is arguably the most important predictor of financial failure and decommissioning noncompliance.
The GAO report correctly acknowledges the difficulties in disqualifying operating companies. However, the regulations at 30 CFR § 250.135 specifically provide for disqualification for poor performance. While the regulations could be tighter, enforcing disqualifications regulations is dependent on persistence and strong support from management and DOI attorneys. Given the political risks associated with disqualifying operators, that support is often lacking.
Disqualification difficulties make it imperative that BOEM carefully consider past performance before approving lease assignments or determining financial assurance amounts. Provisions in 30 CFR §585.408 and §585.107 could have been used to disapprove assignments to Signal Hill, Fieldwood, Cox, and other problem operators. The failure to do so has significantly delayed decommissioning and increased public exposure to financial risks.
In some cases, lease assignments to unqualified companies have not only been approved but they have been facilitated by BOEM/MMS. The case of Platforms Hogan and Houchin, in the Santa Barbara Channel, is a particularly good example. (Did GAO inquire about the Inspector General report on this matter or ask why that report has still not been released?)
Most operating companies are responsible about planning for and fulfilling their decommissioning obligations. The problem is the exceptions, and they are not difficult to identify if you look at compliance data and obtain input from BSEE inspection personnel.
Other important decommissioning questions that need to be considered:
Given that decommissioning responsibility is divided between BSEE and BOEM, is regulatory fragmentation limiting their efficiency and effectiveness? Is coordination between BSEE and BOEM delaying action on fitness to operate and disqualification matters?
As concerns about wind leasing mount, it is becoming increasingly apparent that the rush to hold auctions may not be in the best long-term interest of the wind program. The primary objective should be cost-effective and responsible development, not gigawatt deadlines.The administration’s vision for wind energy capacity, particularly the 15 GW goal for floating turbines by 2035, is unlikely to be achieved and rushing the process is not helpful.
The Confederated Tribes of Coos, Lower Umpqua and Siuslaw tribal council unanimously passed a resolution opposing offshore wind energy development off the Oregon coast.
The federal government states that it has ‘engaged’ with the Tribe, but that engagement has amounted to listening to the Tribe’s concerns and ignoring them and providing promises that they may be dealt with at some later stage of the process. The Tribe will not stand by while a project is developed that causes it more harm than good – this is simply green colonialism.
A previous post commented on the bonding waiver for the Vineyard Wind project’s offshore facilities. According to this presentation by Cliff Carroll at the “Close to the Wind Summit” (Jan. 27 in Hyannis, MA), certain onshore bonding requirements are also being waived. Per Mr. Carroll, the Massachusetts Energy Facilities Siting Board has overruled the Town of Barnstable’s objections to bonding waivers for large transformer substations to be located withing the town.
Now there is no Federal bonding on decommissioning and now we have no bonding as a town.
Mr. Carroll’s brief bonding comments begin at the 11:30 mark. Prior to that he considers some of the environmental risks associated with these substations.
Roughly 237 NARWs have died since the population peaked at 481 in 2011, exceeding the potential biological removal (PBR) level on average by more than 40 times for the past 5 years (Pace III et al. 2021).
Human-caused mortality is so high that no adult NARW has been confirmed to have died from natural causes in several decades (Hayes et al. 2023).
Most NARWs have a low probability of surviving past 40 years even though the NARW can live up to a century.
There were no first-time mothers in 2022.
About 42% of the population is known to be in reduced health (Hamilton et al. 2021)
A NASEM study confirmed that offshore wind has the potential to alter local and regional hydrodynamics
“Effects to NARWs could result from stressors generated from a single project; there is potential for these effects to be compounded by exposure to multiple projects.” (p. 14)
BOEM/NOAA strategy:
No new mitigation is recommended pending further study.
“BOEM and NOAA Fisheries will work together alongside our partners (including the OSW industry) to further develop the information and science the agencies will use to inform their decisions to responsibly develop OSW while protecting and recovering NARWs.” (Comment: While regulator-industry collaboration is essential for effective offshore development, be it wind or oil and gas, regulators and operating companies have distinctly different missions and responsibilities and should not be viewed as partners.)
(p. 15): “As the OSW industry continues to grow and as projects begin construction, BOEM and NOAA Fisheries will continue to work with our partners to evaluate existing strategies and to further collect and apply newly available information to inform future decisions. This Strategy is an integral step to organize BOEM, NOAA Fisheries, and their partners around a shared vision and clear path to effectively study and manage this issue moving forward.” (???)
(p.17): BOEM will “attempt to avoid issuing new leases in areas that may impact potential high-value habitat and/or high use areas for important life history functions such as NARW foraging, migrating, mating, or calving. For areas that are leased, permitting activities should minimize any known or potential threat to NARWs and their habitats, and developers and BOEM should support research and monitoring.”
Questions:
How are the NARW threats identified in the NASEM study being mitigated?
Why are the Rice’s whale litigants okay with the more compelling threat to the NARW?
What happens if the hydrodynamic threats identified by the NASEM panel are confirmed?
Why isn’t this collaborative approach being pursued in assessing and mitigating risks to the Rice’s whale?
Can we expect the Federal government’s leading offshore wind promoter to impose restrictions that further weaken the economics of offshore wind development?
Pictured below: density of NARWs near wind leases and hydrodynamic effects of turbines
It’s prudent, if not imperative, to tow floating wind turbines to sheltered coastal locations for major maintenance. For that reason, Hywind, the world’s first floating wind farm will be offline for up to 4 months this summer.
Hywind Scotland‘s operator, Norwegian power giant Equinor, says that operational data has indicated that its wind turbines need work. The pilot project has been in operation since 2017.
The five Siemens Gamesa turbines will be towed to Norway this summer. An Equinor spokesperson said, “This is the first such operation for a floating farm, and the safest method to do this is to tow the turbines to shore and execute the operations in sheltered conditions.”
Published data indicate that Hywind has been the UK’s best performing offshore wind farm. Performance data for Hywind, and a chart illustrating the capacity factors since commissioning, are posted below. The 2024 capacity factor will, of course, be substantially reduced as a result of the essential offsite maintenance.
capacity factor = total energy generated/(hours since commissioning x capacity)
The first US floating turbines are expected to be at these California offshore leases, and Hywind operator Equinor is one of the lessees:
Given the financial challenges facing the offshore wind industry, the still emerging technology, and the risks inherent in California offshore development, the amounts bid on these leases only 13 months ago are stunning.
Some Central Coast residents are not enamoured with “another attempt to industrialize the coast.” Although the turbines will be >20 miles offshore, they will have to be towed to shore for major maintenance. For the Central California leases, nearby harbor areas like Morro Bay (pictured below) would be overwhelmed by the large structures and the maintenance and repair operations. Towing the towers to LA/Long Beach, albeit rather distant from the leases, would seem to be the preferred option for such work.
Ironically, a report for BOEM, points to synergies between the offshore wind industry and oil and gas decommissioning industry. Such synergies will only be possible if longstanding oil and gas decommissioning obstacles are satisfactorily addressed and the offshore wind projects proceed as planned.
Which will come first – platform decommissioning or wind turbine commissioning? For those young enough to find out, what is the over-under for the years until (1) half of those platforms are decommissioned, and (2) half of the wind turbines commissioned? Any number <10 is unrealistic for either.
Recent disclosures indicate that BOEM, which very publicly promotes the offshore wind projects that it regulates, has waived a fundamental financial assurance requirement at the request of Vineyard Wind (approval letter attached). Given its broad applicability, this precedential waiver could have the effect of revising a significant provision of the offshore wind decommissioning regulations without public review and comment.
The issue is the “pay as you build” financial assurance requirement at 30 CFR § 585.516, which was waived by BOEM. This requirement, which is intended to project the public from decommissioning liability, is fair and reasonable given that wind developers must only provide financial assurance “in accordance with the number of facilities installed or being installed.” Companies that don’t have sufficient financial strength to comply with this requirement should not be installing and operating offshore wind turbines.
Vineyard Wind was either unable or unwilling to comply with the requirement. They instead requested to defer providing the full amount of the required financial assurance until year 15 of actual operations. The waiver changes “provide assurance when you install” to provide assurance 15 years after installation if everything goes as planned (hoped?).
After their waiver request was denied in 2017, Vineyard Wind resubmitted the request in 2021 seeking a favorable decision from an administration concerned that project cancellation or delay might tarnish the program that they were enthusiastically promoting.
BOEM (as directed from above?) granted the waiver, citing the general departure authority at 30 CFR § 585.103. However, that authority is intended for special situations, not for broadly applicable waivers that have the effect of revising the regulations without the public review required by the Administrative Procedures Act and Executive Orders 12866 and 13563.
There are no criteria in the Vineyard Wind waiver approval that could not apply to other wind developers. Vineyard Wind has simply committed to the same “risk-reduction factors” that apply to all offshore wind projects: damage insurance, the “use of proven turbine technology,” and long-term power purchase agreements. How could BOEM deny the same request from other companies?
It’s noteworthy that the regulations specific to financial assurance at 30 CFR § 585.516 provide no criteria for waiving the assurance requirements; nor do the regulations provide for the 15-year payment plan approved by BOEM. Given the precedential nature of the BOEM action and its enormous financial implications, a revision to the decommissioning regulations that provides criteria for such payment schemes should be promulgating before any similar departures are approved.
In light of the waiver, the public will likely incur substantial costs if Vineyard Wind fails, walks away, doesn’t fully fund their decommissioning account in a timely manner, or seeks new concessions after some or all of the 62 turbines have been installed.
Given the decommissioning obligations, what company would want to step in and assume responsibility for a failing project 10-15 years from now? What happens if Vineyard Wind’s project revenues don’t meet expectations and contributions to their decommissioning account are insufficient or used improperly? More concessions? We’ve seen this dance before.
Whether the project is for oil, gas, or wind energy, protecting the public from decommissioning liabilities should always be prioritized over facilitating development.
The announcement boasts about “the fewest oil and gas lease sales in history” while seemingly apologizing for holding any sales at all.
Consistent with the requirements of the Inflation Reduction Act (IRA) concerning offshore conventional and renewable energy leasing, the Department of the Interior today published the final 2024–2029 National Outer Continental Shelf Oil and Gas Leasing Program (Program) with the fewest oil and gas lease sales in history.
These three lease sales are the minimum number that will enable the Interior Department’s offshore wind energy program to continue issuing leases in a way that will ensure continued progress towards the Administration’s goal of 30 gigawatts of offshore wind by 2030.
This impressive NOAA study confirms the importance of Nantucket Shoals as a feeding ground for right whales and implies a need for protective measures in months (October through December) when the existing restrictions do not apply.
“The importance of Nantucket Shoals as a feeding ground for the critically endangered North Atlantic right whales within the southern New England wind energy is well understood (Leiter et al., 2017; Quintana-Rizzo et al., 2021; Estabrook et al., 2022). Similarly, year round presence of this species has been demonstrated since as early as 2011 (Quintana-Rizzo et al., 2021; Estabrook et al., 2022), showing that North Atlantic right whales have consistently used this region for well over a decade. Currently, the National Marine Fisheries Services and Bureau of Ocean Energy Managements policy is to exclude pile driving during the months of January through April in the southern New England wind energy area. Evaluation of the need for further management protections are needed for North Atlantic right whales especially in October through December, along with further assessment of risk to this species (Southall et al., 2023).
A map of the southern New England planned offshore wind energy lease areas off the East Coast of the United States (insert). Passive acoustic recorders (SoundTrap and F-POD recorders) were deployed for varying time periods (see Table 1) between January 2020 and November 2022 at seven sites surrounding the wind energy areas.
Note (below) the acoustic presence of the North Atlantic Right Whale (NARW) from Oct. through April.
Weekly acoustic presence summary of eight cetacean species (harbour porpoise, sperm whale, humpback whale, minke whale, North Atlantic right whale (NARW), sei whale, fin whale, blue whale) and one family (Delphinid sp.). The boxplots represent the median number of days of acoustic presence per calendar week across all data at four recording sites, in the southern New England offshore wind energy area. Only recorders with 2 or more years of data (NS01, NS02, COX01, and COX02) were used. Horizontal lines within the boxes indicate the median, box boundaries indicate the 25th (lower quartile) and 75th (upper quartile) percentiles, vertical lines indicate the largest (upper whisker) and smallest (lower whisker) values no further than 1.5 times the interquartile range, and black dots represent outliers.
BOEM diminishes the credibility of their important (and generally excellent) scientific, lease administration, and regulatory work with over-the-top wind energy promotion. The tweet below is a recent example.
This is not a good look for the bureau that is expected to objectively evaluate offshore wind projects. Leave the hype to the wind industry and its NGO supporters.
Offshore wind is a once-in-a-generation opportunity to build a new clean energy industry, tackle the climate crisis, and create good-paying jobs, while ensuring economic opportunities for all communities.
Bud's Offshore Energy (BOE) 