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    US BOEM Announces Massive Offshore Wind Auction And Much More


    January 18, 2022 - By Ms Lauren A. Bachtel, J. Paul Forrester, Emily M. Gleichert and Eric Pogue

     

      On January 12, 2022, the Bureau of Ocean Energy Management (BOEM) announced that it will hold a competitive auction for six lease areas (totaling roughly 488,000 acres) in the New York Bight area, which is off the coast of New York and New Jersey. Twenty-five bidders are eligible to participate, which is up from the 11 that were announced as qualified in BOEM's Proposed Sale Notice. The ascending bidding auction will take place on February 23, 2022, and is estimated to last one to two business days. The minimum bid for each lease area will begin at $100 per acre, with the minimum price of the six lease areas ranging from approximately $4.3 million to $12.6 million. The auction will proceed in rounds with incremental price increases until no more than one active bidder remains for each of the six lease areas. Each bidder is limited to winning one lease, and BOEM will announce provisional winners at the end of the auction.

      Changes in the Final Sale Notice

      Areas Offered

      BOEM's Final Sale Notice accounts for comments received in response to its Proposed Sale Notice, published on June 14, 2021. To address conflicts raised by ocean users, including the fishing industry, United States Coast Guard, National Marine Fisheries Service and the Department of Defense, BOEM reduced the overall proposed lease area by 22 percent. BOEM also reduced the eight proposed lease areas to six and reconfigured the boundaries of the remaining six lease areas. Also, no surface occupancy areas have been added to select portions of four of the six lease areas.

      Lease Stipulations

      In addition to the changes to areas offered for leasing, BOEM's Final Sale Notice also added and modified certain lease stipulations.

      • First, building on an existing lease stipulation to require a semi-annual report, BOEM will require each lessee to identify potentially affected Tribes and people; consider its project's potential impacts on identified parties; coordinate with other lessees on party engagement; and develop communications plans for fisheries, Tribes and agencies.
      • Second, BOEM may condition approval of a lessee's Commercial and Operations Plan on the incorporation of certain transmission methods, including cable corridors, regional transmission systems and meshed systems.
      • Third, BOEM will require the installation of automated tracking systems on meteorological buoys to monitor bird and bat movement.
      • Fourth, to encourage union-built projects and the growth of the domestic supply chain, BOEM will require each lessee to establish a goal statement and provide progress updates regarding the lessee's contribution to the US-based offshore wind industry supply chain, as well as make every reasonable effort to enter a project labor agreement covering the construction stage. Additionally, BOEM will reduce the 2 percent operating fee of the lease to 1 percent for lessees that meaningfully and substantially assemble or manufacture major components of their projects in the United States.
      • Fifth, lessees with abutting leases must either collaborate on the layout of surface structures or incorporate a 1-nmi setback from the abutting boundary.
      • Finally, BOEM will require lessees to implement Project Design Criteria and Best Management Practices that include mitigation, monitoring and reporting requirements for noise reduction, mooring design, marine debris and vessels so as to avoid interaction with or entanglement with protected species under the Endangered Species Act.

      With more qualified bidders and reduced lease acreage, the auction will undoubtedly be competitive.

      Other Wind Developments

      The Final Sale Notice was issued only days after the Save Long Island Beach nonprofit filed a complaint in the DC District Court challenging BOEM's March 26, 2021, memorandum that designated the five Wind Energy Areas (WEAs) in the New York Bight. (See Save Long Beach Island v. U.S. Department of the Interior, U.S. District Court for the District of Columbia, No. 1:22-cv-00055.) The nonprofit argues that, when designating the WEAs, BOEM failed to comply with (1) the National Environmental Policy Act because it did not compile a programmatic environmental impact statement analyzing the potential impacts of offshore wind projects in the five WEAs and (2) the Endangered Species Act because it did not conduct a Section 7 consultation with the National Marine Fisheries Service to assess potential impacts to the various marine mammals and habitats in the New York Bight. The nonprofit requests that the court set aside BOEM's March 26, 2021, WEA designation but was silent on the upcoming auction.

      BOEM has also been extremely busy moving forward with potential wind development in other areas off the US coast. On January 11, 2022, BOEM announced that it is preparing a draft environmental assessment (EA) for the Gulf of Mexico Call Area to assess potential impacts associated with issuing wind leases and conducting site assessment and characterization activities in the area. The Gulf of Mexico area includes approximately 30 million acres of federal lands on the outer continental shelf and covers areas in what is commonly known as the Western and Central Planning Areas of the Gulf of Mexico. Comments will be received through February 9, 2022, and BOEM anticipates completing the draft EA this summer.

      On January 11, BOEM also released its draft EA on the potential impacts from future commercial leasing and related site characterization and assessment activities within the Humboldt WEA off northern California. The Humboldt WEA is approximately 206 square miles and could result in up to 1.6 GW of energy. Comments will be received on the draft EA through February 10, 2022.

      Visit us at mayerbrown.com

      Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

      © Copyright 2020. The Mayer Brown Practices. All rights reserved.

      This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

      Ms Lauren A. Bachtel

      Mayer Brown

      1675 Broadway

      New York

      NY 10019-5820

      UNITED STATES

      Tel: 3127820600

      Fax: 3127017711

      E-mail: Mnoonan@mayerbrown.com

      URL: www.mayerbrown.com

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