EPAct 2005 requires the issuance of competitive leases, although the rule allows for a noncompetitive process if no competitive interest exists in a particular area of the OCS after public notice (Figure 7-3). If competitive interest exists, BOEM will follow the competitive process outlined in the regulatory framework (§§ 210–225) and conduct an auction. If
competitive interest does not exist, BOEM will move forward with the noncompetitive process outlined in the regulatory framework (§§ 226–231). BOEM begins the competitive process by issuing a “Call for Information and Nominations” to announce interest in leasing an area and to solicit relevant information. After this call, BOEM evaluates the nominations and information received, determines the leasing area to be analyzed under NEPA (and suitable alternatives),
issues a proposed sale notice to inform the public and request comments on lease terms and conditions, and ultimately issues a final sale notice announcing the details of the auction at which bids for leases will be accepted.
Some factors that BOEM will consider in determining competitive interest include (Bradley 2009):
• Site locations
• Timing and type of proposed activities
• Infrastructure
• Anticipated power production and likely purchasers
• Environmental and resource data and information
• Qualifications to hold an OCS lease.
As shown in Figure 7-3, issuance of a commercial lease either competitively or noncompetitively requires NEPA review (see Section 7.4.2). It is likely that a lease sale Environmental Impact Statement (EIS) and associated consultations must be completed, which could take a minimum of 18–24 months. After acquiring a lease, the lessee must receive approval of required plans—a Site Assessment Plan (SAP) for construction of a data collection facility and associated activities and a Construction and Operations Plan (COP) for full build-out of the commercial generating facilities. In the final rule preamble, MMS assumed that geophysical and geotechnical surveys would be conducted either pre- or postlease under a permit from the USACE Nationwide Permit Program. MMS did nonetheless encourage developers to coordinate activities with MMS as well as USACE (§§ 285.605, 285.610, 285.625, 285.645), because this process has not been tested across the USACE Districts (MMS 2009e).
NEPA review is also required for these plans, calling for an Environmental Assessment (EA) or EIS for each, depending on the depth of analysis accomplished for each preceding step. For example, if a lease issuance EIS analysis is robust enough to cover the leasing scenario, as well as subsequent site assessment and construction and operations scenarios, the need for subsequent NEPA analysis when a plan is submitted could be minimized or fulfilled completely by the initial analysis. If initial analyses are not so robust, subsequent separate analyses will be needed for each plan, resulting in a longer, sequenced fulfillment of NEPA requirements. The regulatory framework is flexible enough to accommodate either approach, but the key to achieving
efficiencies in review and approval of leases and plans is the availability of information for analysis. Thus, it is incumbent on the developers to develop and submit complete plan information as early as practicable to foster timely and efficient NEPA analysis in support of their projects.
Source: BOEM June 2010
Figure 7-3. OCS renewable energy process
Commercial leases have a site assessment term of 5 years in which to complete site
characterization activities and prepare a COP for submission to MMS. The COP describes all activities and installed facilities to be used to gather, transport, transmit, generate, or distribute energy from the lease. If a project is deemed “complex or significant,” which is likely for all commercial-scale generating facilities, the lessee must submit two additional reports before construction and installation: a Facility Design Report (FDR) and a Fabrication and Installation Report (FIR), as described in Subpart G. Also, the lessee must submit a Safety Management System, as described in Subpart H (MMS 2009b). The results of surveys and studies undertaken prelease must be described in the plans that are subsequently submitted (Final Rule, Subpart F) (§§ 285.610(b), 285.626(a), 285.645(a)). As discussed previously, if the COP is submitted with the SAP, NEPA reviews could take place simultaneously (§ 285.601(d)), reducing review time within the approval process. Though not required by EPAct, BOEM will conduct scheduled and unscheduled inspections of the OCS facilities and any vessels engaged in authorized activities.
The inspection procedures are detailed on the BOEM regulatory compliance Web site at http://www.boemre.gov/regcompliance/inspect.htm. As specified in Subpart I, the agency will also review applications for decommissioning plans.
MMS began the leasing process under the final framework by establishing state task forces before issuing Requests for Interest (RFI). An RFI is a formal invitation for submissions of interest in obtaining one or more commercial leases from MMS, and it serves as the first step in the leasing process (Bradley 2009). The task forces help MMS comply with the requirement of EPAct 2005 calling for coordination and consultation and are a forum for MMS to share information about leasing activities with state and other government officials and for those officials to supply input on the implementation of the framework. MMS has named Delaware, New Jersey, and Rhode Island as priority states because those states made significant progress in preparing for OCS renewable energy development while the MMS regulatory framework was being developed. In addition to these three states, task forces are being pursued with North Carolina, Massachusetts, Virginia, Maine, New York, Maryland, and other states that have initiated offshore wind activities (MMS 2009f). As of December 2009, MMS had held task force meetings in Delaware, Rhode Island, Massachusetts, New Jersey, Virginia, and Maryland (MMS 2009c). Further solidifying development of an offshore program at MMS, Interior Secretary Salazar established an Atlantic Renewable Energy Office to manage and implement the renewable energy program (Quimby 2009).
In April 2010, MMS released the first RFI for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore Delaware under the new renewable energy framework (MMS 2010c).
The RFI invited developers to submit descriptions of their interest in obtaining a commercial lease in the OCS lease areas off the coast of Delaware and asked other interested and affected parties to submit relevant comments and information. Several areas have been excluded because of NOAA fisheries concerns and potential conflicts with shipping lanes, among other reasons.
The RFI detailed specific information that developers should submit. The Delaware RFI was developed in consultation with the state task force. The MMS announced that two entities responded to the RFI, and they are considering the responses before deciding the next steps concerning commercial wind leasing off Delaware. One of the entities, NRG Bluewater Wind, currently holds an interim lease in Delaware, which allows them to hold the lease for 5 years and to build a meteorological (met) tower (MMS 2009f).
BOEM asks interested and affected parties to submit the following information to indicate their interest in OCS leases:
• A description of the specific whole or partial OCS blocks or areas within the RFI area that are of interest for commercial development, including any required buffer area. Any indications of interest identifying areas greater than what would be reasonably necessary to develop a proposed commercial wind facility will not be considered as valid indications of interest. In addition, BOEM will not consider any areas outside of the RFI area in this process.
• A description of the objectives and the facilities necessary to achieve those objectives.
• A schedule of proposed activities, including those leading to commercial operations.
• Available and pertinent data and information concerning renewable energy and
environmental conditions in the area of interest, including energy and resource data and information used to evaluate the area of interest.
• Documentation demonstrating that the applicant’s qualifications to hold a lease as set forth in 30 CFR §285.107, including documentation demonstrating technical and financial
capabilities of constructing, operating, maintaining, and decommissioning the facilities.
Financial qualification can include documentation of access to sufficient capital to complete development. Examples of documentation of technical qualification can include evidence of international or domestic experience with renewable energy projects or other types of electric-energy-related projects.