Offshore Windfarms: What Laws Apply?

• Author: Graffeo, Peter-Raymond

1. Background 103 II. OCSLA 105 III. What is an Artificial Island? 109 IV. Issue 114 V. Classifying Wind As a Resource of The Outer Continental Shelf 117 VI. OCSLA Includes All Artificial Islands 122 VII. OCSLA Applies, Not Maritime Law 124 VIII. Alternative; Extraterritorial Application of State Law 127 IX. Conclusion 130 I. Background

   The United States uses a tremendous amount of energy, and the numbers are rising. In 2017, the United States used about 98 quadrillion Btu, or around 17% of the world's total energy consumption. (1) Over the past three years, the numbers have remained relatively consistent, and as of 2020, the United States is using 92.94 quadrillion Btu. (2) Currently, the primary U.S. energy sources are petroleum and natural gas, accounting for 69% of the total U.S. energy consumption. (3) However, renewable energy, which makes up just 12% of the U.S. energy consumption, (4) has remained a focal point in development of U.S. energy growth. Six U.S. cities have already met their 100% renewable energy goals as of 2018, with an additional 300 cities pledging similar commitments around the U.S. (5) In particular, wind energy has seen exponential growth in the last decade. Since 2011, land-based wind energy generation has grown by more than 60%. (6) With the current energy markets trending toward more renewable sources, it makes sense that the United States government and private corporations have piqued an interest in offshore wind farms. The Department of Energy states that offshore wind energy holds the promise of significant environmental and economic benefits because it is an abundant, low-carbon, domestic energy source. (7) Additionally, the market has been maturing rapidly, and costs of implementation are falling. (8) "These trends suggest that offshore wind has the opportunity to play a substantial role as a source of domestic, large-scale, affordable electricity for the nation." (9)

   In 2015, the Department of the Interior awarded eleven commercial leases for offshore wind development. (10) The United States realized the significant opportunity that these developments provide. Offshore wind energy alone could provide nearly double the total electric generation of the U.S. from 2015. (11) Additionally, the Department of Energy estimates a potential 1.6 billion metric ton reduction in greenhouse gases, as well as $440 million in annual lease payments and $680 million in annual property tax payments. (12) These enormous benefits are further supplemented by Congress's desire to diversify the nation's energy portfolio. "For the last 40 years, energy security in the United States has focused on decreasing the Nation's dependence on foreign oil." (13)

   The United States government plays a vital role in facilitating the development of the offshore wind industry. The vast scale of these projects requires a comprehensive set of regulations to properly develop offshore wind farms in a responsible and sustainable manner. The federal government has the unique opportunity to establish a clearly defined regulatory process which also encourages collaboration with stakeholders. The President of the United States recognized this unique opportunity. On March 28, 2017, Executive Order 13783 was signed and established "the federal policy of promoting clean and safe development of domestic energy resources, including renewable energy, to ensure national security and provide affordable, reliable, safe, secure, and clean energy." (14) The Bureau of Ocean Energy Management is the governing agency on ocean developments, and has been working on site-selection processes, producing fifteen active commercial leases for offshore wind development. (15) These lease agreements give stakeholders the right to one or more project easements for the purpose of installing power transmitters. (16) Another important role the government plays in implementing these complex systems is allowing stakeholders to collaborate with European nations. (17) Europe has been the leader in offshore wind development and has produced significant cost reduction strategies that their American counterparts can use. (18) The current European trend suggests that offshore wind energy can produce at costs competitive with other land-based competitors. (19)

   Implementing these ideas, the United States projects to have 14% of all coastal energy demands met by offshore wind by 2050. (20) This new market for energy production requires adequate regulation for supporting effective stewardship. Being offshore, the only possible applicable laws are maritime law or the Outer Continental Shelf Lands Act (OCSLA). This comment will explain two current challenges of using such regulatory schemes, and which one is best suited for adequately controlling these structures.

2. OCSLA

   Prior to 1953, individualized states had the sole power to issue leases for offshore oil production. (21) However, the Supreme Court has consistently held that the federal government owned the submerged lands adjacent to individual states. (22) Accordingly, states petitioned these rulings, and as a result, in 1953, Congress passed the Outer Continental Shelf Lands Act (OCSLA) giving the Department of the Interior jurisdiction over all offshore lands beyond state waters. Contemporaneously, the OSCLA passed the Submerged Lands Act granting states ownership over the three miles immediately adjacent to their shorelines. (23) OSCLA's original purpose was to establish federal jurisdiction for the purpose of mineral leases. (24) The Act vests authority in the Secretary of the Interior to administer provisions to carry out the effective leasing of the Outer Continental Shelf (OCS). (25) OSCLA's primary concern was the exploration and development of oil and gas deposits, but included provisions for the development of a broad range of minerals. (26) In addition to the right to grant leases, the Act granted the Secretary of the Interior the right to "at any time prescribe and amend such rules and regulations as he determines to be necessary and proper in order to provide for the prevention of waste and conservation of natural resources of the OCS..." (27) The Secretary was not constrained in his broad authority over the OCS, and was not required to consult with other conservative agencies when making decisions on leases. (28)

   As oil companies took considerably larger risks with their exploration, problems started arising. In 1969, a Union Oil well in the Santa Barbara Channel blew, resulting in significant environmental damages. (29) Concerns about the further environmental impacts of such drilling lead to amendments in the OCSLA. (30) In 1978, amendments to the OCSLA introduced a heightened duty of environmental protection and consultation. (31) Specifically, the amendments required environmental impact statements to be produced, along with requiring the Secretary to develop five-year OCS leasing programs. (32) By requiring the Secretary to coordinate with other various agencies and departments, these amendments reduced the Secretary's power. (33) Another pertinent addition to OCSLA was the 1978 amendment's interest concerning the safety of operations on the OCS. (34) Taken together, the 1978 OCSLA established a four stage process for the exploration, development, and transportation of resources on the OCS. (35)

   The first stage is the development and publication of schedules for proposed lease sales. The second stage involves the consultation process, which includes the environmental impact statement where adjacent states and the public may make comments on the proposal. The third stage is the filing and review of the exploration plan. The final stage is the filing and review of a development and production plan. (36) In theory, these additions to the OCSLA were sufficient to protect both the environment and workers on such facilities.

   In 1986, the OCSLA was revised again to resolve the dispute over the division of 8(g) revenues. (37) The amendment mandated how revenues from production within three miles of the federal state boundary were to be dispersed. (38) Then, in 1989, the infamous EXXON VALDEZ incident occurred, spilling approximately 11 million gallons of crude oil into the Gulf of Alaska and the Alaska Peninsula. (39) "The spill raised significant concerns about the adequacy of existing oil spill prevention and response capabilities." (40) As a result, the Oil Pollution Act was passed in 1990, which added an amendment to the OCSLA to govern "cooperative development of common hydrocarbon-bearing areas." (41) The main purpose was to prevent harmful effects of unrestrained competitive production. (42) Finally, in 1994 and 1999, the OCSLA was amended for better regulating how lease sales were conducted. (43) The Secretary of the Interior now had the power to negotiate these lease sales, as opposed to a strict competitive lease sale. (44)

   It is important to remember that the Outer Continental Shelf Lands Act governs the "lands" lying at the bottom of these waters. The Act does not govern the water above the Outer Continental Shelf. This distinction is important because the facilities that fall under the OCSLA need to be attached to the seabed in some way. Offshore wind farms are permanent structures attached to the seabed of the OCS, and thus should fall under the OCSLA.

   The specific provision of the OCSLA that governs offshore wind farms is section 1333 which states:

   The Constitution and laws and civil and political jurisdiction of the United States are hereby extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom, or any such installation or other device (other than a ship or vessel) for the purpose of transporting such resources, to the same extent...