On 11 February 2020, the Bureau of Ocean Energy Management issued a revised timeline for completing the final environmental impact statement for Vineyard Wind 1, the first commercial-scale offshore wind project in the country
According to a new scheduled released by BOEM on 11 February 2020, the official notice of availability of a supplement to the draft environmental impact statement will now be published in the Federal Register on 12 June 2020.
A preferred alternative will be agreed by 21 August 2020, and official notice of the availability of the final environmental impact statement (FEIS) will be published in the Federal Register on 13 November 2020. BOEM will issue a record of decision on 18 December 2020. It was originally due to do so on 16 August 2019.
Responding to the revised timeline, Vineyard Wind chief executive Lars Pedersen said, “We need to analyse what a longer permitting timeline will mean for beginning construction; commercial operation in 2022 is no longer expected. We look forward to the clarity that will come with a final EIS so that Vineyard Wind can deliver this project to Massachusetts and kick off the new US offshore energy industry.”
The American Wind Energy Association said, “The Department of Interior’s schedule for Vineyard Wind’s FEIS provides important clarity for the burgeoning US offshore wind industry. It is critical that Interior meets or accelerates the newly announced schedule, expedites the review for other offshore wind projects under development, and moves forward with auctions for new wind energy lease areas, which will create thousands of new jobs and economic opportunities nationwide.”
National Ocean Industries Association president Erik Milito said the updated permitting timeline for the Vineyard Wind 1 project was “disappointing.” Mr Milito said regulatory delays – especially of a new industry – could open the door to unexpected and unintended bottlenecks and holdups.
“However, the complexity of what Interior is doing should not be forgotten. It is critically important that Interior issue a robust FEIS that can withstand the litigation that could be filed in an attempt to block the ascendant offshore wind industry.”
BNEF wind energy analyst Rachel Shifman told OWJ the delay was “potentially very concerning” for the overall economics of the Vineyard Wind project. “What this delay means is there is no chance the windfarm will be online by its – already delayed – 2022 commissioning deadline,” she explained.
“It also means there is no chance they can even start construction in 2020, which means that they could have some trouble with tax credit qualification as well.” Ms Shifman said it was by no means out of the question that Vineyard Wind might “end up suing over this.”
But Business Network for Offshore Wind president and chief executive officer Liz Burdock said the fact the updated Vineyard Wind permitting review timeline coincided with the Trump administration’s release of its proposed 2021 budget, allocating nearly US$27M to offshore renewable energy – a US$5M increase over last year’s budget – should not be overlooked.
“These actions indicate that the White House is addressing resource constraints inside BOEM through the budget process and understands the importance of permitting and leasing US offshore wind projects,” she said.
“BOEM has indicated that they would complete the Vineyard EIS review as quickly as possible but is giving itself time. It is good to see they understand the significance of completing the EIS review on schedule.”
Two schools of thought prevail about BOEM’s review of the offshore wind project. One narrative has it that it is a politically motivated attempt to rein in green energy by the Trump administration and that BOEM’s growing support for offshore wind under former Secretary of Interior, Ryan Zinke, is ebbing away.
That narrative is fed by President Trump’s dislike of wind energy and by the appointment of an Interior Secretary, David Bernhardt who has a background in ‘big oil’. Mr Bernhardt used to work at a Washington law and lobbying firm, including on behalf of mining companies, oil and gas companies and has been described by some as “a walking conflict of interest.”
The second, more likely narrative, is that since Vineyard Wind entered the environmental approval process, a huge amount of offshore wind capacity has been approved by states up and down the east coast of the US, and that BOEM wants to take stock of the situation and ensure that problems that could affect numbers of projects are addressed now.
When it announced its intention to hold what it described as “a more robust cumulative analysis” of the Vineyard Wind project in August 2019, BOEM said it was “taking into account recent state offshore wind procurement announcements.” It also indicated that the review includes other projects in the US for which a power purchase agreement has been signed.
Under Executive Order 13807, federal agencies like BOEM are required to make timely decisions with the goal of completing all environmental reviews and authorisation decisions for major infrastructure projects within two years. That means the extended Vineyard Wind review should have been completed in March 2020.
In October 2019, BOEM acting director Walter Cruickshank was reassuring in comments he made at an industry meeting. He said the additional analysis “was intended to better address potential conflicts with other ocean users” such as commercial fishing.
He went on to say that BOEM expected its analysis “would serve as a model for future projects” and that the Department of Interior was “committed to getting this right” and “taking a long-term view on how best to manage offshore wind activities.” Mr Cruickshank told the meeting that BOEM was “committed to a permitting process that minimises ocean conflicts and establishes a strong foundation for wind projects moving forward.”
As Ms Shifman said, “It is entirely possible that BOEM simply wants to address potential conflicts of interest and avoid potential problems further down the road and avoid the kind of ‘death by litigation’ that happened to Cape Wind.” Cape Wind was an early offshore windfarm that could have become the first commercial project in the US, that has come to be seen as the ‘wrong project in the wrong place’.
“The backstory is that David Bernhardt was an oil lobbyist and that other large offshore projects in the oil and gas sector have been fast-tracked, as offshore wind is being slow-walked. The truth is, we won’t know for sure what the real reason for the review is until BOEM announces its decision. No-one really knows for sure what it is going to say or what the implications might be, but in theory at least Vineyard Wind could take legal action. That is a course open to anyone affected by a review like this if an agency does not comply with executive order 13807.
“The big problem for Vineyard Wind is that the longer the delay, the more expensive the project becomes because of the step-down in the investment tax credit (ITC), which helped the company put in a very competitive bid in the first place.” Vineyard Wind’s owners Avangrid and Copenhagen Infrastructure Partners are understood to have been talking to the tax authorities in the US about extending the ITC for the 800-MW project, although no announcement has been made.
Power Advisory president John Dalton told OWJ, “A case can be made that it makes sense to review the potential impact of offshore wind on the US east coast now. The pace of development of offshore wind in the US has been much faster than anyone expected, but some people are still sceptical about the review.
“A lot depends on what the cumulative impacts BOEM is looking at will actually turn out to mean. But despite the further delay, I believe the industry has sufficient momentum behind it to ride it out. We are talking about very different projects to Cape Wind now and a very much better level of engagement with stakeholders such as fisheries.”