Pursuit of US Offshore Wind Energy Takes a Step Forward, Yet Technical, Legal Challenges Remain

With nearly 100,000 miles of coastline, the US Department of Energy (DOE) estimates that US offshore wind holds the potential to provide 900,000 megawatts of electricity, which is roughly the energy necessary to power 270 million homes.  Yet, it may come as a surprise to the general public that there are currently zero operational offshore wind farms in the US.

In a bid to pursue the feasibility of the nascent American offshore wind energy industry, the DOE announced in 2012 that seven offshore wind “demonstration projects” would receive approximately $4 million each in federal matching funds, aimed at exploring the design, engineering and permitting challenges present at sites throughout the country.  In a second phase of this initiative, dubbed the Offshore Wind Advanced Technology Demonstration Project, the DOE recently announced in May 2014 that a further $47 million would be awarded to three projects for final engineering and construction, planned for deployment by 2017.  The three sites, located off the coasts of New Jersey, Virginia, and Oregon, are anticipated to feature a combined 67 megawatts of electrical generation capacity, or roughly enough energy to power up to 16,500 homes.

Technical Challenges

Each of the projects selected for additional funding by DOE has prompted innovative solutions to meet the technical challenges presented by the particular physical characteristics at these sites, such as the demands of hurricane season on the East Coast, and the narrow continental shelf on the West Coast, which does not provide an otherwise more readily available base upon which to construct wind turbines. According to DOE, these ventures are intended to explore how this sustainable energy resource can be harnessed in a financially feasible manner by incentivizing technical innovation, thereby ultimately lowering the barriers to entry by industry and government.

Legal Hurdles and Court Challenges

Development of these projects will require more than simply meeting these daunting technical challenges.  While the projects are planned to be positioned from 3 to 26 miles offshore, developers must apply for and receive numerous federal, state and local permits and approvals, including approvals pursuant to often extensive environmental impact reviews.  Furthermore, the projects must comply with a host of administrative and environmental and other laws, which may include the Clean Water Act, the Clean Air Act, the Endangered Species Act, the Migratory Bird Treaty Act, the National Environmental Policy Act, the Marine Mammal Protection Act, the Magnuson-Stevens Fishery Conservation & Management Act, and the Historic Preservation Act, among others.

This matrix of legal requirements provides a fertile ground for potential court challenges, exemplified by extensive legal battles involving the 454 megawatt Cape Wind offshore energy project planned for Nantucket Sound off the coast of Massachusetts.  The Cape Wind project, which has now been in development for more than 10 years, has been reviewed and approved by 17 federal and state agencies, yet has been the subject of more than 20 lawsuits brought by private individuals, citizens groups, local municipalities and a native American tribe opposing the project under a host of legal theories, including adverse environmental impacts and improvidently issued governmental permits and administrative decisions.

In the latest court decision involving Cape Wind, a federal court in Boston on May 2, 2014, sided with the project in the face of challenges from opponents comprising a local municipality, an interest group named Alliance to Protect Nantucket Sound, various businesses and neighboring citizens.  In Town of Barnstable, Mass. et al. v. Berwick, Civ. No. 14-10148-RGS (D. Mass.), the plaintiffs alleged that approval by state regulators of an above-market agreement to sell power from the Cape Wind project to regional power provider Nstar, while Nstar was undergoing a merger subject to governmental authorization, was improper as an exercise of government influence to induce Nstar to enter the agreement with Cape Wind, violating the Commerce Clause and Supremacy Clause of the U.S. Constitution.  Rejecting these arguments, the federal judge held the plaintiffs, who had sued state officials, were barred from doing so under the sovereign immunity doctrine arising under the Eleventh Amendment to the U.S. Constitution, which prevents state officials from being sued for past actions.  The victory for Cape Wind may be short-lived, however, as the Alliance to Protect Nantucket Sound has indicated that it will appeal this latest decision.

With its latest announcement, the DOE Offshore Wind Advanced Technology Demonstration Project marks a significant investment in developing technological solutions to the various technical hurdles which must be overcome to bring the promise of reliable, affordable offshore wind energy to fruition.  Nevertheless, as the Cape Wind example demonstrates, the pursuit of offshore wind power in the US may continue to face significant legal challenges, which must also be taken into account when proceeding from the planning phase to implementation.

For additional information, please contact Stephen E. O’Day or Christopher J. Bowers.

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