U.S. Presidential Memorandum Directed at Onshore and Offshore Wind Projects
Among the flurry of actions taken on January 20, President Trump issued a Memorandum entitled “Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects” (the “Memorandum”) that will affect both onshore and offshore wind energy projects. The Memorandum (1) withdraws all areas of the U.S. Outer Continental Shelf (the “OCS”) from offshore wind leasing such that the Bureau of Ocean Energy Management (“BOEM”) cannot issue new offshore wind leases; and (2) prohibits the issuance of new or renewed approvals, rights of way, permits, leases, or loans for onshore or offshore wind projects.
Significant Provisions in the Memorandum
Pursuant to Section 12(a) of the Outer Continental Shelf Lands Act, Section 1 of the Memorandum withdraws all areas within the OCS from new or renewed wind energy leasing until the Memorandum is revoked and it extends current OCS area withdrawals until the Memorandum is revoked as well. This withdrawal only applies to leasing for wind purposes and does not apply to leasing for any other purposes – specifically oil, gas, minerals, or environmental conservation. The withdrawal does not affect rights under any existing wind energy leases in the withdrawn areas. However, regarding existing OCS wind leases, Section 1 directs the Secretary of the Interior, in consultation with the Attorney General, to prepare a report to submit to the President (through the Assistant to the President for Economic Policy) reviewing the ecological, economic, and environmental necessity and legal bases for terminating or amending existing leases.
Section 2 of the Memorandum directs all applicable federal agencies to halt issuing new or renewed approvals, rights of way, permits, leases, or loans for all onshore and offshore wind projects until the Secretary of the Interior (in consultation with other enumerated federal agencies) completes an assessment of the current federal wind leasing and permitting practices’ environmental impacts on wildlife and the economic costs associated with the generation of electricity and the subsidies provided to the wind industry. This does not limit existing operations under valid leases. As is seen with the suspension of delegated authorities issued by the Acting Secretary of the Interior, it also likely does not apply to authorizations necessary to avoid: (1) conditions that might pose a threat to human health, welfare, or safety; or (2) adverse impacts to public land or mineral resources. In addition, Section 2 directs certain federal agencies to deliver a joint report to the President both assessing the environmental impact and cost of “defunct and idle windmills” and suggesting legal authorities to remove them. However, the Memorandum does not define “defunct and idle windmills.” Finally, Section 2 permits the Attorney General to submit the Memorandum to any court with jurisdiction over any related pending litigation to request a stay or other appropriate relief until the relevant actions in Section 2 are completed.
Key Takeaways and Potential Implications
The Memorandum has no specified deadline or termination date. Additionally, none of the required actions described in the Memorandum have any specified deadlines or termination dates. This creates uncertainty as to how long the Memorandum will stay in effect and by when the applicable federal agencies will complete the required actions and reviews. As we saw when previous Secretaries of the Interior undertook assessments of large programs, such as the coal leasing and permitting program in 2016, the incoming Secretary will work with the relevant federal agencies to identify the scope and timeline for the assessment and may request public and stakeholder input. It could take the form of a voluntary programmatic environmental impact statement, as was done with the assessment of the coal program, or it may be conducted outside the National Environmental Policy Act process. The next communications regarding the assessment will likely be released by the Secretary of the Interior, the Bureau of Land Management, or BOEM and will likely inform stakeholders of the next steps to be taken, the potential timeline, and/or the process it plans to utilize for the assessment. Such communications may be delayed as the federal administration moves forward with the transition period and political appointees are put in place.
While the Memorandum prevents the applicable federal agencies from issuing new or renewed approvals, rights of way, permits, leases, or loans for all onshore and offshore wind projects, it does not prevent the applicable federal agencies from continuing to conduct the environmental reviews required for such projects. Once political appointees are put in place, we expect the Secretary of the Interior through the applicable federal agencies to issue guidance on implementation of the Memorandum.
In addition to onshore wind projects located on federal lands, the Memorandum will affect onshore wind projects located on private lands that require federal wildlife or other federal environmental permits.
The Memorandum will have varying effects on offshore wind projects on the OCS depending on what stage the project is at in its development:
- For projects attempting to secure a new lease – The Memorandum pauses all new and renewed wind energy leasing until the Memorandum is revoked. In addition, with the temporary withdrawal of the OCS for wind leasing, BOEM will not be conducting any competitive auctions for new leases while the Memorandum is in effect. Therefore, no project will be able to secure a new lease until the Memorandum is revoked.
- For projects with existing wind energy leases that do not have an approved Construction and Operations Plan (“COP”) – The Secretary of the Interior is directed to analyze whether there is reason and a legal basis for terminating or amending existing leases. For various reasons, including, but not limited to, the environmental reviews that supported lease issuance and the significant costs incurred by the lessees to both obtain the leases and satisfy their ongoing obligations under the leases, it seems unlikely that the Secretary’s review will result in termination or modification of existing leases without significant legal challenges and legal vulnerabilities. The Memorandum does not prevent BOEM from continuing to conduct the environmental reviews for COPs that have been submitted for offshore wind projects. However, the Memorandum creates uncertainty about when BOEM will issue COP approvals, which will depend on the timing and outcome of the required assessment. Once political appointees are in place, we expect BOEM to issue guidance on implementation of the Memorandum.
- For projects with existing wind energy leases and COP approvals from BOEM – As with the above projects with existing leases, the Secretary is analyzing whether there is reason and legal basis to terminate or modify the underlying leases. As stated above, it seems unlikely that the Secretary’s review would result in termination or modification of existing leases without significant legal challenges and vulnerabilities. The Memorandum is silent on BOEM rescinding or amending previously issued COP approvals for offshore wind projects. Additionally, the Memorandum does not call for a freeze on projects that are already under construction.
It is unclear how the states will react that are relying on wind energy to meet state climate goals. This is especially true for the northeastern states, California, Oregon, and Louisiana, which are relying on offshore wind energy to meet state climate goals. Many states have also awarded or worked closely with onshore and offshore developers on various power purchase agreements, interconnection projects, and supply chain facilities that may be indirectly impacted by the Memorandum.
Lastly, the U.S. Supreme Court’s decision last year in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), may constrain the ability of the applicable federal agencies to modify the onshore and offshore wind leasing and permitting programs or terminate or modify existing leases after the required assessments have been completed. Loper Bright overturned the landmark 1984 case Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). In doing so, it held that the Administrative Procedure Act requires federal courts to exercise their independent judgment in determining whether a federal agency has acted within its statutory authority, and federal courts may not defer to a federal agency’s interpretation of a statute solely because the statute is ambiguous. Therefore, any future modifications to the onshore and offshore wind leasing and permitting programs or termination or modification of existing leases will be heavily scrutinized by developers, stakeholders, and courts (if challenged) to determine if such actions fall within the delegated statutory authority.
