There’s good news for offshore wind and hydrokinetic project developers looking to site projects on the Outer Continental Shelf (“OCS”). The Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE” or the “Bureau”) issued a Notice of Proposed Rulemaking (“NOPR”) on February 16, 2010 to delete a step in the regulatory process for issuing noncompetitive leases to renewable energy projects on the OCS when an applicant responds to a Request for Interest (“RFI”) or a Call for Information and Nomination (“Call”) issued by BOEMRE. 

As originally adopted, the regulations governing renewable energy leasing on the OCS outline two methods by which BOEMRE may issue leases noncompetitively.

• First, the Bureau may issue a noncompetitive lease if (1) the applicant submits an unsolicited request for a noncompetitive lease and (2) after issuing notice of the request and soliciting comments, the Bureau determines that no competitive interest in the proposed lease area exists. In this situation, BOEMRE is required to initiate only one public process.
• Second, the Bureau may issue a noncompetitive lease if (1) it publishes an RFI or a Call, (2) the applicant submits an area of interest for leasing in response, and (3) after issuing notice of the area of interest and soliciting comments, the Bureau determines that no competitive interest exists. In this situation, BOEMRE is required to initiate two public processes (the initial RFI or Call and a subsequent notice and comment period) even if the responses to the RFI or Call indicate no overlap in the respondents’ areas of interest.

In its NOPR, the Bureau recognized that “this requirement for a second notice is redundant and is at odds with the noncompetitive process prescribed for cases in which a party submits an unsolicited request . . . and requiring only one RFI notice would make BOEMRE’s leasing processes more streamlined and efficient while maintaining BOEMRE’s obligation to notify the public of areas that may be leased.”

Thus, BOEMRE’s proposed change would eliminate the requirement for a second notice and comment period if, in response to an RFI or a Call, an applicant expresses interest in a lease area that does not overlap with another applicant’s area of interest. This small change could reduce the time to acquire a noncompetitive lease by 12 months.  In the event that two respondents indicate an interest in the same lease area, the Bureau’s rules governing competitive leasing would govern.

So far, the vast majority of substantive comments on the NOPR have been positive. All comments are due no later than March 18, 2011.