United States: Application Of The Jones Act To Floating Offshore Wind

With 80 percent of the world's wind resources in deep water, the future of offshore wind power generation is in floating offshore wind turbines (often abbreviated FOWT).¹ Because this is a relatively new technology, U.S. Customs and Border Protection (CBP) has not yet had the occasion to issue any rulings regarding floating offshore wind turbines in federal waters (generally, beyond three nautical miles from the U.S. coast). Here, we examine CBP's existing rulings and guidance to determine how the Jones Act may apply to floating offshore wind turbines.

U.S. Offshore Floating Wind Market

In September 2022, the Biden Administration announced a goal of deploying 15 gigawatts (GW) of floating wind capacity by 2035 to go along with its goal of 30 GW by 2030 of fixed bottom capacity.² In that announcement, the Biden Administration indicated that "deep-water areas that require floating platforms are home to twothirds of America's offshore wind energy potential." In general, floating wind must be employed if the water depth exceeds 60 meters."³

The Biden Administration recognized that floating wind will require further investment to be competitive. The U.S. Department of Energy estimated that the cost of floating offshore wind would be more than 50 percent higher than the cost of fixed-bottom offshore wind.⁴ For this reason, the Energy Department announced in 2022 a "Floating Offshore Wind Shot" research and development initiative to drive down floating wind costs.

Although floating offshore wind generation is a fastevolving technology, several floating projects have already been installed around the world and more are being installed. The largest floating project to date is Hywind Tampen in Norway which consists of 11 turbines of about 8 megawatts (MW) each for a total of 88 MW. Those turbines provide power to offshore oil and gas production facilities. There is also the Kincardine 47.5 MW capacity wind farm off the coast of Scotland installed in 2022 (five 9.5 MW turbines) and the WindFloat Atlantic 25 MW capacity wind farm off the coast of Portugal (three 8.4 MW turbines), among others.

The first substantial U.S. floating project is likely to be pursuant to a federal research lease issued to the state of Maine for an area 20 nautical miles southeast of Portland which would have a capacity of 144 MW (12 turbines).⁵ The Gulf of Maine has deep water, making fixed bottom wind turbines impractical. Maine has been developing floating offshore wind since 2008 and intends to proceed first with a single turbine pilot project developed by New England Aqua Ventus, LLC, scheduled to deploy in 2025.⁶ The Bureau of Ocean Energy Management ("BOEM" - the federal agency that manages the leasing and permitting review of offshore wind projects) also announced in October 2023 a draft wind energy area for floating wind in the Gulf of Maine that has a capacity of 40 GW if fully developed.⁷

In addition, BOEM issued in December 2022 five leases off the U.S. West Coast in deep waters which can only be developed to produce electricity with floating technologies. Those five leases were issued after an auction which generated $757 million in total in winning bids.8 BOEM estimates that these lease areas have the capacity to produce over 4.6 GW of energy. In August 2023, BOEM announced two draft wind energy areas off the coast of Oregon.⁹

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Footnotes

1. Presentation of Walt Musial, "Floating Offshore Wind Technology," National Renewable Energy Laboratory, Bureau of Ocean Energy Management, Gulf of Maine Intergovernmental Renewable Energy Task Force (May 10, 2023), https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/Musial-Floating-Wind-Technology.pdf.

2. The White House, "Fact Sheet: Biden-Harris Administration Announces New Actions to expand U.S. Offshore Wind Energy" (Sep. 15, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/15/fact-sheetbiden-harris-administration-announces-new-actions-toexpand-u-s-offshore-wind-energy/.

3. Musial, Walt, Donna Heimiller, Philipp Beiter, George Scott, and Caroline Draxl. 2016 Offshore Wind Energy Resource Assessment for the United States. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5000-66599 (Sep. 2016), https://www.nrel.gov/docs/fy16osti/66599.pdf.

4. U.S. Department of Energy, "Floating Offshore Wind Shot: Unlocking the Power of Floating Offshore Wind Energy," DOE/EE-2634 (Sep. 2022), https://www.energy.gov/sites/default/files/2022-09/floating-offshore-wind-shotfact-sheet.pdf

5 BOEM, Press Release, "BOEM Seeks Input on Draft Environmental Analysis of Gulf of Maine Offshore Wind Research Lease" (Jul. 19, 2023), https://www.boem.gov/newsroom/press-releases/boem-seeks-public-input-draftenvironmental-analysis-gulf-maine-offshore.

6. See https://newenglandaquaventus.com.

7. BOEM, Press Release, "BOEM Releases Draft Wind Energy Area in the Gulf of Maine for Public Review and Comment" (Oct. 19, 2023), https://www.boem.gov/newsroom/press-releases/boem-releases-draft-wind-energyarea-gulf-maine-public-review-and-comment

8. BOEM, Press Release, "Biden-Harris Administration Announces Winners of California Offshore Wind Energy Auction" (Dec. 7, 2022), https://www.doi.gov/pressreleases/biden-harris-administration-announces-winners-californiaoffshore-wind-energy-auction.

9. BOEM, Press Release, "BOEM Identifies Draft Wind Energy Areas Offshore Oregon for Public Review and Comment" (Aug. 15, 2023), https://www.boem.gov/newsroom/press-releases/boem-identifies-draft-wind-energyareas-offshore-oregon-public-review-and.

Originally Published by First Quarter 2024 Benedict's Maritime Bulletin

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