Moratorium on Offshore Wind Leases off the Atlantic Coast Will Have Ripple Effects on State Emission Reduction Plans | Article

The Biden-Harris Administration set a goal in March 2021 of deploying 30 gigawatts (GW) of offshore wind by 2030. If met, this would support about 77,000 jobs, generate power for about 10 million homes, and reduce carbon dioxide emissions by about 78 million metric tons, according to the announcement’s press release. This effort, however, is limited by an upcoming moratorium on offshore energy development along the southern Atlantic coast.

Offshore leases and permits for energy development are managed by the Bureau of Ocean Energy Management (BOEM), an agency within the Department of the Interior. BOEM is responsible for managing nearly 2.5 billion acres of ocean surrounding the United States.

In 2006, the Gulf of Mexico Energy Security Act of 2006 created a moratorium on oil and gas “leasing, preleasing, or any related activities” in certain areas of the Gulf of Mexico. This moratorium was set to expire on June 30, 2022. But, in September 2020, in what was seen as an effort to appeal to coastal voters in the Southeast, then-President Trump used two executive memorandums to extend the 2006 moratorium for another decade and expanded the geographic reach of the moratorium to include offshore areas off the Atlantic Coast of North Carolina, South Carolina, Georgia, and Florida. The new ten-year moratorium is expected to take effect on July 1, 2022, and bans all offshore leasing for the purpose of energy “exploration, development, or production” including oil, gas, and offshore wind development.

While the moratorium may prevent fossil fuel extraction, it has an outsized impact on deployment of offshore wind. Not only will the moratorium affect the ability of the United States to meet its climate goals, but it will particularly affect the clean energy plans of southeastern states. For example, North Carolina recently set utility carbon emission reduction goals of 70 percent by 2030 and 100 percent by 2050 through the bipartisan Energy Solutions for North Carolina (H.B.951). North Carolina Governor Roy Cooper also established a 2.8 GW offshore wind capacity goal by 2030 through Executive Order 218.

“North Carolina is well positioned to take advantage of the tremendous opportunities presented by offshore wind along the East Coast. In fact, offshore wind has the potential to cover more than four times the state’s retail electricity sales, and could generate more than $4.6 billion in economic output for the state if the governor’s goals are realized,” explained Matt Abele, director of marketing and communications at North Carolina Sustainable Energy Association.

As required by the new law, the North Carolina Utilities Commission, which is responsible for regulating monopoly, investor-owned utilities in the state, is working to draft a carbon plan that will be submitted to state regulators by May 16, 2022, and finalized by the end of 2022. The moratorium limits North Carolina’s ability to deploy renewable energy and therefore also limits the possible scenarios to reach the carbon plan’s emissions reduction goals. This is particularly detrimental to North Carolina, as it is the state with the most offshore wind potential on the Atlantic coast.

The North Carolina draft carbon plan presented at a March 2022 stakeholder meeting showed different energy mix scenarios, including either 800 MW or 1600 MW of offshore wind capacity by 2030, depending on the availability of natural gas from the Appalachian region. Proposed projects to supply Appalachian gas to North Carolina have faced significant resistance from local communities and unexpected costs.

This graph shows when different sources of carbon-free energy are expected to be available for deployment according to Duke Energy’s draft carbon plan. If the federal moratorium is maintained, no offshore wind development will take place in the 2040s since construction will not be allowed in the 2020s. Image credit: Duke Energy

The moratorium will impact offshore wind deployment beyond its ten-year period. Offshore wind deployment is time-intensive, as projects take four to eight years or longer from the lease sale to becoming operational. Due to this lengthy development period, the moratorium could limit offshore wind in the Atlantic and Gulf coasts through 2050. Indeed, the North Carolina draft carbon plan accounts for a ten-year gap during the 2040s with no additional offshore wind capacity installed (see above graph).

North Carolina still has some opportunities for offshore wind development before the Atlantic Coast portions of the moratorium takes effect. BOEM raced to hold an auction for two lease areas off the coast of North and South Carolina on May 11, 2022. Turbines on the leased areas would have the potential to generate 1.3 GW of wind energy and power 500,000 homes.

As a spokesperson for the North Carolina Department of Commerce explained, “A pipeline of offshore wind projects is taking shape off of the North Carolina coast, which creates significant economic and clean energy opportunities for North Carolina. Development of projects in the Kitty Hawk and Carolina Long Bay areas can provide approximately 4 GW of offshore wind, putting the state on track to meet Governor Cooper’s offshore wind goals. Though the moratorium prohibits the federal government from executing new offshore wind leases, BOEM is moving forward to identify areas for wind development in the Central-Atlantic region, including off of our coast.”

The Avangrid Renewables offshore wind project and the lease areas available for auction are located near North Carolina’s northern and southern borders and could produce almost 4 GW of energy combined. Photo Credit: U.S. Department of the Interior Bureau of Ocean Energy Management.

These projects could be just the start of a more robust offshore wind energy supply along the eastern seaboard, but Congress would need to take action to remove offshore wind from the moratorium. Rep. Paul Tonko (D-N.Y.) and Sen. Kirsten Gillibrand (D-N.Y.) introduced the Restoring Offshore Wind Opportunities Act (H.R.2635/S.3808) to provide an exception to the moratorium for offshore wind. Now, that bill language is included in legislation on U.S. competitiveness that is currently in the final stage of resolving differences between the House-passed America COMPETES Act of 2022 and the Senate-passed United States Innovation and Competition Act of 2022. It is not yet known if the language on excepting offshore wind will remain in the final version of the bill.

The fact that North Carolina and other states are developing their carbon emission reduction plans while taking into consideration the impacts of the moratorium illustrates how today’s policies are affecting the feasibility of reducing greenhouse gas emissions over the coming decades. This underscores the critical nature of designing effective policies in the here and now.

Author: S. Grace Parker

Thank you to EESI Advisory Board Member Steve Kalland, executive director of the North Carolina Clean Energy Technology Center at North Carolina State University, for his guidance on this article.