The Obama administration has taken the first regulatory action toward development of offshore wind energy projects in the Great Lakes by entering into a Memorandum of Understanding (MOU) with certain states bordering the Great Lakes to expedite environmental review of proposed projects. The MOU is the first step in freeing up what the administration believes to be as much as 700 gigawatts of power, representing about one-fifth of the offshore wind potential in the U.S.

Federal signatories on the MOU include the White House Council on Environmental Quality; the U.S. Departments of Energy, Defense and Army; the Advisory Council on Historic Preservation; the U.S. Coast Guard; the U.S. Environmental Protection Agency; the U.S. Fish and Wildlife Service; the Federal Aviation Administration; and the National Oceanic and Atmospheric Administration. The state agencies are the Commonwealth of Pennsylvania, and States of Illinois, Michigan, Minnesota and New York. The parties have agreed to “work together to create a regulatory roadmap–a document that describes the regulatory review process and anticipates current and anticipated data needed to inform efficient review of proposed offshore wind energy facilities in the Great Lakes.” MOU § III, subsection 2.

In simple terms, the MOU is necessitated by the National Environmental Policy Act, 42 U.S.C. § 4321, et seq. (NEPA), which requires, among other things, that “all agencies of the Federal government shall . . . (B) identify and develop methods and procedures, in consultation with the Council on Environmental Quality . . . which will ensure that presently unquantified environmental amenities and values may be given appropriate consideration in decision making . . .,” 42 U.S.C. § 4332, subsection (B).

Given the potential impact of offshore wind energy facilities on the marine environment, the administration has taken the increasingly common step of bringing to the table all governmental parties with a stake in the project, not only for the purpose of achieving consensus on potential environmental impacts, but also to forestall future, environmentally-based objections to the project by participant governments and agencies. State laws, constitutions and the Submerged Lands require and authorize state participation. Act, 43 U.S.C. §§ 1301-1315. That Act recognizes and confirms to the states the title and ownership of the lands beneath the navigable waters within the boundaries of their respective states. 

Apparently benign, the MOU commits signatories to, among other things:

  1. Efficiently coordinating data collection, dissemination and reviews by participants, including review processing times and decision making associated with each type of permit
  2. Completing the “roadmap” within 15 months of the effective date of the MOU, in this case about March 30, 2013
  3. Attempting to resolve issues arising under the MOU “expeditiously.” See MOU § III. 

The strength of these commitments to regulatory streamlining is, however, complicated by the substantial caveats on the MOU’s applicability. For example, the MOU expressly declines “to limit or affect in any way the authority or legal responsibility of the participants,” MOU § V, subsection 1, and agrees to “remain consistent with participant’s existing authorities.” § III, subsection 2.

Therefore, each participant could, consistent with its own regulatory mandate, object to, or even challenge, the environmental analysis resulting from the MOU. Moreover, the Great Lakes states of Ohio, Indiana and Wisconsin are not yet signatories to the agreement, leaving in doubt whether, in their absence, the desired informational and analytic conformity can be achieved. 

Finally, practical experience with such MOUs lends itself to skepticism. Local and federal authorities signed a similar agreement as a predicate to the Federal Aviation Administration (FAA)’s environmental review for the Philadelphia International Airport Capacity Enhancement Program.

Ultimately, FAA’s sister agency, the Environmental Protection Agency (EPA), exercising its own regulatory authority, vehemently objected to the completed environmental review conducted under the MOU. Whether a more collegial result can be expected from an MOU for an environmentally contentious project such as the development of offshore wind energy remains to be seen. What is certain is that governmental MOUs will be further refined in the future in an effort to avoid the regulatory delays attendant upon projects such as offshore energy development of great magnitude, impact and controversy.