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An Update on Wind Farm Development along the US Coastline

On October 13, 2021, during a speech at American Clean Power’s Offshore WINDPOWER Conference & Exhibition, US Department of the Interior Secretary Deb Haaland announced a path forward for future offshore wind leasing along the US coastline. This announcement supports the Biden administration’s goal to install 30 gigawatts of offshore wind energy by 2030 and comes approximately five months after the Biden administration approved the 800 megawatt Vineyard Wind Project.

“The Interior Department is laying out an ambitious roadmap as we advance the Administration’s plans to confront climate change, create good-paying jobs, and accelerate the nation’s transition to a cleaner energy future,” Secretary Haaland said. As part of this roadmap, Secretary Haaland also announced plans for the Bureau of Ocean Energy Management (BOEM) to potentially offer up to seven new offshore lease sales by 2025 in the Gulf of Maine, New York Bight, Central Atlantic, Gulf of Mexico and offshore the Carolinas, California and Oregon.

Secretary Haaland shared that the Interior Department’s “timetable provides two crucial ingredients for success: increased certainty and transparency. Together, we will meet our clean energy goals while addressing the needs of other ocean users and potentially impacted communities. We have big goals to achieve a clean energy economy and [the Department of] Interior is meeting the moment.”

BOEM Director Amanda Lefton advised, “[w]e are working to facilitate a pipeline of projects that will establish confidence for the offshore wind industry…At the same time, we want to reduce potential conflicts as much as we can while meeting the Administration’s goal to deploy 30 gigawatts of offshore wind by 2030. This means we will engage early and often with all stakeholders prior to identifying new Wind Energy Areas.”

As we move closer to 2030, industry investors and developers should expect to see a steady increase of offshore wind activity due to the recent announcements and the Investment Tax Credit for projects that will start construction before 2026.




Key Takeaways | The Latest Merger Control Developments under the Biden Administration

The Biden administration has placed an emphasis on antitrust enforcement that will create meaningful implications for future transactions, as well as those already consummated. In this webinar, hosted by McDermott Will & Emery partners Kevin Brophy and Lesli Esposito and associate Matt Evola, learn who the new leaders at the Federal Trade Commission (FTC) and US Department of Justice (DOJ) Antitrust Division are and how their approach to antitrust enforcement is already changing merger review process.

Below are key takeaways from the webinar:

1. Antitrust Agency Personnel Changes. The FTC and the DOJ Antitrust Division have recently seen leadership changes. At the FTC, US President Joe Biden appointed Lina Khan to chair, and she’s already making headlines for her efforts to “modernize” merger assessments. Chairwoman Khan has indicated that she wants the FTC to focus on addressing the “rampant consolidation” that has resulted in dominant firms across markets. She has also advocated for a holistic approach to identifying harms, a focus on power asymmetries and a need for the agency to be forward-looking. The changes she has implemented have significantly impacted merger review.

At the DOJ, President Biden appointed Jonathan Kanter, who has not yet taken office but is also expected to take an aggressive approach to enforcement, to lead the Antitrust Division.

2. President Biden’s Executive Order on Antitrust. In a July executive order, President Biden indicated that antitrust enforcement would be a top priority for his administration. The order calls for a whole-of-government approach, encompassing 72 initiatives directed at more than 12 separate agencies. The order directed the FTC and the DOJ to vigorously enforce the antitrust laws by toughening the review of future mergers and revisiting anticompetitive mergers that went unchallenged.

3. Policy Changes with Practical Implications. The FTC has been especially active in announcing new policies and procedures that will likely extend the merger review timeline and open previously consummated transactions to further scrutiny. Among these changes are:

  • The suspension of early termination for the 30-day Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) waiting period: Early termination has always been discretionary, but the FTC’s Premerger Notification Office has suspended early termination in 2021 with no resumption in sight.
  • Warning letters sent at the conclusion of the HSR Act waiting period: These “close at your own risk” letters indicate that while the waiting period has concluded, the agencies may challenge the transaction post-closing.
  • Increased requests for “pull-and-refiles”: This process restarts the HSR Act waiting period, granting agencies an additional 30 days to review a transaction, and are being requested at an increasing rate.
  • Procedural and timing changes aligning the FTC with the DOJ: Changes made at the FTC are bringing the agencies into alignment on certain procedures for second requests, and these changes are likely to extend the timeline required for responding to second requests.

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Key Takeaways | How Solar Industry Leaders are Addressing and Overcoming the US–China Trade War

The US-China trade war has caused a significant impact on the solar industry, and that impact is expected to grow. In this webinar, learn how solar industry leaders are handling the effects of the US–China trade war and how they are preparing for the future.

Our first webinar of this series featured McDermott Will & Emery partner Carl Fleming, Pine Gate Renewables Director of Regulatory Affairs Brett White, Vice President of Construction James Froelicher and Assistant General Counsel Jess Cheney.

Below are key takeaways from the webinar:

1. Withholding Release Order. The US Customs and Border Protection (CBP) issued a withholding release order (WRO) against Hoshine Silicon Industry Co. Ltd., a company located in China’s Xinjiang Uyghur Autonomous Region wherein all silica-based products made by Hoshine and its subsidiaries are to be detained at all US ports of entry. Because of this WRO, manufacturers have been moving outside of the Xinjiang Uyghur Autonomous Region in order to avoid being subject to it.

There have been numerous detentions of silica-based products at multiple ports across the United States, and it is expected that the detention of materials will continue. In order to combat this, suppliers and industry leaders are presenting documentation to show that the materials are not being produced from forced labor or Hoshine and its subsidiaries.

Although the WRO was expected to cause significant disruption, it is not having as large of an impact as feared because many suppliers had already left the Xinjiang Uyghur Autonomous Region.

2. Anti-Dumping and Countervailing Petition. Anti-Dumping and Countervailing Petitions filed in August 2021 requested that the US Department of Commerce (DOC) include additional tariffs against solar panel imports from Malaysia, Thailand and Vietnam. The petitioners requested additional tariffs ranging from 50% – 250%. The DOC has yet to decide whether to investigate based on the petition, however, the impacts of the petition are already being felt with disruptions to the supply chain. If the DOC were to investigate, the solar industry would likely see a severe slowing of projects in 2022 and 2023 as neither suppliers nor developers are willing to bear the economic risk of the potential tariffs.

3. The DOC and the Biden Administration. The DOC and the Biden administration are expected to make decisions regarding tariffs, as well as anti-dumping and countervailing duties, that will directly affect the solar materials supply chain.

The Biden administration hopes to increase the domestic supply of solar materials, however, domestic manufacturers currently only produce approximately 25% of the overall demand for solar materials. As a result, the solar industry cannot immediately divert to purchasing solar materials from domestic manufacturers as the supply simply is not available. As an incentive to increase domestic manufacturing, solar industry leaders hope tax credits can be offered to companies that manufacture solar materials.

The Biden administration is expected to decide whether the 18% tariff on imported solar panels that [...]

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International News: Spotlight on the Energy Industry

US RENEWABLES: INVESTMENT OPPORTUNITIES PERSIST IN UNCONVENTIONAL PLACES

Christopher Gladbach | Seth B. Doughty

Apart from a few challenges, the sellers’ market in renewable energy is accelerating under the Biden administration, leading international investors to seek opportunities in non-traditional investments. Read more.

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THE US $2.3 TRILLION AMERICAN JOBS INFRASTRUCTURE PLAN

Elle Hayes | Dominique J. Torsiello | Carl J. Fleming | Ranajoy Basu

In March this year, US President Joe Biden unveiled the American Jobs Plan, the first of a two-part infrastructure package to revive the economy after the COVID-19 pandemic and the second stage of President Biden’s “Build Back Better” agenda. Read more.

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RECENT DEVELOPMENTS IN THE SOUTH EAST ASIA RENEWABLES MARKET

Ignatius K. Hwang | Merrick White

Despite considerable challenges, South East Asia is pulling out all the stops to transition to primarily renewable energy in the coming years. Read more.

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GREEN AMMONIA: AT THE INTERSECTION OF PETROCHEMICALS AND THE ENERGY TRANSITION

John Bridge | Parker A. Lee

As the world seeks to transition to a lower carbon economy, replacing traditional hydrocarbon-based transport fuels in the automobile, aviation, and shipping industries will be important. Read more.

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CLEAN ENERGY EMPLOYERS ARE THE NEW TARGET FOR ORGANISED LABOUR

Ellen M. Bronchetti | Ron Holland | Saniya Ahmed

Employers in the clean energy sector should be prepared to consider how changes to the US labour landscape are likely to impact their workforce. Read more.

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COMPETITION POLICY AND THE EUROPEAN GREEN DEAL: A PATHWAY TOWARDS CLEAN ENERGY AND ENERGY EFFICIENCY

Hendrik Viaene | David Henry | Karolien Van der Putten

EU competition rules—particularly State aid, merger control, and antitrust rules—are playing a key role in supporting the goals of the European Green Deal. Read more.

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NOT YET THE END FOR HYDROCARBONS

Merrick White

There has there been significant activity in the Asian upstream market this year. Who is buying mature oil fields, and why? Read more.

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ENGLISH HIGH COURT SANCTIONS RESTRUCTURING OF DTEK GROUP

Mark Fennessy | Sunay Radia | Alexander Andronikou

The recent restructuring of DTEK Group provides guidance regarding the English High Court’s position on challenges to the international effectiveness of schemes of arrangement and/or restructuring plans post-Brexit. Read more.

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President Biden Raises the Bar on Electrification of the Auto Industry through Executive Order

On August 5, 2021, US President Joe Biden announced and signed an executive order that sets a new target to make half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric and fuel cell electric vehicles. This executive order is consistent with President Biden’s goal of building more than 500,000 electric vehicle (EV) chargers throughout the United States, which will provide manufacturing opportunities for charging infrastructure and battery technology. These new actions announced by President Biden—paired with investments in the Build Back Better agenda—aim to build up American leadership in clean cars and trucks “by accelerating innovation and manufacturing in the auto sector, bolstering the auto sector domestic supply chain, and growing auto jobs with good pay and benefits.” The executive order will commence “development of long-term fuel efficiency and emissions standards to save consumers money, cut pollution, boost public health, advance environmental justice, and tackle the climate crisis.” It also directs agencies to:

  • Consult with the US Secretaries of Commerce, Labor and Energy on ways to accelerate innovation and manufacturing in the automotive sector, strengthen the domestic supply chain for that sector and grow jobs that provide good pay and benefits, as well as,
  • Secure input from a diverse range of stakeholders, including representatives from labor unions, industry, environmental justice organizations and public health experts.

Concurrently with President Biden’s announcement, American automakers Ford, GM and Stellantis, along with the United Auto Workers (UAW), released statements saying they look forward to working with the Biden Administration to enact policies that will enable President Biden’s 2030 target to be reached. In a joint statement, Ford, GM and Stellantis also recognized that the United States’ transition to electric vehicles “represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the Administration in the Build Back Better Plan, including purchase incentives, a comprehensive charging network of sufficient density to support the millions of vehicles these targets represent, investments in R&D, and incentives to expand the electric vehicle manufacturing and supply chains in the United States.” Similarly, in a joint statement from BMW, Ford, Honda, Volkswagen and Volvo, the automakers state that, “bold action from our partners in the federal government is crucial to build consumer demand for electric vehicles….” It is expected that government agencies will announce policies, procedures and regulations that will advance President Biden’s target of electric vehicles representing 50% of auto sales in 2030.




Biden Administration Issues National Security Memorandum Shortly after the House Passes Three Bills Aimed at Cybersecurity in the Energy Industry

The federal government is seeking to increase cybersecurity in critical infrastructure industries through the implementation of a voluntary Industrial Control Systems Cybersecurity Initiative (Initiative), while the US House of Representatives (House) concurrently focuses on the same goal by passing three bills aimed at enhancing cybersecurity. While it’s currently voluntary, it’s likely the Initiative—along with its performance goals issued in conjunction— may become mandatory for companies that own or operate critical infrastructure facilities.

In order to focus on strengthening the nation’s cybersecurity within the energy industry, the House recently passed the Energy Emergency Leadership Act (HR 3119), the Enhancing Grid Security through Public-Private Partnerships Act (HR 2931) and the Cyber Sense Act (HR 2928).

On July 28, 2021, shortly after the House passed the above three bills, the Biden Administration released a National Security Memorandum on Improving Cybersecurity for Critical Infrastructure Control Systems (Memorandum). The Memorandum affirmatively recognized the “[p]rotection of our Nation’s critical infrastructure is a responsibility at the Federal, State, local, Tribal and territorial levels and of the owners and operators of that infrastructure.” In order to protect such infrastructure, the administration provides that it is their policy “to safeguard the critical infrastructure of the Nation, with a particular focus on the cybersecurity and resilience of systems supporting National Critical Functions…”

As a result, the administration established the voluntary Initiative between the federal government and the critical infrastructure community with the primary objective of defending the United States’ critical infrastructure through facilitating the deployment of technologies and systems that will increase cybersecurity. The Memorandum further instructs the US Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) and the US Department of Commerce’s National Institute of Standards and Technology (NIST) to develop cybersecurity performance goals for critical infrastructure. The US Secretary of Homeland Security will issue initial goals for control systems no later than September 22, 2021, with cross-sector and sector-specific goals to be issued within a year of the Memorandum.

On May 7, 2021, just before 5 am, an employee in the Colonial Pipeline Co.’s control room found a ransom note sent by hackers demanding cryptocurrency. In response, Colonial Pipeline Co. Chief Executive Officer Joseph Blount shut down the entire pipeline by 6:10 am. This marked the first time in its 57-year history that Colonial Pipeline Co. shut down its entire gasoline pipeline system. Colonial Pipeline Co. paid the hackers, who were an affiliate of a Russia-linked cybercrime group known as DarkSide, a $4.4 million ransom shortly after the hack. However, the US Department of Justice announced it recovered $2.3 million of the ransom in June.

Only mere months after this significant breach of cybersecurity, the House approved HR 3119, which was introduced by US Representatives Bobby Rush (D-IL) and Tim Walberg (R-MI) to increase energy emergency and cybersecurity responsibilities as a core function for the US Department of Energy (DOE) and create a new assistant secretary position to specifically focus on these issues. In a statement released [...]

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Nine Governors Issue Letter to President Biden Urging Continued Prioritization of Offshore Wind Development

On June 4, 2021, days before the Biden Administration announced its intent to consider further expansion of offshore wind development in the Gulf of Mexico, nine governors issued a joint letter to US President Joe Biden’s administration to commend its commitment to offshore wind development and provide recommendations to build upon the momentum to prioritize offshore wind development in the United States.

Signed by the governors of Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Virginia, the letter urges the Biden Administration to continue to prioritize offshore wind development while also focusing on the development of a long-term relationship and plan between the federal and state governments to advance the offshore wind industry. According to the governors’ joint letter, doing so will create thousands of jobs and cause significant investments to be made in aging ports and the accompanying US supply chain that will build, operate and maintain the new infrastructure.

The governors further noted that the expansion of the offshore wind industry “creates an unprecedented opportunity for the United States to capture significant economic development activity and build equity in coastal communities while improving air quality and increasing the option for energy diversity.” However, the governors also recognized in their joint letter that realization of this opportunity will depend on several variables, including “the pace and uniformity of the federal permitting process, the degree of regional coordination among states, the amount of available space in federal lease areas, the potential impacts on marine resources, and the availability of supporting infrastructure to deliver high-voltage power from project areas to the mainland.”

Notwithstanding, the governors aim to collaborate across their respective states to consult with one another regarding any permitting challenges, natural resource consideration, opportunities to coordinate schedules and to align construction timelines so that states’ respective clean energy targets may be met. Additionally, the governors provided the following strategies to support offshore wind development:

  • Set long-term targets for the Bureau of Ocean Energy Management’s lease area scoping and establishment that are informed by state clean energy goals
  • Supplement interstate coordination during project design and permitting processes
  • Consider setting long-term targets for offshore wind ports that can support the scale and timeline of state procurement targets
  • Ensure adequate transmission capacity
  • Provide support for other marine industries and users



DOI Announces Competitive Lease Sale for Offshore Wind Development off the Coasts of New York and New Jersey

The US Department of the Interior (DOI) announced plans to expand offshore wind development off the coasts of New York and New Jersey by proposing a lease sale it strives to complete by the end of this year. More specifically, the Biden Administration proposed a competitive sale of eight lease sites for over 627,000 acres of federal waters on the Outer Continental Shelf in the New York Bight. This proposed lease sale will support the administration’s goal of installing 30 gigawatts of offshore wind energy by 2030.

The proposed leases contain notable stipulations, including the encouragement of project-labor agreements during construction and the requirement of increased engagement with the fishing industry and other affected ocean users during the leasing process. “The development of renewable energy is an important piece of addressing climate change,” US Secretary of the Interior Deb Haaland said in the DOI’s statement, adding, the “new proposed lease stipulations puts a priority on creating and sustaining good-paying union jobs as we build a clean energy economy.”

The lease sites have the potential to generate an additional seven gigawatts of offshore wind energy, powering more than 2.6 million homes and creating thousands of new jobs. “A lease sale not only opens a door to investment in New York and New Jersey, but will support jobs and businesses throughout the U.S.,” National Ocean Industries Association President Erik Milito said. “Providing new offshore wind opportunities will boost critical investments into the supply chain, ports, and workers, and will provide a foundation for exceptional offshore wind growth.”

Despite the stipulations within the proposed leases, the DOI’s Bureau of Ocean Energy Management (BOEM) claimed that 11 offshore wind developers have already expressed interest in the leases. Should the lease sale occur, it would be the first competitive offshore wind lease sale for the administration. A Proposed Sale Notice has been issued in the Federal Register, which opens a 60-day public comment period and provides further information about the potential lease areas, proposed lease provisions and conditions, as well as auction details.

The lease sale announcement builds upon the Biden Administration’s commitment to advance offshore wind development, which includes approval of the Vineyard Wind project—the first large-scale project in federal waters—and the recent announcement to assess potential renewable energy opportunities in the Gulf of Mexico.




Biden Administration Aims to Fix “Structural Weaknesses” in Key Supply Chains and Rolls Out National Blueprint for Lithium Ion Batteries

The White House released a report on June 8, 2021, detailing the findings and recommendations of a crucial supply chains review ordered by US President Joe Biden in February. The order directed the examination of semiconductors, electric vehicle (EV) batteries, critical minerals and pharmaceuticals, four products that are critical to American national security, economic security and technological leadership. Tuesday’s report found “structural weaknesses” in the supply chains of all four products, which were only worsened by the COVID-19 pandemic.

The Biden Administration plans to take the following actions to address these structural weaknesses:

  • Issuing a national blueprint on lithium EV batteries to improve domestic production
  • Financing key strategic areas of EV battery development using the US Department of Energy’s loan authority
  • Forming a strike force to “propose enforcement actions against unfair foreign trade practices” that have harmed these crucial supply chains, including potentially using the controversial Section 232 of the Trade Expansion Act of 1962 to restrict imports of neodymium magnets (a key component of electric motors)
  • Establishing a public-private consortium to onshore the production of essential medicines

Taking a more holistic approach, the National Blueprint for Lithium Batteries (Blueprint) set five broad goals to improve the domestic lithium battery manufacturing industry. Those goals include:

  • Securing access to raw and refined materials, as well as discovering alternatives for critical minerals for commercial and defense applications
  • Supporting the growth of a US materials-processing base that’s able to meet domestic battery manufacturing demand
  • Stimulating the US electrode, cell and pack manufacturing sectors
  • Enabling end-of-life reuse, critical materials recycling at scale and a full competitive value chain in the United States
  • Maintaining and advancing US battery technology leadership by strongly supporting scientific research and development (R&D), science, technology, engineering and mathematics (STEM) education and workforce development

The report calls for a variety of policies to achieve these goals, including promoting private investment in the mining, battery manufacturing and recycling industries, training workers for employment throughout the lithium battery supply chain and making use of public-private partnerships to encourage investment and ensure industry alignment with the Blueprint’s goals.

The report also called for congressional action to fund at least $50 billion in semiconductor R&D and to incentivize the adoption of electric cars through the passage of legislation.

Michael Burnett, a summer associate in the Washington, DC, office, also contributed to this blog post.




Biden Administration Explores Offshore Wind Development in the Gulf of Mexico

Earlier this week, the Biden Administration announced its intent to consider further expansion of offshore wind development in the Gulf of Mexico. This announcement comes two weeks after the Biden Administration announced an agreement to lease almost 400 miles off California’s northern and central coasts for wind development. Potential offshore wind leasing in the Gulf of Mexico may play an integral role in the administration’s goal of installing 30 gigawatts of offshore wind by 2030.

To continue its exploration into offshore wind development in the Gulf of Mexico, the US Department of the Interior’s Bureau of Ocean Energy Management (BOEM) will publish a Request for Interest (RFI) in the Federal Register on June 11 to evaluate development interest, potential environmental consequences and other possible uses of the proposed area. Interior Secretary Deb Haaland acknowledged that, “Offshore wind development has the potential to create tens of thousands of good-paying, union jobs across the nation. This is an important first step to see what role the Gulf may play in this exciting frontier.”

The RFI will focus specifically on the Gulf of Mexico’s Western and Central Planning Areas offshore to Louisiana, Texas, Mississippi and Alabama. Although the emphasis is on wind energy, BOEM is also seeking information on other renewable energy technologies, according to the Interior Department. Publishing the RFI will open a 45-day comment period, after which the agency will review comments and data received to determine the next steps in the renewable energy leasing process in the Gulf.

“The Gulf of Mexico has decades of offshore energy development expertise,” Mike Celata, regional director of BOEM’s Gulf of Mexico office in New Orleans, said. “Working directly with our partners in the Gulf, we will make sure that offshore renewable energy development proceeds in an orderly, safe, and environmentally responsible manner.”

Developing offshore wind projects in the Gulf may prove more difficult than projects on the east coast (or even deepwater projects in California) for a few reasons. First, other than the Electric Reliability Council of Texas (ERCOT), wholesale power markets are generally not developed in the region. Second, the wind resource (with some exceptions) is not as strong as the wind resource on the east coast. Finally, it is unclear whether states will provide the necessary incentive programs (in the form of offshore wind renewable energy certificate (OREC) programs or otherwise) to support development. There are a few mitigating counterfactors however, including the historic presence of major oil developers in the region that are collectively looking to “go green,” vocalized support from leadership—including the Governor of Louisiana—the declining price of offshore wind technology and the recently expanded offshore investment tax credit (ITC).

Currently, BOEM has leased approximately 1.7 million acres in the Gulf of Mexico’s Outer Continental Shelf for offshore wind development and has 17 commercial leases on the Atlantic— from Cape Cod to Cape Hatteras. After the comment period concludes on the RFI, information on offshore wind development in the Gulf is expected to [...]

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