Potential Implications of President Trump’s Wind Energy EO on Offshore Leasing, Development

This Holland & Knight alert provides a summary of President Donald Trump’s Wind Energy EO, an overview of the offshore wind leasing process and considerations for current lessees regarding potential outcomes and legal remedies should the government take adverse action to halt their wind development projects. Note that though the Wind Energy EO applies broadly to all federal wind energy leases, this alert largely focuses on impacts to the offshore wind leasing process.

President Trump’s Wind Energy EO

Leasing and utilization of the Outer Continental Shelf (OCS) for energy development and exploration (including wind and oil and gas) have proven to be divisive issues in national politics over the past decade. The most recent example occurred on Jan. 20, 2025, when President Trump signed the Wind Energy EO relating to onshore and offshore wind development projects. Effective as of Jan. 21, 2025, the order:

• indefinitely withdraws all OCS areas for new or renewed wind energy leasing
• requires that the U.S. Department of the Interior (DOI) Secretary, in consultation with the U.S. Attorney General, “conduct a comprehensive review of the ecological, economic and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal, and submit a report with recommendations to the President”
• prohibits all “relevant agencies” including DOI, the U.S. Department of Agriculture (USDA), U.S. Department of Energy (DOE) and U.S. Environmental Protection Agency (EPA) from issuing new or renewed approvals, rights to way, permits, leases or loans for wind development projects until a comprehensive assessment and review of the government’s current wind leasing and permitting practices, to be led by DOI, is completed

Under the Wind Energy EO, the entire OCS has been indefinitely withdrawn from any future wind leasing, and prospective offshore wind developers will not be able to bid on new leasing areas until subsequent action is taken by the federal government to reopen the OSC for wind leasing. For more information, please refer to Holland & Knight’s previous alert discussing presidential authority to revoke OSC withdrawals in the context of the Biden Administration and the actions that may need to be taken to restore withdrawn areas for future leasing. (See “Understanding President Joe Biden’s Offshore Drilling Restrictions,” Jan. 13, 2025.)

Though existing offshore leases remain valid as of now, they are subject to review with the potential for termination or amendment. Additionally, no new permits or approvals can be issued by any federal agencies until a comprehensive assessment and review of federal wind leasing and permitting practices has been completed. However, no time frame has been provided for the completion of that review. Though the full extent of this permit moratorium remains to be seen, it likely includes approvals such as Clean Water Act permits for cables and dredging, permits related to air emissions and pollution discharges, authorizations regarding impacts to endangered species and approvals of project documents (e.g., Construction and Operations Plans and Site Assessment Plans). It is possible that the federal government may extend it to other approvals that are indirectly related or tangential to a wind energy project as well, though the full scope has yet to be tested.

Critically, the Wind Energy EO does not provide any deadlines for completing the analysis of offshore impacts. Thus, lessees with outstanding federal permits will remain in a holding pattern and likely be unable to move forward with project development at least until there is more clear guidance as to the scope of the permit moratorium, or until the DOI review is complete. Furthermore, it remains unclear whether, upon completion of the DOI review, projects will be permitted to move forward or whether the Trump Administration will seek to cancel or suspend all existing wind leases.

The Offshore Wind Leasing Process

The Outer Continental Shelf Lands Act (OCSLA) is the federal law that authorizes the government to lease offshore areas for energy uses, including for wind projects and oil and gas exploration.¹ The Interior Secretary has delegated leasing authority to the Bureau of Ocean Energy Management (BOEM). In that capacity, BOEM promulgated regulations for offshore wind development under authority provided to the Interior Secretary in the Energy Policy Act of 2005.² Under the renewable energy program, BOEM designates areas for offshore wind development, holds lease sales for wind projects, evaluates the environmental impacts of projects, and approves operations plans and other required project documents. BOEM’s regulations governing its wind leasing and approval processes are set forth at 30 C.F.R. Part 585 and largely mirror the agency’s oil and gas regulations.

In addition to outlining the processes for leasing and project approval, BOEM’s regulations provide the specific reasons for which an offshore wind lease may be canceled or suspended.³ Lease suspension may occur for reasons of national security or, if necessary, to comply with a judicial order.⁴ Similarly, lease cancellation may occur for, among other reasons, failure to comply with the terms of the lease, reasons of national security and if the lease will result in serious harm to the life, property, the environment or certain resources.⁵ In some instances, BOEM may be required to provide the lessee notice and opportunity for a hearing prior to cancellation.⁶

Though BOEM’s wind energy regulations do not provide for remedies that may be available to a lessee in the event of lease cancellation, many active offshore wind leases issued by BOEM incorporate OCSLA’s statutory lease cancellation provisions, which provide for financial compensation for the lessee in the event of lease cancellation.⁷ For instance, under OCSLA, if the lease is canceled for reasons of national security or environmental harm, the lessee will be legally entitled to compensation that is the lesser of 1) the fair value of the canceled rights, or 2) the excess, if any, over the lessee’s revenues, from the lease.⁸ Even though OCSLA’s lease cancellation provisions have not been explicitly incorporated into BOEM’s wind regulations, lessees may be entitled to this compensation if the statutory reference is included in their lease. If the compensation provision is invoked, it would likely involve a detailed review of financial information by both the lessee and BOEM to determine the appropriate amount of compensation.

Considerations for Current Lessees

If the federal government seeks to move forward with suspending or canceling existing offshore leases as a result of the Wind Energy EO, lessees should take certain steps to evaluate any potential legal claims that may be available to challenge the suspension/cancellation and identify the scope of the remedies that may be available.

For instance, because there are specific regulatory procedures that must be followed by BOEM when suspending or canceling a lease (including, in some instances, notice and opportunity for a hearing), lessees should pay close attention to the agency’s processes to ensure compliance with these requirements. This may include a detailed review of DOI/BOEM’s administrative record and decision-making processes to confirm that proper justification exists to permit suspension/cancellation.

Further, lessees should carefully review the terms of their offshore lease and any other relevant contractual documentation to determine whether there are any potentially actionable breaches or noncompliance with contract terms. Lessees should also confirm whether the lease explicitly provides for any remedies such as statutory remedies under OCSLA in the event of a breach or lease cancellation.

Finally, lessees may want to consider evaluating any additional constitutional, statutory or common law challenges, rights and remedies that may be available should BOEM move forward with lease cancellation and terminate their projects or if the permit moratorium indefinitely continues in the long term.

Holland & Knight’s Wind Energy Team has been closely evaluating the Trump Administration’s EOs and renewable energy policies and has extensive experience assisting developers in successfully navigating the regulatory and commercial challenges associated with offshore wind projects. Please contact the authors with any questions.

Notes

¹ 43 U.S.C. §§ 1331 et seq.

² 43 U.S.C. Section 1337(p).

³ 30 C.F.R. Section 585.422

⁴ 30 C.F.R. Section 585.417.

⁵ Id. Section 585.422.

⁶ Id. §§ 585.422(a); (b)(1), (2), (4).

⁷ 43 U.S.C. Section 1334(a)(2); see also BOEM, Lease and Grant Information

⁸ Id.

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