Cheryl Stahl * DNV
Josh Kaplowitz * Locke Lord LLP
In every industrial sector, unforeseen incidents are a reality that businesses must prepare for. Forward-thinking companies establish comprehensive emergency response strategies, not just to fulfill legal obligations but also to mitigate risks to their operations and protect the public from both the effects of the incident and misinformation regarding it. Successful emergency response strategies are meticulously crafted, communicated, and regularly tested through drills to ensure that they are robust and effective. And perhaps most importantly, they sit on a foundation of strong relationships with regulators and affected communities built through early and frequent engagement.
These maxims are acutely relevant in the US offshore wind sector. While offshore wind developers in the US have the advantage of lessons learned in Europe, the industry is also under an unusual amount of public scrutiny due to opposition from coastal communities, commercial fishermen, and political operatives. This can magnify reputational harms and financial exposure resulting from an incident. While not every incident can be foreseen, developers and operators can put themselves in the best possible position to resume operations—and keep the trust of stakeholders and the general public—by ensuring their emergency response plans are road tested and fully deployable, proactively communicating with potentially affected parties, and building relationships and awareness with the relevant regulatory agencies.
Make a risk-based plan
A lot can go awry during construction or operation of an offshore wind farm. And while not every potential hazard can be foreseen, a battle-tested emergency response plan (ERP) that contemplates the most likely, as well as the highest categories of risk, will put a developer in the best possible position to manage and minimize the fallout.
The Bureau of Safety and Environmental Enforcement (BSEE) requires offshore wind developers to assemble ERPs as a condition of approval of their Construction and Operations Plans (COPs). Crucially, this requirement is on top of the oil spill response plans (OSRPs) required by regulation and also included in the conditions of COP approval. ERPs are more than “check-the-box” exercises. For starters, they should be drafted with an eye toward preparing for the right risks, which means creating a clear and accurate “risk register”— that is, an inventory of the events that could befall an offshore wind project, including their likelihood and holistic impacts to the company. External events must be included, which requires some homework concerning what others are doing and where they are doing it, and some assumptions about their approach to risk management.
A low-investment, high-value corporate exercise is to review the highest ranked risks, identify potential mitigations, and use cost-benefit analysis to determine the appropriate funding for various levels of mitigation. Subsequent work involves assigning roles and identifying an initial action list. The effort more than pays for itself in avoided costs should just one significant event occur during the life of a project.
Although current BSEE requirements for ERPs are less robust than for OSRPs, ERPs should adopt the same “road testing” ethos. Much like OSRPs, ERPs have little value as a binder on the shelf; they must be operational and resourced. Fortunately, many offshore wind developers have transferable experience from other industries such as offshore oil and gas or onshore energy operations.
Getting value from ERPs requires exercising them. Training/workshops and tabletop discussions of simulated situations are important first steps. Taking these to the next level is key: investing in operations-based exercises. These range from drills focused on a single function to full-scale exercises that involve multiple disciplines, agencies, and responders in the field.
Public communications risk
Beyond managing actual threats to safety and the environment, it is important to ensure that the general public and other stakeholders are getting robust, timely, and accurate information about the incident and mitigation efforts. Offshore wind development in the US has been the target of a years-long, coordinated, well-funded public relations campaign, one that has greatly exaggerated the technology’s impacts on whales, property values, and tourism. Any adverse incident occurring within this context is highly likely to be amplified and distorted.
The solution to this problem starts years before operations commence, during project planning, when a prudent developer will begin forging strong ties within affected communities. That groundwork will pay off if and when the unexpected happens. An existing network of community relationships, backed by a robust and sufficiently resourced incident communications plan, can enable a developer and its contractors to speedily communicate internally and with communities, agencies, and the public more broadly. In some cases, developers might be well advised to err on the side of providing more information to the public and sooner. In turn, this can help maintain trust in affected communities and help prevent negative narratives from taking hold.
Regulatory risk
Given that offshore wind is still relatively new to US regulators, incidents which occur during construction and operation of the first tranche of projects could end up being a new experience for regulators and developers. And each new event could spur new policies and obligations for the whole industry.
Prudent developers should therefore build strong relationships with federal enforcement authorities and local community leaders long before the first steel goes in the water, and ideally before the first survey vessel is deployed. The lead enforcer is BSEE, which was formally handed enforcement authority from the Bureau of Ocean Energy Management in early 2023. But the US Coast Guard (USCG) also plays a key role, particularly with respect to navigational safety. The two agencies recently updated their memorandum of understanding to clarify areas of cooperation and overlapping jurisdiction, and a developer would be wise to ensure that both agencies are “in the loop” on all risk mitigation and response measures.
BSEE has wide latitude to order suspension of operations—or even cancellation of lease rights—if it finds that “continued activities pose an imminent threat of serious or irreparable harm or damage to natural resources; life (including human and wildlife); property; the marine, coastal, or human environment; or sites, structures, or objects of historical or archaeological significance.” Once a suspension is ordered, the developer will likely need to “conduct a site-specific study that evaluates the cause of the harm, the potential damage, and the available mitigation measures.” BSEE may require the developer to pay for the study, and the results will be made public. BSEE has wide discretion to determine the duration of the suspension, when it can be lifted, and under what conditions—conditions that will almost certainly include mitigation of damage caused. Before it lifts its suspensions, BSEE will also confirm that any remedies will not cause safety issues for workers, regulators, and the public.
BSEE can impose an even more severe punishment—lease cancellation—if it determines that the lessee fails to comply with requirements for an extended period of time, or if it determines that any harm caused by continued activities on the lease cannot be stopped or mitigated within a reasonable period of time.
Given this broad authority, a foundation of trust and a regular cadence of communication with BSEE and USCG are essential to ensure that developers and regulators can work cooperatively to determine root causes, negotiate a fair mitigation plan, and ensure operations get back on track as soon as possible.
Conclusions
Understanding and managing incident risk is vital to navigating operational tides in offshore wind. While incidents may not always be prevented, several common threads run through a robust emergency response plan:
- ERPs that meet not just the letter of the law, but have been tailored to site-specific risks and put through their paces before steel goes in the water.
- A plan for communicating with the public in the event of a wide range of potential incidents, backed by durable community relationships that can help push back on misinformation; and
- Trust-based relationships with regulators, including proactive communications prior to the occurrence of an incident.
By focusing on these three tenets, an offshore wind developer—and really, the proponent of any major clean energy infrastructure project—can put itself in a position to get back on track as quickly as possible if and when incidents occur.
