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Despite Shutdown, BOEM Resumes Work on Offshore Drilling Plan

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By MarEx 2019-01-16 18:52:00

The Bureau of Ocean Energy Management (BOEM), the permitting agency for offshore development in federal waters, has recalled 40 furloughed employees to work on the Trump administration's proposed offshore oil and gas leasing plan. The majority of the agency - including the departments that handle offshore wind development - will remain shut. 

The closure of BOEM has significant implications for the wind industry, according to trade group Business Network for Offshore Wind. “There are a number of big, important offshore wind projects moving through the BOEM approval process, and we can’t afford to have them disrupted in terms of their coordination and timing,” said Liz Burdock, the group's CEO and president, speaking to Bloomberg. “We are not able to hold meetings with BOEM because they’re not able to work."

Six public hearings scheduled for the $2 billion Vineyard Wind project off Martha's Vineyard have already been pushed back due to the shutdown, and the timeline for rescheduling them is uncertain. Federal tax credits for wind developments will expire this year, so a lengthy delay could impose a large financial penalty on wind farm operators, according to Business Network for Offshore Wind.

Work on offshore oil and gas resumes

Separately, BOEM has redesignated 40 of its furloughed employees as exempt from the shutdown's closure requirements, which will allow them to return to work on the National Outer Continental Shelf Program - the master five-year policy plan for oil and gas drilling in federal waters.  The first draft of this plan, which was released in January 2018, drew controversy over proposed leasing activity off the Atlantic and Pacific coasts. 

Additional BOEM personnel will now return to working on permitting and other related functions, including previously-scheduled oil and gas lease auctions. BOEM cited "the Administration's America First energy strategy" and the potential impact on investment in the Gulf oil sector for its decision to resume work.

"[We] support the Administration’s decision to bring back, on a limited basis, dedicated Department of Interior employees to continue preparatory work for upcoming offshore oil and natural gas lease sales," said Randall Luthi, president of the National Ocean Industries Association in a statement. "It makes both economic and energy sense to continue work on this long-planned and approved sale."

NOIA suggested that BOEM should also take steps to keep future offshore wind sales on track, given the recent success of the offshore wind auction for waters off Massachusetts.

However, environmental advocacy group Oceana suggested that BOEM's decision was out of order. "Charging ahead with what appears to be the demands of the offshore drilling industry while so many government services go neglected is jaw dropping,” said Oceana campaign director Diane Hoskins in a statement. 

Rep. Raul Grijalva (D-NM), the chair of the House Natural Resources Committee, suggested that BOEM's decision to restart activities on oil and gas policy could be a violation of the Antideficiency Act. This rarely-cited law dates back to 1884, and it implements the Constitution's ban on spending money without an appropriation from Congress. 

"We urge you to reverse these actions," Rep. Grijalva wrote. "If you refuse, we insist that you come to Capitol Hill this week for a detailed briefing . . . providing information on where the funding for these activities is coming from, how it is being spent, and what the consequences are of spending that funding during a shutdown."

Unlike 800,000 other federal employees, the personnel working on BOEM's National OCS Program will be paid during the shutdown, as BOEM has reclassified them as "exempt" from furlough requirements. According to the Treasury, this classification indicates that "their work is funded by a source of funds that has not expired."