19638 Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 

DEPARTMENT OF THE INTERIOR 

Minerals Management Service 

30 CFR Parts 250, 285, and 290 

[Docket ID: MMS–2008–OMM–0012] 

RIN 1010–AD30 

Renewable Energy and Alternate Uses 

of Existing Facilities on the Outer 

Continental Shelf 

AGENCY: Minerals Management Service 

(MMS), Interior. 

ACTION: Final rule; Notice of Availability 

of the Final Environmental Assessment. 

SUMMARY: The MMS is publishing final 

regulations to establish a program to 

grant leases, easements, and rights-ofway (ROW) for renewable energy project 

activities on the Outer Continental Shelf 

(OCS), as well as certain previously 

unauthorized activities that involve the 

alternate use of existing facilities 

located on the OCS; and to establish the 

methods for sharing revenues generated 

by this program with nearby coastal 

States. These regulations will also 

ensure the orderly, safe, and 

environmentally responsible 

development of renewable energy 

sources on the OCS. 

The MMS prepared a Final 

Environmental Assessment (EA) 

analyzing this rule. The EA incorporates 

by reference the Programmatic 

Environmental Impact Statement 

Programmatic Environmental Impact 

Statement for Alternative Energy 

Development and Production and 

Alternate Use of Facilities on the Outer 

Continental Shelf, Final Environmental 

Impact Statement, October 2007. The 

EA was prepared to assess any impacts 

of this rule. The Final EA is available on 

the MMS Web site at: http:// 

www.mms.gov/offshore/ 

AlternativeEnergy/ 

RegulatoryInformation.htm. 

DATES: Effective Date: This final rule is 

effective on June 29, 2009. The 

incorporation by reference of the 

publication listed in the regulation is 

approved by the Director of the Federal 

Register as of June 29, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Final rule: Maureen Bornholdt, 

Program Manager, Office of Alternative 

Energy Programs, at (703) 787–1300 or 

maureen.bornholdt@mms.gov; or Amy 

C. White, Regulations and Standards 

Branch, at (703) 787–1665 or 

amy.white@mms.gov. 

Environmental Assessment: James F. 

Bennett, Chief, Branch of Environmental 

Assessment, at (703) 787–1660 or 

James.F.Bennett@mms.gov. 

SUPPLEMENTARY INFORMATION: The MMS 

developed this program and final 

regulations under the authority granted 

to the Secretary of the Interior 

(Secretary) by the Energy Policy Act of 

2005, which amended the Outer 

Continental Shelf Lands Act (OCS 

Lands Act). Under this new authority, 

the Secretary maintains discretionary 

authority to issue leases, easements, or 

ROWs on the OCS for previously 

unauthorized activities that: (i) Produce 

or support production, transportation, 

or transmission of energy from sources 

other than oil and gas; or (ii) use, for 

energy-related or other authorized 

marine-related purposes, facilities 

currently or previously used for 

activities authorized under the OCS 

Lands Act. 

Background 

Mandate of Energy Policy Act of 2005 

(EPAct) 

The EPAct amended the OCS Lands 

Act to authorize the Secretary to issue 

leases, easements, or ROWs on the OCS 

for activities that: 

(i) Support exploration, development, 

production, or storage of oil or natural 

gas, except that a lease, easement, or 

right-of-way shall not be granted in an 

area in which oil and gas preleasing, 

leasing, and related activities are 

prohibited by a moratorium; 

(ii) Support transportation of oil or 

natural gas, excluding shipping 

activities; 

(iii) Produce or support production, 

transportation, or transmission of energy 

from sources other than oil and gas; or 

(iv) Use, for energy-related or other 

authorized marine-related purposes, 

facilities currently or previously used 

for activities authorized under the OCS 

Lands Act. 

This new authority does not apply to 

activities that are otherwise authorized 

by law, including those covered by the 

OCS Lands Act, the EPAct, the 

Deepwater Port Act of 1974, and the 

Ocean Thermal Energy Conversion Act 

of 1980. On March 20, 2006, the 

Secretary of the Interior delegated to the 

MMS the new authority that was 

conferred by the EPAct. Under this 

authority, MMS will regulate the 

generation of electricity or other forms 

of energy from sources other than oil 

and natural gas on OCS facilities and 

the transmission on project easements 

and ROWs issued under this part. The 

MMS will not regulate sales of 

electricity or other forms of energy. The 

MMS will not regulate the transmission 

of electricity or other forms of energy on 

State lands. 

In addition, the EPAct requires the 

Secretary to share with nearby coastal 

States a portion of the revenues received 

by the Federal Government from 

authorized renewable energy and 

alternate use projects on certain areas of 

the OCS. This final rule implements this 

mandate and describes the methods 

MMS will use for identifying what 

projects are covered by this 

requirement, determining which States 

are eligible to receive shares of the 

revenues, and—if two or more States are 

eligible to receive revenues from the 

same project—allocating the appropriate 

share to each eligible State. 

The EPAct included a requirement 

that the Secretary develop any necessary 

regulations to implement the new 

authority. This final rule applies to the 

activities described in (iii) and (iv) 

previously (i.e., those relating to 

production, transportation, or 

transmission of energy from sources 

other than oil and gas, and to the use of 

existing OCS facilities for energy-related 

or other authorized marine-related 

purposes). Regulations for activities 

described in (i) and (ii) previously (i.e., 

those relating to oil and gas) will be 

promulgated separately in appropriate 

parts of the existing MMS oil and gas 

regulations. 

While the MMS is the lead agency for 

authorizing OCS renewable energy and 

alternate use activities, we recognize 

that other Federal agencies have 

regulatory responsibility in such 

activities. The new authority does not 

expressly supersede or modify existing 

Federal laws, and all activities must 

comply fully with such laws. For 

instance, FERC has exclusive 

jurisdiction to issue licenses for 

hydrokinetic projects under Part I of the 

Federal Power Act and issue 

exemptions from licensing under 

Section 405 and 408 of the Public 

Utility Regulatory Policies Act of 1978 

for the construction and operation of 

hydrokinetic projects on the OCS. 

However, no FERC license or exemption 

for a hydrokinetic project on the OCS 

shall be issued before MMS issues a 

lease, easement, or right-of-way. The 

MMS possesses the exclusive authority 

to issue leases, easements, and rights-ofway for renewable energy projects on 

the OCS. 

In addition to providing the authority 

to issue leases, easements, and ROWs, 

the EPAct included a requirement that 

any activity permitted under this 

authority be ‘‘carried out in a manner 

that provides for— 

(A) Safety; 

(B) Protection of the environment; 

(C) Prevention of waste; 

(D) Conservation of the natural 

resources of the outer Continental Shelf; 

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Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 19639 

(E) Coordination with relevant 

Federal agencies; 

(F) Protection of national security 

interests of the United States; 

(G) Protection of correlative rights in 

the outer Continental Shelf; 

(H) A fair return to the United States 

for any lease, easement, or right-of-way 

under this subsection; 

(I) Prevention of interference with 

reasonable uses (as determined by the 

Secretary) of the exclusive economic 

zone, the high seas, and the territorial 

seas; 

(J) Consideration of— 

(i) The location of, and any schedule 

relating to, a lease, easement, or rightof-way for an area of the outer 

Continental Shelf; and 

(ii) Any other use of the sea or seabed, 

including use for a fishery, a sealane, a 

potential site of a deepwater port, or 

navigation; 

(K) Public notice and comment on any 

proposal submitted for a lease, 

easement, or right-of-way under this 

subsection; and 

(L) Oversight, inspection, research, 

monitoring, and enforcement relating to 

a lease, easement, or right-of-way under 

this subsection.’’ 

The MMS addresses these items, as 

appropriate, in this rulemaking. 

MMS and Federal Energy Regulatory 

Commission (FERC) MOU 

Until March 2009, regulatory 

uncertainty existed regarding which 

Federal agencies had authority to 

regulate wave and current energy 

development on the outer Continental 

Shelf (OCS). Both MMS and the Federal 

Energy Regulatory Commission (FERC) 

claimed this authority based on 

differing interpretations of Part I of the 

Federal Power Act (FPA) and section 

8(p) of OCSLA, as amended by EPAct. 

However, on March 17, 2009, the 

Secretary of the Interior and the Acting 

Chairman of the Federal Energy 

Regulatory Commission issued a joint 

statement on the development of 

renewable energy resources on the OCS. 

In this joint statement, the Secretary and 

the Acting Commissioner requested that 

MMS and FERC staff prepare a 

Memorandum of Understanding (MOU) 

to describe the process by which 

authorizations related to renewable 

energy resources in offshore waters will 

be developed. 

The MMS and FERC finalized this 

MOU on April 9, 2009. This agreement 

clarifies jurisdictional understandings 

regarding renewable energy projects on 

the OCS in order to develop a cohesive, 

streamlined process that would help 

accelerate the development of wind, 

solar, and hydrokinetic energy projects. 

Specifically, the MOU recognizes that 

(1) MMS has exclusive jurisdiction with 

regard to the production, transportation, 

or transmission of energy from nonhydrokinetic alternative energy projects 

on the OCS, including renewable energy 

sources such as wind and solar; (2) 

MMS has exclusive jurisdiction to issue 

leases, easements, and rights-of-way 

regarding OCS lands for hydrokinetic 

projects; and (3) the Commission has 

exclusive jurisdiction to issue licenses 

and exemptions for hydrokinetic 

projects located on the OCS. 

Under this new agreement, those 

entities interested in operating a 

hydrokinetic project on the OCS must 

first obtain a lease from MMS. The MMS 

will issue a public notice to determine 

whether competitive interest exists in 

the area, and will proceed with either 

the competitive or noncompetitive lease 

issuance process depending on 

responses received to this public notice. 

The MMS will conduct the NEPA 

analysis necessary for the lease issuance 

and any site assessment activities that 

will occur on the lease. After an 

applicant acquires a lease from MMS, 

FERC may issue a license or exemption 

for the hydrokinetic project, and 

conduct any necessary NEPA analysis. 

After a license is issued, construction 

and operations of the project may begin 

as per the terms of the license. To 

facilitate efficient processing of the lease 

and license applications, it may be 

helpful for potential lessees to apprise 

both MMS and FERC of their interest in 

hydrokinetic development at the start of 

the process. 

Further, the MOU states that MMS 

and FERC will work together to the 

extent practicable to develop policies 

and regulations with respect to OCS 

hydrokinetic projects, and coordinate to 

ensure that hydrokinetic projects meet 

the public interest, including the 

adequate protection, mitigation, and 

enhancement of fish, wildlife, and 

marine resources and other beneficial 

public uses. The MOU ensures that the 

interests of both agencies are adequately 

represented and that the process of 

developing renewable energy on the 

OCS happens efficiently, in an 

environmentally responsible manner, 

and with appropriate benefit to the 

people of the United States. 

Importantly, the agreement addresses 

the issue of potential site-banking by 

developers on the OCS by eliminating 

redundant regulatory processes for 

acquiring use of OCS lands. In addition, 

by eliminating dual regulatory 

processes, the agreement addresses the 

potential for granting conflicting awards 

of OCS sites to developers by the two 

agencies. Specifically, FERC has agreed 

not to issue preliminary permits for 

hydrokinetic activities on the OCS, and 

MMS has agreed that FERC will have 

the primary responsibility to issue 

licenses for these activities. The Federal 

Government has effectively eliminated 

the opportunity for abuse by entities 

seeking to reserve, block, or acquire for 

speculative purposes large portions of 

the OCS. These concerns were raised by 

many commenters on the REAU 

rulemaking. The DOI/FERC MOU 

creates a unified, coherent process for 

the authorization of hydrokinetic 

activities on the OCS, ensuring that U.S. 

resources on the OCS will not be subject 

to a ‘‘land rush,’’ and will be developed 

in the most efficient manner possible. 

Regulatory Process 

On December 30, 2005, the MMS 

issued an Advance Notice of Proposed 

Rulemaking (ANPR) (70 FR 77345) 

requesting comments on the program 

requirements. 

The ANPR requested public 

comments on five major program areas: 

(1) Access to OCS lands and 

resources; 

(2) Environmental information, 

management, and compliance; 

(3) Operational activities; 

(4) Payments and revenues; and 

(5) Coordination and consultation. 

The MMS provided a summary of the 

comments received on the ANPR in the 

Notice of Proposed Rulemaking (NPR) 

(73 FR 39376) published on July 9, 

2008. The NPR is available on the 

Regulations.gov Web site. 

Programmatic Environmental Impact 

Statement (PEIS) Summary 

The MMS prepared a final PEIS in 

support of the establishment of a 

program for authorizing renewable 

energy and alternate use activities on 

the OCS. The final PEIS examines the 

potential environmental effects of the 

program on the OCS and identifies 

policies and best management practices 

that may be adopted for the program. 

The PEIS examined three alternatives, 

as well as the no action alternative. The 

three alternatives were: (1) The 

proposed action which would establish 

the program; (2) a case-by-case 

alternative that would evaluate each 

project individually without the benefit 

of a comprehensive program; and (3) the 

preferred alternative, which consisted of 

a combination of the first two 

alternatives, thus allowing MMS to 

review projects during the interim while 

the program and regulations are being 

established. 

Given the rapidly evolving nature of 

this nascent industry, the MMS cannot 

reasonably anticipate and assess the 

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potential environmental impacts of all 

of the various technologies and 

potential OCS locations where these 

renewable energy and alternate use 

projects could someday be proposed. 

Accordingly, this PEIS is focused on 

renewable energy technologies and 

areas on the OCS that industry has 

expressed a potential interest in and 

ability to develop or evaluate from 2007 

to 2014. The PEIS proposed policies and 

best management practices based on the 

analyses in the PEIS. As the program 

evolves and more is learned, the 

mitigation measures may be modified or 

new measures developed. Each project 

developed under this new program will 

be subject to environmental reviews 

under the National Environmental 

Policy Act (NEPA), and each project 

may have additional project-specific 

mitigation measures. 

A Record of Decision (ROD) was 

published on January 10, 2008. The 

preferred alternative was selected as 

well as interim policies and best 

management practices that were 

recommended in the PEIS. The PEIS 

and ROD are available at: http:// 

ocsenergy.anl.gov/. 

Environmental Assessment 

The MMS prepared a Final EA 

analyzing this rule. The EA incorporates 

by reference the PEIS, Programmatic 

Environmental Impact Statement for 

Alternative Energy Development and 

Production and Alternate Use of 

Facilities on the Outer Continental 

Shelf, Final Environmental Impact 

Statement, October 2007. This EA was 

prepared to assess any impacts of this 

rule. The Final EA is available on the 

MMS Web site at: http://www.mms.gov/ 

offshore/AlternativeEnergy/ 

RegulatoryInformation.htm. 

Notice of Proposed Rulemaking 

Summary of Comments 

The MMS published a NPR (73 FR 

39376) on July 9, 2008. The proposed 

rule was accompanied by a 60-day 

public comment period that ended 

September 8, 2008. 

In response to the request for 

comments, MMS received 280 letters 

from a range of entities, including, but 

not limited to, Non-Governmental 

Organizations, State and local 

governments, industry, and the general 

public. A list of commenters is included 

at the end of the summary. The 

following table illustrates the 

segmentation of comment letter 

submissions received by organization 

type: 

No single issue dominated the 

comments, which were divergent and 

wide-ranging. In general, comments 

were supportive of renewable energy 

developments on the OCS and reuse of 

existing OCS facilities. Commenters 

advised MMS to provide as much 

certainty as possible in the final rule to 

support the burgeoning offshore 

renewable energy industry, while also 

providing flexibility to allow industry to 

meet the necessary requirements. The 

MMS was also urged to advocate for 

early and consistent stakeholder 

involvement in both the program and 

with individual project permitting. 

The most common topics addressed 

by commenters included: Aquaculture, 

State and local consultation, bonding, 

confidentiality, alternate-use liability 

transference, jurisdiction, revenue 

sharing, and environmental review 

processes. These topics and others are 

addressed further in the sections that 

follow. 

Access to OCS Lands and Procedures for 

Leasing 

With regard to timeframes for 

activities required by the proposed rule, 

several commenters requested this rule 

provide clear and defined timelines for 

MMS’s responsibilities. Some suggested 

that timelines should be set for the 

issuance of the public notice to 

determine developer interest. Others 

suggested that a timeline be set for the 

comment evaluation period following 

the deadline for public comments in 

response to a public notice. Some 

suggested that a timeline be set for the 

determination of competitive interest. 

Other commenters proposed a timeline 

be set for MMS action on leasesuspension requests. 

With regard to jurisdiction, one 

commenter raised the question about 

whether MMS has jurisdiction over the 

cables associated with a renewable 

energy project even if these cables were 

used for a nonrenewable energy project 

at the end of the original lease term. 

Some commenters requested that duediligence requirements be established to 

ensure that the applicant is financially 

and technically sound when being 

considered as a potential leaseholder. 

Some comments suggested that 

additional clarification is needed on a 

number of elements in the rule, 

including on what constitutes 

competitive interest, the ROW and rightof-use and easement (RUE) grant 

process, and activity cessation and 

suspension orders and the activities that 

these orders affect. 

A large number of comments related 

to the process for renewing leases. Some 

of these comments requested that the 

renewal process begin earlier, and 

others asked that while a lease renewal 

request is pending, the rule make it 

clear that the lease term will be 

automatically extended until MMS 

makes a decision. 


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Some commenters expressed concern 

with the concept of lease area 

contractions, suggesting that MMS 

could contract leases capriciously. 

Other commenters suggested MMS 

should reconsider allowing for the 

scaling of projects to ensure fairness and 

ease of market entry. The MMS should 

also consider additional strategies 

beyond diligence requirements to 

ensure that individual developers could 

not tie up large areas of the OCS, 

thereby prohibiting other development 

interests and, potentially, other uses. 

Many commenters suggested that 

MMS should permit lessees of limited 

leases to have priority consideration 

when considering a commercial lease 

application. For instance, if a lessee is 

already operating on a limited lease in 

a given area, and that same area is 

opened up for a commercial lease sale, 

that lessee should be given priority over 

other competitors for that lease area. 

With regard to the issuance of limited 

leases for the purpose of research, some 

commenters supported the idea of 

having Department of Energy supported 

research access rights expanded to 

include State governments and 

academic institutions. 

Several comments urged MMS to 

consider and establish a multi-factor 

evaluation process when considering a 

project proposal in a competitive lease 

sale. 

Environmental Information, 

Management, and Compliance Programs 

Several commenters suggested that 

the environmental review process 

proposed by MMS would be overly 

burdensome and redundant. Some 

commenters suggested that the NEPA 

process proposed by MMS goes far 

beyond what NEPA requires and what 

other agencies require to implement 

NEPA in order to demonstrate the extent 

of environmental impact. Some 

commenters suggested that the NEPA 

process is far too cumbersome as set out 

in the proposed rule. Having the Site 

Assessment Plan (SAP), Construction 

and Operations Plan (COP), and lease 

sale Environmental Impact Statement 

(EIS) undergo NEPA is burdensome and 

unnecessary. 

With regard to the environmental 

review process, several comments 

pertained to the division of cost burden, 

requesting clarification, or changes to 

the designation of responsible parties 

with regard to payment. Some 

commenters suggested that MMS should 

allow companies the option of 

developing the required environmental 

documents instead of having MMS staff 

and its contractors develop them for 

projects. 

With regard to the Coastal Zone 

Management Act (CZMA) review 

process, several commenters requested 

clarification on how the process would 

work. Some commenters suggested that 

it is unclear in the proposed rule 

regarding exactly what is required under 

a noncompetitive lease sale versus a 

competitive lease sale. Other 

commenters were unclear on what parts 

of CZMA applied to these types of lease 

sales. 

Many commenters expressed concern 

with minimizing the environmental 

impacts of leases, easements, and 

ROWs. With regard to cumulative 

impacts and monitoring, several 

commenters proposed that projects be 

closely monitored for their overall 

impacts on the environment, both 

beneficial and adverse. Some 

commenters suggested that the proposed 

rule did not adequately address the 

need for consideration of potential 

impacts on commercial fishing. Other 

commenters advocated that monitoring 

activities should not only encompass 

the proposed project area, but also those 

areas directly adjacent to projects. Some 

commenters suggested that the 

guidelines for monitoring should clarify 

that States reserve the right to impose 

additional requirements as needed. The 

MMS also received comments 

suggesting that cumulative effects 

should be required as part of an 

applicant’s SAP, COP, and initial 

project proposal. The cumulative effects 

should also be considered as part of the 

lease-sale evaluation process. 

With regard to adaptive management, 

several commenters proposed that the 

requirements and process for adaptive 

management are unclear in the 

proposed rule and need to be clarified. 

Some suggested that the lease 

instrument should be site specific and 

clearly specify the scope of the adaptive 

management activities MMS might 

require. Some comments pointed to the 

approach employed by the U.S. Fish 

and Wildlife Service for specifying 

adaptive management, where the terms 

and obligations are negotiated upfront. 

Some suggest that adaptive management 

should be included as a standard 

component of the SAP, General 

Activities Plan (GAP), and COP. 

Several commenters advocate that 

MMS apply categorical exclusions for 

certain data gathering activities. Some 

comments suggest that categorical 

exclusions could apply to most, if not 

all, resource evaluation activities, the 

installation of monitoring devices, and 

activities conducted prior to the 

approval of plans while on a lease. 

Some comments point to the policy 

currently employed by the U.S. Bureau 

of Land Management (BLM) for granting 

these exclusions. 

Facility Design, Fabrication, and 

Installation 

With regard to facility design and 

engineering, the majority of comments 

pertained to the proposed requirement 

that the lessee use a Certified 

Verification Agent (CVA). Many 

commenters suggested that the required 

use of a CVA is redundant, expensive, 

and not effective where such design, 

fabrication, installation, repairs, and 

modifications are done under the 

direction of a licensed engineer. Some 

commenters pointed out that because 

construction of offshore wind facilities 

consist of repeated installation of 

numerous, nearly identical units, 

requiring the CVA to verify, witness, 

survey, or check most, if not all, of a 

wind farm installation is burdensome 

and unnecessary. 

With regard to the engineering and 

design standards by which offshore 

renewable energy facilities are aligned, 

many commenters suggested it was 

unclear in the proposed rule to what 

standard(s) the CVA would compare 

individual projects, as there is no 

governing body approving such designs, 

nor does MMS state specific standards 

in the rule. Some commenters urged 

MMS to adopt internationally accepted 

standards wherever possible. Other 

commenters suggested that MMS 

consider a phased approach in the 

facility design, fabrication, and 

installation requirements, thereby 

proposing that MMS rely on existing 

standards while proceeding with the 

analysis of all standards to determine 

what modifications might be justified in 

a second phase of the program. In 

addition, because there are no set 

standards or governing body, some 

commenters proposed that MMS 

provide training to prospective CVAs to 

meet the safety requirements that MMS 

will impose. 

Regulation of Operational and 

Decommissioning Activities 

With regard to site-assessment 

activities, some commenters expressed a 

desire to have the ability to conduct 

site-assessment activities before a lease 

has been issued. Other commenters 

suggested that the SAP and COP be 

combined into a single plan, while 

others recommended that MMS create a 

categorical exclusion for site-assessment 

activities. 

With regard to information 

requirements, many commenters 

requested additional clarification 

regarding various information 

requirements under the lease, including 

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those required during the application 

phase, within the plans, during the 

environmental reviews, and during the 

technical evaluation of a proposed 

project. 

A large number of comments 

addressed the topic of the proposed 

notification requirements. Some 

commenters suggested that the 3-day 

notification requirement, as explained 

in subpart H, should be restated to 

address equipment or failures that pose 

significant risk to the environment, 

personnel, or property. Some 

commenters suggested that the 

notification requirement may not be 

appropriate for routine repair work, and 

would be better suited to emergency 

repairs only or those that would require 

environmental documentation. As 

stated in the proposed rule, the 

notification requirements are unclear 

regarding what activities would require 

notification; because there are a range of 

activities that could take place, such as 

changing light bulbs, this provision 

needs to be better defined. 

Several comments addressed the topic 

of inspections. Some commenters 

pointed out that renewable energy 

facilities, like wind farms, will be 

unmanned and, as such, should not be 

subject to the same inspection 

requirements that the oil and gas 

industry are subject to. Certain 

commenters suggested that offshore 

wind turbines be classified as 

unmanned for safety purposes, as these 

facilities are unmanned during normal 

operations. Unscheduled inspections to 

the actual wind turbines or energy 

generating facilities would be better 

served with visits to the 24-hour 

shoreside monitoring station, where 

real-time information on the condition 

and operation of the facility would be 

available. Some commenters advocated 

unscheduled inspections should be 

coordinated with the developer to 

minimize possible safety risks to the 

inspector. 

A large number of comments 

pertained to the decommissioning 

obligations set out in the proposed rule. 

Some suggested that allowing structures 

to remain in place at the end of a lease 

makes more sense than removal, both 

from a financial perspective and from an 

environmental perspective. Facility 

components, such as a turbine 

foundation, scour protection equipment, 

and cabling could cause greater harm to 

the surrounding ecology during and 

after removal than if left in place. Some 

commenters suggested that these 

structures could benefit the local 

ecology by continuing to serve as 

artificial reefs. Some comments 

requested that MMS require CZMA 

review as part of the decommissioning 

application. Others advocated having 

decommissioning requirements be 

determined on a case-by-case basis in 

the COP, by considering site-specific 

characteristics. On the side of those that 

support removal of all structures, some 

commenters suggested that the final rule 

should include a requirement that the 

development site be returned to the 

ecological baseline that existed prior to 

the installation of the energy project. 

Other commenters suggested that the 

requirements incorporate a presumption 

that all facilities, cables, and other 

obstructions be removed, as submarine 

cables and other components can pose 

a long-term obstruction for much of the 

fishing gear used on the OCS. 

Some comments suggested that the 

specifics of the decommissioning 

requirements should be modified. Some 

suggested that the removal of structures 

to the seabed depth specified in the rule 

is unnecessary. Some pointed to 

requirements employed in Europe, 

where the common removal depth for a 

wind turbine foundation is no more 

than 2 meters or 6 feet. 

Payments, Royalties, Fees, and Bonds 

The majority of comments regarding 

payments and financial assurance 

requirements urged MMS to expand the 

range of financial assurance options 

available to the lessee, including 

allowing the use of a third-party 

guaranty, audited financial statements, 

power purchase or other sale 

agreements, insurance, or other 

alternatives approved by MMS. 

Another point raised in a large 

volume of comments addressed the 

topic of decommissioning costs. Some 

commenters suggested MMS should 

separate financial assurance for 

decommissioning costs from financial 

assurance for other regulatory 

obligations, while others suggested that 

the rule be crafted in a way that ensured 

the final bonding costs will remain 

within reason and are reviewed 

carefully to cover only the necessary 

costs. A number of commenters 

suggested MMS should revise the 

provisions to provide more costeffective protection against defaults on 

decommissioning obligations. Some 

commenters shared concern regarding 

MMS’s ability to use bonding for 

cleanup and recovery activities once a 

lease term has ended. Some commenters 

suggested the decommissioning 

obligation under a limited lease, with a 

meteorological tower cited as an 

example, should not accrue—at a 

minimum—until after the development 

lease is awarded and MMS has 

approved the plan. 

At least one commenter mentioned 

the uncertainty in the requirements and 

in the process of granting and 

overseeing ROWs and RUEs will impact 

the feasibility for the developer to 

obtain financing. 

With regard to operating fees, many 

commenters recommended that 

operating fees under a commercial lease 

be deferred until the leaseholder is 

either generating energy or has begun 

construction on the lease. One 

suggestion was made to have the 

operating fees deferred until the CVA 

approves the COP. 

With regard to bidding, some 

commenters recommended MMS 

establish minimum bids and allow for 

the rejection of high bids in certain 

circumstances. 

Some commenters suggested the 

leasing fees, royalties, and rent in the 

proposed rule were set too low in light 

of the value of existing fisheries that 

could be displaced by renewable energy 

projects. 

Coordination and Consultation 

Many commenters urged early and 

consistent consultation and 

coordination with relevant State and 

Federal agencies. A few commenters 

suggested the establishment of standing 

inter-agency advisory and planning 

committees to allow for continuous 

dialogue with multiple stakeholders 

during the lease issuance process. Some 

commenters requested they be 

specifically mentioned as a consulting 

entity in the rule. 

With regard to State competitions for 

offshore development, some 

commenters requested MMS recognize 

the results of State competitions and 

grants for renewable energy 

development offshore their States when 

considering potential lessees in Federal 

waters. 

With regard to consultation during 

specific stages in the lease issuance 

process, some commenters suggested 

the rule require applicants consult with 

affected State and local governments 

during the area identification stage and 

throughout the remaining SAP and COP 

review processes. Some suggested MMS 

work more closely with the Federal 

Energy Regulatory Commission to avoid 

duplication in coastal EAs and reviews, 

while others suggested MMS work just 

as closely with State agencies during the 

coastal zone management processes. 

Other comments from industry 

suggested that renewable energy 

developers should also confer with local 

oil and gas project planners to ensure 

compatibility. Some commenters 

advocated that MMS express, in the 

final rule, a process for MMS to 

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coordinate with States, tribes, and local 

governments in adjusting mitigation and 

monitoring requirements. 

A common thread running through 

the comments on coordination and 

consultation is the desire to establish 

and use planning and coordination 

mechanisms to facilitate appropriate 

siting of OCS renewable energy activity 

and to develop meaningful priorities. 

Some commenters recommended 

establishing new mechanisms, and 

others suggested working with existing 

means. The MMS believes that such 

approaches may be accommodated 

under the final rule, and we are 

committed to reaching out to 

stakeholders, and local, state, and 

Federal government agencies as we 

implement the rule. 

We began outreach to officials and 

organizations at the national, regional, 

state, and local levels when we began 

the rulemaking process, and we have 

received valuable input throughout the 

process. We have participated in 

existing regional planning mechanisms, 

such as the West Coast Governors 

Agreement and the Northeast Regional 

Ocean Council, which are working 

toward properly balanced uses of the 

ocean through a regionally coordinated 

approach to relevant issues, including 

renewable energy development. We 

recognize and support new efforts, such 

as the one under way jointly by the 

States of New York, New Jersey, 

Delaware, Maryland, and Virginia to 

convene a Mid-Atlantic Ocean Summit, 

as well as the U.S. Offshore Wind 

Collaborative’s proposed New England 

and Mid-Atlantic States Joint Planning 

Agreement. We also have been working 

with individual States, localities, and 

tribes in the implementation of the 

MMS interim policy on resource 

assessment and technology testing and 

hope to build on those efforts in the 

establishment of joint task forces 

addressing commercial renewable 

energy development opportunities as 

provided under the final rule. 

Two States—New Jersey and Rhode 

Island—are well along in planning 

efforts that will help to determine 

appropriate areas of the OCS for 

development, and MMS has been an 

active partner with those States. Such 

efforts—supported by MMS 

environmental study and technical 

research initiatives, as well as the 

Coordinated OCS Mapping Initiative 

mandated by EPAct—will contribute 

significantly as MMS implements this 

final rule. 

Section 388 of EPAct 2005 requires 

that any activity permitted under this 

authority be carried out in a manner that 

provides for, among other things, 

protection of the environment, 

conservation of the natural resources of 

the outer continental shelf; coordination 

with relevant Federal agencies; 

protection of national security interests 

of the United States, prevention of 

interference with reasonable uses and 

functions of the exclusive economic 

zone, the high seas, and the territorial 

seas, and consideration of any other use 

of the sea or seabed, including, but not 

limited to fisheries, protection of 

biodiversity and ecosystem function, 

sealanes, potential siting of deepwater 

ports, or navigation. Consistent with 

this statutory direction, MMS 

understands that this rule will be 

applied in conjunction with 

interagency-led planning activities that 

are undertaken to avoid conflicts among 

users and maximize the economic and 

ecological benefits of the OCS. These 

activities will include multifaceted 

spatial planning effort that will 

incorporate ecosystem based science 

and stewardship along with 

socioeconomics, research, and modeling 

in the context for demands for other 

ocean uses and functions. It is 

anticipated that the Council on 

Environmental Quality will help 

coordinate this interagency effort, with 

the National Oceanic and Atmospheric 

Administration (NOAA) playing a key 

role, along with MMS. Through this 

type of coordination and advance 

planning, we expect to be able to speed 

the process of developing renewable 

energy projects in the OCS. 

This final rule is designed to be 

implemented both within the existing 

federal framework of multi-agency 

management of ocean activities, as well 

as to adapt to alternative ocean 

governance regimes that could be 

developed in the future. MMS will 

coordinate closely with all relevant 

federal and state agencies both on the 

implementation of this rule, through 

actualization and operation to 

termination and decommissioning, as 

well as on the development of any 

broader governance structure to address 

the many competing demands and 

interests facing our oceans. 

The MMS is responsible for ensuring 

that the decisions made within this 

comprehensive regulatory structure are 

supported by environmental analysis, 

documents, and other decision support 

resources. We will ensure that 

environmental analysis for OCS 

renewable energy proposals is 

proportional to the scope and scale of 

each proposal, is effectively tiered to 

programmatic NEPA documents, and 

efficiently incorporates other publicly 

available information by reference. The 

MMS will ensure timely and efficient 

coordination of the development and 

review of environmental documents 

with all agencies that have jurisdiction 

or special expertise to provide the 

decisionmakers. We will ensure that 

mitigation and monitoring information 

informs future decisionmaking 

processes. 

Management of renewable energy 

activities by MMS under this rule is 

founded on many years of experience in 

administering OCS energy and mineral 

programs and will be supported by 

extensive investigation and information 

gathering under the MMS 

Environmental Studies and the 

Technology Assessment and Research 

Programs. Both of these programs will 

play a significant role to ensure the safe 

and environmentally-responsible use of 

OCS renewable energy resources. 

Several initiatives examine real offshore 

renewable energy activity experiences 

in Europe that will provide useful 

information in considering similar 

activity in U.S. waters as well as 

opportunities to form close partnerships 

with and learn from international 

governments and developers possessing 

offshore renewable energy expertise. As 

we implement our regulatory framework 

to harness these new and exciting ocean 

renewable energy opportunities, we will 

draw on partnerships among the 

Federal, state, and local governments 

entities to share critical information, 

and agency expertise, and to foster 

better communication between different 

arms of the Federal Government 

The MMS believes that all of these 

efforts and others will be extremely 

helpful in deciding where and when to 

pursue development of renewable 

energy on the OCS. They will help 

government at all levels to commit 

resources appropriately and will 

provide developers with information to 

facilitate proper and efficient project 

proposals. Most importantly, MMS 

coordination and consultation with 

regional, state, and local planning 

mechanisms will give those entities that 

will be most affected by renewable 

energy activity a proper voice in the 

development of priorities. 

Reuse of Existing Facilities 

The vast majority of comments 

pertaining to alternate use addressed the 

concern that MMS would authorize 

mariculture activities on the OCS in the 

absence of express Federal mariculture 

legislation (such as the National 

Offshore Aquaculture Act that has been 

debated in Congress but never passed). 

Several commenters argued that MMS 

did not have the legal authority under 

subsection 8(p) of the OCS Lands Act to 

authorize Alternate Use RUEs for 

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mariculture activities that involved the 

use of an existing OCS facility. 

Several commenters raised concerns 

regarding the apportionment of 

decommissioning liability between the 

holder of the alternate use right-of-use 

and easement (Alternate Use RUE) and 

the existing OCS lessee or operator. 

Most of these commenters argued that 

the Alternate Use RUE holder should 

assume liability for decommissioning 

the existing OCS facility, thereby 

allowing the existing lessee or operator 

to shed its decommissioning liabilities 

for that particular existing structure that 

is subject to the approved alternate use. 

Other commenters expressed concern 

that the alternate use provisions were 

too general in nature, and did not set 

forth specific grant terms, payment 

levels, or financial assurance 

commitments. 

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BILLING CODE 4310–MR–C 

Overview of the MMS Alternative 

Energy and Alternate Use Program 

To accommodate the regulations to 

support the Alternative Energy and 

Alternate Use Program, MMS will add a 

new part to subchapter B of title 30 of 

the Code of Federal Regulations (CFR). 

The new part 285 will be titled 

Renewable Energy and Alternate Uses of 

Existing Facilities on the Outer 

Continental Shelf and will address the 

requirements of section 388(a) of the 

EPAct, which amended the OCS Lands 

Act by adding section 8(p) (43 U.S.C. 

1337(p)). In the proposed rule the new 

part 285 was titled Alternative Energy 

and Alternate Uses of Existing Facilities 

on the Outer Continental Shelf. We are 

now using the term ‘‘renewable energy’’ 

instead of alternative energy because it 

is a more commonly used term and 

more easily understood by the industry 

and general public. 

Approach to Rulemaking 

The MMS developed these regulations 

to provide a regulatory framework for 

leasing and managing OCS renewable 

energy project activities and authorizing 

activities that involve the alternate use 

of OCS Lands Act-permitted facilities. 

These regulations are also intended to 

encourage orderly, safe, and 

environmentally responsible 

development of renewable energy 

sources on the OCS. The MMS expects 

that renewable energy projects in the 

near term will involve the production of 

electricity from wind, wave, and ocean 

current. In the future, other types of 

renewable energy projects may be 

pursued on the OCS, including solar 

energy and hydrogen production 

projects. These regulations were 

developed to allow for a broad spectrum 

of renewable energy development, 

without specific requirements for each 

type of energy production. 

Following the publication of these 

regulations, MMS will publish a 

guidance document to support the 

regulations. This guidance document 

will provide more details on the 

program and will describe the type of 

information that we are looking for in 

various plan submittals. As we gain 

experience with renewable energy 

development on the OCS, we will 

update our regulations to include 

energy-resource-specific provisions and 

incorporate by reference appropriate 

documents. 

This final rule (30 CFR part 285) 

applies to all aspects of the Alternative 

Energy and Alternate Use Program 

except for the procedures applying to 

appeals of MMS decisions or orders, 

which are covered in 30 CFR part 290, 

subpart A. The MMS is revising § 290.2 

to clarify our decisions on bids under 

this program that are exempt from the 

appeals process at 30 CFR part 290 and 

are covered under § 285.118(c). This 

section describes the procedures for a 

bidder whose high bid was rejected to 

apply for reconsideration by the 

Director of MMS (Director) for 

renewable energy leases, ROW grants, 

RUE grants, or Alternate Use RUE. 


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Overview of the Project Development 

Process 

General Overview 

Types of Access Rights 

The MMS will issue lease access 

rights for commercial development and 

site assessment and technology testing. 

The ROW and RUE grants will be issued 

for the support of renewable energy 

activities. The MMS will use a special 

grant, the Alternate Use RUE, for 

activities that use an existing facility. 

Commercial and Limited Leases 

The MMS will issue two types of 

leases: (1) Commercial or (2) limited. A 

commercial lease would convey the 

access and operational rights necessary 

to produce, sell, and deliver power 

through spot market transactions or a 

long-term power purchase agreement. A 

commercial lease provides the lessee 

full rights to apply for and receive the 

authorizations needed to assess, test, 

and produce renewable energy on a 

commercial scale over the long term 

(approximately 30 years). A commercial 

lease will include the right to a project 

easement, which will be issued to allow 

the lessee to install gathering, 

transmission, and distribution cables to 

transmit electricity; pipelines to 

transport other energy products (i.e., 

hydrogen); and appurtenances on the 

OCS, as necessary, for the full 

enjoyment of the lease. The project 

easement will be issued upon approval 

of the COP (for commercial leases) or 

GAP (for limited leases). 

A limited lease will convey access 

and operational rights for activities on 

the OCS that support the production of 

energy, but do not result in the 

production of electricity or other energy 

product for sale, distribution, or other 

commercial use exceeding a limit 

specified in the lease. In a change from 

the proposed rule, MMS has decided to 

permit limited leases that generate 

power during technology testing to sell 

that power within limits set in the lease 

instrument. For example, a limited lease 

could include in its terms and 

conditions the authorization to sell 

electricity produced during the testing 

of experimental ocean current turbine 

generators of up to 5 megawatts (MW) 

total installed capacity, thereby 

allowing the lessee to recoup some of 

the expenses entailed in its limited lease 

activities. Limited leases may be issued 

for site-assessment purposes only or for 

site assessment and development and 

testing of new or experimental 

renewable energy technology. Limited 

leases will be issued for a short term, 5 

years. Under the provisions of these 

regulations, limited leases may be 

renewed, but they cannot be converted 

to commercial leases. If the holder of a 

limited lease wished to pursue 

commercial development on the OCS, 

the leaseholder will need to obtain a 

new commercial lease through the 

leasing process, as defined in these 

regulations. 

RUE Grants and ROW Grants 

The MMS will issue RUE grants 

authorizing the use of a designated 

portion of the OCS to support renewable 

energy activities on a lease or other 

approval not issued under this part (e.g., 

on a State-issued lease). 

The MMS will issue ROW grants to 

allow for the construction and use of a 

cable or pipeline for the purpose of 

gathering, transmitting, distributing, or 

otherwise transporting electricity or 

other energy product generated or 

produced from renewable energy not 

generated on a lease issued under this 

part. An ROW grant could be used to 

transport electricity from a State lease to 

shore or from one State to another State 

through a transmission line that must 

cross the Federal OCS. An ROW is not 

the same as a project easement issued 

with a renewable energy lease under 

this part. 

Alternate Use RUEs 

The MMS will issue an alternate use 

RUE for the energy- or marine-related 

use of an existing OCS facility for 

activities not otherwise authorized by 

this subchapter or other applicable law. 

See preamble at subpart J, for more 

details regarding Alternate Use RUEs. 

Obtaining Access Rights 

The EPAct requires MMS to award 

leases, ROW grants, and RUE grants 

competitively, unless we make a 

determination of no competitive 

interest. In conjunction with the 

competitive leasing process, we will 

prepare NEPA and other environmental 

compliance documents. The MMS will 

put forth a call for interest, designate the 

lease or grant area, and publish in the 

Federal Register all other notices and 

calls relating to the sale. If, after putting 

forth a call for interest, we determine 

that there is no competitive interest in 

that particular OCS area, we may 

proceed in issuing a lease or grant 

noncompetitively. Whether a company 

acquires a lease or grant competitively 

or noncompetitively, it must comply 

with all MMS lease stipulations or 

conditions in the grant. 

Federal Compliance for the Leasing 

Process 

All activities permitted under this 

part must comply with all relevant 

Federal laws, regulations, and statutes, 

including, but not limited to, the 

following: 

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BILLING CODE 4310–MR–C 

National Environmental Policy Act 

Compliance 

The NEPA process helps public 

officials make decisions based on an 

understanding of environmental 

consequences and take actions that 

protect, restore, and enhance the 

environment. It provides the tools to 

carry out these goals by mandating that 

every Federal agency prepare an indepth study of the impacts of ‘‘major 

federal actions significantly affecting the 

quality of the human environment’’ and 

alternatives to those actions, and by 

requiring that each agency make that 

information an integral part of its 

decisions. The NEPA also requires that 

agencies make a diligent effort to 

involve the interested and affected 

public before they make decisions 

affecting the environment. 

The MMS is the lead Federal agency 

for NEPA compliance for renewable 

energy and alternate use activities on 

the OCS. Some of the information we 

request under this part are in support of 

other Federal agencies’ information 

requirements associated with 

compliance with the laws and 

regulations that they enforce. 

Coastal Zone Management Act 

Compliance 

Each coastal State has a federallyapproved coastal management plan 

(CMP). In compliance with CZMA 

mandates found at section 307(c)(1), 

when MMS conducts a competitive 

lease sale for leases or grants under this 

part, MMS will determine if the sale 

activity is reasonably likely to affect any 

land or water use or natural resource of 

a State’s coastal zone. If such effects are 

reasonably foreseeable, the MMS must 

submit a consistency determination 

(CD) to the affected State(s) at least 90 

days before the lease sale. This CD will 

include a detailed description of the 

proposed activity, its expected coastal 

effects, and an evaluation of how the 

proposed activity is consistent with 

applicable enforceable policies in the 

State’s CMP. If the affected State(s) agree 

with MMS’s determination, MMS may 

proceed with the competitive sale. If the 

affected State(s) disagree, MMS will 

follow the procedures as outlined in 15 

CFR part 930, subpart C. 

In their CMP, the State lists Federal 

licenses and permits which are 

reasonably likely to affect coastal uses 

or resources and requires a Federal 

consistency review. Listed activities 

must be conducted in a manner that is 

consistent with the enforceable policies 

of the State’s CMP, and the applicant 

must submit a Federal consistency 

certification to the State and approving 

Federal agency. Also, the State may ask 

the NOAA ORCM for permission to 

review, for consistency, activities that 

are not listed in its CMP. If NOAA 

approves the request, the applicant is 

required to submit a consistency 

certification for the unlisted Federal 

license/permit. In compliance with 

CZMA mandates, MMS will not issue 

noncompetitive leases or approve 

noncompetitive grants or plans under 

this part if: (1) Consistency has not been 

conclusively presumed; or (2) the State 

objects to the applicant’s consistency 

certification, and the Secretary of 

Commerce has not found that the 

permitted activities are consistent with 

the objectives of the CZMA or are 

otherwise necessary in the interest of 

national security. Table 1 summarizes 

the NEPA and CZMA compliance 

requirements for leases and grants. 


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Development Process 

Developing Leases and Grants 

Once a company acquires a lease, 

ROW grant, or RUE grant, it must 

submit certain plans to MMS for 

development of the lease or grant. The 

various plans serve as a blueprint for 

site development, construction, 

operations, and decommissioning. The 

MMS has specific requirements for each 

phase of the lease, grant, and plan. The 

MMS will not allow development 

without proper plan submission and 

approval. Site assessment activities on a 

commercial lease will require the 

applicant to submit a SAP and receive 

MMS approval of that plan before 

beginning those activities. The SAP will 

undergo the appropriate NEPA reviews 

and may require either an 

Environmental Impact Statement (EIS) 

or an EA. The SAP must demonstrate 

how you will conduct the proposed 

activities to comply with relevant 

Federal statutes such as the CZMA, 

Endangered Species Act (ESA), Marine 

Mammal Protection Act (MMPA), and 

CWA. 

For a commercial lease, after you 

perform site assessment activities, you 

will be required to submit and receive 

MMS approval of a COP before you may 

begin any development and production 

activities on your lease. Like the SAP, 

the COP will undergo the appropriate 

NEPA reviews and may require either 

an EIS or an EA. Like the SAP, the COP 

must also comply with relevant Federal 

statutes. 

For limited leases, ROW grants, and 

RUE grants, you will be required to 

submit a GAP, which covers all 

activities on the lease or the grant 

including site assessment, development, 

operations, and decommissioning. Like 

the SAP and COP, the GAP will undergo 

the appropriate NEPA reviews and must 

comply with relevant Federal Statutes. 

Revenue Sharing 

The new subsection 8(p)(2)(B) of the 

OCS Lands Act (43 U.S.C. 1337(p)(2)(B)) 

requires payment to certain coastal 

States of 27 percent of the revenues 

received by the Federal Government 

from any projects under this section that 

are located wholly or partially within 

the area extending 3 nautical miles 

seaward of State submerged lands. (For 

ease of description, this 3-mile-wide 

area adjoining State submerged lands 

will be referred to in this preamble as 

the ‘‘8(g) zone,’’ a term widely used to 

refer to the identical 3-mile area 

described in subsection 8(g) of the OCS 

Lands Act (43 U.S.C. 1337(g)). In 

addition, when a project extends into 

the 8(g) zone of at least one State, 

subsection 8(p) extends eligibility for a 

share of the revenues to States with a 

coastline that is located within 15 miles 

of the geographic center of the project. 

The Secretary is required to establish a 

formula by rulemaking that provides for 

the equitable distribution of payments 

to eligible States based on the proximity 

of each State’s coastline to the 

geographic center of the project. 

Operations 

The regulations that address 

operations cover environmental 

management, safety management, 

inspections, facility assessments, and 

decommissioning. The regulations on 

operations are designed to ensure safety 

and prevent or minimize the likelihood 

of harm or damage to the marine and 

coastal environments. The structure of 

the regulations is based on adaptive 

management. The company will be 

required to monitor activities and 

demonstrate that its performance 

satisfies specified standards in its 

approved plans. In addition, the 


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company will be required to comply 

with regulations regarding air quality, 

safety, maintenance and shutdowns, 

equipment failure, adverse 

environmental effects, inspections, 

facility assessments, and incident 

reporting. 

Alternate Use of Existing Facilities 

These regulations establish general 

requirements for how MMS will 

consider proposals for activities that 

involve the alternate use of existing OCS 

facilities. This includes general 

provisions that explain how we will 

approve and regulate such alternate use 

activities on the OCS. We will authorize 

such activities through the issuance of 

an Alternate Use RUE. 

These regulations explain how 

applicants can request an Alternate Use 

RUE; how MMS will decide whether to 

issue Alternate Use RUEs; how 

Alternate Use RUEs will be 

competitively issued (if we determine 

that competitive interest exists); the 

terms of such authorizations; required 

payments to MMS; necessary financial 

assurance; other administrative issues 

such as assignment, suspension, and 

termination; and decommissioning of 

approved alternate use structures. 

In addition to the provisions in 

subpart J, MMS will make associated 

revisions to our existing oil and gas 

decommissioning regulations found in 

30 CFR part 250, subpart Q, to clarify 

the oil and gas platform owner’s 

obligations for decommissioning in the 

event we approve alternate uses of the 

platform. 

Subpart-by-Subpart Discussion 

Part 285—Renewable Energy And Alternate 

Uses Of Existing Facilities On The Outer 

Continental Shelf 

Subpart A—General Provisions 

Subpart B—Issuance of OCS Renewable 

Energy Leases 

Subpart C—Rights-of-Way Grants and Rightsof-Use and Easement Grants for Renewable 

Energy Activities 

Subpart D—Lease and Grant Administration 

Subpart E—Payments and Financial 

Assurance Requirements 

Subpart F—Plans and Information 

Requirements 

Subpart G—Facility Design, Fabrication, and 

Installation 

Subpart H—Environmental and Safety 

Management, Inspections, and Facility 

Assessments for Activities Conducted 

Under SAPs, COPs and GAPs 

Subpart I—Decommissioning 

Subpart J—Rights of Use and Easements for 

Energy and Marine-Related Activities 

Using Existing OCS Facilities 

Subpart A—General Provisions 

Overview 

Subpart A establishes MMS’s 

authority and the purpose for the 

regulations. It also addresses the general 

requirements that apply to all activities 

regulated under this part, for example, 

the qualifications for holding leases, 

ROW grants, and RUE grants on the 

OCS, and the appeals process. The 

definitions for these regulations are also 

in subpart A. 

Approach 

The OCS Lands Act requires MMS to 

ensure that the activities permitted 

under these regulations are carried out 

in a manner that provides for safety, 

protection of the environment, 

oversight, and enforcement (43 U.S.C. 

1337(p)(4)). This subpart lays the 

foundation for these responsibilities. 

The responsibilities of the lessee, 

applicant, operator, or holder of a ROW 

grant, RUE grant, or Alternate Use RUE 

grant are based on ensuring that projects 

under these regulations are designed 

and conducted in a safe and 

environmentally sound manner. 

Departures from the regulations were 

selected as a way of allowing MMS to 

maintain flexibility within the program 

and to be able to adapt to this new and 

changing industry. Requirements and 

qualifications for lessees and grant 

holders are based on section 8 of the 

OCS Lands Act and are designed to 

deter nuisance and speculative 

interference with the leasing process. 

Appeal rights are modeled after those 

established for offshore oil and gas 

operations. 

This subpart provides for 

participation of State and local 

governments in task forces or other joint 

planning agreements with MMS. The 

joint planning provision is modeled 

after § 281.13 of this subchapter, which 

pertains to the use of task forces when 

considering leasing of minerals in the 

OCS other than oil, gas, and sulphur. 

We envision that such task forces could 

be useful and applicable to any phase of 

the OCS Alternative Energy Program, 

from preliminary studies and lease sale 

formulation, through site assessment 

and construction, to decommissioning. 

We may invite any affected State 

Governor or local government executive 

to join in establishing a task force or 

other joint planning or coordination 

agreement if we are considering to offer 

or issue leases (or grants) under this 

part. Participation in a task force will 

give the parties opportunities to 

contribute to the planning process and 

access to nonproprietary information. 

The task force or other such 

arrangements will be constituted and 

conducted, as agreed to by the 

participants, consistent with Federal 

law and these regulations. The task 

force may make recommendations and 

may be requested to conduct or oversee 

research, studies, or reports. However, 

MMS is not limited to using just task 

forces for coordination and 

consultation. Throughout the lease, 

grant issuance, and project development 

processes, MMS will work with affected 

State, local, and tribal governments and 

other planning and oversight 

organizations. 

Section-by-Section Discussion of 

Subpart A 

Authority (§ 285.100) 

This section restates MMS’s authority 

to issue regulations and oversee access 

and development on the OCS for 

renewable energy and alternate use of 

existing facilities. The authority 

statement is included to inform the 

affected public and other interested 

parties of the basis for establishing these 

regulations. The authority for these 

regulations was granted to the Secretary 

of the Interior in amendments to 

subsection 8 of the OCS Lands Act (43 

U.S.C. 1337), as set forth in section 

388(a) of the EPAct (Pub. L. 109–58). 

With regard to hydrokinetic projects 

on the OCS, MMS possesses the 

exclusive authority to issue leases, 

easements, and rights-of-way for such 

projects, but will not duplicate the 

operational approvals granted by FERC 

when it issues licenses and exemptions 

for the construction and operation of 

hydrokinetic projects on the OCS. 

The MMS revised this section from 

the NPR to state that the Secretary of the 

Interior delegated to MMS the authority 

to regulate activities under section 

388(a) of the EPAct. These regulations 

will address activities that: (a) Produce 

or support production, transportation, 

or transmission of energy from sources 

other than oil and gas; or (b) use, for 

energy-related purposes or for other 

authorized marine-related purposes, 

facilities currently or previously used 

for activities authorized under the 

EPAct. 

What is the purpose of this part? 

(§ 285.101) 

This section describes MMS’s 

objectives for this rule. Our objectives 

include: (1) Establishing procedures for 

issuance of leases, ROW grants, and 

RUE grants and for administration of 

operations for activities permitted under 

this part; (2) informing applicants and 

third parties of their obligations under 

this part; and (3) ensuring that these 

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activities are conducted in a safe and 

environmentally sound manner, in 

conformance with applicable laws and 

regulations, and the terms of the lease 

or grant. However, this part does not 

convey access rights for oil, gas, or other 

minerals. 

We did not make any changes to the 

section. 

What are MMS’s responsibilities under 

this part? (§ 285.102) 

This section describes MMS’s 

responsibilities, which are derived from 

section 8(p)(4) of the OCS Lands Act (43 

U.S.C. 1337(p)(4)). These 

responsibilities include ensuring 

activities are carried out in a manner 

that provides for: 

• Safety; 

• Protection of the environment; 

• Prevention of waste; 

• Conservation of the natural 

resources of the OCS; 

• Coordination with relevant Federal 

agencies; 

• Protection of national security 

interests of the United States; 

• Protection of the rights of other 

authorized users of the OCS; 

• A fair return to the United States; 

• Prevention of interference with 

reasonable uses (as determined by the 

Secretary or Director) of the exclusive 

economic zone, the high seas, and the 

territorial seas; 

• Consideration of the location of and 

any schedule relating to a lease or grant 

under this part for an area of the OCS, 

and any other use of the sea or seabed; 

• Public notice and comment on any 

proposal submitted for a lease or grant 

under this part; and 

• Oversight, inspection, research, 

monitoring, and enforcement of 

activities authorized by a lease or grant 

under this part. 

To enforce these responsibilities, 

MMS will require compliance with all 

applicable laws, regulations, other 

requirements, the terms of your lease or 

grant under this part, and approved 

plans. We will also establish practices 

and procedures to govern the collection 

of all payments due to the Federal 

Government, including any service 

recovery fees, rents, operating fees, and 

other fees or payments. We will 

coordinate and consult with the 

Governor of any affected State and 

executive of any affected local 

government or Indian tribe. As part of 

coordination and consultation with 

State and local governments, we may 

invite any affected State Governor, 

representative of an affected Indian 

tribe, and affected local government 

executive to join a task force or other 

joint planning or coordination 

agreement. 

Based on comments received on the 

NPR, we added affected Indian tribes to 

this section. In addition, we added text 

in paragraph (a)(5) to emphasize 

coordination with Federal agencies 

involved in planning activities that are 

undertaken to avoid conflicts among 

users and maximize the economic and 

ecological benefits of the OCS, 

including multifaceted spatial planning 

efforts. 

When may MMS prescribe or approve 

departures from these regulations? 

(§ 285.103) 

This section establishes times when 

MMS may approve departures from the 

requirements established in the 

regulations. We will consider a 

departure when it is needed to: 

• Facilitate the proper development 

of a lease or grant under this part; 

• Conserve natural resources; 

• Protect life (including human and 

wildlife), property, or the marine, 

coastal, or human environment; or 

• Protect sites, structures, or objects 

of historical or archaeological 

significance. 

A departure must be consistent with 

subsection 8(p) of the OCS Lands Act 

and must protect the environment and 

safety to the same degree as if there was 

no approved departure from the 

regulations. 

We did not make any changes to the 

section. 

Do I need an MMS lease or other 

authorization to produce or support the 

production of electricity or other energy 

product from a renewable energy 

resource on the OCS? (§ 285.104) 

This section explains that, except as 

otherwise authorized by law, it is 

unlawful for any person to construct, 

operate, or maintain any facility to 

produce, transport, or support the 

generation of electricity or other energy 

product derived from a renewable 

energy resource on any part of the OCS, 

except under and in accordance with 

the terms of a lease, easement, or ROW 

issued pursuant to the OCS Lands Act. 

If you intend to construct and operate a 

hydrokinetic facility on OCS lands, you 

will first need a lease from MMS and 

later be required to seek a license from 

FERC. 

It should be noted that with the final 

rule MMS is clarifying that 

authorization of geological and 

geophysical and related site assessment 

surveys will be the responsibility of the 

U.S. Army Corps of Engineers. In many 

instances these types of activities may 

be verified under the Corps’ Nationwide 

Permit Program. We have revised the 

regulation at subpart F to remove MMS 

approval of these types of surveys and 

the requirement to describe the design 

of such surveys in relevant plans. 

Although MMS will not be the permitter 

for such surveys—either before or after 

issuance of a lease or grant—we strongly 

urge that those conducting surveys 

coordinate with MMS and the Corps to 

ensure that proposed activities meet 

both Corps permitting requirements and 

MMS information requirements 

described in subpart F relating to lease 

or grant issuance and plan approval. 

We did not make any changes to the 

section. 

What are my responsibilities under this 

part? (§ 285.105) 

This section describes the general 

responsibilities of a lessee, applicant, 

operator, or holder of a ROW grant, RUE 

grant, or Alternate Use RUE grant under 

these regulations. These responsibilities 

include: 

• Designing projects and conducting 

operations in a safe manner to minimize 

adverse effects to the coastal and marine 

environments, including their physical, 

atmospheric, and biological components 

to the extent practicable, and taking 

measures to prevent the discharge of 

pollutants, including marine trash and 

debris; 

• Submitting requests, applications, 

plans, notices, modifications, and 

supplemental information as required 

by this part; following up any oral 

request or notification in writing within 

3 business days; 

• Complying with the terms and 

conditions of the applications, plans, 

notices, and modifications; making 

payments on time; 

• Complying with the Department of 

the Interior’s (DOI) nonprocurement 

debarment regulations; including the 

requirement to comply with 2 CFR part 

1400 in all contracts and transactions 

related to a lease or grant under this 

part; and 

• Responding to requests from the 

Director in a timely manner. 

We added measures to prevent the 

discharge of pollutants, including 

marine trash and debris, to this section 

to clarify that adverse effects to the 

environment include pollutants, trash, 

and debris. Also, while hydrokinetic 

projects will entail obligations and 

responsibilities relating to FERC 

regulation under licenses and 

exemptions, the holder of a 

hydrokinetic lease must comply with all 

terms and conditions set forth in the 

MMS-issued lease including MMS’ right 

to access data and information for all 

activities conducted on leases issued 

under this part to meet our statutory 

responsibilities as lessor. 

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Who can hold a lease or grant under 

this part? (§ 285.106) 

This section details the qualifications 

of a lessee or grant holder. To qualify for 

a lease or grant, you must be either a 

citizen or a national of the United 

States; an alien lawfully admitted for 

permanent residence in the United 

States; a private, public, or municipal 

corporation organized under the laws of 

the United States, any of its States or 

territories, or the District of Columbia; 

or an association of any of the parties 

described previously. In addition, you 

may be excluded from becoming a 

lessee or grant holder if you are 

excluded or disqualified from 

participating in transactions covered by 

the Federal nonprocurement debarment 

and suspension system, you have failed 

to meet or exercise due diligence under 

any OCS lease or grant, or you remained 

in violation of the terms and conditions 

of any lease or grant issued under the 

OCS Lands Act for a period extending 

longer than 30 days after MMS directed 

you to comply. 

Based on comments received on the 

NPR, MMS added a requirement to this 

section that in order to qualify to 

become a lessee or a grant holder, the 

applicant must demonstrate the 

technical and financial capabilities to 

construct, operate, maintain, and 

terminate/decommission projects for 

which you are requesting authorization. 

We also deleted § 285.106(b)(4) because 

it was redundant with § 285.106(b)(2). 

The MMS also received comments 

requesting that we limit ownership of 

leases and grants to United States 

citizens and companies. The 

requirements for lease and grant holders 

limit ownership to United States 

citizens, lawfully admitted aliens, and 

United States companies. Another 

comment stated that it is not clear if 

private universities and research 

institutions are eligible to hold leases or 

grants under this part. Private 

universities and research institutions 

could be qualified to hold leases or 

grants under these regulations, under 

paragraph (a)(4), as an ‘‘association’’. 

In addition, we added Federal 

agencies to the list of entities qualified 

to hold a lease. After the proposed rule 

was published, MMS received inquiries 

from the U.S. Navy concerning the 

acquisition of areas of the OCS as setasides for renewable energy 

development to meet requirements 

imposed by the Energy Independence 

and Security Act of 2007 and EPAct that 

pertain to improved energy performance 

in the federal sector. By adding Federal 

agencies to the qualification list, MMS 

could issue a lease to the Navy or other 

Federal agency that would authorize 

OCS renewable energy development to 

provide electrical generation for its 

installations and facilities. 

As with hydrokinetic commercial 

leases issued to private entities, a 

Federal or state agency holding an MMS 

lease cannot construct or operate an 

hydrokinetic project without a FERCapproved license or exemption. 

How do I show that I am qualified to be 

a lessee or grant holder? (§ 285.107) 

This section describes the evidence 

you must submit to MMS to establish 

qualification to hold a lease, ROW grant, 

or RUE grant. For an individual, this 

evidence includes documents that 

demonstrate citizenship or lawful 

admittance of permanent residence. For 

an association, the acceptable evidence 

includes a certified statement indicating 

the State in which it is registered and 

that it is authorized to hold leases and 

grants on the OCS, or an appropriate 

reference to statements or records 

previously submitted to an MMS OCS 

office. A corporation must submit a 

statement certified by the corporate 

Secretary or Assistant Secretary over the 

corporate seal showing the State in 

which it was incorporated, and that it is 

authorized to hold leases and grants on 

the OCS, or an appropriate reference to 

statements or records previously 

submitted to an MMS OCS office 

(including material submitted in 

compliance with prior regulations), and 

evidence of the authority of the persons 

signing to bind the corporation. If MMS 

has qualified you to hold a renewable 

energy lease, RUE, or ROW in one OCS 

Region, it is our intent that you will be 

qualified to hold a renewable energy 

lease, RUE, or ROW in the other OCS 

Regions. We will provide more 

information in the implementation 

guidance that we intend to issue after 

the final rule is approved. 

Based on comments received on the 

NPR and to conform with changes made 

to § 285.106, we added a description of 

the documentation that you may 

provide to MMS to demonstrate the 

technical and financial capabilities to 

construct, operate, maintain, and 

terminate/decommission projects for 

which you are requesting authorization. 

We also added some documentation 

requirements for local, state, and federal 

entities that are comparable to those for 

associations and corporations. 

When must I notify MMS if an action 

has been filed alleging that I am 

insolvent or bankrupt? (§ 285.108) 

If any action is filed alleging that a 

company, operating under these 

regulations, is insolvent or bankrupt, the 

company must notify MMS within 3 

days of learning of the action. 

We did not make any changes to the 

section. 

When must I notify MMS of mergers, 

name changes, or changes of business 

form? (§ 285.109) 

This section requires you to notify 

MMS of any merger, name change, or 

change of business form. This must be 

done no later than 120 days after either 

the effective date or the date of filing the 

change or action with the Secretary of 

the State in the State of registry. You do 

not have to request an assignment under 

§§ 285.408 through 285.411 in these 

cases. 

We did not make any changes to the 

section. 

How do I submit plans, applications, 

reports, or notices required by this part? 

(§ 285.110) 

You must submit all plans, 

applications, reports, or notices to MMS 

at the address provided in this section. 

We changed this section, requiring 

that, unless otherwise noted, applicants 

must submit one paper copy and one 

electronic copy of all plans, 

applications, reports, or notices required 

by this part. 

When and how does MMS charge me 

processing fees on a case-by-case basis? 

(§ 285.111) 

This section provides that MMS may 

charge processing fees for applications 

or requests filed under this part, on a 

case-by-case basis. The MMS may 

charge processing fees if the preparation 

of a document or study is necessary for 

MMS to evaluate or process an 

application or request. For example, 

MMS may charge processing fees for the 

preparation of a project-specific study, 

EA, or EIS. 

The Independent Offices 

Appropriations Act (31 U.S.C. 9701), the 

Omnibus Appropriations Bill (Pub. L. 

104–133, 110 Stat. 1321, April 26, 

1996), and the Office of Management 

and Budget (OMB) Circular A–25, 

authorize Federal agencies to recover 

the full cost of services that confer 

special benefits. Under the Department 

of the Interior’s (DOI) implementing 

policy, the Minerals Management 

Service (MMS) is required to charge the 

full cost for services that provide special 

benefits or privileges to an identifiable 

non-Federal recipient above and beyond 

those that accrue to the public at large. 

An application or request filed under 

this regulation conveys special benefits 

to recipients beyond those accruing to 

the general public and are subject to 

service fees. 

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There may be other authorities that 

MMS may use to recover costs 

depending on the particular 

circumstances of the project and the 

nature of the evaluation or processing 

needed. Such authorities may include 

the Regulations for Implementing the 

Procedural Provisions of the National 

Environmental Policy Act (40 CFR 

1506.5), Public Law 99–591 (title I, 

section 101), and Public Law 110–161 

(division F, title I, section 121). 

The MMS intends to recover those 

costs that we incur following the 

decision that the document processing 

will have a unique processing cost. We 

will not charge for costs that MMS 

incurred before that decision was made. 

In cases where we may charge a case-bycase processing fee, we will provide the 

applicant with a written estimate of the 

processing costs that may include a 

standard overhead rate, or the closest 

estimate we have based on previous 

work, which is similar in nature. The 

case-by-case processing fees provided 

for in this rule relate to the documents 

that an applicant must submit to satisfy 

various statutory and regulatory 

requirements pertaining to actions 

authorized by this regulation. For 

example, MMS statutory responsibilities 

require that we independently review 

any analysis performed by an outside 

contractor. This review is necessary 

before a decision can be rendered on the 

application. Processing fees charged by 

MMS will include contract oversight 

and efforts to review and approve 

documents prepared by contractors, 

whether the contractors are paid 

directly by the applicant or through 

MMS. The applicant may comment on 

the proposed fee or request approval to 

directly pay a contractor for the 

document, study, or other activity. If 

warranted, based on information 

provided, we will re-estimate our 

reasonable processing costs following 

the procedure established in this 

section. 

The MMS made several edits to this 

section. We expanded and clarified this 

section regarding the following issues: 

(1) That if a study or other document 

such as an EA or EIS is not required, 

MMS will not charge a processing fee at 

this time, (2) that MMS document 

review and approval and contract 

oversight will be recoverable costs, (3) 

that processing costs will include a 

standard bureau overhead rate or an 

estimate that will take projected costs 

into account, and (4) that payment 

instructions and terms will be provided 

in the final cost estimate. 

Based on comments, we changed the 

citation for 43 CFR part 4, subpart J, to 

just 43 CFR part 4. The 43 CFR part 4, 

subpart J is ‘‘Special Rules Applicable to 

Appeals Concerning Federal Oil and 

Gas Royalties and Related Matters.’’ The 

43 CFR part 4 covers all DOI appeals. 

Definitions (§ 285.112) 

This section provides definitions of 

terms used throughout the 30 CFR part 

285 regulations. Some of the definitions 

used in this part are definitions that 

were established in legislation or 

contained in other regulations (i.e., 30 

CFR part 250). For example, the 

definition of archaeological resource is 

almost identical to the definition used 

by MMS for oil and gas operations in 

the 30 CFR part 250 regulations. This 

definition mirrors that in the 

Archaeological Resource Protection Act, 

and was adopted in response to 

comments from the Advisory Council 

on Historic Preservation and the 

Departmental Consulting Archaeologist 

on our original rule on archaeology. It 

is consistent with the definitions in 

other Federal laws and regulations. 

We received comments on various 

definitions in this section. We revised 

the following definitions to reflect the 

comments: 

Commercial activities—we added, 

‘‘for renewable energy leases and 

grants,’’ to the definition to clarify that 

this does not apply to alternate use of 

existing OCS facilities. 

Eligible State—we revised this 

definition to conform with changes we 

made concerning revenue sharing. We 

clarified that eligible States must be no 

more than 15 miles from the geographic 

center of a qualified project area. 

Geographic center of a project—we 

made minor edits to the definition to 

conform with the final rule’s revenue 

sharing provisions. 

Income—we made minor, 

grammatical edits to the definition; the 

original meaning of the term has not 

changed. 

Lease—we changed the definition 

from an ‘‘authorization’’ to an 

‘‘agreement authorizing’’ the use of a 

designated portion of the OCS for 

activities allowed under this part. 

Lessee—we clarified the definition. 

Natural resources— we made minor 

edits to the definition. 

Person—we added ‘‘Federal agency’’ 

to the definition, since MMS may issue 

leases, RUEs, or ROWs to another 

Federal agency. 

Project—we clarified the definition. 

Project area—we clarified the 

definition. 

Qualified project—this definition was 

removed because the term is explained 

in the regulations for revenue sharing. 

Qualified project area—this definition 

was removed because the term is 

explained in the regulations for revenue 

sharing. 

Revenues—we changed the meaning 

of revenues to clarify that it does not 

include administrative fees. 

Right-of-use and easement (RUE) 

grant—we made minor edits to the 

definition. 

Right-of-way (ROW) grant—we made 

minor edits to the definition. 

Significant archeological resource— 

we made minor edits to the definition. 

Site assessment activities—we 

removed ‘‘physical characterization 

studies’’ and ‘‘baseline collection 

studies’’ as examples of the types of site 

assessment activities, and we added 

technology testing as a type of site 

assessment activity. We added 

‘‘involving the installation of bottomfounded facilities,’’ since surveys can be 

performed using an ACOE permit. 

You and your—we made minor edits 

to the definition. 

We, us and our—we made minor edits 

to the definition. 

How will data and information obtained 

by MMS under this part be disclosed to 

the public? (§ 285.113) 

This section describes how MMS will 

handle data and information submitted 

to the MMS, including public disclosure 

and nondisclosure. The MMS will 

follow the applicable requirements of 

the Freedom of Information Act (FOIA) 

(5 U.S.C. 552) and protect data and 

information to the extent allowed by 

law. In response to comments we 

received regarding the protection and 

release of proprietary data and 

information, we clarified how we will 

protect data and information under this 

part and when MMS will release that 

data and information. 

As set forth in § 285.113, MMS will 

not release data and information that we 

have determined to be exempt under 

exemption 4 of FOIA. However, the 

passage of time may erode the 

protections offered by exemption 4 of 

FOIA. To accommodate for this 

possibility, MMS has set forth a 

schedule in this section that we will 

follow to review such data and 

information, and any objections by the 

submitter, to determine whether release 

at that time would result in substantial 

competitive harm or disclosure of trade 

secrets. If MMS determines that the 

release of such data and information 

will not result in substantial 

competitive harm or disclosure of trade 

secrets, then MMS will release it. If it is 

determined that release will result in 

substantial competitive harm or 

disclosure of trade secrets, then the data 

and information will not be released at 

that time, but will be subject to further 

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review every 3 years thereafter. Nothing 

in this section is intended to displace or 

supersede MMS’s obligations under 43 

CFR part 2.23. 

Paperwork Reduction Act Statements— 

Information Collection (§ 285.114) 

These provisions cover Paperwork 

Reduction Act statements and 

information collection requirements 

pertaining to this part. We revised the 

burden to appropriately reflect the 

changes due to comments. 

Documents Incorporated by Reference 

(§ 285.115) 

This section lists the industry 

standard documents MMS will 

incorporate by reference into the 30 CFR 

part 285 regulations. 

We did not make any changes to the 

section. In the future, we will 

incorporate new documents after MMS 

has thoroughly reviewed them and 

determined that they are needed and 

appropriate. 

Requests for Information on the State of 

the Offshore Renewable Energy Industry 

(§ 285.116) 

This section allows the MMS Director 

(1) to request information from industry 

and other relevant stakeholders 

(including State and local agencies), as 

necessary, to evaluate the state of the 

offshore renewable energy industry, 

including the identification of potential 

challenges or obstacles to its continued 

development, and (2) to require the 

applicant, lessee, or grant holder to 

respond to a request in a timely manner. 

These requests could relate to the 

identification of environmental, 

technical, or economic matters that 

promote or detract from continued 

development of renewable energy 

technologies on the OCS. The MMS 

would use the information received to 

evaluate potential refinements to the 

OCS Alternative Energy Program that 

promote development of the industry in 

a safe and environmentally responsible 

manner, and to ensure a fair value for 

use of the Nation’s OCS. The MMS 

would publish these requests for 

information in the Federal Register. 

In response to comments, MMS edited 

this section to include ‘‘regulatory 

matters’’ as an additional issue that such 

information requests may entail. We 

also deleted the last sentence in 

paragraph (a) of this section. 

Reserved Section (§ 285.117) 

Section 285.117 is reserved. 

What are my appeal rights? (§ 285.118) 

This section describes when a 

decision made by MMS under this part 

may be appealed and who may appeal. 

Most decisions made under this part 

may be appealed according to the 

regulations found in 30 CFR part 290, 

subpart A. A bidder whose bid is 

rejected may apply for reconsideration 

by the MMS Director. If your lease is 

issued in order to obtain a FERC license 

or exemption, you may only appeal 

those decisions made by MMS under 

the authority of this subpart. 

Based on comments, we changed the 

citation in § 285.118(b) from 43 CFR 

4.21 to 43 CFR part 4, since multiple 

sections of 43 CFR part 4 apply to 

appeals. 

Subpart B—Issuance of OCS Renewable 

Energy Leases 

Overview for Subpart B 

This subpart outlines a process for 

issuing renewable energy leases, both 

for commercial production activities 

and for assessment or technology testing 

activities. The process will be 

competitive, unless there is a 

determination that no competitive 

interest exists. In addition, this subpart 

describes how we will determine when 

to use a competitive process for issuing 

a renewable energy lease and identifies 

auction formats and bidding systems 

and variables that we may use when 

that determination is affirmative. 

Finally, this subpart discusses the terms 

under which we will issue renewable 

energy leases. To establish a framework, 

we begin with a discussion of various 

types of leases that a prospective 

renewable energy developer may 

consider. 

Types of Leases 

Leases will be required for any type 

of renewable energy activity on the 

OCS. We will issue two types: (1) 

Commercial leases and (2) limited 

leases. Although we also will convey 

access to areas of the OCS for research 

under some form of negotiated lease 

agreement as provided in § 285.238, this 

discussion of types of leases focuses on 

the commercial or limited leases that we 

will issue directly to lessees on a 

competitive or noncompetitive basis. 

A commercial lease will provide the 

access and operational rights, subject to 

necessary approvals, to produce, sell, 

and deliver power on a commercial 

scale through spot market transactions 

or a long-term power purchase 

agreement. A commercial lease will be 

issued over the long term (i.e., up to 

approximately 30 years, with possible 

renewals) and will convey preferential 

rights to project easements on the OCS 

for the purpose of installing 

transmission and distribution systems. 

A commercial lease will not include a 

limit on the amount of energy to be 

produced and sold. 

A limited lease will be issued for a 

shorter term (i.e., up to 5 years, with 

possible renewals). It will provide the 

access rights necessary to conduct 

activities, such as site assessment and 

technology testing that support 

production of renewable energy, and 

may provide the right to produce and 

sell power within limits set by the terms 

and conditions of the lease. Limited 

leases are not intended to authorize 

long-term or large-scale commercial 

operations. As provided in the proposed 

rule, operations on a limited lease may 

interconnect to electricity or other 

power distribution systems for testing 

and information gathering purposes. In 

response to comments on the proposed 

rule recommending authorization of the 

sale of power generated from limited 

leases to offset site assessment and 

technology testing expenses, we have 

changed relevant definitions and text in 

the final rule to allow limited amounts 

of electricity to be sold from such leases. 

Also, since we anticipate only small 

amounts of power (e.g., 5 MW) to be 

generated for a relatively short duration 

(less than 5 years), we do not propose 

to charge an operating fee for the sale of 

power from limited leases. We will 

charge only rentals for limited leases. 

In issuing limited leases authorizing 

use of the OCS for hydrokinetic activity, 

it will be necessary to coordinate early 

with the FERC licensing process. For 

example, if MMS entertains a proposal 

for a limited lease a determination from 

FERC will be necessary as to whether an 

exemption or license is required. 

Should FERC determine that a license or 

exemption would not be required for 

such a proposal, MMS would proceed 

with the limited lease issuance. 

However, if FERC determines that a 

license or exemption would be required, 

MMS would not proceed with limited 

lease issuance but would instead 

proceed with commercial lease 

issuance. 

As originally proposed, a limited 

lease will not convey any preferential 

rights to obtain a commercial lease to 

develop the leased area. Several 

comments on the proposed rule 

recommended that limited leases be set 

up to allow conversion to commercial 

leases or at least to give the lessee some 

sort of preference in subsequently 

pursuing a commercial lease for the 

same leasehold. Although we have not 

changed the text of the rule to provide 

an express commercial right preference, 

we believe that there will be ways to 

recognize the limited lessee in the 

commercial sale process under the final 

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rule. For example, at the time a limited 

lease is offered, whether competitively 

or noncompetitively, MMS will be able 

to indicate in the lease terms and 

conditions that acquiring a particular 

limited lease will give weight to the 

lessee in any subsequent conveyance of 

commercial rights. Such details will be 

established through the leasing process 

and published in the associated public 

notices. Also, the level of NEPA analysis 

for such leases will have to be 

commensurate with the type and scope 

of potential activities entailed with the 

lease rights conveyed. We believe that 

this approach for limited lessees will be 

best accommodated under a multiplefactor competitive process, which the 

rule has been revised to include as an 

available approach. 

The MMS believes that by offering the 

two types of lease, commercial and 

limited, the rule provides a developer 

the flexibility to pursue a lease that will 

be best suited for its needs. If a 

developer testing a technology for 

demonstration purposes is uncertain as 

to whether full-scale commercial 

activities will ultimately be conducted 

on the lease, including long-term sale of 

power to the grid to generate revenues, 

then a commercial lease can be obtained 

instead of a limited lease to assure full 

and unlimited operational rights to 

produce, sell, and deliver power. In the 

event that the demonstration facility is 

not technically feasible for commercial 

operations, the lessee is not obligated 

for the full term of the lease and may 

relinquish the lease pursuant to 

§ 285.435. 

We continue to believe that offshore 

renewable energy companies generally 

will prefer to acquire commercial leases 

rather than limited leases. However, we 

believe that providing for the issuance 

of limited leases will give all 

companies, including smaller entities, 

an opportunity to pursue renewable 

energy activities without the 

commitments and expenses entailed by 

a long-term commercial lease. Even if 

the rule provided for limited leases to be 

issued with a preference for subsequent 

commercial rights, competition for those 

competitive rights still will be required 

under subsection 8(p) of the OCS Lands 

Act, as amended, and NEPA compliance 

could require some analysis of a 

commercial development scenario. 

The most important factor for an 

applicant to consider in deciding 

whether to pursue a commercial lease or 

a limited lease is the assured right to 

full-scale commercial development of 

the leased site, and such right is 

included only in a commercial lease 

under the final rule. Thus, if a 

renewable energy project applicant is 

interested in demonstrating a particular 

renewable energy technology, but is 

unsure that it will ultimately lead to 

commercial production, we encourage 

that applicant to pursue a commercial 

lease because it reserves the full right to 

commercially develop the OCS site. 

Technology testing can be conducted 

during the site assessment term of a 

commercial lease. Pursuing a 

commercial lease will not obligate the 

lessee to remain on a lease for the full 

term of the lease. As provided in 

subpart D, if the lessee no longer 

intends to commercially develop the 

leasehold (e.g., results of testing prove 

unsatisfactory), a commercial lease may 

be relinquished by the lessee. 

Alternatively, if a company obtained 

a limited lease to initiate technology 

testing activities and subsequently 

determined that full-scale commercial 

development of the OCS area is 

possible, that company may receive 

some advantage in pursuing the right to 

develop that site commercially, for 

example as a consideration in a multifactor competitive process, but the 

issuance of a commercial lease would be 

subject to the statutory requirements 

concerning competition. Thus, the 

subsequent full commercial lease right 

is not assured to a holder of a limited 

lease. For these reasons, we anticipate 

that most project applicants will pursue 

commercial leases to ensure that all 

necessary rights for future development 

are reserved should initial testing 

activities show that a commercial 

project could be viable. 

The types of leases and the activities 

authorized are intended to provide for 

both long-term, large scale commercial 

production of renewable energy and for 

short-term, smaller scale activities in 

support of renewable energy 

production, such as site assessment and 

technology testing activities, including 

the limited sale of power generated. 

One commenter recommended 

providing for issuance of combined 

limited and commercial leases to 

facilitate necessary site assessment and 

authorize such activities in advance of 

the issuance of commercial rights. We 

believe such an approach is possible 

under the rule. It will require a 

developer to simultaneously request 

both a limited lease (e.g., for a 

meteorological tower) and a commercial 

lease. We anticipate that the limited 

lease could be processed and issued in 

a relatively short time (perhaps 6 

months), allowing construction and 

operation of the meteorological tower 

while the commercial lease is processed 

over a longer time (1–2 years). Some 

renewable energy interests, especially 

wind developers, view such a process as 

a more timely and efficient approach to 

leasing and development. We will work 

with project proponents and 

stakeholders to pursue this approach if 

requested, and we plan to describe it in 

detail in the guidance document we 

intend to issue after the rule is 

promulgated. 

Issuing Leases 

It is the goal of MMS to issue 

renewable energy leases through a 

simple and straightforward process and 

in a fair and equitable manner. The OCS 

Lands Act requires that leases, 

easements, and ROWs be issued 

competitively, unless after publication, 

MMS determines that there is no 

competitive interest. 

We anticipate that initial leasing of 

renewable energy sites on the OCS may 

be driven by unsolicited applications 

from project proponents, rather than by 

an MMS-initiated request for interest in 

an area. A formal Request for Interest 

will be part of the process for 

confirming that there is no competitive 

interest in the area identified in the 

unsolicited application. The process for 

the issuance of OCS renewable energy 

leases when no competitive interest 

exists is based on the requirements of 

the OCS Lands Act and is patterned 

after the existing MMS process for 

issuing noncompetitive negotiated 

agreements for the conveyance of OCS 

sand and gravel. 

Any leasing process for OCS 

renewable energy activity must comply 

with the applicable requirements of 

NEPA and other Federal laws. Table 1, 

which is presented in the discussion 

titled, OVERVEW OF THE PROJECT 

DEVELOPMENT PROCESS, under the 

Federal Compliance for the leasing 

process, describes the NEPA 

requirements for steps in the OCS 

renewable energy process, including the 

lease issuance step. 

The competitive sale process for 

renewable energy leases is similar to 

long-standing Federal and State 

processes for conveying mineral rights. 

It provides several opportunities for 

input from interested and affected 

parties—notably State and local 

governments and affected Indian 

tribes—to develop appropriate lease sale 

terms and conditions including 

mitigation measures. The process is 

outlined in the following sections. 

Call for Information and Nominations 

(Call) 

Once MMS decides to initiate a 

competitive leasing process, which will 

usually occur following a Request for 

Interest, the first step in the sale process 

will be to publish in the Federal 

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Register a Call for Information and 

Nominations (Call). Comments are due 

45 days after the Call. The Call informs 

the public of the area under 

consideration for leasing; it solicits 

comments from all interested parties on 

areas or subjects that should receive 

special attention and analysis; it invites 

potential bidders to indicate areas and 

levels of interest; and it invites public 

input regarding possible advantages and 

disadvantages of potential leasing and 

development to the region and the 

Nation. 

Along with the Call, MMS will 

announce how it plans to document 

compliance with the requirements of 

NEPA. We believe that at the outset of 

the OCS Alternative Energy Program, it 

is likely that an EIS will be required for 

a competitive lease sale. However, it is 

possible, especially as the program 

matures, that less-costly environmental 

documentation, an EA, may be 

appropriate. 

Area Identification 

After the comment period for the Call 

closes, MMS will use the information 

received to develop, evaluate, and 

recommend options for continued 

environmental analysis and for 

consideration of leasing. This process 

step is known as Area Identification, 

and it determines the geographical area 

of the proposed action to be analyzed in 

an ensuing environmental analysis 

document (e.g., EIS, EA), any 

alternatives to the proposed action, and 

mitigation measures and other issues to 

be analyzed and considered further. The 

MMS will strive to resolve as many 

issues as possible at this step to prevent 

unnecessary conflicts throughout the 

remainder of the process. Early 

resolutions of such issues serve to 

reduce the level of public controversy 

and help industry and the Federal 

Government (and ultimately the 

taxpayer) focus on promising acreage 

and avoid needless expense. 

In identifying the area to be studied 

in the environmental analysis, 

consideration is given to the level of 

industry interest; comments from State 

and local governments, Federal 

agencies, affected Indian tribes, 

environmental groups, and other 

interested parties; geologic and 

geophysical information; environmental 

conditions and effects of development; 

and other economic and social 

considerations. At this stage, the area 

considered for leasing will be more 

closely identified based on relevant 

considerations such as use conflicts. 

Public notice of the area identified 

usually will be provided with a press 

release and a fact sheet that includes a 

map of the proposed sale area. 

NEPA Documentation 

The MMS will prepare draft 

environmental documentation that 

includes, but is not limited to, a 

description of the lease sale proposal, 

including the renewable energy resource 

to be developed and a projection of the 

site assessment, construction, and 

generation activities that might occur; 

reasonable alternatives to the leasing 

proposal; a description of the existing 

environment; a detailed analysis of 

possible effects on the environment, 

including socioeconomic and 

cumulative effects; a description of the 

assumptions on which the analysis is 

based; potential mitigation measures; 

any unavoidable adverse environmental 

effects; the relationship between shortterm uses and long-term productivity; 

any irreversible or irretrievable 

commitment of resources; and the 

records of consultation and 

coordination with others in preparation 

of the document. This document may 

also describe the technology assumed or 

deemed necessary for site assessment 

and commercial development and 

operations in the proposed lease sale 

area. Pertinent published and 

unpublished investigations from 

academic and other institutions and 

organizations and from other Federal 

and State agencies are reviewed during 

the preparation of the NEPA document. 

When the draft is complete, it is made 

available for public review. In the case 

of a draft EIS, the document is filed with 

the EPA and a Notice of Availability is 

published in the Federal Register, 

providing for a 60-day public comment 

period. 

No sooner than 30 days after 

publication of a draft EIS, but within the 

60-day comment period, one or more 

public hearings will be held in the 

vicinity of the proposed lease area for 

the purpose of receiving comments on 

the draft EIS. The MMS will announce 

the time and location in the Federal 

Register at least 30 days before the 

public hearings. 

The comments and data received 

through the public hearings and the 

official review process are analyzed 

along with any newly acquired 

information and, when appropriate, are 

incorporated into the final EIS or EA. At 

this stage, new stipulations or other 

measures to protect sensitive areas, or 

biological or other types of resources, 

may be included after comments from 

affected States and affected Indian tribes 

are reviewed. In some cases, new 

deferral options are developed and 

incorporated into the final EIS. Under 

typical circumstances, 3 to 5 months 

after the public hearing, a final EIS is 

filed with EPA and a Notice of 

Availability is published in the Federal 

Register. 

Coastal Zone Management Consistency 

Determination 

Concurrent with the preparation of 

the final EIS or other NEPA 

documentation, a CZMA consistency 

review and subsequent Consistency 

Determination (CD) is completed by 

MMS relative to each affected State’s 

federally approved coastal zone 

management plan. Each CD includes a 

review of each State plan, analyzes the 

potential impacts of the proposed lease 

sale in relation to program 

requirements, and makes an assessment 

of consistency with the enforceable 

policies of each State’s plan. 

Proposed Sale Notice 

The Proposed Sale Notice is the 

public announcement of the terms and 

conditions of a proposed competitive 

lease sale, including the proposed 

provisions of the lease(s) to be issued. 

Generally, the Proposed Sale Notice will 

be issued after (1) completion of the 

final NEPA documentation; (2) 

preparation of the CD; and, (3) 

preparation of various in-house analyses 

of proposed lease sale economic terms 

and conditions. Information from these 

completed documents and analyses is 

consolidated in an executive decision 

memorandum that summarizes all 

proposed lease sale issues that may 

relate to State, local government, and/or 

affected Indian tribe comments and 

recommendations; environmental 

concerns; coastal zone consistency 

conflicts; economic benefits and costs; 

operational or legal constraints; 

multiple-use conflicts; or any other 

subject of concern. This memorandum 

also evaluates any prelease mitigation 

measures that are available or 

appropriate to resolve conflicts, issues, 

and concerns. On the basis of this 

memorandum and all supporting 

materials, decisions are made on the 

proposed terms and conditions of the 

sale. An attempt is made to balance the 

various economic, social, and 

environmental factors including those 

raised by the affected States, local 

governments, and affected Indian tribes, 

as well as other Federal agencies and 

the general public. A Notice of 

Availability of the Proposed Sale Notice 

is published in the Federal Register 

approximately 4 to 6 months prior to the 

proposed sale date. The Notice of 

Availability informs the public where 

copies of the actual Proposed Sale 

Notice may be obtained. 

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The proposed notice also assists in 

consultation with affected States, 

localities, and Indian tribes. Officials 

will be sent copies of the Proposed Sale 

Notice along with a letter explaining the 

rationale for the decisions made in 

determining the conditions of the 

proposed sale. The officials will have 60 

days to submit comments on the 

proposed competitive lease sale. These 

comments will provide a framework for 

the discussion and resolution of 

concerns that the affected States, 

localities, or Indian tribes may have on 

a particular sale. 

Final Sale Notice 

After the end of the period for 

comments on the Proposed Sale Notice, 

a final decision memorandum will be 

prepared for the Director. If the Director 

decides to proceed with the lease sale 

after consideration of the comments and 

any other new pertinent information, 

MMS would issue a Final Sale Notice. 

The Final Sale Notice would include the 

date, time, and place of the sale; blocks 

available for lease; stipulations and 

other mitigating measures; bidding 

systems and lease terms; and other 

pertinent information. The Final Sale 

Notice is published in the Federal 

Register at least 30 days before the sale 

date. 

Bid Evaluation 

After the Final Sale Notice is 

published in the Federal Register, bids 

submitted by qualified bidders are 

received by MMS. The bids, including 

bid deposit if applicable, are checked 

for technical and legal adequacy as well 

as financial capability. They are also 

immediately evaluated to determine if 

the bidder has complied with all 

applicable regulations. The MMS 

reserves the right to reject any or all bids 

and the right to withdraw an offer to 

lease an area from the sale. 

Issuance of a Lease 

When a high bid is deemed acceptable 

by MMS, the submitter is immediately 

notified of the decision and is provided 

a set of official lease forms for 

execution. The successful bidder must 

pay within 10 days the remaining 80 

percent of the bonus bid and file the 

required financial assurance. Upon 

receipt of the required payments and 

properly executed lease forms, a lease is 

issued to the successful bidder. Leases 

usually are effective the first day of the 

month following the date they are 

signed by an MMS official. Within 45 

days after you receive the lease copies, 

you must pay the first 6 months rent. 

Under the lease, the Federal 

Government conveys certain exclusive 

rights to the lessee and reserves other 

rights to the Government. The lease 

further spells out requirements for 

surety bonds, operating fee payments, 

rent payments, and assignment or other 

transfers. 

Following the competitive process 

outlined previously, a lease sale for 

renewable energy activities may be held 

for one type of activity (e.g., wind) or for 

various activities (e.g., wind, wave, 

ocean current, etc.). We will determine 

the scope of competing renewable 

energy activities based on responses to 

initial public notices (Request for 

Information, Call for Information and 

Nominations, or other Federal notices) 

issued during the leasing process, and 

we will clearly state that scope (e.g., 

wind, wave, ocean current, etc.) early in 

that process and the subsequent 

Proposed and Final Sale Notices. If we 

decide to limit competition to one type 

of activity (e.g., ocean current), we will 

not consider bids for any other type of 

activity, and the lease will be limited to 

that activity. If we decide to open 

competition to more than one type of 

activity (e.g., wind, wave, ocean current, 

etc.), we will consider all bids for one 

or more of those activities, and the lease 

may authorize one or more of those 

activities. 

Noncompetitive Lease Process 

The MMS will first determine 

competitive interest in processing an 

unsolicited request in order to decide 

whether to proceed with leasing under 

a competitive or noncompetitive 

process. If we find that there is 

competitive interest in the lease area, 

we will proceed with a competitive 

lease process. If we determine that there 

is no competitive interest, then we will 

issue a notice of such determination. 

This section also states that if MMS 

processes a proposed lease area on a 

competitive basis, no unsolicited 

requests for leasing in that area will be 

considered for as long as that process is 

pending. Thus, once an area is subject 

to a lease sale process, the only way to 

pursue a lease within that area is 

through that competitive process until 

that process concludes. After the 

process concludes, and if acreage within 

the area that had been considered for 

lease remains unleased, unsolicited 

requests will again be considered for 

that acreage. 

If we determine that there is a 

competitive interest, we will proceed 

with a competitive process and will 

apply your acquisition fee to any bid 

you submit. If you choose not to bid, we 

will not refund your acquisition fee. We 

believe retention of your fee in this case 

is appropriate in order to discourage all 

but serious requests and because of the 

costs associated with processing your 

original request. If you submit a 

qualified bid that does not win, we will 

refund your deposit, including the 

amount of the acquisition fee. 

Paragraph (d) describes how MMS 

will proceed if it determines there is no 

competitive interest. Within 60 days 

after we issue a finding that there is no 

competitive interest, the prospective 

lessee must submit either a SAP for a 

commercial lease or a GAP for a limited 

lease. We will review the plan and 

conduct NEPA and other required 

analyses before simultaneously issuing 

the lease or grant and approving the 

SAP or the GAP. 

Lease Terms 

Provisions relating to the duration of 

leases are set forth in several sections of 

this subpart B as well as in subpart D. 

Sections 285.235 and 285.236 set finite 

terms for both commercial and limited 

leases while providing for automatic 

extensions only if necessary for MMS 

review and approval of necessary plans. 

The term depends on the type of lease 

(commercial or limited) and the award 

process. For example, a competitive 

commercial lease would have 3 terms: A 

6-month preliminary term, a 5-year site 

assessment term, and a 25-year 

operations term. Sections 285.415 

through 285.421 discuss suspensions 

that extend the term of a lease, and 

§§ 285.425 through 285.429 address 

lease renewal. 

Section-by-Section Discussion for 

Subpart B 

General Lease Information 

What rights are granted with a lease 

issued under this part? (§ 285.200) 

We may issue OCS leases for any 

renewable energy source. Paragraph (a) 

of this section identifies the types of 

renewable energy leases that we will 

make available and describes the rights 

that come with a lease issued under 

these regulations. In general, a lease 

issued under this part conveys the right 

to install and operate facilities on a 

designated portion of the OCS for the 

purpose of conducting commercial 

(production) activities or limited 

(noncommercial) activities supporting 

the production of energy from 

renewable energy sources. All rights are 

subject to compliance with 

requirements to secure approvals of, and 

then comply with, applicable plans (i.e., 

SAP, COP, and GAP) that are set forth 

in subpart F. 

Paragraph (a) clarifies that an MMS 

lessee cannot construct or operate a 

hydrokinetic project without a FERCmstockstill on PROD1PC66 with RULES2

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approved license or exemption. This 

revision was made to conform with 

provisions in the April 2009 MOU 

signed by the Department of the Interior 

and FERC. Under that MOU, 

construction and operations of 

hydrokinetic projects on the OCS cannot 

commence without a license or 

exemption from FERC, except in 

circumstances where FERC has notified 

MMS that a license or exemption is not 

required. OCS wind energy projects are 

not required to obtain a FERC license. 

Under paragraph (b) of this section, 

leases generally include the right to one 

or more project easements without 

further competition for the purpose of 

installing lines through the OCS (i.e., 

extending to the State/Federal 

boundary) for gathering, transmission, 

and distribution of electricity; as well as 

pipelines for transporting other energy 

products (i.e., hydrogen); and 

appurtenances on the OCS as necessary 

to conduct operations. These may 

include the OCS segment of cables, 

pipelines, and other structures 

necessary to transmit electricity or 

transport other energy products 

produced from the OCS to shore. The 

lessee will apply to MMS for the project 

easement as part of the COP or GAP. 

When we approve the proposed plan 

and project easement, an addendum 

covering the project easement will be 

incorporated in the lease. Additional 

project easements and revisions may be 

authorized through the plan revision 

process. One commenter recommended 

that easements be identified earlier in 

the process (i.e., in the lease or in the 

SAP). We believe such an approach 

would be premature at this stage in the 

process and impractical, but we will 

work with applicants and stakeholders 

as we implement the rule. Also, project 

easements that run through other leases 

or grants may be accommodated under 

the rule, and such situations will be 

addressed in the implementation 

guidance we intend to issue after the 

rule is approved. 

Ancillary activities that are not 

associated with an OCS renewable 

energy lease (e.g., a transmission line or 

support structure located in Federal 

waters to support a project in State 

waters or a commonly shared line 

supporting multiple leases) will be 

permitted and managed as a separate 

ROW grant or RUE grant under subpart 

C. 

Paragraph (c) of this section provides 

for phased lease development. The 

commercial lease framework will 

accommodate multi-phase project 

development as is commonly used for 

onshore utility-scale wind projects (see 

§§ 285.200(c) and 285.629). The lease 

applicant must inform us of its intent to 

develop a project in multiple phases 

and would need to lease from the outset 

all of the acreage necessary for the 

planned full build-out. If the applicant 

for a commercial lease phases in 

operations, the applicant must pay rent 

on the portion of the lease that is not 

generating electricity and operating fees 

on the portion of the lease that is 

generating electricity. We may waive the 

rent for the acreage on which activities 

are deferred, as provided by subpart E, 

on a case-by-case basis for any lease 

issued under this part. As additional 

acreage is developed, operating fees 

would be charged in place of rentals, as 

appropriate. If the lessee decides not to 

develop the additional acreage, it may 

relinquish that acreage, or MMS may 

contract the lease, as provided in 

§§ 285.435 and 285.436. Multi-phased 

project development will have to 

comply with NEPA, CZMA, and other 

applicable laws. 

We did not make any changes to this 

section. 

How will MMS issue leases? (§ 285.201) 

As required by subsection 8(p) of the 

OCS Lands Act, MMS must issue leases, 

easements, or ROWs for OCS renewable 

energy activities on a competitive basis 

unless we determine after public notice 

that there is no competitive interest. If 

we determine that there is competitive 

interest, we will conduct a fair and open 

competition process. When we receive 

an unsolicited request for a lease, we 

will make a determination if a 

competitive interest exists by first 

issuing a public notice of the proposed 

lease. In the public notice, we may offer 

additional areas for leasing. After 

considering the comments received on 

the notice, as required by the OCS 

Lands Act, section 8(p), we will issue a 

determination that there is, or is not, 

competitive interest in the proposed 

lease. If two or more project proponents 

express interest in leasing the same area 

of the OCS (overlapping partially or 

completely), we will conclude that 

competitive interest exists and conduct 

a competitive lease sale. 

We are aware that instances of 

partially overlapping interests may 

occur and requested comments on this 

issue. For example, if proposed Project 

A entails 10,000 acres for generation of 

500 MW and Project B entails 2,000 

acres for 100 MW, and there is an 

overlap of 1,000 acres, we will have to 

determine whether there is competitive 

interest in all or part of the acreage 

requested. The following six alternative 

approaches for addressing such a 

situation were offered for comment with 

the proposed rule. 

(1) Offer both the Project A and 

Project B areas and award a lease for one 

or the other to the high bidder. If a cash 

bonus is a bid variable, it could be based 

on either the total or the amount per 

acre, and if an operating fee is a bid 

variable, it could be based on the total 

or the amount per MW of proposed 

capacity. 

(2) Offer and award a lease through 

competition for only the overlapping 

1,000-acre area and then follow with a 

noncompetitive lease issuance for the 

remaining 9,000 acres under Project A 

and 1,000 acres under Project B. 

(3) Offer to lease individual tracts 

covering the area of interest, designated 

as legal subdivisions of a standard OCS 

lease block of 9 square miles. Bidders 

that value specific tracts most highly 

could win leases through a 

simultaneous tract offering, and 

subsequently propose operations on 

multiple 1⁄16 legal subdivisions (a 1⁄41⁄4

of a lease block) to obtain possible 

synergies. 

(4) Offer the combined Project A and 

B areas as one lease and award the lease 

to the high bidder (the winning lessee 

could then relinquish excess acreage). 

(5) Offer standard block sizes or legal 

subdivisions of those block sizes and 

allow bidders to ‘‘package’’ those blocks 

in a bidding unit (package bidding). 

Identify the various features of the 

auction, e.g., bidder eligibility to 

compete and to remain active in various 

rounds, information to be released 

between rounds, rules for ending the 

auction, method for choosing the 

provisional high bidders, restrictions on 

bidding in subsequent rounds, etc. 

(6) Rely on coordination and 

consultation efforts with State and local 

governments to identify one preferable 

project area to be offered and awarded 

to the high bidder. 

The consensus of the comments we 

received is that all of these approaches 

are reasonable. Some commenters 

recommended an additional approach 

that would give the competing project 

proponents the opportunity to adjust 

their areas of interest to eliminate 

overlapping proposed lease areas. We 

have not adopted this recommendation 

due to potential adverse effects on 

competition. 

We also are aware that there will be 

other instances in which multiple 

projects could be proposed in the same 

general area with no actual geographic 

overlap, but the number of lease tracts 

may need to be limited based on 

regional or local needs and concerns. 

For example, a State or locality may 

identify a need for a certain amount of 

renewable energy generation from an 

OCS source. If the number of 

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prospective leases proposed for an area 

greatly exceeded the projected demand, 

we may limit the number of tracts that 

could be offered. Such a case could be 

addressed by proceeding with an 

intertract competition in which multiple 

tracts could be offered for lease in the 

auction formats described in the 

section-by-section summary (see 

§§ 285.220 through 285.223), but the 

number of tracts to be awarded would 

be limited. Although it would be our 

preference to use consultation—notably 

with the affected States and local 

communities, as well as the 

applicants—to identify the appropriate 

tract or set of tracts to be offered for sale, 

we have decided to preserve the option 

for conducting intertract competitive 

auctions. Such an approach is 

authorized under the rule, so we have 

not changed the regulatory text. 

Generally, we believe that priority 

should be given to leasing tracts for 

commercial operations. We may 

consider only issuing limited leases in 

areas in which there is no interest in 

commercial leasing. 

Once we make the determination 

about competitive interest, we will 

proceed with issuing leases under the 

appropriate process described in this 

subpart. The competitive process is set 

forth in §§ 285.210 through 285.225, and 

the process for issuing leases when no 

competition exists is set forth in 

§§ 285.230 and 285.231. The MMS will 

prepare an OCS renewable energy lease 

form and provide or reference such a 

lease form in a public notice. The 

approved lease form (or forms) for OCS 

renewable energy will be developed 

separately from the rulemaking and in 

consultation with interested and 

affected parties. This approach is 

designed to give us the flexibility to 

accommodate all possible renewable 

energy activities and adapt forms as 

necessary. 

What types of leases will MMS issue? 

(§ 285.202) 

This section states that MMS may 

issue leases for one or more types of 

activity relating to assessment and 

production of renewable energy and 

may issue commercial or limited leases 

as discussed previously in the overview 

of this subpart. A single-purpose lease 

will authorize one type of activity (e.g., 

wind power generation), whereas a 

multi-purpose lease will authorize 

multiple types of activity (e.g., both 

wind and wave power generation). A 

lease issued for one type of renewable 

energy activity will not necessarily 

preclude subsequent leases for other 

types of activities in that same area. For 

example, we may conduct a lease sale 

for a wind energy project and then 

conduct a lease sale for a wave energy 

project in that same area. While the 

initial lessee in such a case would be 

restricted to a wind energy project 

development, we may authorize 

additional types of OCS renewable 

energy activities in the same OCS area 

to the extent that such activities are 

compatible and do not unreasonably 

impede the ability of the existing wind 

energy project to conduct operations. 

Unless the original lease authorizes 

more than one type of renewable energy 

activity, expanding the authorized 

activities to include other kinds of 

renewable energy would require the 

issuance of a new lease or leases. We 

will not issue access rights for oil, gas, 

or any other minerals under this part. 

We did not make any changes to this 

section. 

With whom will MMS consult before 

issuance of a lease? (§ 285.203) 

As directed by subsections 8(p)(4) and 

(7) of the OCS Lands Act or by other 

relevant Federal statutory requirements 

(e.g., ESA and Magnuson-Stevens 

Fishery Conservation and Management 

Act (MSA)), MMS will coordinate and 

consult with relevant Federal agencies 

(including the Department of Defense 

and those agencies involved in planning 

activities that are undertaken to avoid 

conflicts among users and maximize the 

economic and ecological benefits of the 

OCS, including multifaceted spatial 

planning efforts), the Governor of any 

State, the executive of any local 

government that may be affected by a 

renewable energy lease, and affected 

Indian tribes. As provided in 

§ 285.102(e), we may invite any 

Governor of an affected State or 

government executive of an affected 

local government to participate in a 

joint task force or other joint planning 

or coordination agreement if we are 

considering offering or issuing leases (or 

grants). Participation in a task force 

would give the parties opportunities to 

contribute to the planning process and 

access to nonproprietary information. 

This section has been revised to include 

affected Indian tribes. In response to 

comments, we have also revised this 

section to differentiate between general 

consultation and coordination under 

this rule and the consultations with 

Federal agencies that are mandated by 

other laws (e.g., ESA). 

We urge project proponents that plan 

to pursue renewable energy activities on 

the OCS to conduct preliminary 

outreach early in the process by 

contacting interested and affected 

parties about their proposals. We 

believe that it is particularly important 

for project proponents that plan to 

produce and deliver electricity to 

existing onshore distribution systems to 

consult with involved States and 

localities to establish power generation 

needs and to become aware of pertinent 

regulatory requirements before pursuing 

OCS commercial development and 

production rights. Early communication 

between project proponents and the 

States and localities that would be most 

affected by any project development and 

that would regulate associated onshore 

facilities, may ensure that the project 

will be compatible with and support 

any renewable portfolio standards, 

policies on the location of transmission 

and other support facilities, and any 

other relevant factors. 

What areas are available for leasing 

consideration? (§ 285.204) 

We intend to consider offering for 

lease any area of the OCS that is 

appropriately platted, except areas 

prohibited from leasing. Subsection 

8(p)(10) of the OCS Lands Act prohibits 

renewable energy leasing in any area of 

the OCS within the exterior boundaries 

of any unit of the National Park System, 

National Wildlife Refuge System, 

National Marine Sanctuary System, or 

any National Monument. In 

administering this program, the 

Secretary will take into account other 

uses and may decide not to offer 

portions of the OCS for leasing under 

this part or may restrict operations. 

The areas we actually make available 

for renewable energy leasing are likely 

to be determined through a process that 

assesses different types of renewable 

energy resources and potential 

environmental impacts and other 

relevant information on a national, 

regional, or more area-specific basis. 

The assessment process will include 

coordination and consultation with 

Federal, State, and local governments; 

affected Indian tribes; and other 

interested and affected parties and may 

entail the establishment of task forces as 

discussed previously. The MMS will 

consider input from the task forces—as 

well as other national, regional, local, 

and tribal planning and coordination 

mechanisms—in determining 

appropriate siting of renewable energy 

projects and leasing priorities. Based on 

such assessments, we have the 

discretion when making the 

determination whether to offer areas for 

leasing. We intend to use our existing 

system of OCS regions, planning areas, 

official protraction diagrams, and lease 

blocks to designate, delineate, and 

describe areas of the OCS under the 

OCS Alternative Energy Program. 

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We did not make any changes to this 

section. 

How will leases be mapped? (§ 285.205) 

This section states that MMS will 

prepare and use necessary leasing maps 

and official protraction diagrams as it 

does for mineral leasing on the OCS 

(e.g., 30 CFR part 256.8) 

We did not make any changes to this 

section. 

What is the lease size? (§ 285.206) 

We will determine the size for each 

lease on a case-by-case basis to ensure 

that it is an appropriate size to 

accommodate the anticipated activities. 

The lease size will accommodate buffers 

or setbacks as necessary. The process for 

the issuance of all leases will provide 

public notice of the lease size. We plan 

to delineate leases by using mapped 

OCS blocks, portions of such blocks, or 

aggregations of such blocks. For 

example, a limited lease supporting a 

small data gathering or technology 

testing facility might require only a 

small part of a 3-mile by 3-mile OCS 

block. In such a case, the lessee could 

acquire (or retain after originally 

acquiring a larger area) an aliquot part 

as small as a quarter-quarter (i.e., 1⁄16) of 

a block. On the other hand, it is likely 

that a typical commercial-scale 

renewable energy project would result 

in the issuance of one lease 

encompassing several contiguous OCS 

blocks. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.207 through 

285.209) 

Sections 285.207 through 285.209 are 

reserved. 

Competitive Lease Process 

How does MMS initiate the competitive 

leasing process? (§ 285.210) 

This section establishes a process for 

us to solicit proposals to develop the 

renewable energy potential on the OCS. 

We may use a general Request for 

Interest to gauge interest in renewable 

energy leasing anywhere on the OCS or 

a specific Request for Interest to assess 

interest in specific areas after receiving 

an unsolicited leasing proposal. Any 

Request for Interest will be published in 

the Federal Register. 

Depending on the level and extent of 

interest and review of comments, we 

may formulate a nationwide or regional 

program schedule of lease sales, or we 

may initiate individual competitive 

lease sales on a case-by-case basis 

without an overarching program 

schedule. Once a determination is made 

to offer an area(s) for leasing, we would 

initiate a renewable energy lease sale 

process. 

We did not make any changes to this 

section. 

What is the process for competitive 

issuance of leases? (§ 285.211) 

This section lays out the discrete 

steps we propose to follow in preparing 

for and holding a lease auction and 

issuing leases. These steps include a 

Call for Information and Nominations 

(Call), an Area Identification, a 

Proposed Sale Notice, and a Final Sale 

Notice as explained in the description of 

the competitive leasing process 

presented previously. 

We received several comments 

recommending that we provide for 

accepting the results of competitive 

processes conducted by States and 

utilities to select developers of offshore 

wind generation projects. Notably, 

during the time that MMS has been 

promulgating this rule, the States of 

Delaware, New Jersey, and Rhode Island 

have conducted competitive processes 

and have selected companies to develop 

wind resources on the OCS. We believe 

that the pre-existing State processes are 

relevant to the competitive processes 

that MMS is required to conduct 

following approval of this rule. We 

intend to do so by using a competitive 

process that considers, among other 

things, whether a prospective lessee has 

a power purchase agreement or is the 

certified winner of a competitive 

process conducted by an adjacent State. 

We also may consider a similar 

approach to recognize the winners of 

competitions held by States in the 

future. There is additional discussion of 

this issue in our explanation of 

multiple-factor bidding provided in the 

next section. 

In response to a comment pointing 

out a typographical omission from the 

proposed rule, we have revised 

§ 285.211(b)(2) to say, ‘‘* * * human, 

marine, and coastal environments 

* * *’’ 

We have also added time periods for 

the steps in the competitive lease 

issuance process, and we have cited 

affected Indian tribes in paragraph (b). 

What is the process MMS will follow if 

there is reason to believe that 

competitors have withdrawn before the 

Final Sale Notice is issued? (§ 285.212) 

This is a new section MMS added in 

response to comments that we clarify 

what will happen in the competitive 

sale process if competitors withdraw. If, 

before the Final Sale Notice is issued, 

MMS has reason to believe that 

competitors have withdrawn and 

competition no longer exists, we may 

decide to end the competitive process. 

We will issue a public notice of Request 

for Interest and consider comments 

received to confirm that there is no 

competitive interest. If, after we have 

issued the public notice, we determine 

that there is no competitive interest in 

the lease area, and one party wishes to 

acquire a lease, we will discontinue the 

competitive process and will proceed 

with the noncompetitive process set 

forth in §§ 285.231(d) through (i), and 

the acquisition fee as specified in 

§ 285.502(a) must be submitted with the 

SAP or GAP. However, if MMS 

determines that competitive interest in 

the lease area continues to exist, we will 

continue with the competitive process 

set forth in §§ 285.210 through 285.225. 

What must I submit in response to a 

Request for Interest or a Call for 

Information and Nominations? 

(§ 285.213) 

This section describes the type of 

information we seek from potential 

lessees in response to a Request for 

Interest or a Call. We may issue a broad 

request for interest to be used as a basis 

for developing a national or regional 

schedule of renewable energy lease 

sales, or we may issue a tract-specific 

request to be used to determine 

competitive interest in a particular area 

that has been proposed for leasing. We 

will issue a Call as the first step in a 

competitive lease sale process to elicit 

information from all interested and 

affected parties concerning proposed 

leasing activities and the existing 

conditions that may affect or be affected 

by those activities. In all cases— 

responding to a general or specific 

Request for Interest or a Call—we will 

require prospective lessees to submit the 

same types of information. That 

information will include: The area of 

interest for a possible lease; a general 

description of objectives and the 

facilities needed to achieve those 

objectives; a general schedule of 

proposed activities, including those 

leading to commercial production or 

other approved operations; available 

and pertinent data and information 

concerning renewable energy resources 

and environmental conditions in the 

area of interest, including energy and 

resource data and information used to 

evaluate the area of interest; devices and 

infrastructure involved; anticipated 

power production and likely 

purchasers; a statement that the 

proposed activity conforms with State 

and local energy planning requirements, 

initiatives or guidance, as appropriate; 

documentation showing that the 

applicant is qualified to hold a lease; 

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and any other information specifically 

requested in the Federal Register notice. 

We believe that this information is 

necessary for MMS in developing 

leasing schedules, determining 

competitive interest for unsolicited 

proposals, and proceeding with 

renewable energy lease sales. We also 

believe that such information should be 

readily available from prospective 

lessees and that this requirement poses 

no undue burden. In cases where a 

prospective lessee has already 

submitted the required information, we 

will not require it to be submitted 

subsequently. For example, if a project 

proponent responds to a broad or 

specific Request for Interest for an area 

that MMS subsequently decides to offer 

in a lease sale, that project proponent 

will not have to resubmit information in 

response to the Call for that sale. Only 

those that have not previously 

expressed interest and submitted 

information will be expected to provide 

the required information in response to 

the Call. 

In addition to the items listed, we 

believe that information relating to 

potential power markets that could be 

served, and proposed conventional and 

renewable energy projects that are 

located onshore and offshore and could 

serve those markets, is important. Also, 

environmental, technical, and economic 

information on similar projects 

elsewhere in the world that may be 

relevant to your proposed area(s) may be 

necessary for our deliberations. 

Some comments indicated that this 

section meant that MMS may require a 

response to a Request for Information or 

a Call. Clearly, MMS cannot mandate 

such responses, but we can specify the 

information we need from those who 

opt to respond and participate in the 

leasing process. We believe the 

respondents should recognize that it is 

also in their best interest to submit 

complete and accurate information 

about their leasing intentions to enable 

proper consideration by MMS. 

We have made two changes to this 

section. We added to § 285.213(d) a 

statement that we will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure 

under exemption 4 of the FOIA. Also, 

we deleted § 285.213(e) and renumbered 

subsequent sections because we can 

expect affected State(s), rather than the 

prospective lessee, to submit 

information communicating the State 

perspective on proposed projects and 

associated leasing. 

What will MMS do with information 

from the Requests for Information or 

Calls for Information and Nominations? 

(§ 285.214) 

This section states that we will use 

the information we receive to identify 

lease areas, develop options for 

conducting environmental analysis and 

adopting lease provisions, and prepare 

documentation to satisfy relevant 

Federal requirements, such as NEPA, 

CZMA, ESA, and MSA. 

For purposes of Federal consistency, 

we will treat renewable energy 

competitive lease sales as Federal 

agency activities and follow the 

requirements of subsection 307(c)(1) of 

the CZMA. That means we must 

determine if the effects to any land or 

water use or natural resource of a State’s 

coastal zone from the competitive lease 

offering are reasonably foreseeable and 

comply with the appropriate Federal 

consistency regulations in 15 CFR part 

930, subpart C. 

We did not make any changes to this 

section. 

What areas will MMS offer in a lease 

sale? (§ 285.215) 

Under this section, the areas we will 

offer for lease will be those identified 

pursuant to § 285.211(b). However, the 

offered area could be subsequently 

reduced through the lease sale process. 

This section also states that no further 

nominations for a lease sale will be 

accepted after the Call for Information 

and Nominations closes. Comments on 

this provision asked for clarification 

that such areas will be available for 

nomination in subsequent nomination 

and leasing processes. We believe that, 

as written, this section should be 

understood to mean that nominations 

are required to be submitted during the 

comment period following a Call for a 

particular lease sale process. After that 

particular lease sale process concludes, 

parties may submit unsolicited 

nominations for areas that were within 

the scope of that sale, and MMS will 

give them full consideration under the 

processes outlined. 

We did not make any changes to this 

section. 

What information will MMS publish in 

the Proposed Sale Notice and Final Sale 

Notice? (§ 285.216) 

We will publish Proposed Sale 

Notices and Final Sale Notices in the 

Federal Register for each lease sale. 

Proposed Sale Notices and Final Sale 

Notices will provide information 

pertaining to: 

• The area offered for leasing; 

• Proposed and final lease terms and 

conditions including lease size, lease 

term, payment and financial assurance 

requirements, performance 

requirements, and site-specific lease 

stipulations; 

• Auction details including bidding 

procedures and systems, the bid 

variable and minimum bid, the bid 

deposit, the place and time for filing 

bids, and the place, date, and hour for 

opening bids; 

• The official MMS lease form to be 

used or a reference to that form; 

• Bid evaluation criteria we will use 

and how the criteria will be used in 

decision-making for awarding a lease; 

• Award procedures including how 

and when we will award leases and how 

we will handle rejected bids or 

applications; 

• Procedures for appealing the lease 

issuance decision; and 

• Execution of the lease. 

The Proposed Sale Notice will invite 

comments from all interested and 

affected parties. We expect that the use 

of such a notice in the process of 

offering leases for development of OCS 

renewable energy sources will provide a 

valuable opportunity for us to consult 

on the selection of appropriate 

competitive leasing procedures and the 

formulation of the details of the leases 

to be issued. After considering 

comments on the Proposed Sale Notice, 

we will revise and publish a Final Sale 

Notice. The final steps in the leasing 

process will be conducting the auction 

and awarding the leases. 

We received comments 

recommending that we should delete 

the regulatory reference to minimum 

bids and provide additional guidance as 

to the bid evaluation criteria MMS 

might announce and apply. We have 

decided to retain the regulatory 

reference. The MMS will set a minimum 

bid to inform auction participants of the 

smallest bid amount that could be 

accepted in a sealed bid auction or to set 

the level for opening bids in an 

ascending bid auction. Potential lessees 

should find this information helpful 

when making financial preparations 

prior to participating in an auction. 

Further, minimum bids can serve as a 

deterrent to speculative bidding from 

companies who either are less 

financially sound than is desirable, do 

not plan to undertake investments in an 

expeditious manner, or whose main goal 

is to make a profit by re-selling the 

property rights. We will address bid 

evaluation procedures generally in 

implementation guidance that we 

intend to issue after the rule is 

approved, and we will publish the 

details of bid evaluation criteria in the 

sale notices. 

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We did not make any changes to this 

section. 

Reserved Sections (§§ 285.217 Through 

285.219) 

Sections 285.217 through 285.219 are 

reserved. 

Competitive Lease Award Process 

What auction format may MMS use in 

a lease sale? (§ 285.220) 

This section, as well as the following 

two sections, describes the auction 

formats and bidding systems that will be 

available to MMS for awarding 

renewable energy leases on a 

competitive basis. In the proposed rule, 

we set forth three auction formats: 

Sealed bidding, ascending bidding, and 

two-stage bidding. In response to 

comments, we have added a fourth 

auction format that considers multiple 

factors relating to proposed OCS 

renewable energy projects. This 

additional format is described in detail 

in the next section. The concept of 

package bidding, introduced in 

§ 285.220 and applicable to all the 

auction formats described in this 

section, is also detailed in this section. 

The sealed bidding format is 

mandated for oil and gas lease sales by 

subsection 8(a) of the OCS Lands Act. In 

contrast, no particular auction format is 

required for renewable energy lease 

sales conducted under subsection 8(p) 

of the OCS Lands Act. 

For each auction, we will establish a 

sale area or sale areas based on 

information received in response to 

Request for Interest and Call notices, 

and establish a bid variable, a minimum 

acceptable bid, and the criteria for bid 

acceptance. We will include specific 

details of the selected auction format in 

notices published in the Federal 

Register including the Proposed Sale 

Notice and the Final Sale Notice. The 

sale notices will include details on the 

bidding process, such as the auction 

format, bidder eligibility, bidder 

deposits, bid variable, minimum bid 

amounts, bid increments, criteria for 

ending or continuing the auction, 

method for determining the provisional 

winning bidder(s), and bid adequacy 

considerations. A general description of 

the four auction formats from which we 

propose to choose follows. 

Sealed Bidding will consist of a single 

round of bidding and provide for each 

lease sale participant to submit a single 

bid by post or email, after which we will 

publicly announce the high bidder. We 

will specify in the Call either a cash 

bonus or an operating fee rate for the bid 

variable. This auction format is 

administratively compatible with the 

application of a ranking and filtering 

procedure to identify the set of highest 

bids per tract before MMS decides 

which of those tracts to lease. This 

ranking of high bids can serve as a bid 

adequacy mechanism for determining 

which high bids to accept. It also has 

the advantage of creating competition 

for lease rights across tracts when 

competition for individual leases is 

absent. This procedure is known as 

‘‘intertract competition.’’ 

Ascending Bidding involves multiple 

rounds of bidding and provides for 

participants to submit increasing 

sequential bids over a specific time 

period. Again, we will specify either a 

cash bonus or an operating fee rate for 

the bid variable. Bids may be submitted 

orally or electronically (e.g., internet). If 

bidding activity continues until the 

deadline, the time period for bidding 

may be extended if warranted by 

additional bidding activity. 

Two-stage Bidding combines the 

previous two formats, sealed and 

ascending bidding. Generally, we will 

require interested bidders to offer a 

minimum cash bonus to join the 

auction. In the most likely process 

formulation, participants are expected 

to submit ascending bids (e.g., operating 

fee rate, cash bonus, etc.) in the first 

stage until all but two bidders drop out 

or more than one bidder offers to pay 

the maximum bid amount specified by 

MMS. The auction will then move to the 

second stage, where the remaining 

participants typically will offer a sealed 

bid on a bid variable not employed in 

stage one. However, we reserve the 

option to conduct the two-stage auction 

using sealed or ascending bidding in 

either or both stages, and to select the 

bid variables in each stage. 

Multiple-factor Auction may be 

employed to rank proposals, resulting in 

a lease award to the bidder making what 

MMS perceives is the best offer. Single 

or multiple financial bid variables may 

be considered (e.g., rental rate, operating 

fee, variable cash bonus, or 

combination). Nonmonetary variables 

may also be considered including 

technical merit, timeliness, financing 

and economics, the environment, public 

benefits, consistency with State and 

local needs and requirements, or other 

factors. 

Subject to the bid adequacy 

requirements referenced in § 285.222, 

typically the qualified bidder offering 

the highest cash bonus or the highest fee 

rate, depending on which deciding bid 

variable is used, will win the lease. 

When there are multiple leases, 

intertract competition could be used to 

decide which of the high bids to accept 

under the category of bid adequacy. 

We received numerous comments on 

this section of the rule, many 

recommending more subjective lease 

issuance processes. We revised the rule 

at §§ 285.220 through 285.224, and 

§ 285.501, to accommodate a multiple 

factor auction format for competitive 

lease award. A method of assessing 

multiple factor bids may be employed to 

rank proposals, resulting in a lease 

award to the bidder making what MMS 

perceives is the best offer. Single or 

multiple financial bid variables may be 

considered along with nonmonetary 

variables, such as technical merit, 

timeliness, financing and economics, 

the environment, public benefits, 

consistency with State and local needs 

and requirements, or other factors. 

While we have included the multiple 

factor auction format as an option, we 

are concerned that this format would 

not meet the objective under the 

mandate of subsection 8(p)(3) of the 

OCS Lands Act (43 U.S.C. 1337(p)(3)), 

which is to issue renewable energy 

leases through a simple and 

straightforward process in a fair and 

equitable manner. This auction format is 

likely to be less transparent to the 

public and more susceptible to 

favoritism and manipulation by selected 

parties than other auctioning formats. 

However, MMS is willing to work with 

States and other interested organizations 

to develop a procedure that would meet 

the OCS Lands Act mandate. 

Some entities submitted a preference 

for sealed bidding rather than ascending 

bidding. In their view, a single round of 

bidding is a more equitable process than 

ascending bidding and is the simplest, 

most straight forward method. One 

comment related a sealed bidding 

auction format as proposed by MMS to 

procedures for placing a bid in response 

to a request for proposal (RFP). Another 

comment explained that, to the extent 

there is competitive interest, ascending 

bidding will assure MMS that it is 

receiving the maximum amount each of 

the participants is willing to bid for a 

lease and help satisfy MMS’s concerns 

regarding a ‘‘fair return.’’ Other 

commenters criticized the sealed bid 

process because of the risk that one of 

the bidding parties will offer an 

unnecessarily high bonus bid, depriving 

that entity of important capital that it 

will need to develop the lease and 

potentially other leases. We recognize 

that under certain conditions, a sealed 

bid auction may yield better results than 

an ascending bid auction. It is also true 

that if different conditions prevail, an 

ascending auction may maximize the 

public’s expected revenue. The MMS 

will make a determination regarding the 

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19666 Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 

type of auction to be used based on 

whether the choice would encourage 

companies to participate in the auction 

and result in leasing to developers that 

have the financial and technical means 

to successfully develop a renewable 

energy project. The MMS will review 

information received in response to a 

Request for Interest and a Call before 

announcing a sale design and auction 

format in a Proposed Sale Notice. 

On the issue of package bidding, the 

general consensus of the comments 

supported such an approach, although 

there were some concerns expressed 

about its complexity. This approach was 

possible under the rule as proposed, and 

MMS believes that package bidding 

should be available under the final rule. 

Package bidding used in the auction 

formats described in this section would 

allow project proponents to identify 

possible synergies between tracts, then 

delineate a lease area comprised of 

those tracts, and bid the value of those 

tracts based on the development 

potential of the overall proposed 

project. Before making the decision to 

hold an auction that featured the option 

to submit package bids, MMS would 

analyze information submitted in 

response to the competitive lease 

process given in §§ 285.210 through 

285.215 to determine if it was in the 

public’s interest. If utilizing such an 

approach is beneficial and selected, 

MMS may choose among different 

approaches to implement package 

bidding. For example, a simultaneous 

ascending auction could be held, where 

MMS believes that package bidding 

would provide the best means by which 

bidders may compete for leases they 

need for project development. Bidders 

would submit a bid consisting of 

multiple lease blocks whereby the bid 

value would represent the total value of 

those lease blocks. The determination of 

winning packages can be made through 

the application of a software algorithm 

that maximized the sum of the package 

bids submitted in successive rounds. As 

a simpler, alternate approach, a bidder’s 

choice ascending auction could be held 

in which the high bidder in each round 

earns the right to choose one tract, or 

multiple tracts to form a logical 

development unit, from all tracts 

offered. 

We did not make any changes to this 

section other than the addition of the 

multiple-factor auction format. 

What bidding systems may MMS use for 

commercial leases and limited leases? 

(§ 285.221) 

A bidding system is composed of 

various elements, the most important of 

which are the bid variable(s) and the 

payment requirements. The bid variable 

is generally subject to a minimum bid 

level and potentially to a reservation 

price, both established by MMS. The 

minimum bid level represents the entry 

level of the bid, i.e., the smallest bid 

amount that MMS would consider 

acceptable. Usually the same minimum 

bid level will be set across certain 

classes of tracts. The reservation price is 

a tract-specific measure that represents 

an estimate of the underlying value of 

the tract when used for a specific 

purpose. In cases where sufficient 

competition is deemed to exist, a 

reservation price typically will not be 

needed to ensure that a fair return is 

obtained in the auction for the 

individual tract. For a renewable energy 

lease, we will choose from six different 

bid systems: 

(1) A cash bonus with a constant fee 

rate (decimal); 

(2) A constant operating fee rate with 

a fixed cash bonus; 

(3) A sliding operating fee rate with a 

fixed cash bonus; 

(4) A cash bonus and a constant 

operating fee rate; 

(5) A cash bonus and a sliding 

operating fee rate; or 

(6) A multiple-factor combination of 

nonmonetary and monetary factors. 

The fee rate in this context is 

analogous to a royalty rate used in oil 

and gas leasing. If a cash bonus is the 

bid variable, the operating fee each year 

will be based on the formula in subpart 

E. If the fee rate is the bid variable, the 

cash bonus will be fixed, and the 

operating fee will be calculated using 

the fee rate offered by the winning 

bidder as a part of the formula in 

subpart E of this regulation. The two-bid 

variable systems, cash bonus and 

operating fee rate, either constant or as 

a sliding scale, will be used only in a 

two-stage auction. 

The resulting annual operating fee in 

these two-stage bidding auctions will be 

derived from the formula established in 

subpart E of this part which is based, in 

part, on megawatts of installed capacity 

and the prevailing market rates for 

electricity sold in the consuming region 

targeted by the lease. Values for the 

formula components, excluding the fee 

rate when it is used as the bid variable, 

will be established in the Final Sale 

Notice or in the final public notice in 

the case when no competitive interest 

exists for a proposed lease. 

For limited leases, the cash bonus will 

be the only permissible bid variable. 

The MMS imposes no operating fee for 

limited leases because such leases could 

produce and sell power only within 

limits set by the terms and conditions of 

the lease; limited leases will not 

authorize long-term or large-scale 

commercial operations. Since we 

anticipate only small amounts of power 

(e.g., 5 MW) being generated for 

relatively short duration (less than 5 

years), we do not propose to charge an 

operating fee for the sale of power from 

limited leases. We will charge only 

rentals for limited leases. This also 

means we will not be using a two-stage 

auction format for issuing limited 

leases. 

One renewable bidding system that 

we considered but rejected in the 

proposed rule is a multiple-factor 

system. Such a system consists of many 

different bid variables as factors, both 

quantitative and qualitative, in 

determining the winning bid in a 

competitive process. This is the 

approach used in Denmark, which has 

the most developed offshore wind 

program in the world and issues 

licenses based on multiple factors (e.g., 

project design, operator experience, 

etc.). 

However, we received numerous 

comments recommending that we 

reconsider the multiple-factor approach, 

and based on those comments, we 

revised the rule at §§ 285.220 through 

285.224, and § 285.501, to accommodate 

a multiple-factor auction format for 

competitive lease award. The multiplefactor auction format may be employed 

to rank proposals, resulting in a lease 

award to the bidder making what MMS 

perceives is the best offer. Single or 

multiple financial bid variables that 

may be considered include a rental rate 

and operating fee, with a fixed or 

variable cash bonus or a fixed entry fee. 

Nonmonetary variables may also be 

considered including technical merit, 

timeliness, financing and economics, 

the environment, public benefits, 

consistency with State and local needs 

and requirements, or other factors. 

Under the multiple-factor auction 

format, MMS will publish criteria for 

winning bid determinations in the Final 

Sale Notice. A panel made up of 

members selected by MMS, or members 

from MMS, would assess and rank the 

proposals. Possibly, a quantitative 

framework may be devised that would 

weigh the importance of each factor and 

provide a rating scheme for bids placed 

on the factors. Further, it is possible that 

a negotiation stage may be included in 

the bid assessment criteria, to be used 

if it becomes necessary to modify a 

proposal prior to acceptance. The MMS 

will coordinate with States and other 

stakeholders, as appropriate, to establish 

procedures that are best designed to 

assure that the winning proposal will 

result in the selection of the most 

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worthy offer and provide a fair return to 

the public. 

Multiple factor bidding may be useful 

if MMS identifies a market failure in a 

purely monetary auction format. In 

certain circumstances, nonmonetary 

factors involving important public 

policy matters may not be reflected in 

auctions where a fiscal term measure is 

applied to determine the winning 

bidder. Examples of such market failure 

include situations where public benefits 

could accrue from innovative research 

and technology development or 

situations where public benefits could 

accrue from the abatement of existing or 

potential carbon emissions. 

In the first example, two or more 

project proponents want to prove a new 

project concept using technology that is 

not available on a commercial scale. The 

expected value of this type of project is 

marginal; so the proponents would seek 

the minimal initial cost of obtaining 

access rights, perhaps to a level even 

lower than the cost of obtaining a lease 

when no competition exists, in order to 

have more capital for facility expenses. 

When more than one project proponent 

indicates an interest in acquiring leases 

to develop resources in the same area, 

MMS might hold a multiple-factor 

auction to encourage the advancement 

of the technology. The MMS could 

design the bidding factors specifically 

for the type of project proposed, giving 

consideration to the estimated resource 

potential. It is possible that MMS could 

give the winning bidder, in a multiplefactor auction, an opportunity to prove 

the project concept and profitability 

before requiring payment of a significant 

share of the cash flow. The Government 

would take on the role of supporting a 

promising project concept impeded by 

financing difficulties for public policy 

reasons. While MMS originally chose to 

exclude this option from the proposed 

rule, comments indicated that this 

method of lease award may advance the 

development in wave energy 

technology, and so it has been added to 

the auction format regulations in this 

rule. 

In the second example, MMS may 

choose to use a multiple-factor auction 

to advance the synchronization of State 

and Federal regulatory processes that 

have different but compatible 

conceptual goals, e.g., a State 

administered RFP to supply electricity 

under a power purchase agreement in 

conjunction with an MMS competitive 

renewable energy commercial lease 

offering. This situation may arise when 

a State announces an RFP for a power 

purchase agreement that would help a 

utility company meet growing demand 

for electricity within its customer base. 

Proposals would be assessed based on 

factors such as technical merit, 

timeliness, financing and economics, 

the environment and public benefits, or 

other factors. The RFP could specifically 

state that consideration in awarding 

leases would be given to potential 

emission reduction benefits to the 

public and could request that bidders 

submit a lease bonus bid payable to 

MMS for its preferred site in any 

proposal to develop an OCS renewable 

energy project. The lease bonus bid 

would be one of the multiple factors 

published in the RFP, to be assessed by 

the State and MMS jointly to determine 

the winning proposal. A primary 

concern would be that the interests of 

the Federal Government might not 

coincide with that of the power 

purchaser and the State, resulting in a 

bid factor weighting and assessment 

process that does not lead to a fully 

satisfactory selection process. In such 

cases, the proposal receiving the highest 

ranking may not be the proposal that is 

the highest valued, thus negatively 

impacting the return to the United 

States and the State(s) when revenues 

are shared. The MMS will coordinate 

with States and interested organizations 

to establish procedures that assure 

competition and a fair return to the 

United States. 

Several commenters expressed 

concerns about inviting possible sham 

bidding and speculation, especially 

with the use of bidding systems based 

on fee rate as the variable. We 

understand these concerns and agree 

that a combination of bonus, rental, and 

operating fee payments should be 

balanced in a way that encourages 

participation by serious project 

proponents. We will analyze energy 

market conditions through the 

competitive lease process, beginning 

with the analysis of information 

available after a request for interest is 

published, and continuing through the 

Call and the Proposed Sale Notice. We 

will endeavor to hold auctions that will 

tend to award leases to bidders who 

value the tracts the most. We anticipate 

that renewable energy lease sales will be 

focused on sites where the resource 

potential can be assessed with a 

relatively high level of certainty before 

the auction. This could allow MMS to 

set the minimum bid at a level that 

potential bidders who do not have the 

financial and technical capability to 

develop a lease would not be willing to 

pay. As a result, speculative bidders 

should not be able to compete 

effectively for renewable energy leases 

against legitimate project proponents. 

However, to provide additional 

assurance, MMS intends to defer from 

using bidding systems incorporating the 

fee rate, as used in the formula found in 

§ 285.506, until the technology for the 

development of the given renewable 

energy source has been commercially 

proven. 

What does MMS do with my bid? 

(§ 285.222) 

The MMS will open sealed bids at the 

place, date, and hour specified in the 

Final Sale Notice for the sole purpose of 

publicly announcing and recording the 

bids. However, we will not accept or 

reject any bids at that time. We will 

determine whether to accept a high bid 

as a winning bid based on the following 

factors. 

With sealed bidding, bid acceptance 

criteria typically rely on (1) minimum 

bid levels we establish, with bids above 

that level being acceptable if there is a 

sufficient level of competition or if the 

lease area is not considered to be viable, 

or (2) assessments of the adequacy of the 

high bids for a specific lease area in 

comparison to calculated reservation 

prices for the property rights that are the 

object of the bidding. Whereas a 

minimum bid reflects a publicized level 

below which bids are not deemed 

satisfactory or competitive and thus will 

not be considered, the reservation price 

reflects an unpublished estimate of the 

value of the tract, and thus generally the 

lowest bid level at which we would 

award the lease. In this context, the term 

‘‘reservation price’’ could also refer to 

the lowest operating fee at which we 

would award the lease, if the operating 

fee is used as the deciding bid variable. 

The calculation of the reservation price 

compensates for insufficient market 

competition, so if enough competition 

for the tract materializes, there is less of 

a need to rely on a reservation price. 

However, when there is little 

competition for specific acreage, the 

reservation price becomes critical if the 

absence of competition is known to the 

potential bidder. An additional factor 

we may consider in calculating the 

reservation price is the value of other 

uses of the area that are incompatible 

with the renewable energy project. 

Due to the competitive aspects of the 

ascending bidding procedure, bid 

acceptance ordinarily would be less 

dependent on application of a 

reservation price and instead would rely 

solely on the bidding results to ensure 

receipt of fair market value. The 

ascending bid framework has been used 

by the BLM for allocating the property 

ROWs for wind energy projects. If we 

conclude that ascending bidding is the 

preferred auction format for many 

proposed renewable energy leases, then 

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sale procedures for ascending auctions 

could differ substantially from the 

customary OCS sealed bid model. 

With a two-stage auction format, the 

bid acceptance considerations are the 

same as those that apply to the format 

for the final stage that was used (i.e., 

sealed and/or ascending bidding). 

One way to reduce reliance on a 

calculated reservation price in sealed 

bidding or two-stage bidding could be to 

apply the auction format to multiple 

areas employing intertract competition. 

Intertract competition may be needed in 

areas with high industry interest in a 

number of OCS leases, but where 

expected demand per tract is limited or 

constrained. In addition to enhancing 

competition, the object of intertract 

competition would be to provide signals 

through the bids, which serve to assist 

us in leasing areas providing access to 

the most valuable sources of energy. 

Our goal is to accept or reject all 

sealed bids within 90 days after the sale 

date, although we may extend that time 

if necessary. In the case of ascending 

bidding, we may be able to determine 

the winning bidder once we confirm 

that the high bidder is a qualified 

bidder. Nevertheless, we reserve the 

right to reject any and all bids, 

regardless of the amount offered or 

bidding system employed. We will send 

a written notice to each high bidder, 

accepting or rejecting the bid or 

informing the bidder of tied high bids. 

One comment on this section 

recommended that a 30-day deadline for 

acceptance or rejection of the high bid 

be set for MMS. This commenter and 

others also recommended revisions to 

establish meaningful bidder competence 

requirements. They suggested that the 

proposed § 285.222(b) be changed to 

provide that MMS review the high 

bidders’ qualifications as they relate to 

the bidders capabilities to make 

productive use of renewable energy 

leases. This review should take place 

prior to awarding the lease and should 

substitute for conducting a bid adequacy 

review. The commenter further stated 

that MMS’s authority under this section 

to nullify an auction, because the 

competitively determined value of a 

lease falls short of a minimum value 

that MMS has placed on it, is 

misguided. 

We have decided to establish a bidder 

competence requirement in § 285.107. 

To ensure a fair return, MMS intends to 

rely primarily on area-specific 

minimum bid levels and auction 

designs that encourage competitive bids. 

Where competition clearly prevails, 

MMS expects to make high bid 

acceptance and rejection decisions 

within 30 days following the sale, 

absent the presence of unusual bidding 

patterns. This amount of time may be 

necessary to ensure that MMS has 

selected the proper allocation of leases 

to high bidders when (1) package 

bidding is employed, (2) one or more 

package bids overlap, and (3) 

determination of the appropriate set of 

winning packages requires application 

of a software algorithm. 

The 90-day postsale evaluation period 

is generally intended to apply in those 

unusual cases where bid adequacy 

procedures must be used. Bid adequacy 

considerations will be used where 

bidding evidences certain anomalies 

that indicate anti-competitive, illegal, or 

unauthorized behavior, where bidding 

is expected to be sparse, or when bids 

submitted for a tract are otherwise not 

a good indicator of true market 

competition. Legal bids would be bids 

submitted in compliance with the MMS 

regulations at 30 CFR part 285 and the 

Final Sale Notice. Anti-competitive or 

unauthorized behavior includes any 

form of collusion, or attempts to 

manipulate MMS auction rules to obtain 

an improper advantage over 

competitors. In cases where there are 

multiple tracts of interest but few 

bidders per lease, MMS may choose to 

employ intertract competition to assess 

bid adequacy. Under this approach, the 

high bids would be ranked, and a subset 

of those high bids would be accepted 

subject to the bid adequacy conditions 

that applied. If MMS decides that a tract 

should undergo evaluation to determine 

if fair value has been received, or there 

is a wide variation among bids, a 

reservation price may be calculated. A 

wide variation in bidder values could be 

caused by asymmetric information 

concerning the resource potential on a 

tract or tracts, or dissimilar bidding 

strategies. Bid adequacy would be used 

if MMS has reasonable confidence in its 

ability to accurately estimate project 

value in conjunction with the bids for 

the project. 

Several commenters took issue with 

our proposed approach to determining 

and assuring fair return for renewable 

energy rights. Some commenters stated 

that our approach misapplies elements 

of the approach taken to determine fair 

market value for oil and gas resources. 

We agree that there are significant 

differences among the market 

conditions for oil and gas exploration 

and development and renewable energy 

siting and development, but we believe 

that a competitive lease process is 

compatible with assuring that the 

United States receives a fair return for 

issuance of a renewable energy lease. 

Conceptually, the MMS renewable 

energy lease program will be different 

from an oil and gas lease program due 

to resource risk considerations. We 

anticipate that renewable energy lease 

offerings will be focused on sites where 

the resource potential can be more 

accurately assessed before the auction 

than during typical oil and gas lease 

offerings. Further, costs to measure 

renewable energy resource potential are 

relatively low in comparison to the cost 

of oil and gas exploratory drilling. 

While it is not known whether oil and 

gas accumulations exist on most oil and 

gas tracts offered in MMS sales, there is 

a significant amount of OCS renewable 

energy resource information available to 

the public. In light of these differences, 

renewable energy developers should not 

need to assemble the type of extensive 

lease portfolios typical of an oil and gas 

exploration company in order to 

identify a site suitable for development. 

As a result, the minimum bid set by 

MMS could more closely relate to the 

value of the tract to the project 

proponent, than, for example, the value 

to an investor that hoped to re-sell the 

lease rights on the secondary market. 

This factor could make it more difficult 

for speculative bidders to compete 

effectively for renewable energy leases 

against legitimate project proponents. 

We have made changes to this section 

relating to the addition of the multiplefactor approach and the rationale for 

rejecting bids. 

What does MMS do if there is a tie for 

the highest bid? (§ 285.223) 

In response to comments objecting to 

the proposed approach of breaking ties 

by lot, we have revised the text of 

§ 285.223(a) to authorize an additional 

round of bidding when more than one 

bidder on a lease submits the same high 

bid amount. If the highest bids are tied, 

we will notify the tied bidders. The 

winning bidder will be determined from 

the tied bidders by a final round of 

ascending or sealed bidding. This 

section does not apply to bids at the end 

of stage one of a two-stage bidding 

format. 

One commenter suggested that 

creditworthiness be considered in 

breaking ties. We did not adopt this 

approach because it would introduce 

unnecessary complexity into the 

determination of a winner by requiring 

MMS to establish a measure to 

differentiate one bidder from another 

through the analysis of financial 

information that may not be readily 

accessible to MMS. 

What happens if MMS accepts my bid? 

(§ 285.224) 

This section explains the 

responsibilities of the successful bidder. 

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Our acceptance notice will include 

three copies of the lease to be executed 

by the bidder. The proposed rule 

required execution of the lease, payment 

of the first 6 months’ rental, payment of 

the balance of the winning or fixed 

bonus, and filing of required financial 

assurance within 10 business days. 

Numerous commenters recommended 

increasing this 10-day timeframe. We 

believe this timeframe is reasonable for 

lease execution, payment of the balance 

of the bonus bid, and filing of financial 

assurance, and we have retained it for 

those actions. Also, we may extend this 

deadline upon request if we find a delay 

is due to events beyond the control of 

the successful bidder. 

Based on experience with our interim 

policy for issuing limited leases, and in 

response to comments on the proposed 

rule, we have increased to 45 days the 

timeframe for providing the first 6 

months’ rental. This will give lessees 

the opportunity to relinquish unwanted 

acreage before having to pay a rental 

that is based on the total amount of 

acreage under lease. While the rental 

requirement will be deferred for 45 

days, the payment will cover the first 6 

months of the lease, beginning on the 

effective date of the lease. 

After three executed copies of the 

lease are returned to MMS, we will 

execute the lease on behalf of the United 

States and send one fully executed copy 

to the lessee. If the bidder fails to 

execute the lease or otherwise fulfill 

requirements, the bidder’s deposit will 

be forfeited, and no lease will be issued. 

If, before the lease or grant is executed 

on behalf of the United States, the offer 

to the lease is withdrawn or restricted 

from leasing, we will not issue a lease 

and will refund the deposit. We reserve 

this right to rescind a lease offering in 

situations where new environmental or 

other concerns about the prospective 

area, operation, or need for the facility 

surface after the lease sale. If the 

awarded lease or grant is executed by an 

agent acting on behalf of the bidder, the 

bidder must submit with the executed 

lease evidence that the agent is 

authorized to act on behalf of the 

bidder. 

We also made changes to this section 

to accommodate addition of the 

multiple-factor approach. 

What happens if my bid is rejected, and 

what are my appeal rights? (§ 285.225) 

This section explains what options a 

bidder has if we reject the apparent high 

bid. We will provide a written statement 

of reasons and refund any money 

deposited with the bid. The bidder may 

then petition the MMS Director for 

reconsideration, in writing, within 15 

business days of bid rejection. The 

Director will send the bidder a written 

response either affirming or reversing 

the rejection. Denial of a bid 

reconsideration by the Director is a final 

agency action. It is not subject to review 

by the Interior Board of Land Appeals, 

but is judicially reviewable. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.226 Through 

285.229) 

Sections 285.226 through 285.229 are 

reserved. 

Noncompetitive Lease Award Process 

May I request a lease if there is no Call? 

(§ 285.230) 

Anyone qualified to hold an OCS 

lease under § 285.106 may request a 

renewable energy lease from us at any 

time, except in areas otherwise 

proposed for competitive lease offerings 

or excluded by statute from leasing. 

Such an unsolicited request for a lease 

may be submitted to conduct either 

commercial or noncommercial activities 

authorized in this part. To be valid, the 

request must include information 

equivalent to that required under 

§ 285.213 in response to a Call for 

Information and Nominations. 

Specifically, the unsolicited request 

must contain a depiction of the area 

requested for lease; a general 

description of the objectives of the 

project and the facilities that would be 

used; a general schedule of proposed 

activities, including those leading to 

commercial production or other 

approved operations; available and 

pertinent data and information 

concerning renewable energy resources 

and environmental conditions in the 

area of interest; a statement that the 

proposed activity conforms with State 

and local energy planning requirements, 

initiatives, or guidance, if any; and 

documentation that you are qualified to 

be a lessee as specified in § 285.107. In 

response to comments, we have changed 

§ 285.230(e) to refer to a statement 

rather than certification in order to 

eliminate any confusion that this 

provision is alluding to CZMA 

compliance. 

In addition, your request must 

include an acquisition fee of $0.25 per 

acre for the area requested as required 

by § 285.502. This fee is at a level 

intended to be high enough to 

discourage speculation but low enough 

not to inhibit interest, allowing lessees 

to establish a low ratio of lease 

acquisition costs to total project costs. 

We have revised this section by 

adding to paragraph (d) a statement that 

we will withhold trade secrets and 

commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA. 

How will MMS process my unsolicited 

request for a noncompetitive lease? 

(§ 285.231) 

Paragraphs (a), (b), and (c) of this 

section state that MMS will first 

determine competitive interest in 

processing an unsolicited request in 

order to decide whether to proceed with 

leasing under a competitive or 

noncompetitive process. If we find that 

there is competitive interest in the lease 

area, we will proceed with a 

competitive lease process. If we 

determine that there is no competitive 

interest, then we will issue a notice of 

such determination. This section also 

states that if MMS processes a proposed 

lease area on a competitive basis, no 

unsolicited requests for leasing in that 

area will be considered for as long as 

that process is pending. Thus, once an 

area is subject to a lease sale process, 

the only way to pursue a lease within 

that area is through that competitive 

process until that process concludes. 

After the process concludes, and if 

acreage within the area that had been 

considered for lease remains unleased, 

unsolicited requests will again be 

considered for that acreage. 

If we determine that there is a 

competitive interest, we will proceed 

with a competitive process and will 

apply your acquisition fee to any bid 

you submit. If you choose not to bid, we 

will not refund your acquisition fee. We 

believe retention of your fee in this case 

is appropriate in order to discourage all 

but serious requests and because of the 

costs associated with processing your 

original request. If you submit a 

qualified bid that does not win, we will 

refund your deposit, including the 

amount of the acquisition fee. 

Paragraph (d) describes how MMS 

will proceed if it determines there is no 

competitive interest. Within 60 days 

after we issue a finding that there is no 

competitive interest, the prospective 

lessee must submit either a SAP for a 

commercial lease or a GAP for a limited 

lease. We will review the plan and 

conduct NEPA and other required 

analyses before simultaneously issuing 

the lease or grant and approving the 

SAP or the GAP. As explained in the 

preamble discussion of plans in subpart 

F, a combined SAP and COP may be 

submitted for commercial leases. For 

hydrokinetic projects early coordination 

with the FERC licensing process will be 

necessary, but no COP will be required. 

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Our process for conveying OCS sand 

and gravel by negotiated 

noncompetitive lease under Public Law 

103–421 is a relevant model for the 

process for issuing renewable energy 

leases when no competitive interest 

exists. The sand and gravel process 

starts with a request to MMS for a 

noncompetitive lease. If we determine 

that the request has potential, we 

require a NEPA analysis (EIS or EA). We 

inform the requestor of the type of 

environmental analysis required and 

provide an estimated schedule for 

completing the analysis and making the 

decision on whether or not to issue a 

lease. As part of the NEPA analysis, we 

undertake or participate in endangered 

species consultations with NOAA and 

the FWS. We may ask the requestor to 

fund the NEPA analysis. After the NEPA 

analysis is completed, we decide 

whether or not to issue a lease. If the 

decision is made to issue a lease, the 

specific terms and conditions (e.g., 

mitigating measures, size and length of 

lease) are discussed with the requestor 

and included in the noncompetitive 

agreement (lease) that we offer. The 

requestor must sign that agreement to 

complete acquisition of the lease. 

We will follow the requirements of 

subsection 307(c)(3)(A) of the CZMA 

and 15 CFR part 930, subpart D, as 

shown in Table 1 for noncompetitive 

lease issuance and SAP or GAP. Under 

the CZMA and its implementing 

regulations, an OCS plan is any plan for 

the exploration or development of, or 

production from, any area leased under 

the OCS Lands Act that is submitted to 

the DOI, which describes in detail 

Federal license or permit activities. The 

SAP or GAP cannot qualify as an ‘‘OCS 

Plan’’ under the CZMA implementing 

regulations for leases issued when no 

competitive interest exists, because the 

lease and the SAP or GAP will be 

processed simultaneously. For leases 

issued competitively, the SAP or GAP 

would be submitted and processed after 

the lease has been issued, and in those 

instances, the SAP or GAP would be 

processed as an ‘‘OCS Plan’’ (as defined 

by 15 CFR 930.73), following the 

requirements of subsection 307(c)(3)(B) 

of the CZMA and 15 CFR part 930, 

subpart E. 

In response to comments, we have 

added provisions to this section that 

address public notification and 

participation in the noncompetitive 

leasing process. We also have revised 

this section by adding procedures and 

timeframes for executing leases issued 

noncompetitively that are analogous to 

those for competitive leases. 

May I acquire a lease noncompetitively 

after responding to a Request for 

Interest or Call for Information and 

Nominations under § 285.213? 

(§ 285.232) 

This is a new section that describes 

the process that MMS will follow to 

consider issuing a lease 

noncompetitively, if an area of interest 

was submitted by only one interested 

party, in response to the Request for 

interest or Call. The MMS may inform 

you that there does not appear to be 

competitive interest and ask if you wish 

to proceed with acquiring a lease. If you 

wish to proceed with acquiring a lease, 

you must submit your acquisition fee as 

specified in § 285.502. After receiving 

the acquisition fee, MMS will follow the 

process outlined in §§ 285.231(b) 

through (i). 

We added this section in recognition 

that §§ 285.230 and 285.231 of the 

proposed rule did not explicitly address 

situations in which a Request for 

Interest or Call for Information and 

Nominations results in no overlapping 

or otherwise competing indications of 

interest. The new section clarifies that 

in such a situation the prospective 

lessee may pursue the leasing process 

set forth in § 285.231, leading to either 

competitive or noncompetitive lease 

issuance. 

Reserved Sections (§§ 285.233 Through 

285.234) 

Sections 285.233 through 285.234 are 

reserved. 

Commercial and Limited Lease Terms 

If I have a commercial lease, how long 

will my lease remain in effect? 

(§ 285.235) 

This section describes the duration 

terms for a commercial lease. 

Commercial leases issued competitively 

would have three separate phases of 

lease activity: Preliminary term, site 

assessment term, and operations term. 

For commercial leases issued 

competitively, the preliminary term 

extends for the initial 6 months during 

which the lessee must submit a SAP or 

a combined SAP/COP in accordance 

with subpart F. If the commercial lease 

is issued when no competitive interest 

exists, there is no preliminary term 

because lease issuance and SAP or SAP/ 

COP approval occur simultaneously. 

The site assessment term for all 

commercial leases would begin on the 

date that we approve the lessee’s SAP or 

SAP/COP and extend for a term of 5 

years in most cases to allow the lessee 

to conduct the approved activities 

proposed in the SAP. Unless the lessee 

has submitted a SAP/COP and received 

MMS approval, the lessee is required to 

submit a COP, in form and content 

satisfactory to us, before the end of this 

5-year term to keep the lease in effect. 

A commercial lease would expire at the 

end of the site assessment term unless 

the lessee submits a COP, in form and 

content satisfactory to us, before the end 

of the 5-year term. The preliminary and 

site assessment terms are automatically 

extended as necessary to allow review 

and approval of plans. 

The operations term will follow, 

beginning on the date that we approve 

the lessee’s COP, and will be for a 

period of 25 years to allow 

development, construction, and 

ultimately commercial production 

activities. If you submit a COP, your 

operations term begins on the date we 

approve it. If you submit a SAP/COP, 

your operations term begins 5 years after 

we approve it or when fabrication and 

installation commence, whichever is 

earlier. An operations term longer than 

25 years could be established if 

applicable parties determine that such a 

term is warranted (e.g., the lessee and 

project proponent negotiate a power 

purchase agreement with a 30-year term 

before the lease is issued). While we 

revised the timing of the operating fee 

requirement in response to comments 

(see subpart E), this change does not 

alter the lease terms that originally were 

proposed. As provided in subpart D, the 

operations term may be renewed. 

For hydrokinetic commercial leases 

the COP in the previous discussion 

would be replaced with a FERC license 

application. In cases where a combined 

SAP/license application is submitted, 

MMS would review, approve, and 

regulate the SAP activities, and FERC 

would review, approve, and regulate the 

license activities. The preliminary and 

site assessment terms will be the same 

for all commercial leases, but the 

operations term for commercial 

hydrokinetic leases will coincide with 

the term of the FERC license. 

The MMS revised this section to 

clarify that the term of a lease renewal 

will be the same as the original term of 

the lease, unless a longer term is 

negotiated by applicable parties. 

If I have a limited lease, how long will 

my lease term remain in effect? 

(§ 285.236) 

Limited leases issued competitively 

will have two phases: Preliminary term 

and operations term. For limited leases 

issued competitively, the preliminary 

term will be the initial 6 months during 

which the lessee must submit a GAP in 

accordance with subpart F. If the 

limited lease is issued when no 

competitive interest exists, there is no 

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preliminary term because lease issuance 

and GAP approval occur 

simultaneously. The operations term for 

all limited leases will begin on the date 

that we approve the GAP and continue 

for a term of 5 years to allow the lessee 

to conduct the approved activities 

proposed in the GAP. 

For hydrokinetic activity MMS will 

only issue limited leases if FERC 

determines that a license or exemption 

is not required. If a FERC license or 

exemption is required, MMS will issue 

a commercial lease. 

We did not make any changes to this 

section. 

What is the effective date of a lease? 

(§ 285.237) 

This section describes how we will 

determine the effective date of a lease. 

A lease issued under this part must be 

dated and become effective on the first 

day of the month following the date a 

lease is signed on behalf of the lessor. 

However, if the lessee submits a written 

request and we approve, a lease may be 

dated and become effective on the first 

day of the month within which it is 

signed on behalf of the lessor. 

Are there any other renewable energy 

research activities that will be allowed 

on the OCS? (§ 285.238) 

This section describes how renewable 

energy research activities might be 

conducted on the OCS. This provision 

was developed following discussions 

with Department of Energy (DOE) 

officials who cited a need for an 

offshore research area or areas patterned 

after the European Marine Energy 

Center, an offshore wave and tidal 

energy technology testing site in the 

United Kingdom. This section describes 

the process for MMS to issue leases, 

ROWs, and RUEs to Federal agencies 

and States for testing all types of 

offshore renewable energy technology, 

after giving public notice and 

determining that there is no competitive 

interest in the area and complying with 

all relevant Federal statutes (e.g., ESA, 

NEPA, MSA, etc.). In response to 

comments from States recommending 

that they be allowed to establish and 

manage OCS renewable energy research 

areas, we have broadened this provision 

to apply to States and other Federal 

agencies in addition to DOE. 

We believe that such research areas 

should not preempt potential 

commercial development and should be 

only offered to a Federal agency or a 

State if there is no competitive interest. 

The purposes, issue process, and terms 

of this kind of lease or grant may be 

established by MMS and a Federal 

agency or a State on a case-by-case 

basis, or pursuant to a framework 

established by a Memorandum of 

Agreement. These leases or grants 

would not be available to private project 

proponents seeking to conduct either 

commercial or noncommercial 

activities. Leases and grants issued to a 

Federal agency and a State for research 

activities are different from the limited 

leases issued for renewable energy 

activities through the competitive or 

noncompetitive process. In further 

response to comments, we have clarified 

this section. 

When FERC determines that any OCSsited hydrokinetic research activities 

will not require a license or exemption, 

the MMS has the discretion to authorize 

such research activities under this 

section. This is consistent with the 

April 2009 MOU which provides that 

when FERC has determined that a 

license or exemption is not required, 

MMS may authorize hydrokinetic 

construction and operation activities 

related to noncommercial projects. It is 

anticipated that FERC could find 

hydrokinetic research activities do not 

require a license or exemption and 

therefore the lessee must comply with 

the requirements of § 285.238. However, 

if FERC determines that a license or 

exemption is required for a research 

project, then MMS would not consider 

that project to be a research activity 

under this section and would initiate 

the commercial leasing process. 

Subpart C—Rights-of-Way Grants and 

Rights-of-Use and Easement Grants for 

Renewable Energy Activities 

Overview 

Applicability 

Subpart C addresses issuing ROW 

grants and RUE grants for OCS to 

support renewable energy activities 

associated with onshore projects, State 

leases, or an MMS-issued renewable 

energy lease. Renewable energy leases 

include the rights to project easements 

for cables, pipelines, and other facilities 

associated with projects on OCS leases 

as discussed in subparts B and F; so in 

most cases a ROW grant or RUE grant 

will not be needed for an OCS 

renewable energy lease. However, there 

may be some cases when it makes more 

sense for an OCS renewable energy 

leaseholder to receive a ROW grant or 

RUE grant instead of a project easement. 

An example of this would be when 

multiple OCS renewable energy lessees 

want to share a ROW for a transmission 

cable or a RUE for a substation. In this 

case, it may make more sense for the 

lessees to use an ROW or RUE grant. 

Additionally, a transmission company 

may want to request an ROW grant for 

a transmission cable to support an OCS 

renewable energy project or multiple 

projects. It is important to distinguish 

the grant authority under this part with 

grant authorities of MMS under other 

regulations, such as those in 30 CFR 

part 250. The following two examples 

are helpful to illustrate the types of 

activities, not associated with an OCS 

renewable energy lease, MMS will 

authorize with a ROW grant or RUE 

grant issued under subpart C. 

Example 1: The MMS will issue a ROW 

grant under this part for activities involving 

the placement and maintenance of a 

transmission cable that crosses the OCS and 

transmits energy produced from renewable 

energy resources onshore or in State waters. 

The proposed Juan de Fuca Cable Project— 

which will install, on the OCS, a cable 

several-hundred-miles-long to transport 

electricity from renewable energy sources in 

the northwest to the San Francisco area—is 

a good illustration of an activity requiring a 

ROW granted under this subpart. 

Example 2: The MMS will issue a RUE 

grant under this part for activities involving 

the placement and operation of a facility on 

the OCS that supports a renewable energy 

project located on State submerged lands. 

The provisions include general 

requirements for ROW grant and RUE 

grant applicants, as well as application 

and issuance procedures. These 

provisions are similar to the provisions 

for issuing OCS renewable energy 

leases. 

The MMS will not issue ROW grants 

and RUE grants for installing site 

assessment facilities (e.g., 

meteorological towers) on the OCS. If a 

company intends to install site 

assessment facilities, it must acquire a 

lease under this part. 

Commenters raised questions 

concerning the issuance of ROWs for 

transmission lines that mix electricity 

generated from renewable energy 

sources and nonrenewable energy 

sources. After serious consideration, 

MMS has decided the following: (1) 

MMS will authorize renewable energy 

ROWs for transmission of energy from 

sources other than oil and gas; (2) MMS 

will not authorize renewable energy 

ROWs that solely support the 

transmission of energy from oil or gas 

sources; and (3) MMS will consider, on 

a case-by-case basis, renewable energy 

ROWs supporting the transmission of 

energy from oil or gas sources that is 

combined with energy from sources 

other than oil or gas, provided that 

renewable energy generated from 

sources other than oil and gas is 

primarily what is being transmitted. 

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Competitive and Noncompetitive 

Processes 

As required by subsection 8(p) of the 

OCS Lands Act, MMS must issue ROW 

grants and RUE grants through a 

competitive process unless MMS 

determines after public notice that there 

is no competitive interest. This subpart 

provides for public notice of 

applications for ROW grants and RUE 

grants to allow potential competitors 

and other interested and affected parties 

to comment on proposals and possibly 

compete for the ROW grants and RUE 

grants. However, due to the nature of 

potential operations on ROW grants and 

RUE grants, as well as the areal 

requirements involved, it is unlikely 

that there will be much, if any, 

competition. It appears that, in most 

cases, even separate geographically 

overlapping proposals for ROWs and 

RUEs will not be mutually exclusive. It 

is therefore unlikely that MMS will 

conduct an auction of ROW grants or 

RUE grants. The noncompetitive process 

for granting ROWs and RUEs will be 

similar to the noncompetitive leasing 

process described in subpart B, except 

there is no acquisition fee, and a GAP 

is required in lieu of a SAP. 

In the unlikely event that MMS did 

determine there is competition for a 

ROW or RUE, we will follow the process 

outlined in subpart B for competitive 

issuance of leases, with the ultimate 

terms and conditions of the grant 

established in a Final Sale Notice. As 

noted in the discussions of subparts A 

and B, we have changed the 

qualification requirements for lessees 

and grantees to discourage nuisance 

indications of interest. Also, in 

instances where a competitive process 

for the issuance of an ROW or RUE is 

pursued, MMS may choose to recognize 

companies selected by State or utility 

competitions in developing the terms 

and conditions of the auction and the 

grant, as explained in the subpart B 

discussion. While the rule provides the 

means necessary to conduct fair and 

efficient competitions for ROWs and 

RUEs, we continue to believe it is more 

likely that we will receive unsolicited 

proposals that will be processed after a 

public notice and determination that no 

competitive interest exists. As explained 

previously in the discussion of subpart 

B, because of the competition 

requirement set forth in section 8(p) of 

the OCS Lands Act, MMS decided to 

authorize transportation and other 

ancillary activities associated with an 

OCS renewable energy lease through the 

issuance of a project easement as part of 

the lease rather than providing for 

separate grants of ROWs and RUEs. 

Data and Information 

Subpart C requires the submission of 

data and information associated with 

ROW grant and RUE grant proposals. 

Subpart A discusses how MMS will 

handle such data and information, 

including procedures for withholding 

trade secrets and proprietary 

information from public disclosure to 

the extent allowed by law. 

Coordination and Consultation 

The MMS must coordinate and 

consult with other Federal, State, and 

local governments and affected Indian 

tribes as directed by sections 8(p)(4) and 

(7) of the OCS Lands Act and by other 

relevant Federal statutory requirements 

(e.g., ESA and MSA). As in subpart B, 

subpart C provides for coordination and 

consultation with affected Federal 

agencies, the Governors of affected 

States, and the executives of affected 

localities, including possible 

participation of State and local 

governments in task forces or other joint 

planning agreements with MMS. 

CZMA Compliance 

For purposes of Federal consistency, 

MMS will treat ROW grants and RUE 

grants issued through a competitive 

process as direct Federal agency 

activities and follow the subsection 

307(c)(1) procedures of the CZMA. The 

MMS will determine if the ROW grant 

or RUE grant is reasonably likely to 

affect any land or water use or natural 

resource of a State’s coastal zone and 

comply with the appropriate Federal 

consistency regulations under 15 CFR 

part 930 subpart C. 

The MMS will treat ROW grants and 

RUE grants issued noncompetitively as 

Federal licenses or permits, which will 

follow requirements of CZMA 

subsection 307(c)(3)(A) and 15 CFR part 

930 subpart D. For ROW grants and RUE 

grants issued noncompetitively, MMS 

requires the applicant to submit a 

proposed GAP simultaneously with the 

application for the ROW or RUE grant. 

The GAP is a Federal license or permit 

under current CZMA regulations since it 

will describe activities and operations 

proposed to be undertaken in areas of 

the OCS that are not under a lease; and 

therefore, does not qualify as an OCS 

plan (as defined by 15 CFR 930.73). 

Areas Available for ROW Grants and 

RUE Grants 

As with OCS renewable energy leases, 

ROWs and RUEs may be granted on any 

appropriately platted area not located 

within the exterior boundaries of any 

unit of the National Park System, 

National Wildlife Refuge System, 

National Marine Sanctuary System, or 

any National Monument. 

ROW and RUE Sizes 

The size of an ROW will encompass 

200 feet (61 meters) in width, the full 

length of the cable, pipeline, or other 

facilities, and adjacent areas reasonably 

necessary for accessory facilities, such 

as power stations for electricity or 

pumping stations for other energy 

products (i.e., hydrogen). The size of a 

RUE grant will be determined by MMS 

on a case-by-case basis to include the 

site of facilities, associated structures, 

and the areal extent of anchors, chains, 

or other equipment. 

ROW and RUE Term 

An ROW grant or RUE grant is in 

effect for as long as it is properly 

maintained, continues to support the 

activities for which it was granted, and 

is used for the purpose for which it was 

granted, unless otherwise stated on a 

case-by-case basis. Since ROW grants 

and RUE grants are tied to specific 

activities and purposes, MMS believes 

that, in most cases, it will be 

appropriate to link their term to those 

activities and purposes rather than 

setting specific independent terms. 

However, MMS may set specific 

independent terms when appropriate. 

Other ROW and RUE Provisions 

The ROW grants and RUE grants will 

be issued on forms approved by MMS 

and will become effective on the date of 

the grant or as specified in the grant 

instrument. Financial assurance and 

rental requirements are provided in 

subpart E. Additional provisions 

relating to the administration of ROW 

grants and RUE grants are set forth in 

subpart D. 

Section-by-Section Discussion for 

Subpart C 

ROW Grants and RUE Grants 

What types of activities are authorized 

by ROW grants and RUE grants issued 

under this part? (§ 285.300) 

This section explains what ROW 

grants and RUE grants authorize, which 

includes activities relating to the 

production, transportation, or 

transmission of electricity or energy 

from any renewable energy resource that 

is not produced or generated on an OCS 

renewable energy lease issued under 

this part. It further clarifies that you do 

not need a ROW grant or RUE grant for 

a project easement authorized under 

subpart B of this part however, there 

may be cases when a ROW grant or RUE 

grant is more appropriate than a project. 

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The MMS changed this section to 

allow the holder of a ROW grant to 

install on the OCS cables, pipelines, and 

associated facilities that involve the 

transportation or transmission of 

electricity or other energy product from 

renewable energy projects both on the 

OCS and not on the OCS. We made this 

change to avoid excluding possible 

beneficial uses of ROW grants for 

renewable energy projects on the OCS. 

Section 285.301 What do ROW grants 

and RUE grants include? 

This section provides a detailed 

description of ROW grants and RUE 

grants, including their dimensions, 

boundaries, and limitations based on 

factors such as locations of associated 

and accessory facilities. This does not 

cover RUE grants issued for the alternate 

use of existing facilities, which are 

covered in subpart J of this part. 

We did not make any changes to this 

section. 

What are the general requirements for 

ROW grant and RUE grant holders? 

(§ 285.302) 

This section cites the regulation 

pertaining to lease and grant holder 

qualifications in subpart A. It then 

describes that the rights to be granted 

with a ROW or a RUE will not prevent 

the granting of other rights by the 

United States. Further, other users may 

be granted the right to use or occupy 

any part of the ROW grant or RUE grant 

not actually occupied or required for 

any necessary operations as long as they 

do not unreasonably interfere with the 

activities approved or impede existing 

operations. 

We did not make any changes to this 

section. 

How long will my ROW grant or RUE 

grant remain in effect? (§ 285.303) 

This section states in general terms 

the duration of ROW grants and RUE 

grants. 

We did not make any changes to this 

section. 

Reserved Section (§ 285.304) 

Section § 285.303 is reserved. 

Obtaining ROW Grants and RUE 

Grants 

How do I request an ROW grant or RUE 

grant? (§ 285.305) 

This section addresses how to apply 

for a new or modified ROW grant or 

RUE grant. A separate application is 

required for each ROW grant or RUE 

grant requested. It lists the information 

the application must contain, including 

the area requested, objectives, facilities 

projected to achieve those objectives, a 

general schedule of proposed activities, 

and environmental conditions in the 

area of interest. 

We did not make any changes to this 

section. 

What action will MMS take on my 

request? (§ 285.306) 

This section explains how MMS will 

process requests for ROW grants and 

RUE grants based on whether or not 

competitive interest is determined. It 

cites the competitive process outlined in 

§ 285.308 and describes the 

noncompetitive process. The 

noncompetitive ROW grant and RUE 

grant process is similar to the 

noncompetitive lease issuance process, 

requiring a determination of no 

competitive interest, negotiation of 

terms and conditions between grantee 

and grantor, as well as submission and 

approval of a GAP. 

We did not make any changes to this 

section. 

How will MMS determine whether 

competitive interest exists for ROW 

grants and RUE grants? (§ 285.307) 

This section outlines how MMS will 

determine whether or not there is 

competitive interest by publishing a 

public notice (Request for Interest) of 

the proposed ROW grant or RUE grant. 

The public notice will describe the 

parameters of a project and give 

potential competitors an opportunity to 

express their interest. The MMS will 

make a determination of competitive 

interest based on comments received in 

response to the notice. If competitive 

interest is determined, MMS will 

initiate the process outlined in 

§ 285.308. If no competitive interest is 

determined, MMS will follow the 

process outlined in § 285.306. 

We did not make any changes to this 

section. 

How will MMS conduct an auction for 

ROW grants and RUE grants? 

(§ 285.308) 

This section describes how an auction 

will be held if MMS determines there is 

competitive interest for ROW grants and 

RUE grants. The grant auction process is 

similar to the auction process for leases. 

We did not make any changes to this 

section. 

When will MMS issue a noncompetitive 

ROW grant or RUE grant? (§ 285.309) 

This section describes the 

circumstances under which MMS will 

issue a grant. The MMS will issue a 

grant if we approve your GAP and you 

accept all terms and conditions of the 

grant. 

We did not make any changes to this 

section. 

What is the effective date of an ROW 

grant or RUE grant? (§ 285.310) 

The effective date of an ROW grant or 

RUE grant is established by MMS in the 

ROW grant or RUE grant. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.311 Through 

285.314) 

Sections 285.311 through 285.314 are 

reserved. 

Financial Requirements for Row Grants 

and Rue Grants 

What deposits are required for a 

competitive ROW grant or RUE grant? 

(§ 285.315) 

This section cites the deposit 

requirements of § 285.501 pertaining to 

ROW grant and RUE grant auctions, and 

provides for the return of your deposit 

when a bid is rejected. It also states that 

a written statement of reason will be 

provided if the high bid is rejected. 

We did not make any changes to this 

section. 

What payments are required for ROW 

grants or RUE grants? (§ 285.316) 

This section lists the payments 

required in order for MMS to issue the 

ROW grant or RUE grant. It states the 

balance on an accepted high bid and the 

first year annual rental as specified in 

§ 285.507 (the greater of $5 per acre per 

year or $450 per year), must be paid 

before MMS will issue the ROW grant 

or RUE grant. 

We did not make any changes to this 

section. 

Subpart D—Lease and Grant 

Administration 

Overview 

Subpart D addresses noncompliance 

with regulations pertaining to a lease or 

grant; assignment and designation of 

operator; and suspension, renewal, 

termination, relinquishment, and 

cancellation of leases and grants. We 

received numerous comments 

recommending that we prescribe time 

limits on MMS to complete actions 

under this subpart. We have declined to 

add such time limits to the rule, but we 

will include target timelines for actions 

under this subpart in the guidance 

document we intend to issue after the 

rule is published. 

Noncompliance 

The requirements that the lessee or 

grantee must meet to maintain a lease or 

grant in effect include plan and 

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reporting requirements (subpart F); 

payment obligations (subpart E); and 

procedures for conducting, stopping, 

and resuming operations or receiving 

appropriate suspensions from MMS 

(subpart D). In an instance of 

noncompliance, MMS may issue a 

notice of noncompliance that will 

specifically cite how you failed to 

comply and will prescribe corrective 

action. In an instance of noncompliance 

that poses an imminent threat, MMS 

may issue a cessation order directing the 

lessee or grantee to cease an activity or 

activities. Likewise, failure to take 

corrective action prescribed in a 

noncompliance order may lead to the 

issuance of a cessation order. A 

cessation order does not lengthen the 

term of the lease or grant or relieve any 

payment obligations. Also, 

noncompliance may lead to the 

assessment of civil or criminal 

penalties. The MMS believes the 

noncompliance provisions, in 

conjunction with the regulatory 

requirements, are essential to ensure 

prompt, efficient, and responsible 

renewable energy activities on a lease or 

grant. 

Designation of Operator 

The provisions governing designation 

of an operator to perform activities on 

a lease or grant are patterned after the 

regulations at 30 CFR 250.143 through 

250.146. 

Assignment 

The provisions governing assignment 

of leases or grants are patterned after the 

regulations at 30 CFR 256.62, including 

assignor and assignee responsibilities, 

procedures for filing transfers, and the 

effects of an assignment on a particular 

lease or grant. The MMS believes such 

requirements are appropriate for all OCS 

renewable energy leases and grants. 

Suspension 

The rule provides for lease or grant 

suspensions that will lengthen the 

duration of the lease or grant to allow 

completion of activities or continuation 

of operations. Extensions relating to 

MMS technical and environmental 

review of required plans will be 

automatic. The lessee or grant holder 

could request suspensions for other 

purposes, and these will be subject to 

Director approval. 

Renewal 

The rule provides that a lessee or 

grantee may request a renewal to 

conduct activities substantially similar 

to those that were originally authorized, 

and MMS, at its sole discretion, may 

approve such requests. The renewal 

provisions also provide timeframes and 

information requirements associated 

with renewal requests, as well as 

guidance on making payments and 

suspending activities while a renewal 

request is pending. The length of a 

renewal will be set by MMS on a caseby-case basis. As explained previously 

in the discussion of lease term 

provisions in subpart B, MMS retains 

discretion relating to lease terms and 

renewals in order to ensure the efficient 

use of OCS resources. 

Termination, Relinquishment, and 

Cancellation 

The MMS may cancel leases or grants 

for failure to comply with the OCS 

Lands Act and other applicable laws, 

regulations, and lease requirements; for 

fraudulent acquisition; and for a 

continuing and undiminished threat to 

marine life, property, natural resources, 

national security or defense, or the 

marine, coastal, or human environment. 

Provisions governing terminations and 

relinquishments of a lease or parts of a 

lease are also included. 

Section-by-Section Discussion for 

Subpart D 

Noncompliance and Cessation Orders 

What happens if I fail to comply with 

this part? (§ 285.400) 

This section states that MMS can take 

appropriate corrective action if you fail 

to comply with applicable provisions of 

Federal law, the regulations in this part, 

other applicable regulations, or MMS 

orders. The MMS may issue you a 

notice of noncompliance if it has 

determined there has been a violation. 

A notice of noncompliance will tell you 

how you failed to comply, and will 

specify what you must do to correct the 

noncompliance and when you must act. 

This section also states that if you do 

not follow a notice of noncompliance, or 

any other regulation of this part, MMS 

may issue a cessation order, cancel your 

lease or grant, and assess civil penalties. 

In addition, you may be subject to 

criminal penalties. 

The MMS received a comment 

requesting that we consider reducing 

civil penalties for small businesses 

regulated under this part. If a civil 

penalty is assessed, the company may 

submit a request to modify the payment 

schedule to the Office of Financial 

Management, within MMS’s Mineral 

Revenue Management program. We will 

include information on the Small 

Business Regulatory Enforcement 

Fairness Act and payment schedules in 

the guidance document we intend to 

issue after the rule is published. 

We did not make any changes to this 

section. 

When may MMS issue a cessation 

order? (§ 285.401) 

This section specifies that a cessation 

order may be issued if you fail to 

comply with any law or regulation 

under this part. The cessation order will 

have a timeframe for you to correct the 

noncompliance and set forth what 

measures you are required to take in 

order to resume activities on your lease 

or grant. 

We did not make any changes to this 

section. 

What is the effect of a cessation order? 

(§ 285.402) 

This section gives details of what you 

must do when you receive a cessation 

order. You must cease all activities on 

your lease or grant for the specified 

period, and you must continue to make 

all required payments while a cessation 

order is in effect. A cessation order does 

not extend the term of your lease or 

grant for the period you are prohibited 

from conducting activities. If MMS 

determines that the circumstances 

giving rise to the cessation order cannot 

be resolved within a reasonable time 

period, your lease or grant may be 

cancelled. We received a comment 

recommending that MMS specify lease 

or grant activities covered by a cessation 

order and allow other activities to 

proceed. We prefer the discretion 

afforded in the rule, which allows us to 

issue an order to cease all activities, 

perform necessary reviews, and then 

decide which, if any, activities will be 

allowed to proceed. After issuing a 

cessation order to a lessee or grantee, we 

will provide instructions as to which 

activities are authorized to continue. 

Another commenter asked that the 

process for lifting a cessation order be 

specified in the rule. We believe this is 

already addressed in the previous 

section of the rule, which states that a 

cessation order will indicate the actions 

that lessees or grantees must take to 

resume ceased activities. 

Reserved Sections (§§ 285.403 Through 

285.404) 

Sections 285.403 through 285.404 are 

reserved. 

Designation of Operator 

How do I designate an operator? 

(§ 285.405) 

Under this section, you must identify 

the operator in your specific plan (SAP, 

COP, or GAP) if you intend to designate 

an operator who is not the lessee or 

grant holder. Once approved in your 

plan, the designated operator is 

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authorized to act on your behalf and 

authorized to perform activities 

necessary to fulfill your obligations 

under laws and regulations in this part. 

This section requires you to keep MMS 

informed if there is any change of status 

with your designated operator. If you 

are the designated operator, you must 

comply with all regulations governing 

those activities and are responsible for 

any noncompliance. Designation of an 

operator does not relieve the lessee or 

grantee of its obligations. We received a 

comment recommending we provide a 

timeframe for notification of a change in 

designated operator rather than 

requiring one immediately. We have 

revised paragraph (e) to provide 72 

hours for such notification. 

Another commenter asked for 

clarification of the information that 

must be included in a written change of 

designated operator. We have revised 

paragraph (e) to require that written 

notification be provided on a form 

approved by MMS that will specify the 

information required. 

Who is responsible for fulfilling lease 

and grant obligations? (§ 285.406) 

When you are not the sole lessee or 

grantee, you and your co-lessee(s) or cograntee(s) are jointly and severally 

responsible for fulfilling your 

obligations under the lease or grant. If 

your designated operator fails to fulfill 

any obligations under this part, MMS 

may require you or any or all of your colessees or co-grantees to fulfill those 

obligations. 

We did not make any changes to this 

section. 

Reserved Section (§ 285.407) 

Section 285.407 is reserved. 

Lease or Grant Assignment 

May I assign my lease or grant interest? 

(§ 285.408) 

Under this section, you can assign all 

or part of your lease or grant interest. To 

assign interest, an assignment 

application must be sent to MMS. The 

assignment application includes various 

detailed requirements outlined in this 

section (i.e., location identification, 

qualifications, contact information, etc.). 

The assignment takes effect on the date 

MMS approves your application. We 

received a comment requesting 

clarification on whether mergers and 

acquisitions will require assignments. 

We added a statement about mergers, 

name changes, and changes to business 

forms to clearly state that you do not 

need to assign your lease or grant 

interest in these cases. Another 

comment asked whether subletting 

would be possible under the rule. We 

consider subletting to be synonymous 

with assigning. 

How do I request approval of a lease or 

grant assignment? (§ 285.409) 

This section contains additional 

details of the assignment requirements. 

We did not make any changes to this 

section. 

How does an assignment affect the 

assignor’s liability? (§ 285.410) 

You are liable for all obligations that 

accrued under your lease or grant before 

MMS approves your assignment. If your 

assignee fails to perform any obligation, 

you may be responsible for corrective 

action. 

We did not make any changes to this 

section. 

How does an assignment affect the 

assignee’s liability? (§ 285.411) 

The assignee is liable for all 

obligations once MMS has approved the 

assignment. The assignee will be 

responsible to comply with all lease or 

grant terms and conditions, as well as 

all applicable regulations. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.412 Through 

285.414) 

Sections 285.412 through 285.414 are 

reserved. 

Lease or Grant Suspension 

What is a lease or grant suspension? 

(§ 285.415) 

A suspension is an interruption of the 

term of your lease or grant. You may 

request, or MMS may order, a 

suspension. A suspension extends the 

term of your lease or grant for the length 

of time the suspension is in effect. 

Activities may not be conducted on 

your lease or grant during the period of 

a suspension unless otherwise directed 

by MMS. 

We did not make any changes to this 

section. 

How do I request a lease or grant 

suspension? (§ 285.416) 

To request a suspension, you must 

submit a request to MMS containing the 

details explained in this section. 

We did not make any changes to this 

section. 

When may MMS order a suspension? 

(§ 285.417) 

Under this section, MMS may order a 

suspension to comply with judicial 

decrees prohibiting some or all activities 

under your lease or when continued 

activities pose an imminent threat of 

serious or irreparable harm or damage to 

natural resources, life (including human 

and wildlife), property, etc. This section 

also states that if you have a suspension 

from an imminent threat, you may be 

required to conduct a site-specific study 

to resume activities. One commenter 

stated that the possible requirement to 

conduct such a study could be 

interpreted to require automatic 

preparation of a NEPA or National 

Historic Preservation Act (NHPA) study. 

The requirements of NEPA or NHPA 

would not automatically be invoked if a 

site-specific study was required to 

resume activities. The same commenter 

also requested that the final rule specify 

the process for review of a site-specific 

study. We believe that flexibility in our 

approach to such studies is important 

and have not added the requested 

specifications. We will address this 

issue in the implementation guidance 

that we intend to issue after the rule is 

published. 

We did not make any changes to this 

section. 

How will MMS issue a suspension? 

(§ 285.418) 

The MMS may initially issue a 

suspension order orally, but will follow 

up with a written order. The written 

explanation will describe the effect of 

the suspension order on your lease or 

grant and any associated activities. The 

order may also include authorization of 

certain activities during the period of 

the suspension. 

We did not make any changes to this 

section. 

What are my immediate responsibilities 

if I receive a suspension order? 

(§ 285.419) 

You must take action to comply fully 

with the terms of a suspension order 

upon receipt. 

We did not make any changes to this 

section. 

What effect does a suspension order 

have on my payments? (§ 285.420) 

You must make all payments on your 

original term obligations until MMS 

authorizes/orders the suspension. Once 

the suspension has been issued, MMS 

may waive your payments during the 

suspension period. We received a 

comment recommending an automatic 

waiver of payment obligations for a 

suspension requested by a lessee or 

grantee, or in the absence of such a 

waiver, the criteria on which MMS will 

base decisions about payment 

obligations under such suspensions. We 

do not believe that automatic waivers 

should be granted for a suspension 

requested by a lessee or grantee because 

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a suspension may be necessitated by 

circumstances created or significantly 

contributed to by the lessee or grantee. 

It is important that MMS have 

discretion in deciding the circumstances 

under which payment obligations will 

continue under suspensions; therefore, 

we have not added criteria on which to 

base such decisions in the text of the 

rule. 

We did not make any changes to this 

section. 

How long will a suspension be in effect? 

(§ 285.421) 

A suspension will be in effect for a 

period specified by MMS. However, if 

you request a suspension, MMS will not 

approve a suspension request longer 

than 2 years. We received a comment 

recommending an increase in the 

maximum suspension period to 5 years. 

In the interest of avoiding delays in 

lease development, we have retained the 

maximum suspension period at 2 years. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.422 Through 

285.424) 

Sections 285.422 through 285.424 are 

reserved. 

Lease or Grant Renewal 

May I obtain a renewal of my lease or 

grant before it terminates? (§ 285.425) 

The MMS may approve a renewal 

request to conduct substantially similar 

activities that were authorized under the 

original lease or grant. The MMS will 

not approve a renewal request that 

involves development of renewable 

energy not originally authorized in the 

lease or grant. We received several 

comments recommending automatic 

renewals. We have not adopted those 

recommendations because we are 

concerned that continuation of 

inefficient or obsolete operations could 

result. 

We also received a recommendation 

to adopt the following criteria for 

considering lease renewals that were 

offered for comment in the proposed 

rule: 

(1) Design life of existing technology; 

(2) Availability and feasibility of new 

technology; 

(3) Environmental and safety record of 

the lessee; 

(4) Operational and financial 

compliance record of the lessee; and 

(5) Competitive interest and fair 

return considerations. 

We have adopted these criteria in 

§ 285.429 along with an additional 

criterion suggested by the commenter. 

Application of these criteria will be 

addressed in the implementation 

guidance that we plan to issue after the 

rule is published. 

Specific procedures detailing how an 

entity operating a FERC-licensed 

hydrokinetic project on an MMS-issued 

lease may obtain a lease renewal will 

need to be developed, and will be 

proposed at a later time. In accordance 

with the terms of the April 2009 DOI/ 

FERC MOU, the MMS and FERC will 

work together to establish an efficient 

process to allow lessees to obtain such 

renewals. 

We did not make any changes to this 

section. 

When must I submit my request for 

renewal? (§ 285.426) 

This section specifies when you must 

request a renewal. You must submit 

your request for a renewal no later than 

180 days before the termination date of 

your limited lease or grant, and no later 

than 2 years before the termination date 

of the operations term of your 

commercial lease. We received a 

comment requesting clarification that a 

lessee would be allowed to upgrade 

equipment and apply for a lease renewal 

much earlier (e.g., 15 years into the 

lease). This approach is possible under 

the rule and will be addressed in the 

guidance document that we intend to 

issue after the rule is published. 

We did not make any changes to this 

section. 

How long is a renewal? (§ 285.427) 

The MMS will set the term of a 

renewal on a case-by-case basis not to 

exceed the original term of the lease or 

grant. We received a comment 

recommending that the renewal term be 

shorter. Shorter terms are available 

under the rule. Another commenter 

called for providing a longer term in 

particular circumstances. We have 

revised this section to provide for 

renewal of a commercial lease for a 

duration not to exceed the original term 

or for a longer term negotiated by 

applicable parties. We have retained the 

same term for limited leases, and we 

have clarified that renewed grants will 

continue indefinitely unless otherwise 

stated. 

What effect does applying for a renewal 

have on my activities and payments? 

(§ 285.428) 

If you request a renewal, you must 

continue all payments and may 

continue to conduct your approved 

activities until your lease expires, or 

until we make a determination on your 

request. We received a comment 

requesting clarification that a lessee or 

grantee who has requested a renewal 

will be able to continue operating after 

lease or grant termination while the 

request is pending decision by MMS. 

We have revised paragraph (a) to make 

this clarification. 

What criteria will MMS consider in 

deciding whether to renew a lease or 

grant? (§ 285.429) 

As described previously, this section 

was added to provide criteria that MMS 

will consider in processing a lease or 

grant renewal request. 

Reserved Sections (§§ 285.430 Through 

285.431) 

Sections 285.430 through 285.431 are 

reserved. 

Lease or Grant Termination 

When does my lease or grant terminate? 

(§ 285.432) 

Your lease or grant terminates upon 

the expiration of the applicable term, 

cancellation by the Secretary, or 

approval of your relinquishment. We 

received a comment recommending that 

this section provide for leases 

continuing while renewal requests are 

pending. We have revised paragraph (a) 

to include such a provision. 

What must I do after my lease or grant 

terminates? (§ 285.433) 

After your lease or grant terminates, 

you must make all payments due and 

perform any other outstanding 

obligations under the lease or grant 

(including decommissioning). We have 

changed the timeframe in subsection (b) 

to 2 years to conform to our revision of 

§ 285.902(a), which now calls for 

meeting decommissioning requirements 

within 2 years following lease or grant 

termination. 

Reserved Section (§ 285.434) 

Section 285.434 is reserved. 

Lease or Grant Relinquishment 

How can I relinquish a lease or a grant 

or parts of a lease or grant? (§ 285.435) 

To surrender a lease or grant, you 

must submit a relinquishment 

application to MMS. The application 

will include the information required in 

this section such as identifying 

information and contact information. 

You are responsible for all payment 

obligations until the relinquishment is 

in effect. 

We did not make any changes to this 

section. 

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Lease or Grant Contraction 

Can MMS require lease or grant 

contraction? (§ 285.436) 

The MMS may review your lease or 

grant area, at intervals no more frequent 

than every 5 years, to determine 

whether the lease or grant area is larger 

than needed to develop the project and 

manage activities in a manner that is 

consistent with the provisions of this 

part. The MMS will notify you of our 

proposal to contract the lease or grant 

area and give you the opportunity to 

present, orally or in writing, information 

demonstrating that you need the area in 

question to manage lease activities 

consistent with these regulations. Prior 

to taking action to contract the lease or 

grant area, MMS will issue a decision 

addressing your contentions that the 

area is needed. We received several 

comments expressing concern that MMS 

might act arbitrarily or overreach in 

applying this section. We believe this 

section appropriately safeguards the 

rights of lessees and grantees by 

providing notification and opportunity 

to challenge contraction decisions. 

We did not make any changes to this 

section. 

Lease or Grant Cancellation 

When can my lease or grant be 

canceled? (§ 285.437) 

The Secretary may cancel your lease 

or grant if you obtained it fraudulently; 

if you fail to comply with laws and 

regulations; if it is required for national 

security reasons; or if your activities 

cause serious harm or damage to natural 

resources, life, property, etc. In the 

proposed rule, we stated that, in certain 

circumstances, the Federal Government 

may provide compensation if your lease 

is cancelled. Section 285.437(c) in the 

proposed rule provided that, in the 

event that we cancelled a lease or grant 

under (b)(3) or (b)(4) of § 285.437, 

compensation would be provided as 

appropriate to the extent funds are 

authorized and appropriated for such 

purposes. This provision was removed 

because the compensation as a result of 

such a cancellation under paragraphs 

(b)(3) or (b)(4) of this section would 

have to be determined on a case-by-case 

basis. Consequently, the proposed 

provision provided no guarantees to 

lessees or grantees and might have 

created unrealistic expectations. 

Two commenters stated that the rule 

should expressly provide for affected 

States and Federal agencies to 

recommend cancellation. We believe 

that any interested or affected party may 

approach MMS with a recommendation 

to cancel a lease or grant under the rule. 

Another commenter requested that 

compensation for cancellation be 

specified in the rule. 

We made the changes described 

previously to this section. 

Subpart E—Payments and Financial 

Assurance Requirements 

Overview 

This subpart provides the payment 

structure for renewable energy leases 

that implements subsection 8(p)(2) of 

the OCS Lands Act (43 U.S.C. 

1337(p)(2)) which directs the Secretary 

to establish royalties, fees, rents, 

bonuses, or other payments to ensure a 

fair return to the United States for any 

lease, easement, or ROW granted for 

renewable energy activity on the OCS. 

This also applies to leases, easements, 

and rights-of-way issued for FERClicensed hydrokinetic projects. We 

intend to ensure a fair return through a 

combination of payments. In addition to 

up-front acquisition fees or bonus 

payments for renewable energy leases, 

we will charge acreage-based rents for 

technology assessment activities on 

limited leases. On commercial leases we 

will charge acreage-based rents for the 

pre-development phases of renewable 

energy production ventures and their 

ancillary facilities, and a share of 

revenues from the renewable energy 

production phase in the form of an 

operating fee. You can find a detailed 

summary of how MMS selected our 

approach to payments in the NPR. For 

commercial leases issued for FERClicensed hydrokinetic projects, the 

operating fee will be determined on a 

case-by-case basis. 

Financial Assurance Requirements 

This portion of subpart E is intended 

to minimize the risk of financial loss to 

the Federal Government if lessees, 

operators, and grant holders default in 

fulfilling their obligations under this 

rule and other applicable laws or 

regulations. The final rule will fulfill 

that purpose in two ways: (1) Through 

the prequalification of lessees, 

operators, and grant holders, and (2) by 

requiring the provision of sufficient 

financial security to assure that lessee, 

operator, and grant holder obligations 

can be fulfilled by a third party in the 

event of default. The rule anticipates 

different requirements for ranges of 

activities for commercial production 

leases, limited leases, ROW grants, and 

RUE grants. 

The financial assurance portion of the 

rule is divided into four general areas: 

(1) Basic financial assurance 

requirements for commercial leases; 

(2) Financial assurance for limited 

leases, ROW grants, and RUE grants; 

(3) Requirements for financial 

assurance instruments; and 

(4) Changes in financial assurance. 

Basic Financial Assurance 

Requirements for Commercial Leases 

The financial assurance requirements 

for commercial leases ensure the 

performance of the following lease 

obligations: 

(a) Rents and other payments due the 

Government over the next 12 months; 

(b) Any past due rents and/or other 

payments; 

(c) Other monetary obligations; and 

(d) Project decommissioning and lease 

cleanup. 

Before MMS will issue a commercial 

lease, the prospective lessee must 

provide either a lease-specific $100,000 

bond; alternative financial assurance 

that the Regional Director determines 

protects U.S. interests to the same extent 

as the bond; or evidence that your 

designated lease operator has provided 

commensurate financial assurance. 

Additional bonds/financial assurance 

are required before MMS will approve a 

SAP or a COP. The amount of this 

additional bond/financial assurance will 

be determined by MMS and will be 

based upon the type and number of 

facilities to be used in your planned 

activities. 

Financial Assurance for Limited Leases, 

ROW Grants, and RUE Grants 

The final rule requires that when you 

obtain a limited lease, ROW grant, or 

RUE grant, you must post a lease or 

grant-specific bond or other approved 

financial assurance in the amount of 

$300,000. Unlike commercial leases, 

further financial assurance is not 

automatically triggered by applications 

for activity such as the SAP and the 

GAP. However, MMS may require you 

to increase your level of financial 

assurance as activities progress on your 

limited lease or grant. 

Requirements for Financial Assurance 

Instruments 

This portion of the final rule sets forth 

the requirements for the financial 

instrument you use. The financial 

instrument must be payable to MMS 

upon demand, on a form approved by 

MMS, and guarantee compliance with 

all terms and conditions of the lease or 

grant. Surety bonds must be issued by 

a surety listed in the current Department 

of the Treasury Circular 570. 

This portion of the final rule also 

provides guidance on the types of 

financial instruments that MMS will 

accept. 

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Changes in Financial Assurance 

This portion of the final rule sets forth 

additional financial assurance 

requirements such as termination or 

reduction of financial assurance 

instruments and reduction of required 

bond amounts. Also included are 

requirements such as forfeiture of bonds 

and supplemental bonds. 

Revenue Sharing 

This portion of the final rule 

addresses the requirements related to 

section 8(p)(2)(B) of the OCS Lands Act 

(43 U.S.C. 1337(p)(2)(B)), which 

describes how revenues received by the 

Federal Government as a result of 

payments from renewable energy 

projects or alternate uses of existing 

facilities are to be shared, in some cases, 

with affected States. Sections 285.540 

through 285.543 set forth a process for 

implementing revenue sharing from 

renewable energy projects. 

We will share 27 percent of revenues 

from a project that is within 3 miles of 

State submerged lands with all States 

within 15 miles of the geographical 

center of the project. The proportion of 

revenues to be shared by an eligible 

State depends on the distance from the 

geographical center of the qualified 

project area to the nearest point of the 

State’s coastline. The MMS will base 

State revenue sharing eligibility and 

proportionate shares due the eligible 

States on the objective measure of the 

lease area active at the end of the fiscal 

year in which MMS collects the 

sharable revenue. The configuration of 

the area on the last day of the fiscal year 

will be used to determine eligible State 

payments for that year regardless of 

when during that year a change may 

have occurred in the dimensions of the 

lease or grant. This procedure combines 

the objective basis for revenue sharing 

with the need to make adjustments due 

to changes in project area over the life 

cycle of a project. The fiscal year-end is 

an administratively efficient point for 

establishing revenue shares from all 

renewable energy projects. 

At the time MMS published the NPR, 

we had not fully resolved whether a 

State was eligible for revenue sharing if 

part of the project area is located within 

3 nautical miles of the seaward 

boundary of that coastal State but the 

nearest point on that State’s coastline 

was more than 15 miles from the 

geographical center of the qualified 

project area. Although the proposed 

regulatory text stipulated that in this 

scenario such a State would be eligible 

for revenue sharing, we included a 

question in the NPR asking whether our 

interpretation of the statutory language 

in subsection 388 of the EPAct was 

reasonable and provided the most 

equitable distribution of the revenue to 

coastal States. In response to this 

question, MMS received one comment 

requesting clarification on the 

provisional MMS interpretation that a 

State farther than 15 miles from the 

geographic center of the qualified 

project area would be eligible for 

revenue sharing. 

We have re-examined the statutory 

language in subsection 388 of the EPAct 

and have concluded that allowing a 

State to be eligible for revenue sharing 

when its nearest coastal point is farther 

than 15 miles from the geographic 

center of the project area would not be 

consistent with the statutory language. 

Accordingly, we have revised the final 

rule to reflect a more literal reading of 

the statute. Therefore, revenues from a 

project will not be shared with a State 

if the nearest point on its coastline is 

not within 15 miles of the geographic 

center of a qualified project area, even 

if a portion of the qualified project area 

is located within 3 nautical miles of that 

State’s seaward boundary. 

A project is qualified (its revenues 

may be shared with States) if the project 

is located wholly or partially within the 

area extending 3 nautical miles seaward 

of State submerged lands. The MMS 

will determine and announce the 

project area (for each qualified project) 

and its geographic center at the time it 

grants or issues a lease, easement, or 

ROW on the OCS for the purpose of a 

specific qualified project. The distance 

between the closest point on a State’s 

coastline to the geographic center of the 

qualified project area is the sole 

determinant of whether or not a State or 

any State is eligible for sharing the 

revenues from that qualified project. 

States having the nearest point along 

their coastlines within 15 miles of the 

geographic center of the qualified 

project area will be eligible for revenue 

sharing, while those States not 

satisfying this criterion will not be 

eligible. Consideration of whether or not 

a qualified project area extends into a 

State’s 8(g) zone will not be used to 

determine a State’s eligibility for 

revenue sharing. Location within 3 

miles of some State’s submerged lands 

is only relevant to determining if a 

project is subject to revenue sharing 

under subsection 388 of the EPAct 2005. 

Areas granted for transmission cables 

and other off-lease infrastructure on 

project easements will not be 

considered part of the project area for 

purposes of determining the geographic 

center of the project or whether the 

project is within 3 miles of State 

submerged lands. However, revenues 

from project easements will be shared as 

revenues of the qualified project to 

which they appertain. Only proximity of 

a State’s coastline to the geographic 

center of the qualified project area 

would be a factor in allocating revenues 

among eligible States, should more than 

one State be eligible. If a qualified 

project area changes in size or shape as 

a result of contraction or modification of 

the lease or grant, MMS will redetermine the geographic center of the 

project area to re-determine eligibility 

and to adjust the allocations among 

States. 

We received a number of comments 

with respect to disproportionate effects 

due to activity on a given lease. The 

MMS considered, but rejected, the 

option of defining a special project area 

that differs from the lease area to try to 

account for situations when proximity 

might not be a good surrogate for effects 

that could be compensated by revenue 

sharing payments. The MMS rejected 

this idea because the statute requires us 

to base the allocation formula solely on 

proximity to the project. To respond to 

such situations, we will adjust lease 

acreage as the project evolves, redetermine the geographic center of the 

project area, identify eligible States, and 

determine the eligible State 

proportionate shares in a timely 

manner. 

We received comments indicating that 

the inverse distance formula does not 

equitably distribute revenue among 

eligible States as additional factors other 

than proximity should be used to 

determine the impact the lease’s project 

would have on States. However, 

subsection 388 of the EPAct requires 

that equitable distribution of revenues 

among States be determined by a 

formula that is based on the proximity 

of the eligible States to the project. 

The MMS also received comments 

recommending that mitigation costs, 

such as civil penalties for 

environmental damages, be considered 

as revenue eligible for distribution as 

part of State revenue sharing. The rule 

provides that MMS collect payments in 

the form of bonuses, acquisition fees, 

rentals, and operating fees to ensure the 

receipt of fair value for the acreage that 

MMS leases to generate power from 

renewable energy resources on the OCS. 

As a commenter suggests, it is 

possible that the leaseholder or operator 

may provide a State or other entity 

compensation for impacts; however any 

agreement would not be facilitated by 

the DOI, and the funds would not be 

subject to revenue sharing. The revenue 

resulting from these payments under 

section 8(p)(2)(A) of the OCS Lands Act 

are the types of receipts that qualify for 

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State revenue sharing. Other types of 

revenues, not constituting payment for 

the use of Federal property, such as the 

proceeds from forfeiture of a surety 

bond or other form of financial 

assurance, cost recovery fees, and civil 

penalties, are not subject to revenue 

sharing. The MMS may assess civil 

penalties as authorized under the OCS 

Lands Act and referenced in § 285.400(f) 

of this regulation. However, any civil 

penalties levied for noncompliance of 

lease obligations, including civil 

penalties for environmental damage, are 

excluded under the State revenue 

sharing provisions since they are not 

revenue from payments under section 

8(p)(2)(A) of the OCS Lands Act. 

Accordingly, we have added language to 

the definition of ‘‘revenues’’ in 

§ 285.112 to clarify this distinction 

between payments that do and do not 

qualify for State revenue sharing. 

As a commenter suggests, it is 

possible that the leaseholder or operator 

may provide a State or other entity 

compensation for impacts; however, any 

such compensation would not be 

revenues received by the DOI subject to 

revenue sharing. 

Section-by-Section Discussion for 

Subpart E 

Payments 

How do I make payments under this 

part? (§ 285.500) 

This section explains how persons 

would submit application and filing 

fees, as well as payments due under the 

provisions of leases, easements, and 

ROW grants. Some payments will be 

made electronically through the 

Pay.Gov Web site at: https:// 

www.pay.gov/paygov/. Other payments 

will be made directly to the Minerals 

Revenue Management office in Denver, 

Colorado. We plan to promulgate 

subsequent regulations to describe 

specific payment procedures for the 

Alternative Energy and Alternate Use 

Program. 

Depending on the method of award 

we select for issuing a lease or grant, 

project proponents that seek a lease, 

easement, or ROW on the OCS for 

renewable energy activities may be 

required to submit a bonus or other upfront cash payment for a lease or grant 

issued competitively, or an acquisition 

fee for a lease or grant issued 

noncompetitively. Lessees will pay rent 

during the preliminary and site 

assessment terms. During the operations 

term, after commercial generation 

begins, commercial leaseholders would 

pay operating fees or a rent. We are not 

requiring operating payments for 

limited leases, easements, and ROW 

grants because they would not be issued 

for the purposes of commercial 

generation. Only rent would be paid by 

limited leaseholders for each year of a 

specified lease term, and would be paid 

by grantees for as long as an easement 

or ROW is in effect. 

We did not make any changes to this 

section. 

What deposits must I submit for a 

competitively issued lease, ROW grant, 

or RUE grant? (§ 285.501) 

This section provides the deposit 

requirements for persons submitting a 

bonus or other cash payments on a 

competitive lease, ROW grant, or RUE 

grant. Sealed bids would be offered with 

a deposit of 20 percent of the bid 

amount, unless otherwise specified in 

the Final Sale Notice. Bidders 

participating in ascending auctions 

would deposit a cash payment as 

established in the Final Sale Notice. 

Procedures for submitting the balance 

owed on accepted high bids would also 

be established in the Final Sale Notice. 

We require a 20 percent deposit on 

sealed bids submitted in oil and gas 

sales to assure bids are genuine, but 

through the lease sale process, we will 

consider proposals for setting a different 

deposit requirement for renewable 

energy lease sales as they are scheduled. 

Successful bidders that fail to execute 

the lease within the prescribed time will 

forfeit their deposits. The MMS is 

implementing a similar requirement for 

renewable energy competitive auctions. 

We did not make any changes to this 

section. 

What initial payment requirements must 

I meet to obtain a noncompetitive lease, 

ROW grant, or RUE grant? (§ 285.502) 

Developers may submit unsolicited 

applications for renewable energy 

leases. The MMS is required by law to 

give the public notice of such 

applications, and determine if other 

parties are interested in competing for 

the lease rights. We will require an 

acquisition fee payment when applying 

for a noncompetitive lease. We will not 

require an acquisition fee payment 

when applying for a noncompetitive 

ROW grant or RUE grant. In cases where 

there is no competitive interest, we may 

issue a lease to the applicant. We set the 

acquisition fee of $0.25 per acre for 

noncompetitive leases, unless otherwise 

set by the Director. For example, an 

application to lease a single OCS block 

of 25 square miles in area, or 16,000 

acres, would be submitted with an 

acquisition fee of $4,000. In the event 

we do not issue a noncompetitive lease 

to you, we will refund your acquisition 

fee. 

If, after public notice we make the 

determination that there is competitive 

interest, a lease or grant sale would be 

held. If the applicant submits a qualified 

bid, the acquisition fee would be 

applied to the applicant’s bid for the 

lease. If the applicant does not bid for 

or acquire the lease, we would not 

refund the acquisition fee. 

We will not require an acquisition fee 

payment when applying for a 

noncompetitive ROW grant or RUE 

grant. 

We did not make any changes to this 

section. 

What are the rent and operating fee 

requirements for a commercial lease? 

(§ 285.503) 

This section provides a rent rate of $3 

per acre per year for a commercial lease, 

unless we specify a different rate in the 

Final Sale Notice for leases issued on a 

competitive basis. When we issue a 

commercial lease noncompetitively, the 

elements of the rent and any 

adjustments to it would be stated in the 

lease instrument. Rent for the first 6 

months, or preliminary term, would be 

due 45 days after we issue your lease. 

Rent for the next 12 months and for 

each subsequent year during the site 

assessment term would be due at the 

beginning of the year for the entire lease 

area until commercial generation begins 

under an approved COP, which begins 

the operations term and when the 

obligation to pay operating fees would 

begin. We will apply an interest charge 

to late rent from renewable energy 

leases as we do to other late payments 

under 30 CFR 218.54. 

We may specify the payment of rent 

during part, or all, of the operations 

term, instead of or in addition to 

operating fees, in the Final Sale Notice 

for leases issued on a competitive basis. 

We reserve this right partly to make any 

adjustments that may be needed in 

connection with the operating fee 

structure in § 285.506. 

For example, when a lease is 

developed in phases, both rent and 

operating fees may be due on different 

parts of the commercial lease during the 

same time period. Rent would be paid 

on portions of the lease not authorized 

for commercial development, and 

operating fees could be required for the 

portion of the lease with commercial 

operations. 

A variety of considerations are behind 

our baseline $3-per-acre rent value, 

subject to change in the Final Sale 

Notice for competitively issued leases. 

In general, a rent payment serves several 

purposes. It provides a fair return to the 

United States for the opportunity cost of 

precluding other incompatible uses of 

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the OCS area. Also, it serves as a 

holding cost that encourages the lessee 

to expedite development of the project 

on the area. Under some circumstances, 

we may determine that charging 

progressively higher rents over time 

would be desirable to obtain a fair 

return and to encourage diligent 

operations. In those cases, we may 

adopt a rent rate schedule instead of a 

constant rent rate. 

The baseline commercial renewable 

energy lease rent rate of $3 per acre is 

less than 1⁄2 of the rental rate of $6.25 

per acre for oil and gas leases in shallow 

waters of the Gulf of Mexico issued in 

2007. Rents, as well as operating fees, in 

these regulations for commercial 

renewable energy leases are lower than 

those for other uses of the OCS, such as 

oil and gas development, in part to 

encourage industry to invest in offshore 

renewable energy technology. Another 

reason for setting lower payment rates is 

the lower environmental costs of 

generating electricity with renewable 

energy, rather than fossil fuels such as 

oil, gas, and coal, as discussed in the 

Overview to this part. Since external 

costs of electricity generated from 

renewable energy are much lower than 

external costs of electricity generated 

from fossil fuels, we provide for 

relatively lower payments by renewable 

energy developers to encourage 

investment. 

Based on comments MMS received, 

we modified this section to require that 

the payment of the operating fee starts 

when commercial generation begins, 

instead of with the approval of the COP. 

How are my payments affected if I 

develop my lease in phases? (§ 285.504) 

This is a new section that we added 

to clarify how developing your lease in 

phases would affect your payments. 

What are the rent and operating fee 

requirements for a limited lease? 

(§ 285.505) 

This section provides a $3-per-acre 

per year rent rate for a limited lease, 

unless a different rate is specified in the 

Final Sale Notice for leases issued on a 

competitive basis. When we issue a 

limited lease noncompetitively, the rent 

and any adjustments to it would be 

established in the lease instrument. Rent 

for the first 6 months will be due when 

MMS issues the lease. Rent for the next 

12 months and for each subsequent year 

will be due at the beginning of the year 

for the entire lease area through the end 

of the lease term. We will apply an 

interest charge to late rents from 

renewable energy leases as we apply 

under 30 CFR 218.54. These rent 

requirements are equivalent to those on 

a commercial renewable energy lease 

during the preliminary and site 

assessment terms, before commercial 

generation begins. We also have added 

a statement that no operating fee will be 

charged for the authorized sale of power 

from limited leases. 

We renumbered this section to 

accommodate a new section, § 285.504. 

We did not make any other changes to 

this section. 

What operating fees must I pay on a 

commercial lease? (§ 285.506) 

This section provides that the annual 

operating fee payments for commercial 

renewable energy leases will be 

determined by a formula related to the 

anticipated, rather than actual, gross 

value of the electricity generated on the 

lease. Upon commencement of 

electricity production for commercial 

projects under an approved COP, rent 

payments will cease. We will apply a 

production charge in the form of a 

capacity-based operating fee payment. 

This operating fee will not apply to 

limited leases because those leases do 

not allow commercial production of 

energy. Operating fee payments will be 

due on a schedule established in the 

Final Sale Notice and lease. We will 

also apply an interest charge to late 

operating fees from renewable energy 

leases as we do under 30 CFR 218.54. 

The following is the formula for 

determining the annual operating fee: 

F 

(annual operating 

fee) 

= 

M 

(nameplate 

capacity) 

* H 

(hours per year) * c (capacity factor) * 

P 

(power price per 

unit of production) 

* 

r 

(operating fee 

rate) 

The operating fee rate r, like a royalty 

rate, is one element in the formula. The 

other elements serve as reasonable and 

easily observable proxy measures of the 

output and price related to a specific 

operation. 

Based on the comments that we have 

received regarding the timing of the 

operating fee payment, the operating fee 

rate will be set at 2 percent for each year 

of the operating term, beginning at the 

time that the generating facility starts 

generating electricity commercially, 

unless we specify otherwise in the Final 

Sale Notice for competitively issued 

leases. We may set a time limit as to 

when the rent payments, following 

approval of the COP, would cease and 

the operating fee payment would 

commence, and/or we may increase the 

rental fee during this time in order to 

ensure that the construction and 

commercial operations specified in the 

lessee’s approved COP are done in a 

timely manner. For example, we may fix 

a date of 2 years after the time when the 

COP would have likely been approved 

under normal circumstances, when the 

operating fee would commence 

regardless of whether the generating 

facility actually begins producing 

electricity. Alternatively, we may not set 

a time limit but rather provide that the 

rent fee escalate for each year of 

construction, such that the rent fee rate 

would be $3/acre/year in the first year 

after the COP is approved, $6/acre/year 

in the next year, etc. Any adjustments 

to the rent fee and/or the inclusion of a 

fixed date when operating fees would 

commence will be specified in the Final 

Sale Notice or the lease. We will 

establish initial values for the other 

elements in the formula, such as the 

power price and capacity factor, in the 

lease and provide for the periodical 

revision of the initially selected values 

based on new information. When we 

issue a commercial lease 

noncompetitively, the elements of the 

operating fee and any adjustments will 

be set forth in the lease. 

Using these payment terms, lease 

revenues for a commercial lease in any 

given year would depend on the phase 

of the project and the relevant prices as 

designated by MMS for electricity in the 

State. The lease rent and operating fee 

payments can be illustrated with the 

following example for wind energy. An 

offshore wind lease, issued 

noncompetitively, on 12,000 acres of the 

OCS would be required to pay $36,000 

annually based on a charge of $3 per 

acre in rent during the site assessment 

term under § 285.503. Once we approve 

the COP and the generating facility 

begins generating electricity 

commercially, the operating fees will be 

payable. For a lease with an installed 

capacity of 200 MW and an operating 

capacity factor of 0.38, i.e., 38 percent, 

the operating fee would be $666,000 

annually if the applicable wholesale 

power price was $50 per megawatt hour. 

Additionally, if the approved project 

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plan has easements covering 2,000 

acres, an additional $10,000 in rents 

($5.00 per acre) would be collected per 

year under § 285.506. 

Although a number of comments we 

received recommended that a 

production-based operating fee be used, 

we were not persuaded with such 

arguments and did believe a change 

from the proposed capacity-based 

operating fee was warranted. During the 

production phase of a project, a 

capacity-based operating fee, rather than 

a production amount or value-based fee, 

has several advantages. The capacitybased fee avoids detailed audits of 

production sales accounts and lessens 

the likelihood of subsequent 

disagreements and legal challenges. 

The MMS believes that there are good 

reasons for requiring a higher rental rate 

or operating fee higher during the 

operating period than the charges 

imposed during the preliminary and site 

assessment period. First, a lease with 

proven resource potential is likely more 

valuable and should command a higher 

payment. Second, the lessee will be 

using the leased area more intensively 

during the construction work phase. 

While there is no depletion of a public 

asset, as there is with oil or gas, they are 

causing increased disturbances of the 

seabed. 

Prior to holding a lease sale, a high 

level of uncertainty may exist in the 

estimation of the amount of energy a 

given facility may generate based upon 

the resource potential and technology. 

In the interest of reducing uncertainty 

and stimulating investment in 

renewable energy projects, we may 

initially use a 2-percent fee rate for 

commercial renewable energy leases. 

However, although there is a baseline 2- 

percent fee rate in the regulation subject 

to revisions in the Final Sale Notice, we 

reserve the right to adjust the rate. 

For leases issued competitively, a 

renewable energy lease on the OCS may 

be issued, depending on the bidding 

system, with a constant or sliding 

operating fee rate. However, in response 

to the number of comments received 

recommending deferral of more 

complex bidding system, we will likely 

use a bidding system that is relatively 

simple and straightforward for the first 

lease sales, such as using a cash bonus 

as the bid variable and setting a constant 

operating fee rate. If the operating fee 

rate is constant, it may only vary from 

one year to the next if MMS approves 

a request for reduction or waiver. 

With a sliding fee rate, the operating 

fees may automatically change over the 

life of a lease according to a sliding 

scale schedule specified in the Final 

Sale Notice and/or lease. The term 

sliding in this context applies generally 

to any change in the operating fee rate 

over time or other increment. A sliding 

fee rate may provide for future 

adjustments based on the analysis of 

either market data or actual project data. 

It may also provide that the fee rate used 

to calculate the operating fee changes in 

a specific manner at predetermined time 

intervals. If a sliding operating fee rate 

is used as a bid variable in an auction, 

MMS would specify a mathematical 

function to determine changes to the 

value of the operating fee over time, and 

the function variable which would be 

bid. The sliding operating fee in any 

year would be the amount derived from 

this function in conjunction with the 

operating fee formula. 

We received comments expressing 

concern that MMS would make 

unilateral adjustments to the 

components of the operating fee 

formula, which would result in 

increased uncertainty for project 

proponents. Adjustments maybe made 

to the power price and capacity factor 

components of the operating fee formula 

without a reduction or waiver 

application, as specified in § 285.510. 

We will specify how the adjustments 

will be made in the Final Sale Notice 

and the lease instrument. 

Based on the number of comments 

that we have received recommending 

the use of the wholesale power price for 

the State where the transmission makes 

landfall in the operating fee formula, we 

have accepted that recommendation and 

made the appropriate changes in the 

final rule. The power price component 

will be adjusted on an annual basis 

using publicly available information 

from an independent outside source, the 

Department of Energy, Energy 

Information Agency (EIA), to reflect 

prevailing conditions. However, we 

retain the authority to adjust that 

published value to reflect variations by 

State within a region, as well as current 

market conditions that may be better 

captured in the published retail power 

price. For example, if the published 

wholesale power price for a State is 2 

years old, we may use the retail power 

price, which may be just a year old, to 

scale the wholesale power price for that 

State. We also retain the flexibility to 

use more timely or disaggregated 

wholesale power price indices. 

We reserve the right to review 

relevant capacity factor information as it 

relates to the formula, established in 

subpart E, and adjust the value used in 

the operating fee formula accordingly. 

Upon the completion of the first year of 

commercial operations on the lease, 

MMS may adjust the capacity factor 

(representing a comparison of actual 

production over a given period of time 

with the amount of power a facility 

would have produced if it had run at 

full capacity) to reflect operating 

experience during that first production 

year. The MMS may also retain the 

initial capacity factor if it is determined 

to be a reasonable value, and defer an 

adjustment of the capacity factor to a 

subsequent year. Thereafter, MMS may 

adjust the capacity factor no earlier than 

every 5 years from the most recent year 

that MMS adjusts the capacity factor. 

The process by which MMS will adjust 

the capacity factor, including any 

calculations, will be specified in the 

lease instrument. For example, a 

generating facility may have an initial 

capacity factor set at 35 percent in the 

lease, but at the end of the first full year 

of operations, the actual capacity 

utilization for the generating facility was 

34 percent. The MMS may adjust the 

capacity factor and lower it to 34 

percent for the next 5 years in order to 

reflect more accurately future 

production of the generating facility in 

the annual operating fee formula. 

Alternatively, if MMS determines that 

the existing capacity factor is a better 

representation of future use than was 

evidenced by actual utilization in year 

one, then MMS may leave the original 

capacity factor in place for a number of 

years, say in this example for 4 years. 

Following the end of that year, the 

process is repeated in 5-year intervals 

thereafter, with MMS choosing whether 

to keep the existing capacity factor in 

place, or to rely on experience during 

the most recent 5-year period. 

If MMS chooses to rely on actual 

experience, it must select the rolling 

average capacity utilization of the most 

recent experience between the timing of 

price adjustment decisions. To facilitate 

the adjustment of the capacity factor, 

the lessee will be required to submit to 

MMS the gross annual generation of 

electricity by the generating facility on 

the lease, using the appropriate form 

provided by EIA to collect the 

generation information or a form 

otherwise required by MMS. In either 

the case of a competitively or 

noncompetitively issued lease, we may 

reduce or waive fee rates under the 

process given in § 285.510. 

We would establish operating fees for 

activities not related to the generation of 

electricity, such as the generation of 

hydrogen, on a case-by-case basis 

through the lease sale process. 

Operating fees and other payment 

requirements for activities conducted as 

an alternate use of an OCS facility, such 

as an oil and gas platform, previously 

authorized under the OCS Lands Act, 

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are explained in subpart J of these 

regulations. 

We would establish operating fees for 

hydrokinetic activities requiring a FERC 

license on a case-by-case basis. This 

would give MMS the flexibility to adjust 

the operating fee rate for these projects, 

taking into consideration that 

hydrokinetic technologies are in a 

nascent stage of development and that 

FERC may require payments from the 

project developer as well. 

What rent payments must I pay on a 

project easement? (§ 285.507) 

This section provides an annual rent 

rate of $5 per acre for project easements, 

or a minimum of $450 per year, which 

will be due initially upon approval of 

the COP or GAP. Subsequent payments 

will be made on an annual basis, 

probably in conjunction with payments 

due under § 285.505, unless we specify 

otherwise in the lease for the associated 

commercial project. The width of the 

area covered by a project easement for 

a cable or pipeline would be 200 feet. 

The area covered by an installation, 

outside of the cable or pipeline corridor, 

would be limited to the areal extent of 

anchor chains, other devices, or 

facilities associated with the 

installation. 

We grant ROW easements for 

electrical cables and pipelines under the 

existing oil and gas program, similar to 

project easements under the Alternative 

Energy Program. Rent rates for grants 

issued through the oil and gas program 

are specified by regulation and provide 

a precedent. The level of compensation 

due to the government for grants issued 

under the oil and gas program is an 

appropriate analog for uses under the 

program. Accordingly, we will charge 

project easement holders a constant rent 

rate equal to $5 per acre, commencing 

with our approval of your COP or GAP 

and continuing until lease termination. 

We renumbered this section to 

accommodate a new section, § 285.504. 

We did not make any other changes to 

this section. 

What rent payments must I pay on ROW 

grants or RUE grants associated with 

renewable energy projects? (§ 285.508) 

This section provides the rent rates 

for ROW grant and RUE grants. Rent 

rates for renewable energy ROWs 

parallel rents considered fair and 

reasonable for oil and gas ROWs, and 

will be due in the amount of $70 per 

statute mile that a ROW crosses. For 

sites outside the main corridor, MMS 

will charge an additional rent of $5 per 

acre, or a minimum of $450 per year. 

Likewise, rent rates for a renewable 

energy RUE parallel those for oil and gas 

RUEs, and will be charged at an annual 

rent rate of $5 per acre, or a minimum 

of $450 per year. The first rent payment 

will be due when the ROW or RUE 

request is filed. Subsequent payments 

must be made on an annual basis, for a 

5 year period or for multiples of 5 years. 

We apply the same interest charge to 

late rents due on ROW grants or RUE 

grants for renewable energy projects as 

we do to late payments from oil and gas 

ROWs and RUEs under 30 CFR 218.54. 

ROW authorizations approved under 

the oil and gas program are granted for 

electrical cables and pipelines, and 

similar requests will also be approved 

under the Alternative Energy Program. 

The value of compensation due to the 

government for ROW grants issued 

under the oil and gas program, which 

also appears to be an appropriate analog 

for renewable energy activities, forms a 

useful precedent. As discussed in the 

last paragraph of the preceding section 

on project easements, the rent 

requirements for a renewable energy 

RUE are related to the payment 

requirements for oil and gas RUEs. 

We renumbered this section to 

accommodate a new section, § 285.504. 

We did not make any other changes to 

this section. 

Who is responsible for submitting lease 

or grant payments to MMS? (§ 285.509) 

For each lease, easement, ROW or 

RUE, one person, designated as payor, 

will be responsible for making all 

payments. All lessees and the payor 

must maintain auditable records in 

accordance with regulations in subpart 

A. We may also issue guidance related 

to recordkeeping. 

We renumbered this section to 

accommodate a new section, § 285.504. 

We did not make any other changes to 

this section. 

May MMS reduce or waive my lease or 

grant payments? (§ 285.510) 

This section provides that the MMS 

Director has the authority to reduce or 

waive a rent or operating fee, including 

components of the operating fee such as 

the fee rate or capacity factor, when 

necessary to encourage continued or 

additional activities. Applications to 

modify lease payment terms must 

include information that demonstrates 

that continued or additional activity 

would not be economic without the 

reductions or waiver requested. No 

more than 6 years of your operations 

term will be subject to a full waiver of 

the operating fee. 

It is our intent to use relevant 

electricity market and operating 

information to set the initial values for 

the power price and capacity factor of 

the operating fee formula, and to revise 

the same parameters after a lease is 

issued, as discussed in §§ 285.506(c)(2) 

and (3). Beyond that mechanism for 

revising payment requirements, the 

Director may consider a reduction or 

waiver of payments. In practice, we 

anticipate that most requests for 

reduced payments would involve a 

reduction in the fee rate of the operating 

fee formula. The Director may authorize 

such reductions if an applicant can 

show that market or operating 

conditions have changed significantly in 

a way that reduces project cash flows to 

uneconomic levels. 

We renumbered this section to 

accommodate a new section, § 285.504. 

We did not make any other changes to 

this section. 

Reserved Sections (§§ 285.511 Through 

285.514) 

Sections 285.511 through 285.514 are 

reserved. 

Financial Assurance Requirements for 

Commercial Leases 

What financial assurance must I provide 

when I obtain my commercial lease? 

(§ 285.515) 

Before MMS will issue a commercial 

lease, the applicant must provide either 

a $100,000 basic lease-specific bond or 

another MMS-approved financial 

assurance. You may also satisfy this 

requirement by providing proof that 

your designated lease operator provided 

the bond or approved financial 

assurance. 

We changed the word ‘‘security’’ to 

‘‘financial assurance.’’ We did not make 

any other changes to this section. 

What are the financial assurance 

requirements for each stage of my 

commercial lease? (§ 285.516) 

Minimum financial assurance 

requirements for each stage of lease 

development are presented in this 

section. A $100,000 basic bond or other 

financial assurance is required at lease 

issuance. A second bond or pledged 

financial instrument, in an amount 

determined by MMS, is due before the 

MMS will approve your SAP. And a 

third bond or pledged financial 

instrument, in an amount determined by 

MMS, is due before the MMS will 

approve your COP or before FERC issues 

a license for a hydrokinetic project. 

As the rule was proposed, the COP 

supplemental bond would cover all 

obligations on a lease accrued after the 

approval of the COP, including 

decommissioning costs. However, based 

on comments, we modified this 

provision to add a separate bond 

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specifically to cover decommissioning 

costs. Before you install facilities under 

your approved COP or FERC license, 

you must provide a decommissioning 

bond or other approved assurance. The 

amount of the decommissioning bond 

will be based on the anticipated 

decommissioning costs. The MMS may 

allow you to provide the 

decommissioning bond in stages, based 

on the schedule for facility installation. 

The MMS must approve the schedule 

for providing this bond. 

We made conforming changes 

throughout this section to reflect FERC’s 

role in regulating hydrokinetic activity. 

How will MMS determine the amounts 

of the supplemental and 

decommissioning financial assurance 

requirements associated with 

commercial leases? (§ 285.517) 

The MMS will determine the amount 

required for each bond by considering 

projected amounts of rents and other 

payments due the government over the 

next 12 months; any past due rents or 

other payments; and the costs of lease 

abandonment and cleanup. You may 

increase an existing bond or use a 

combination of existing bonds and other 

approved forms of financial assurance to 

satisfy your requirements. 

We made minor edits to this section, 

including conforming changes to reflect 

FERC’s role in regulating hydrokinetic 

activity. 

Reserved Sections (§§ 285.518 Through 

285.519) 

Sections 285.518 through 285.519 are 

reserved. 

Financial Assurance for Limited 

Leases, ROW Grants, and RUE Grants 

What financial assurance must I provide 

when I obtain my limited lease, ROW 

grant, or RUE grant? (§ 285.520) 

Before MMS will issue a limited lease, 

ROW grant, or RUE grant, the applicant 

must provide either a $300,000 basic 

limited lease or grant-specific bond or 

another MMS-approved financial 

assurance. The basic bond for a limited 

lease or grant is higher than the basic 

bond on a commercial lease because we 

anticipate that obligations on a limited 

lease or grant will begin to accrue 

sooner, but will not be as extensive as 

the obligations on a commercial lease. 

With the commercial lease, we have 

established periods to reassess the bond 

amount (i.e., before approving the SAP 

or the COP). We do not have these 

automatic reassessments under a limited 

lease or grant. Also, a limited lease has 

a short term, only 5 years, and we do 

not anticipate reassessing the bond 

amount unless the applicant proposes 

significant or complex facilities. You 

may also satisfy this requirement by 

providing proof that your designated 

limited lease or grant operator provided 

the bond or approved financial 

assurance. 

We revised parts of this section to 

conform with changes we made to 

bonding requirements in §§ 285.526 

through 285.529. 

Do my financial assurance requirements 

change as activities progress on my 

limited lease or grant? (§ 285.521) 

The MMS may require you to provide 

additional financial assurance as 

activities on your lease progress to cover 

projected liabilities of rents and other 

payments due the government over the 

next 12 months; any past due rents or 

other payments; and the costs of lease 

abandonment and cleanup increase. 

We revised paragraph (a)(4) to make it 

consistent with § 285.517. We also 

added a new paragraph to add the 

option for a separate decommissioning 

bond or other form of financial 

assurance, as we did with commercial 

leases. 

Reserved Sections (§§ 285.522 Through 

285.524) 

Sections 285.522 through 285.524 are 

reserved. 

Requirements for Financial Assurance 

Instruments 

What general requirements must a 

financial assurance instrument meet? 

(§ 285.525) 

All bonds and other forms of financial 

assurance must be payable to MMS 

upon demand and be in a form 

approved by MMS. Your surety bonds 

must be issued by a certified surety 

listed in the current Treasury Circular 

570. This section also provides 

instructions on executing your bond and 

when your surety must notify you and 

the MMS due to changes in its Treasury 

certification status, insolvency, or 

bankruptcy. 

We did not make any changes to this 

section. 

What instruments other than a surety 

bond may I use to meet the financial 

assurance requirement? (§ 285.526) 

You may utilize alternative financial 

assurance instruments when MMS 

determines that they protect the 

interests of the U.S. Government to the 

same extent as a bond. If using an 

alternative financial assurance 

instrument, you must monitor its value 

and must provide the authority for MMS 

to sell it and use the proceeds if the 

MMS determines that you have failed to 

satisfy any lease obligation. 

Based on comments that we received, 

requesting more financial assurance 

options, MMS added options for: 

• Negotiable U.S. Government, State, 

and Municipal securities or bonds; 

• Investment-grade rated securities; 

or 

• Insurance. 

These security instruments must 

protect MMS to the same extent as a 

surety bond. 

May I demonstrate financial strength 

and reliability to meet the financial 

assurance requirement for lease or grant 

activities? (§ 285.527) 

The MMS added a new section to 

allow you to demonstrate financial 

strength and reliability, instead of a 

bond or other form of financial 

assurance, to meet the financial 

assurance requirements under this part. 

This section was added based on 

comments we received requesting such 

an option. This section details the 

requirements for demonstrating 

financial strength and reliability. 

May I use a third-party guaranty to meet 

the financial assurance requirement for 

lease or grant activities? (§ 285.528) 

The MMS added this section to allow 

use of a third-party guaranty to meet 

financial assurance requirements. This 

section was added in response to 

comments requesting more options to 

meeting the financial assurance 

requirements under this part. The 

section details the requirements for 

using a third-party guaranty. 

Can I use a lease- or grant-specific 

decommissioning account to meet the 

financial assurance requirements 

related to decommissioning? (§ 285.529) 

The MMS may authorize you to 

establish a decommissioning account in 

a federally insured institution with 

certain limitations to satisfy that portion 

of your financial assurance obligation 

that is for decommissioning. Funds may 

not be withdrawn without prior MMS 

approval, and must be pledged to meet 

your decommissioning and site 

clearance obligations. This section also 

discusses how interest paid on the 

account must be treated and when we 

may allow the use of Treasury Securities 

to satisfy the obligation to make 

payments into the account. 

We did not make any changes to the 

regulatory text of this section; however, 

we renumbered this section from 

§ 285.527 to § 285.529 to accommodate 

new sections. 

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Changes in Financial Assurance 

What must I do if my financial 

assurance lapses? (§ 285.530) 

This section discusses the steps you 

must take if your surety loses Treasury 

certification, becomes insolvent, or has 

its charter suspended, or if your 

approved financial assurance expires. 

You must promptly notify MMS and 

provide new financial assurance. 

We did not make any edits to this 

section. 

What happens if the value of my 

financial assurance is reduced? 

(§ 285.531) 

This section requires that additional 

financial assurance be provided 

whenever the value of the current 

assurance falls below the required 

amount. 

We did not make any changes to this 

section. 

What happens if my surety wants to 

terminate the period of liability of my 

bond? (§ 285.532) 

This section describes the liabilities 

that accrue during a period of liability 

and provides requirements that a surety 

must follow when requesting to 

terminate the period of liability under 

its bond. 

How does my surety obtain cancellation 

of my bond? (§ 285.533) 

The MMS will release a bond or allow 

a surety to cancel a bond only when all 

obligations covered by the bond have 

been completed satisfactorily or MMS 

accepts a replacement bond or 

alternative form of financial assurance 

that covers the existing liabilities from 

the period covered by the bond to be 

cancelled. This section describes when 

your period of liability ends, when your 

financial assurance will be released by 

MMS, and how the MMS may approve 

a reduction in the amount of your 

approved financial assurance if portions 

of your lease obligations have been 

satisfactorily completed. 

We did not make any changes to this 

section. 

When may MMS cancel my bond? 

(§ 285.534) 

This section presents a 

comprehensive table which displays the 

different types of bonds required in this 

subpart, and when the period of liability 

ends. The table further displays when 

the bond will be released under a 

variety of circumstances. 

We did not make any changes to this 

section. 

Why might MMS call for forfeiture of my 

bond? (§ 285.535) 

The MMS may call for forfeiture of 

your bond if you default on any of the 

conditions under which you accepted 

your bond or refuse or fail to comply 

with any term or condition of your lease 

or grant. 

We did not make any changes to this 

section. 

How will I be notified of a call for 

forfeiture? (§ 285.536) 

This section specifies that you and 

your surety will be notified in writing 

of the call for forfeiture and will be 

provided the reasons for the MMS 

action. The MMS will also advise you 

and your surety in writing of the actions 

you must take within 10 days to avoid 

forfeiture. 

We did not make any changes to this 

section. 

How will MMS proceed once my bond 

or other security is forfeited? (§ 285.537) 

This section explains that you and 

any co-lessee or co-grant holders are 

jointly and severally liable for the full 

cost of corrective actions on your lease 

or grant, even if they exceed the amount 

collected under your bond. The MMS 

may take or direct action to recover all 

costs in excess of the forfeited bonds. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.538 Through 

285.539) 

Sections §§ 285.538 through 285.539 

are reserved. 

Revenue Sharing With States 

Sections 285.540 through 285.543 of 

this rule describes the factors MMS will 

consider in determining how to 

equitably distribute revenues among 

eligible States. 

How will MMS equitably distribute 

revenues to States? (§ 285.540) 

This section provides the procedure 

for calculating the State shares of 

revenue. To determine each eligible 

State’s share of the 27 percent of the 

revenues received by the Federal 

Government for a qualified project, 

MMS will use the inverse distance 

formula, based on the shortest distance 

between State coastlines and the 

geographic center of the qualified 

project area. This is the formula used for 

the same purpose under the Coastal 

Impact Assistance Program 

administered by MMS. 

We made minor changes to this 

section to clarify that revenues do not 

include administrative fees such as 

service fees and those assessed for civil 

penalties and forfeiture of bond or other 

surety obligations. 

What is a qualified project for revenue 

sharing purposes? (§ 285.541) 

This is a new section that describes 

what projects qualify for revenue 

sharing purposes. A qualified project for 

the purpose of revenue sharing with 

eligible coastal States consists of lease 

acreage that is wholly or partially 

located within the area extending 3 

nautical miles seaward of State 

submerged lands. 

What makes a State eligible for payment 

of revenues? (§ 285.542) 

This is a new section that describes 

how MMS will determine if a State is 

eligible for payment of revenues. A State 

is eligible for payment of revenues if 

any part of the State’s coastline is 

located within 15 miles of the 

announced geographic center of the 

qualified project area. A State is not 

eligible for revenue sharing if all points 

on that State’s coastline are more than 

15 miles from the announced 

geographic center of the qualified 

project area. This is the case even if no 

State’s coastline is located within 15 

miles from the announced geographic 

center of the qualified project area, and 

thus no State would share revenues 

from the project. 

Example of How the Inverse Distance 

Formula Works (§ 285.543) 

This is a revised section that 

illustrates several examples of how the 

inverse distance formula works. 

Example (a). A qualified project area 

is located partially within the zone 

extending 3 miles seaward of State A’s 

submerged lands. The geographic center 

of the qualified project area is more than 

15 miles from the coastline of any State. 

In this scenario, no State would be 

eligible for payment of Federal revenues 

from that qualified project. This is the 

case because the distance from the 

geographic center of the qualified 

project area to the nearest point on each 

of the States’ coastline is greater than 15 

miles, which is the only determinant as 

to whether or not a State is eligible for 

payment of revenues. 

Example (b). A qualified project area 

is located partially within the zone 

extending 3 nautical miles seaward of 

State A’s submerged lands. The 

geographic center of the qualified 

project area is within 15 miles of State 

B’s coastline, but is farther than 15 

miles from State A’s coastline. In this 

scenario, State B would receive the 

entirety of the 27 percent of revenues to 

be shared from the project. This is the 

case because State A’s proximity to the 

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geographic center of the qualified 

project area is greater than 15 miles, 

even though the qualified project area is 

located partially within the zone 

extending 3 miles seaward of State A’s 

submerged lands. Again, the location of 

the project area within 3 nautical miles 

of a State’s submerged lands is only 

used to determine if a project is subject 

to revenue sharing (i.e., is a qualified 

project) and is not used to determine 

any State’s eligibility for payment of 

revenue from a qualified project. 

Example (c). A qualified project area 

is located partially within the zone 

extending 3 nautical miles seaward of 

State C’s submerged lands. The 

geographic center of the qualified 

project area is within 15 miles of both 

State A’s and State B’s coastline, but is 

farther than 15 miles from any other 

States’ coastline, including State C. In 

this scenario, State A and State B would 

split the 27 percent of revenues to be 

shared from the project. The sharing 

between these two States would be 

based on their proximity to the 

geographic center of the qualified 

project area. To elaborate, assume that 

the geographic center of the qualified 

project area lies 12 miles from the 

closest point on State A’s coastline and 

4 miles from the closest point on State 

B’s coastline. Pursuant to the inverse 

distance formula, eligible States with 

coastlines that are farther from the 

geographic center of a qualified project 

area would get proportionally lower 

revenue shares from the project. 

State A’s proportion = [(1⁄12) ÷ (1⁄12 + 1⁄4)] 

= 1⁄4

State B’s proportion = [(1⁄4) ÷ (1⁄12 + 1⁄4)] 

= 3⁄4. 

Therefore, State B, being three times 

closer than State A to the center of the 

qualified project’s area, would receive a 

share that is three times larger than 

State A’s share. 

Eligible States share the 27 percent of 

the total revenues from the qualified 

project as mandated under the EPAct. 

Hence, if the qualified project generates 

$1,000,000 of revenues in a given year, 

the Federal Government would 

distribute the States’ 27 percent shares 

as follows, rounded to the nearest whole 

dollar: 

State A’s share = $270,000 × 1⁄4 = 

$67,500. 

State B’s share = $270,000 × 3⁄4 = 

$202,500. 

Subpart F—Plans and Information 

Requirements 

Overview 

Subpart F describes the types of plans 

and information requirements for 

commercial leases, limited leases, ROW 

grants, and RUE grants for renewable 

energy activities. The subpart outlines 

the timing of submission, content 

requirements, and necessary MMS 

approvals for each of the plans. The 

types of required plans are described in 

the next section. The lessee, grant 

holder, or operator must submit the 

appropriate plan to MMS for review and 

approval before beginning any activities 

covered by that plan. 

Types of Plans 

Three types of plans are required, 

depending on the type of instrument 

held and the activity to be conducted: 

(1) Site Assessment Plan (SAP), 

(2) Construction and Operations Plan 

(COP), and 

(3) General Activities Plan (GAP). 

The SAP and the COP will be used for 

commercial leases, while the GAP will 

be used for limited leases and grants. 

As originally proposed, MMS would 

not allow a lease or grant holder to 

conduct any activities on the OCS 

without proper plan submittal and MMS 

approval. Based on comments received 

on the proposed rule, MMS has 

determined that geophysical and 

geological surveys, hazards surveys, 

archaeological surveys, and baseline 

collection studies (e.g., biological) 

conducted for the purpose of preparing 

SAPs, COPs, and GAPs may be 

permitted under the authority of the 

U.S. Army Corps of Engineers (ACOE). 

In many instances, these types of 

activities may be verified under the 

ACOE’s Nationwide Permit program. 

We have revised the regulation to 

remove the requirement for MMS 

approval of these types of surveys and 

the requirement to describe the survey 

designs in a SAP, COP, or GAP. 

Companies may now conduct these 

surveys pre- or post-lease/grant, subject 

to ACOE verification under the 

Nationwide Permit program or other 

appropriate authorization and other 

applicable Federal law. However, MMS 

strongly encourages applicants to 

coordinate any pre- or post-lease/grant 

survey activities with MMS and the 

ACOE prior to their conduct to ensure 

that the activities being proposed meet 

the conditions of the Nationwide 

Permits. Certain Nationwide Permits 

require that an applicant notify the 

ACOE and receive verification that an 

activity is covered under a Nationwide 

Permit prior to start of construction. 

Applicants will be required to submit 

the results of their surveys as part of 

their SAP, COP, or GAP. The data 

collected from these surveys must meet 

the technical requirements that MMS 

will set forth in guidance to be 

published after the promulgation of this 

rule. By making this change, MMS 

believes that applicants will be able to 

complete their plans more efficiently. 

Any construction activities (e.g., 

installation of a meteorological tower, a 

meteorological buoy) or the testing of 

technology devices needs to be 

proposed in the SAP, COP, or GAP. We 

have changed the text of the rule to 

reflect these changes. 

Based on comments, we have reduced 

the number of NEPA and CZMA reviews 

for a commercial lease issued 

competitively from three to two by 

combining the lease sale and site 

assessment activities into one review. 

This, in combination with the 

elimination of MMS approval of surveys 

(e.g., geophysical, geological, 

archaeological, and biological), should 

greatly reduce the review time for 

commercial leases issued competitively. 

The MMS will prepare a NEPA 

document and a consistency 

determination to cover the lease sale 

and site assessment activities. The MMS 

may review the effects of geophysical, 

geological, archaeological, and 

biological surveys in the NEPA 

documentation for the lease sale, as 

well. 

Also based on comments received on 

the proposed rule, we will now include 

technology testing as an activity that 

may be conducted under a SAP or a 

GAP. We have changed the definition of 

site assessment activities to ‘‘those 

initial activities conducted to 

characterize a site on the OCS, such as 

resource assessment surveys (e.g., 

meteorological and oceanographic) or 

technology testing.’’ 

Prior to conducting site assessment 

activities on a commercial lease, a lessee 

will be required to submit a SAP. The 

SAP describes the activities (e.g., 

installation of meteorological towers, 

meteorological buoys) a lessee plans to 

perform for the characterization of their 

commercial lease, including the project 

easement, or to test technology devices. 

The SAP must include data from: (1) 

Physical characterization surveys (e.g., 

geological and geophysical surveys or 

hazards surveys); and (2) baseline 

environmental surveys (e.g., biological 

or archaeological surveys). If you 

propose to construct a facility or 

combination of facilities, which MMS 

determines to be complex or significant, 

you must also comply with the 

requirements of subpart G. 

A COP will be required before a lessee 

may begin construction and/or 

operations on a commercial lease, 

including a project easement. The COP 

describes the construction, operations, 

and conceptual decommissioning 

activities the lessee plans to undertake. 

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A GAP will be required before a lessee 

or grantee may begin activities on a 

limited lease (including a project 

easement, as applicable) or ROW grant 

or RUE grant. The GAP describes the 

site assessment and/or development 

activities. The GAP must describe: (1) 

Resources assessment surveys (e.g., 

meteorological and oceanographic data 

collection); (2) technology testing; and 

(3) construction activities, operations, 

and conceptual decommissioning plans 

for all planned facilities. The GAP must 

include the data from: (1) Physical 

characterization surveys (e.g., geological 

and geophysical surveys or hazards 

surveys); (2) baseline environmental 

surveys (e.g., biological, archaeological, 

or socioeconomic surveys); and (3) 

construction activities, operations, and 

conceptual decommissioning plans for 

all planned facilities. 

The rule requires two plans for a 

commercial lease (SAP and COP) and 

one plan (GAP) for limited leases and 

ROW grants or RUE grants. We chose 

this approach for a commercial lease 

because there are two distinct phases for 

commercial development for renewable 

energy projects: (1) A site assessment 

phase, where a lessee may install a 

meteorological or marine data collection 

facility to assess renewable energy 

resources; and (2) a generation of power 

phase, which includes construction, 

operations, and decommissioning. As 

described previously, physical 

characterization studies (e.g., geological 

and geophysical surveys, hazard and 

archaeological surveys) and baseline 

collection studies (e.g., biological) may 

be permitted under the ACOE 

Nationwide Permit program and other 

applicable Federal law. Therefore, the 

survey designs will not need to be 

included in a SAP, COP, or GAP, nor 

will they need to receive approval from 

MMS prior to implementation. 

Limited leases are limited to resource 

measurements or technology testing and 

are not for the commercial generation of 

power. Therefore, only one phase exists, 

and only one plan, a GAP, is required 

for this phase. Having only one plan for 

one phase allows for a simple process to 

conduct resource evaluation or 

technology testing. The same reasoning 

was used for ROW grants and RUE 

grants—these grants do not involve 

commercial power generation activities 

on the OCS. 

Overview of Required Plans 

The two plans for commercial 

development are a SAP and a COP. 

These plans should clearly describe the 

general approach to the project and 

include detailed technical and 

environmental information. The twoplan approach for commercial activities 

sets two defined times for conducting 

NEPA analysis and CZMA reviews. 

These plans must include all the 

information needed to conduct 

appropriate NEPA analysis and for 

compliance with other Federal laws. 

Based on comments received on the 

proposed rule, we have revised the rule 

to clarify the CZMA reviews for SAPs, 

COPs, and GAPs. For purposes of 

Federal consistency, MMS will treat 

plans (COPs and GAPs) associated with 

competitively-issued commercial and 

limited leases as OCS plans which must 

comply with requirements of CZMA 

subsection 307(c)(3)(B) and 15 CFR part 

930, subpart E. The applicant must 

submit one copy of their CZMA 

consistency certification with each plan. 

The MMS will prepare a consistency 

determination for a competitive lease 

sale and site assessment activities. 

The MMS will treat SAPs and GAPs 

associated with noncompetitivelyissued commercial and limited leases as 

Federal licenses and permits which 

must comply with requirements of 

CZMA subsection 307(c)(3)(A) and 15 

CFR part 930, subpart D. The applicant 

will be required to prepare a 

consistency certification and 

concurrently submit it to the affected 

State’s CZM agency and MMS along 

with the proposed SAP or GAP and all 

supporting information required in 15 

CFR part 930, subpart D. The details of 

the CZMA process are described under 

‘‘CZMA Compliance for Plans.’’ This 

approach includes a predictable 

schedule for development and 

milestones for plan submittals. 

The SAP covers resource, other data 

gathering activities (e.g., meteorological, 

oceanographic), and the testing of 

technology devices that would be 

conducted to gather information needed 

to develop the project. The SAP 

includes the results and data collected 

from physical characterization surveys 

(e.g., geological and geophysical surveys 

or hazards surveys) and baseline 

environmental surveys (e.g., biological 

and archaeological surveys) conducted 

prior to the preparation of the SAP and 

under the authority of the ACOE and 

other Federal laws. However, MMS 

strongly encourages applicants to 

coordinate any pre- or post-lease/grant 

survey activities with MMS and the 

ACOE prior to their conduct. Applicants 

will be required to submit the results of 

their surveys as part of their SAP, COP, 

or GAP. The data collected from these 

surveys must meet the technical 

requirements that MMS will set forth in 

guidance to be issued after the rule is 

final. The data gathered under the SAP 

would be used to develop the COP for 

the project. The site assessment 

activities may include resource 

assessment surveys (e.g., meteorological 

and oceanographic data collection), and 

the testing of technology devices. 

Additionally, a SAP may include the 

construction of simple facilities for data 

collection, such as meteorological 

towers. However, if you are constructing 

a facility or a combination of facilities 

deemed by MMS to be complex or 

significant, you must comply with the 

requirements of subpart G and submit a 

Safety Management System. The SAP 

expires when MMS approves the COP. 

To conduct site assessment type 

activities after a COP is approved, the 

applicant would need to include those 

activities in the COP. 

To facilitate development of a 

commercial lease, an applicant may 

choose to submit to MMS a COP with 

the SAP. In this case, the NEPA 

analysis, CZMA review, and compliance 

with other relevant laws would be done 

at one time. If the applicant decides to 

submit the COP and SAP 

simultaneously, then sufficient data and 

information must be submitted with the 

COP for MMS to conduct needed 

technical, NEPA, and other required 

reviews. If new information becomes 

available after the applicant completes 

the site assessment activities, then the 

COP may require revision. Furthermore, 

MMS may need to conduct additional 

reviews, including NEPA, CZMA, and 

other Federal reviews, on any new 

information. 

The COP describes the construction 

and operations for the project itself, 

covering all planned facilities, including 

onshore and support facilities, and all 

anticipated project easements needed 

for the project. It also describes the 

actual activities related to the project 

including construction, commercial 

operations, maintenance, and 

decommissioning. The COP does not 

need to repeat information that was 

previously submitted in the SAP, but 

should reference such material. The 

COP includes the results of the activities 

conducted under the SAP. The COP 

must demonstrate to MMS that the 

operator has planned and is prepared to 

conduct the proposed activities in a 

manner that conforms to their 

responsibilities under these regulations. 

It also must demonstrate that the 

project: 

• Will conform to all applicable laws, 

implementing regulations, lease 

provisions and stipulations, or 

conditions of the commercial lease; 

• Is safe; 

• Does not unreasonably interfere 

with other uses of the OCS, including 

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those involved with national security or 

defense; 

• Does not cause undue harm or 

damage to natural resources, life 

(including human and wildlife), 

property, or the marine, coastal, or 

human environment; 

• Does not cause undue harm or 

damage to sites, structures, or objects of 

historical or archaeological significance; 

• Will use best available and safest 

technology, will use best management 

practices, and will employ properly 

trained personnel. 

Limited leases, ROW grants, and RUE 

grants will require approval of a GAP. 

The GAP includes components of both 

the SAP and the COP. However, we 

expect that limited leases, ROWs, and 

RUEs would involve less extensive 

activities than those planned for a 

commercial lease. The applicant may 

include multiple scenarios in the GAP 

to address the potential outcome of the 

site assessment activities, so that 

multiple locations would be evaluated 

as part of the NEPA analysis. If, after 

evaluating the site, the initially planned 

location of a facility needs to be 

relocated, additional NEPA would not 

be required since alternative locations 

were evaluated in the NEPA for the 

GAP. 

Site Assessment Plan (SAP) 

The SAP describes the activities (e.g., 

installation of meteorological towers, 

meteorological buoys) a lessee plans to 

perform for the characterization of their 

commercial lease, including testing 

technology devices. These activities 

would take place during the site 

assessment term of a commercial lease. 

The data obtained during site 

assessment is used to develop a COP 

and is included in the COP. The 

activities proposed in a SAP may 

include the installation of facilities 

(including vessels) attached to the sea 

floor, such as meteorological towers to 

measure winds, radars to assess avian 

resources, or marine data collection 

facilities to measure waves or currents; 

or the testing of technology devices. The 

MMS expects that the applicant would 

conduct physical characterization 

surveys and baseline environmental 

surveys prior to the preparation of the 

SAP, and include the results and 

supporting data from those surveys in 

the SAP. Information contained in the 

SAP must provide sufficient detail for 

MMS to adequately assess the proposed 

activities and ensure compliance with 

NEPA and other relevant Federal laws. 

The MMS must approve the SAP 

before the operator can begin 

conducting any proposed activities. If 

MMS approves the SAP, the operator 

may begin conducting activities, 

including the installation of facilities. 

However, if you are constructing a 

facility or a combination of facilities 

deemed by MMS to be complex or 

significant, you must comply with the 

requirements of subpart G and submit a 

Safety Management System before 

construction may begin. 

When MMS receives the applicant’s 

COP for technical and environmental 

review, MMS may extend the siteassessment term during the review 

period, if necessary. The SAP expires 

when MMS approves the COP. 

Therefore, if an applicant anticipates 

conducting site assessment activities 

anytime during the COP period, those 

activities must be described in the COP, 

and the applicant must receive MMS 

approval of the COP before conducting 

the activities. 

Subpart F outlines what issues the 

applicant must address in the SAP such 

as legal requirements, safety, other uses 

of the OCS, environmental protection, 

technology, best management practices, 

and the use of properly trained 

personnel. The provisions also outline 

the information that the applicant must 

submit with the SAP as well as 

additional information that must be 

submitted if the SAP includes activities 

that require the installation of bottomfounded facilities. The MMS envisions 

that most such facilities would be 

relatively simple and temporary. 

However, if an operator proposes to 

install a facility that the MMS 

determines is significant or complex, 

additional information would be 

required. If MMS makes such a 

determination, you must submit a 

Facility Design Report and a Facility 

Fabrication and Installation Report, as 

described in subpart G, and a Safety 

Management System, as described in 

subpart H, before any construction may 

begin. The Facility Design Report 

provides MMS with a detailed 

description of the proposed facility or 

facilities and locations on the OCS. The 

Fabrication and Installation Report 

describes the lessee/operator’s or grant 

holder’s plans for both the facility’s 

fabrication and installation process. The 

MMS will review these reports prior to 

each stage of these operations. 

One commenter suggested that 

applicant preparation and MMS review 

and approval of the Facility Design 

Report and Fabrication and Installation 

Report should proceed in parallel with 

MMS’s preparation of the EIS and 

review of the COP. The commenter 

suggested that proceeding in parallel 

could reduce the overall project 

development timeline by 4–6 months. 

The regulations bind the Facility Design 

Report and the Fabrication and 

Installation Report to the approved COP. 

This is necessary to ensure that these 

two reports cover the activities and 

facilities as approved. As written, the 

regulations do not prevent an applicant 

from submitting the Facility Design 

Report or the Fabrication and 

Installation Report with the COP. 

However, we envision that there will be 

changes to the COP during its review 

and that such changes could result in 

revisions to the Facility Design Report 

and the Fabrication and Installation 

Report. If that situation occurs, the 

applicant would have to revise and 

resubmit the two required reports. We 

do not see that submittal of the Facility 

Design Report and Fabrication and 

Installation Report with the COP saves 

much, if any, time leading up to the 

installation of facilities, but we will not 

prevent an applicant from doing so. 

For commercial leases acquired 

noncompetitively, you must submit the 

SAP within 60 days after the MMS 

determination of no competitive 

interest. The MMS will not issue the 

lease until the SAP is approved. If you 

acquired a commercial lease 

competitively, you must submit the SAP 

within 6 months of the date of lease 

issuance. A commenter raised the 

concern that these time periods may not 

provide enough time to conduct the 

needed assessments and incorporate 

them into a plan. We believe that the 

time period is adequate to prepare a 

SAP. However, if more time is needed, 

the lessee may request a suspension 

under § 285.416(c) after acquiring the 

lease. We will conduct technical and 

environmental reviews. In this case, the 

NEPA and CZMA reviews would be 

completed at the lease sale stage. 

However, if new information from the 

SAP submittal showed changes in 

impacts identified at the lease sale stage, 

the SAP could be subjected to further 

environmental review. If the lease was 

obtained noncompetitively, the 

applicant will be required to prepare a 

consistency certification and 

concurrently submit it to the affected 

State’s CZM agency and MMS along 

with the proposed SAP or GAP, as well 

as all supporting information required 

in 15 CFR part 930, subpart D. After the 

reviews are complete, MMS would 

approve, disapprove, or approve with 

modifications the SAP. Based on 

comments received on the proposed 

rule, we have revised the rule to clarify 

our process for when a State objects to 

the consistency certification. When a 

State objects to the consistency 

certification, MMS will not approve the 

plan if: (1) Consistency has not been 

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conclusively presumed; or (2) the State 

objects to the applicant’s consistency 

certification, and the Secretary of 

Commerce has not found that the 

permitted activities are consistent with 

the objectives of the CZMA or are 

otherwise necessary in the interest of 

national security. 

In response to a comment asking how 

MMS will determine ‘‘affected States’’ 

for CZMA purposes, MMS will 

coordinate with the appropriate CZMA 

agencies and consult with regional task 

forces. The MMS will specify the terms 

and conditions of the approval, and you 

must incorporate these into your SAP. If 

the SAP is approved or approved with 

modifications, the applicant must 

conduct all site assessment activities in 

accordance with the provisions of the 

approved plan. The MMS may require 

the applicant to certify compliance with 

certain of the terms and conditions as 

identified by the MMS. If MMS does not 

approve the SAP, we will provide an 

explanation of our disapproval, and the 

applicant may modify and resubmit the 

revised SAP. 

One commenter asked us to identify 

the type of document MMS will issue as 

its final decision on a SAP or COP. The 

MMS will issue decision letters for a 

SAP, COP, and GAP. In addition, where 

an EIS is prepared, a ROD will be 

issued. In cases where an EA is 

prepared, either a Finding of No 

Significant Impact would be prepared 

(in addition to the decision letter), or, 

depending on the outcome of the 

environmental review, an EIS could be 

prepared. 

One commenter stated that the 

proposed rule is unclear as to the 

process available to States or other 

stakeholders to address and remedy 

disagreements arising from the content 

of the SAP, GAP or COP, other than that 

offered by the comment review process. 

The commenter stated that this process 

is particularly important where a ROW 

easement crosses the State territorial 

sea. The commenter recommends that 

MMS develop language to include such 

a process. The MMS will work closely 

with affected States and local 

governments to coordinate and consult 

on such activities to ensure that related 

issues and concerns are addressed. For 

competitive leases, MMS addresses 

potential impacts from a subsea cable 

route through State waters in the lease 

sale, COP, and GAP NEPA 

documentation. The MMS may consider 

performing this assessment with an 

affected State in a joint environmental 

document. Since MMS’s authority is 

limited to the OCS (outside of State 

waters), the affected State would have 

full authority to decide on access issues 

within State waters. 

If you want to conduct activities not 

directly addressed in the approved SAP, 

you must provide MMS with a written 

description of the proposed activities 

and receive approval from MMS before 

conducting the activities. We will 

determine whether the activities are 

within the scope of the approved SAP 

or if the SAP needs to be revised. If 

MMS determines that you must revise 

the SAP, then MMS must approve the 

revised SAP before you can conduct the 

activities. 

Construction and Operations Plan 

(COP) 

The COP describes the construction, 

operations, and conceptual 

decommissioning plans for the 

operations term of any project under a 

commercial lease, including your 

project easement. Your plan should 

describe all operations and facilities 

(onshore and offshore) that would be 

installed and used to test, gather, 

transport, transmit, or generate and 

distribute energy from the lease. The 

COP should include: 

• Nominations of CVAs for MMS 

approval or request of an exemption, 

where required; 

• Preliminary plans for project 

design, facility fabrication and 

installation, and production 

transportation and transmission; 

• Plans for safety management, 

inspection, maintenance, and 

monitoring systems; and 

• The decommissioning concept. 

The rule outlines the process for 

preparing, submitting, processing, and 

implementing a COP or a combined 

SAP/COP. The MMS must approve the 

COP or the combined SAP/COP before 

you can construct any facilities for 

commercial operation. 

As with the SAP, the provisions of the 

rule outline what a COP must contain 

and demonstrate, as well as how the 

COP is submitted, processed, and 

authorized. The MMS may require 

additional specific information for 

submittal with the COP, to aid in the 

appropriate reviews of the project by 

external agencies and to assist in 

compliance with all relevant Federal 

laws and regulations (e.g., NEPA, 

CZMA, ESA, and MMPA). We may 

request additional information if the 

information provided is insufficient. 

However, the COP does not need to 

repeat information that was previously 

submitted in the SAP, but should 

reference such material. 

For commercial leases acquired 

noncompetitively and competitively, 

you must submit a COP within 5 years 

after MMS approves your SAP. The 

MMS will extend the term of the SAP, 

if necessary, while conducting the 

technical and environmental reviews of 

your COP. We will conduct these 

technical and environmental reviews of 

your COP, including NEPA analysis, 

and, for leases issued competitively, 

will forward the plan, your consistency 

certification and information required 

pursuant to 15 CFR part 930, subpart E 

to affected States for CZMA review. For 

leases issued in a noncompetitive 

process, you will be required to prepare 

a consistency certification and 

concurrently submit it to the affected 

State’s CZM agency and MMS along 

with the proposed COP and all 

supporting information required in 15 

CFR part 930, subpart D. After the 

reviews are complete, MMS would 

approve, disapprove, or approve with 

modifications the COP. Based on 

comments received on the proposed 

rule, we have revised the rule to clarify 

our decision process when a State 

objects to the consistency certification. 

When a State objects to the consistency 

certification, MMS will not approve the 

plan if: (1) Consistency has not been 

conclusively presumed; or (2) the State 

objects to the applicant’s consistency 

certification, and the Secretary of 

Commerce has not found that the 

permitted activities are consistent with 

the objectives of the CZMA or are 

otherwise necessary in the interest of 

national security. The MMS will specify 

the terms and conditions of the 

approval, and they would be 

incorporated into your COP. If MMS 

approves the COP or approves the COP 

with modifications, the applicant must 

conduct all of the proposed activities in 

accordance with the provisions of the 

approved plan and certify compliance 

with those terms and conditions 

identified by the MMS. If MMS does not 

approve the COP, we will provide an 

explanation of our disapproval, and the 

applicant may modify and resubmit the 

revised COP. 

If MMS approves your project 

easement, we will issue an addendum to 

your lease specifying the terms of the 

easement. The project easement will 

provide for areas off the original lease 

areas for cable, pipeline, or associated 

facilities. Areas for cable and pipelines 

may not exceed 200 feet (61 meters) in 

width, unless safety and environmental 

factors during construction and 

maintenance of the associated cables or 

pipelines require a greater width. For 

associated facilities, the area is limited 

to the area reasonably necessary for 

power stations for electricity or 

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pumping stations for other energy 

products such as hydrogen. 

You may propose in your COP to 

develop your lease in phases. You must 

clearly provide details as to the portions 

of the lease that will be initially 

developed for commercial operations, 

and the portions of the lease that will be 

reserved for subsequent phased 

development. 

If MMS approves your COP, you must 

commence construction by the date 

given in your construction schedule, as 

stated in the approved COP. The MMS 

may approve a deviation from this 

schedule. However, before you may 

construct and install facilities under the 

approved COP, you must submit to 

MMS a Facility Design Report and a 

Fabrication and Installation Report. You 

may commence commercial operations 

30 days after the CVA or project 

engineer has submitted the final 

Fabrication and Installation Report to 

MMS. The activities described in these 

two reports must fall within the scope 

of the approved COP, or you will be 

required to submit a revision to the COP 

for approval before commencing the 

activity. 

A COP may require further revisions 

and potentially require additional or 

new environmental and regulatory 

reviews. You must notify MMS in 

writing before you conduct any 

activities not described in your 

approved COP, describing in detail the 

activities you propose to conduct. The 

MMS will determine whether the 

proposed activities may be conducted 

under your existing COP or will require 

a revision to the COP. We may request 

that you provide additional information 

to us to make this determination. The 

MMS will periodically review an 

approved COP and may determine, 

based on the significance of any changes 

in information and environmental 

conditions affecting activities, that 

revisions are necessary. The revisions 

may require new environmental and 

technical reviews. 

Any time you cease commercial 

operations without an MMS approved 

suspension, you must notify MMS. The 

MMS may cancel your lease, and you 

must start the decommissioning process 

if you cease commercial operations for 

a period longer than 6 months. 

When you complete the commercial 

operations under your approved COP, 

you must start the decommissioning 

process described in subpart I of this 

part. 

General Activities Plan (GAP) 

The GAP describes the operator’s 

planned activities for a limited lease, 

ROW grant, or RUE grant. It includes 

information similar to what is required 

in a SAP, as well as additional 

information concerning planned 

activities throughout the term of the 

lease or grant. As with the SAP, the GAP 

must be submitted within 6 months of 

competitive issuance of a lease or grant 

or within 60 days after the 

determination of no competitive interest 

for a lease or grant being pursued 

noncompetitively. In some cases, a GAP 

would describe activities that are 

analogous to those covered in a COP for 

a commercial lease, i.e., if you are 

proposing a facility deemed by MMS to 

be complex or significant. Review, 

approval, and revision of a GAP will be 

subject to requirements and procedures 

similar to those applied to SAPs and 

COPs. 

NEPA Compliance for Plans 

The MMS action on the SAP, COP, 

and GAP would require the preparation 

of appropriate NEPA documentation. 

We anticipate that, initially, all 

commercial development projects will 

require an EIS for the COP. Also, we 

anticipate that limited leases and RUE 

and ROW grants will initially require an 

EIS. After the impacts and related 

mitigation of renewable energy activities 

on the OCS are better understood, it is 

possible that projects may require an 

EA. As the program matures, MMS will 

review the impacts from the program 

and make a determination whether we 

can recommend categorical exclusions 

for certain activities to the Council on 

Environmental Quality. For 

competitively issued commercial leases, 

MMS will prepare a lease sale and site 

assessment NEPA review to include the 

SAP activities. The applicant must 

provide MMS with the data necessary to 

complete the required NEPA 

documentation for other types of plans. 

This would include a description of 

those resources, conditions, and 

activities that could be affected by your 

proposed activities, or that could affect 

the activities proposed in your plan, 

including associated construction and 

decommissioning activities. An 

applicant may reference information 

that was included in the MMS NEPA 

review prepared for the lease. The 

required information would include, but 

is not limited to, information on the 

following: 

• Hazard information including 

meteorology, oceanography, or 

manmade hazards; 

• Water quality including turbidity 

and total suspended solids from 

construction; 

• Biological resources including 

benthic communities, marine mammals, 

sea turtles, coastal and marine birds, 

fish and shellfish, plankton, barrier 

islands, beaches, dunes, wetlands, 

seagrasses and plant life; 

• Threatened or endangered species 

including critical habitats, as defined by 

the Endangered Species Act of 1973; 

• Sensitive biological resources or 

habitats including essential fish habitat, 

refuges, preserves, special management 

areas identified in coastal management 

programs (CMPs), sanctuaries, rookeries, 

hard bottom habitats, chemosynthetic 

communities, and calving grounds; 

• Archaeological resources including 

historic and prehistoric archaeological 

resources to meet the requirements of 

the National Historic Preservation Act of 

1966, as amended, and associated 

regulations; 

• Social and economic information, 

including employment, existing offshore 

and coastal infrastructure (including 

major sources of supplies, services, 

energy, and water), land use, 

subsistence resources and harvest 

practices, recreation, recreational and 

commercial fishing (including typical 

fishing seasons, location, and type), 

minority and lower income groups, 

coastal zone management programs, and 

viewshed; 

• Coastal and marine uses including 

military activities, vessel traffic, and 

mineral exploration or development; 

and 

• Other resources, conditions, and 

activities as identified by MMS. 

The MMS may decide to use a third 

party to prepare the NEPA document. 

However, you may ask for our approval 

to perform, or to directly pay a 

contractor for, the NEPA document (see 

subpart A, § 285.111). 

One commenter suggested that in 

order for States and local governments 

to use the MMS NEPA document for 

their ‘‘equivalent’’ environmental 

process, several analyses and 

information needs would need to be 

included. The MMS will work closely 

with affected States and local 

governments to coordinate and consult 

on activities proposed under this 

program to ensure efficient preparation 

of environmental reviews. These 

reviews may be conducted jointly by 

MMS and other appropriate agencies or 

separately. 

The MMS received numerous 

comments regarding cumulative 

impacts. It was stated that, as more 

renewable energy projects are developed 

on the OCS, the cumulative effects of 

those projects may compound 

individual effects and put an additional 

strain on the ecology of the marine 

environment. The MMS shares the 

concerns of the commenters regarding 

cumulative effects. We will work closely 

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with Federal agencies, affected States, 

local governments, and other 

stakeholders to coordinate and consult 

on activities proposed under this 

program and to identify critical issues 

including their cumulative effects. 

Cumulative effects will be assessed at 

each stage of environmental review of 

projects, including lease sales, in order 

to identify such effects and to 

recommend appropriate mitigation 

measures and monitoring. 

One commenter requested that MMS 

incorporate the requirement of adaptive 

management into the rule. We designed 

the structure of the regulations to reflect 

the approach of adaptive management. 

Operating companies are required to 

demonstrate and validate their 

performance. The MMS will set forth 

terms and conditions to be incorporated 

into plans and will determine when to 

require adjustments to mitigation and 

monitoring activities based on operating 

experience. Lessees are required to 

certify compliance with certain of those 

terms and conditions. Also, refer to the 

preamble discussion in subpart H. 

CZMA Compliance for Plans: Based 

on comments received on the proposed 

rule, we have clarified the rule with 

respect to CZMA compliance. For 

purposes of Federal consistency, MMS 

will treat plans (COPs, and GAPs) 

associated with competitively-issued 

commercial and limited leases as OCS 

plans which must comply with 

requirements of CZMA subsection 

307(c)(3)(B) and 15 CFR part 930, 

subpart E. The MMS will treat COPs 

associated with noncompetitivelyissued commercial leases as OCS plans 

which must comply with requirements 

of CZMA subsection 307(c)(3)(B) and 15 

CFR part 930, subpart E. The plans must 

describe all federally licensed or 

permitted activities and operations 

proposed on the MMS-issued lease, 

ROW grant, or RUE grant. The lease or 

grant holder will be required to prepare 

a consistency certification to submit to 

MMS with the proposed plan. The MMS 

will send one copy of the plan, 

supporting information, and consistency 

certification to the affected State CZM 

agency. The State agency will then 

determine whether the supplied 

information is adequate for its review. 

When the State agency has adequate 

information, it will begin its consistency 

review and either concur with or object 

to the consistency certification. For 

SAPs submitted under a competitive 

lease, MMS will prepare a consistency 

determination that will cover the lease 

sale and site assessment activities. 

The MMS will treat SAPs and GAPs 

associated with noncompetitivelyissued commercial and limited leases as 

Federal licenses and permits which 

must comply with requirements of 

CZMA subsection 307(c)(3)(A) and 15 

CFR part 930, subpart D. The applicant 

will be required to prepare a 

consistency certification and 

concurrently submit it to the affected 

State’s CZM Agency and MMS along 

with the proposed SAP or GAP and all 

supporting information required in 15 

CFR part 930, subpart D. The State 

agency will then determine whether the 

supplied information is adequate for its 

review. When the State agency has 

adequate information, it will begin its 

consistency review and either concur 

with or object to the consistency 

certification. 

The MMS will treat a combined COP 

and SAP associated with a 

noncompetitive commercial lease as a 

Federal license and permit which must 

comply with requirements of CZMA 

subsection 307(c)(3)(A) and 15 CFR part 

930, subpart D. 

Subsequent consistency reviews for 

revisions for SAPs, COPs, and GAPs are 

not required unless MMS determines 

that the revisions: (1) Result in a 

significant change in the impacts 

previously identified and evaluated; (2) 

require any additional Federal 

authorizations; or (3) involve activities 

not previously identified and evaluated. 

For CZMA compliance purposes, 

when a State objects to the consistency 

certification, MMS will not approve the 

plan if: (1) Consistency has not been 

conclusively presumed; or (2) the State 

objects to the applicant’s consistency 

certification, and the Secretary of 

Commerce has not found that the 

permitted activities are consistent with 

the objectives of the CZMA or are 

otherwise necessary in the interest of 

national security. 

NEPA and CZMA Compliance for 

Additional Reports and Approvals 

The NEPA and CZMA compliance for 

a project will be addressed in the MMS 

decision process for the SAP, COP, or 

GAP. The reports and applications that 

are required relating to facility design, 

fabrication, installation, and 

decommissioning are intended to 

provide MMS with specific technical 

details on the project as approved in the 

SAP, COP, or GAP. If these documents 

present activities that fall outside the 

scope of your approved SAP, COP, or 

GAP, then you will be required to 

submit a revision to your SAP, COP, or 

GAP. Additional NEPA or CZMA review 

may be required if the revisions for 

facility design, fabrication, installations, 

or decommissioning: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated; 

(2) Require any additional 

authorizations; or 

(3) Propose activities not previously 

identified and evaluated. 

Frequency of NEPA/CZMA Reviews 

Based on the Type of Lease or Grant 

The number of NEPA and CZMA 

reviews that would be conducted on 

your lease or grant is determined by the 

type of lease or grant that you hold 

(Table 2). For a competitive, commercial 

lease, MMS would conduct two NEPA 

and two CZMA reviews—one NEPA and 

CZMA review for the lease sale action, 

and the SAP activities, and one NEPA 

and CZMA review for the COP. We 

reduced the number of reviews we 

identified in the proposed rule from 3 

to 2 in the final rule by covering SAP 

activities in the lease issuance reviews 

(e.g., lease sale or noncompetitive lease 

NEPA documents). This should greatly 

reduce the processing time for a SAP. 

However, if new information becomes 

available upon SAP submission that 

identifies potential impacts that were 

not previously identified and evaluated, 

additional review (including NEPA and 

CZMA) may be required. Applicants 

with competitive, commercial leases 

could reduce the review time and gain 

efficiency by submitting the COP with 

the SAP. The MMS received comments 

to allow the COP and SAP to be 

submitted simultaneously; however, 

this option was available in the 

proposed rule. It is an option in the final 

rule for those applicants that provide 

sufficient data and information with the 

COP for MMS to complete the needed 

technical, NEPA, CZMA, and other 

required reviews. For a noncompetitive 

commercial lease, two NEPA and two 

CZMA reviews would be required—one 

for the lease with the SAP and one for 

the COP. Since MMS requires the 

applicant to submit a SAP or a GAP 

within 60 days after the Director issues 

a determination that there is no 

competitive interest for the lease or 

grant, the SAP would be reviewed under 

the same review for the lease issuance. 

Efficiency is gained in this example 

because MMS can conduct reviews on 

the SAP and the lease at the same time. 

Again, the rule allows the applicant to 

submit a combined SAP/COP, which 

could result in additional efficiencies. 

For limited leases, two NEPA and two 

CZMA reviews would be required for a 

competitive limited lease and one 

review for a noncompetitive limited 

lease. The reviews for the competitive 

limited lease would be conducted on 

the lease sale action and the GAP, while 

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the noncompetitive limited lease would 

have a simultaneous review of the lease 

issuance and the GAP. 

We envision that all ROW grants and 

RUE grants would likely be 

noncompetitive. The ROW/RUE 

issuance action and the GAP would be 

reviewed under NEPA and CZMA 

simultaneously. In the unlikely case of 

a competitive ROW/RUE grant, a 

separate NEPA and CZMA review 

would be conducted on the ROW/RUE 

sale and the GAP. 

Section-by-Section Discussion for 

Subpart F 

What plans and information must I 

submit to MMS before I conduct 

activities on my lease or grant? 

(§ 285.600) 

This section describes the three 

different types of plans that are required 

to be submitted to MMS for approval. 

The type of plan that you would submit 

depends on the type of instrument held 

and the type of activity to be conducted: 

SAP, COP, and GAP. The SAP and the 

COP are used for commercial leases, 

while the GAP is used for limited leases 

and grants. Prior to conducting site 

assessment activities (e.g., resource data 

collection, technology testing) on a 

commercial lease, a lessee is required to 

submit a SAP to MMS for review and 

approval. A COP is required to be 

submitted to MMS for review and 

approval before a lessee may begin 

construction and/or operations on a 

commercial lease, including a project 

easement. A GAP is required to be 

submitted to MMS for review and 

approval before a lessee may begin 

activities on a limited lease or ROW 

grant or RUE grant including, if 

applicable, a project easement. 

A commenter suggested that the 

proposed rule was unclear when a SAP 

and COP or a GAP is required. The 

comment states, ‘‘The SAP and the COP 

are used for commercial leases, while 

the GAP would be used for limited 

leases and grants. However, § 285.640(a) 

notes that the GAP may be applicable to 

the project easement.’’ We believe the 

rule clearly states the requirements for 

submitting the appropriate plan for a 

lease, easement, or ROW. A GAP is used 

if your limited lease includes a project 

easement. In such a case, the proposed 

activities for the project easement 

associated with your limited lease 

would be described in a GAP. 

We did not make any changes to this 

section. 

When am I required to submit my plans 

to MMS? (§ 285.601) 

The timing for the submission of your 

plans depends on whether your lease or 

grant is issued on a competitive or 

noncompetitive basis (refer to subpart B 

for leases or subpart C for grants for 

further discussion of these types of 

conveyance). The timing is as follows: 

• Competitively issued lease or grant: 

You must submit your SAP or GAP 

within 6 months of issuance. 

• Noncompetitive lease or grant: You 

must submit your SAP or your GAP 

within 60 days after the Director issues 

a determination that there is no 

competitive interest for your lease or 

grant. 

• Operations for commercial lease: 

You must submit a COP or a FERC 

license application at least 6 months 

before the end of your site assessment 

term if you intend to continue your 

commercial lease with an operations 

term for your commercial lease. 

The MMS allows you to submit your 

COP with your SAP. However, you must 

submit the necessary data and 

information with your COP to allow 

MMS to complete its technical and 

environmental reviews. In an effort to 

make the process as streamlined as 

possible, some commenters suggested 

that the MMS combine both the SAP 

and COP into one step or plan, or at 

least allow the environmental analysis 

to be completed at one time, thereby 

reducing the burden on project 

proponents. They stated that, in some 

cases, it may be desirable for the lessee 

to go through both steps, but in others, 

a lessee may be ready to proceed with 

commercial operations. It was proposed 

that MMS would greatly facilitate 

development by combining the SAP and 

COP and their required environmental 

reviews where appropriate and 

desirable. Section 285.601(d) states that 

you may submit your COP with your 

SAP. The NEPA analyses could be 

performed on both submittals 

simultaneously. 

For hydrokinetic commercial leases 

you may submit your FERC license 

application with your SAP. Although 

details for joint processing of such 

documents have not yet been 

developed, MMS and FERC will strive 

to establish an efficient process to 

accomplish review and approval, 


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including NEPA analysis. The MMS 

will be responsible for regulating 

approved site assessment activities, and 

FERC will be responsible for regulating 

approved construction and operations 

activities. 

We made conforming changes to this 

section relating to FERC’s role in 

regulating hydrokinetic activity. 

Based on comments, we have reduced 

the number of NEPA and CZMA reviews 

for a commercial lease issued 

competitively from three to two by 

combining the lease sale and site 

assessment activities into one review. 

This, in combination with the 

elimination of MMS approval of site 

assessment surveys (e.g., geophysical, 

archaeological, biological), should 

greatly reduce the review time for 

commercial leases issued competitively, 

and would allow applicants to conduct 

site assessment surveys sooner. 

One commenter noted that it is 

unclear why MMS has proposed to give 

the applicant only 60 days to prepare 

the GAP/SAP and all required 

environmental documentation for a 

noncompetitive lease, while holders of 

competitive leases are given 6 months to 

produce this documentation. The 

commenter stated that noncompetitive 

lease applicants should be given at least 

6 months as well, noting that the 

physical impacts to be evaluated in a 

SAP or GAP will be the same whether 

a project is leased competitively or 

noncompetitively. We believe that since 

an unsolicited request for a 

noncompetitive lease is initiated by the 

applicant, 60 days after the publication 

of a notice of no competitive interest is 

a sufficient time period to prepare the 

SAP/GAP. The applicant should have 

ample time to gather information prior 

to application for a lease and during the 

time it takes MMS to make a 

determination of no competitive 

interest. However, if more time is 

needed, the lessee may request a 

suspension under § 285.416(c) after 

acquiring the lease. No changes have 

been made to this section. 

What records must I maintain? 

(§ 285.602) 

You must maintain and provide to 

MMS upon request all data and 

information related to compliance with 

required terms and conditions of your 

SAP, COP, or GAP. You must meet this 

requirement until MMS releases your 

financial assurance. Also, while 

hydrokinetic projects will entail 

obligations and responsibilities relating 

to FERC regulation under licenses and 

exemptions, under the terms and 

conditions of the lease, you must make 

available to MMS upon request, data 

and information for all activities 

conducted on leases issued under this 

part to meet our statutory 

responsibilities as lessor. We did not 

make any changes to this section. 

Reserved Sections (§§ 285.603 Through 

285.604) 

Sections 285.603 through 285.604 are 

reserved. 

Site Assessment Plan and Information 

Requirements for Commercial Leases 

What is a Site Assessment Plan (SAP)? 

(§ 285.605) 

This section describes a SAP. A SAP 

contains the plans for conducting data 

gathering and other activities, such as 

technology testing, to characterize a 

commercial lease, including the project 

easement. A SAP must include the 

results and supporting data from 

surveys such as physical 

characterization surveys and baseline 

surveys. It includes additional 

requirements for both simple and 

complex facilities. This section has been 

substantially revised. Based on 

comments received on the proposed 

rule, MMS has determined that 

geophysical and geological surveys, 

hazards surveys, archaeological surveys, 

and baseline collection studies (e.g., 

biological) conducted for the purpose of 

preparing SAPs, COPs, and GAPs may 

be permitted under the authority of the 

ACOE. In many instances, these types of 

activities may be verified under the 

ACOE’s Nationwide Permit program. 

We have revised the regulation to 

remove the MMS approval of these 

types of surveys and the requirement to 

describe the survey designs in a SAP, 

COP, or GAP. Project proponents and 

lessees may now conduct these surveys 

pre- or post-lease/grant, subject to ACOE 

verification under the Nationwide 

Permit program or other appropriate 

approval and other applicable Federal 

law. However, MMS strongly 

encourages applicants to coordinate any 

pre- or post-lease/grant survey activities 

with MMS and the ACOE prior to their 

conducting such activities to ensure that 

the activities being proposed meet the 

conditions of the Nationwide Permits. 

Certain Nationwide Permits require that 

an applicant notify the ACOE and 

receive verification that an activity is 

covered under a Nationwide Permit 

prior to start of construction. 

Additionally, for competitively issued 

commercial leases, we will now prepare 

a NEPA document and a consistency 

determination that covers both the lease 

sale and site assessment activities. 

Applicants and lessees will be required 

to submit the results of their surveys 

and supporting data as part of their 

SAP, COP, or GAP. The data collected 

from these surveys must meet the 

technical requirements that MMS will 

set forth in guidance to be published 

after the rule is promulgated. 

We also added language stating that 

MMS will withhold trade secrets and 

commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA and in accordance with the 

terms of § 285.113. This text was added 

in response to commenters who were 

concerned about the confidentiality of 

certain proprietary information in their 

plans. 

One commenter did not believe the 

construction of two or three identical 

meteorological towers should trigger 

additional requirements, which will add 

significantly to the time and expense of 

SAP submission, and requested that 

§ 285.605(c) be revised. The MMS 

revised § 285.605(d) to clarify the 

requirement. This section now states 

that an applicant must comply with the 

requirements of subpart G when they 

propose to construct a facility or 

combination of facilities that MMS 

determines to be complex or significant. 

What must I demonstrate in my SAP? 

(§ 285.606) 

This section provides details on the 

requirements for a SAP. The SAP must 

demonstrate how a lessee will conform 

to all applicable laws, implementing 

regulations, lease provisions, and 

stipulations. The activities conducted 

under a SAP must: 

• Conform to all applicable laws, 

implementing regulations, lease 

provisions and stipulations; 

• Be safe; 

• Not unreasonably interfere with 

other uses of the OCS, including those 

involved with national security or 

defense; 

• Not cause undue harm or damage to 

natural resources, life (including human 

and wildlife); property; or the marine, 

coastal, or human environment; or sites, 

structures, or objects of historical or 

archaeological significance; 

• Use best available and safest 

technology; 

• Use best management practices; and 

• Use properly trained personnel. 

One revision was made to this 

section—to state that the SAP must 

demonstrate that the planned site 

assessment activities will collect the 

necessary information and data required 

for the COP. One commenter requested 

that MMS not require the exact 

language, ‘‘Best Available and Safest 

Technology.’’ The commenter stated 

that this requirement is overly 

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restrictive and inappropriate for a new 

industry where the economics are 

challenging, the technology is new and 

evolving, and there are no accepted 

design standards. Instead, the 

commenter suggested, the MMS should 

require use of ‘‘reasonably available and 

safe technology,’’ noting that these 

facilities will be unmanned during most 

of their operation. Also, the commenter 

stated that the proposed § 285.606(a)(2) 

already requires that proposed activities 

be ‘‘safe,’’ and this is sufficient to 

address safety concerns. The commenter 

concluded that subsection (a)(5) be 

omitted until and unless a sufficient 

record of scientific measurement studies 

demonstrates a need for a tighter safety 

standard. We kept the requirement of 

‘‘Best Available and Safest Technology,’’ 

in § 285.606(a)(5), as it is required for 

activities conducted pursuant to the 

OCS Lands Act (43 U.S.C. 1347(b), et 

seq.). 

One commenter strongly supports the 

use of best management practices to 

ensure that potential adverse impacts 

associated with the development of 

renewable energy resources on the OCS 

are minimized to the greatest extent 

practicable. We were requested to 

publish the applicable best management 

practices in a specific guidance 

document, which would be updated on 

a regular basis to reflect recent adaptive 

management strategies, technology 

development, and monitoring results. 

The MMS prepared a Record of Decision 

(ROD) in December 2007, for its 

Programmatic EIS on the Alternative 

Energy Program. The EIS identified 

initial mitigation measures for the new 

program by adopting 15 interim policies 

and 52 initial best management 

practices. The ROD is published at 

http://ocsenergy.anl.gov/documents/ 

docs/OCS_PEIS_ROD.PDF. New 

measures will be identified as 

appropriate. The MMS will provide 

guidance to applicants after the 

promulgation of this rule. This guidance 

will incorporate these best management 

practices and interim policies. 

How do I submit my SAP? (§ 285.607) 

This section requires you to submit a 

paper copy and an electronic copy of 

the SAP to MMS at the address in 

§ 285.110. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.608 Through 

285.609) 

Sections 285.608 through 285.609 are 

reserved. 

Contents of the Site Assessment Plan 

What must I include in my SAP? 

(§ 285.610) 

This section contains further detailed 

requirements on what information must 

be submitted for SAP applications, 

including: Identifying information, a 

discussion of the objectives of the site 

assessment or technology testing 

proposal, designation of operator (if 

applicable), general structural and 

project design, fabrication and 

installation information, deployment 

activities, air emissions, lease 

stipulations, a listing of all Federal, 

State, and local authorizations or 

approvals for projected site assessment 

activities, a list of entities that you have 

consulted with regarding the potential 

impacts of your project, how you will 

mitigate and monitor impacts, CVA 

nomination (if required), 

decommissioning procedures, a 

statement about other authorizations, 

financial assurance information, and 

additional information as requested by 

MMS. For site assessment activities that 

include the installation of any facilities 

(e.g., a meteorological tower, 

meteorological buoy), additional 

requirements are listed. They include 

survey results and supporting data from 

geotechnical, shallow hazards, 

archaeological, geological, and 

biological surveys. 

This section was revised to state the 

requirements for survey results and 

supporting data and to provide 

descriptions of any technology testing 

activities. We also made conforming 

revisions relating to FERC’s role in 

regulating hydrokinetic activity. 

What information must I submit with 

my SAP to assist MMS in complying 

with NEPA and other relevant laws? 

(§ 285.611) 

This section requires the applicant to 

submit information needed to assist 

MMS in preparing compliance 

documents related to NEPA (EIS or EA) 

and other relevant laws, including MSA, 

ESA, and CZMA, that are required for 

SAP approval. As stated previously, 

MMS will prepare a NEPA review and 

consistency determination to cover both 

the lease sale and site assessment 

activities. If the action proposed under 

a competitively issued commercial lease 

does not change from that described in 

the environmental reviews conducted 

for the lease sale and site assessment 

activities, then no further environmental 

review would be required for a SAP. 

However, if MMS determines that the 

action has changed to the extent that the 

previously conducted environmental 

reviews do not cover the activities, then 

MMS would notify the applicant that 

additional information and reviews 

would be required. In this case, and for 

noncompetitively issued commercial 

leases, this includes information on 

resources, conditions, and activities 

listed in this section that may be 

affected by or may affect activities 

proposed and approved in your SAP. 

This section also requires the 

applicant for a noncompetitively issued 

lease, or if notified by MMS for a 

competitive commercial lease, to submit 

a consistency certification for CZMA. 

The consistency certification must state 

that the proposed activities covered in 

the SAP comply with the State(s) 

approved CMP and that the applicant 

will conduct these activities in a 

manner consistent with such a program. 

For leases issued noncompetitively, the 

consistency certification must also 

include ‘‘information’’ and ‘‘analysis’’ as 

required by 15 CFR part 930, subpart D. 

When leases are issued competitively, 

the consistency certification must also 

include ‘‘information’’ and ‘‘analysis’’ as 

required by 15 CFR part 930, subpart E. 

We revised this section based on 

comments requesting us to clarify the 

NEPA and CZMA requirements. 

How will my SAP be processed for 

Federal consistency under the Coastal 

Zone Management Act? (§ 285.612) 

This is a new section that explains 

that processing your SAP will be 

dependent upon how your commercial 

lease was issued. When your 

commercial lease is competitively 

issued, MMS will prepare a consistency 

determination for the lease sale and site 

assessment activities. If the action 

proposed under a competitively issued 

commercial lease does not change from 

that described in the environmental 

reviews conducted for the lease sale and 

site assessment activities, then no 

further environmental review would be 

required for a SAP. However, if MMS 

determines that the action has changed 

to the extent that the previously 

conducted environmental reviews do 

not cover the activities, then MMS 

would notify the applicant that 

additional information and reviews 

would be required. When your 

commercial lease is noncompetitively 

issued, you must furnish your SAP, 

consistency certification, and other 

information and analysis required by 15 

CFR part 930, subpart D, to the State 

CZM agency and MMS concurrently. 

This section was added in response to 

comments requesting clarification of the 

CZMA process. 

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How will MMS process my SAP? 

(§ 285.613) 

This section describes the MMS 

review process for a SAP. The MMS will 

review the SAP and determine if it 

contains all of the required information 

needed to complete the technical and 

environmental reviews. Multiple 

commenters suggested that, in order to 

help prevent regulatory delays, the 

MMS should include language that 

requires the MMS to determine 

completeness of the GAP/SAP/COP 

within a specific timeframe (e.g., 30 

days for the SAP/GAP and 60 days for 

the COP). We did not include specific 

timeframes in the rule, since section 

8(p) of the OCS Lands Act does not 

require them. However, in response to 

comments, after the final rule is 

published, we will issue guidance 

setting target deadlines for MMS 

processes. 

After MMS has all of the information 

needed for its reviews, we will prepare 

appropriate NEPA documentation. 

We will consult with relevant Federal, 

State, and local agencies and affected 

Indian tribes and provide to other 

Federal, State, and local agencies and 

affected Indian tribes relevant 

nonproprietary data and information 

pertaining to the proposed site 

assessment activities, as directed by 

subsections 8(p)(4) and (7) of the OCS 

Lands Act and by other relevant Federal 

statutory requirements (e.g., ESA and 

MSA). We may request additional 

information during the review and 

approval process; if you do not provide 

this information, MMS may disapprove 

your application. 

After MMS completes the technical 

and environmental reviews, we may 

approve, disapprove, or approve with 

modifications your SAP. When a State 

objects to the consistency certification, 

MMS will not approve the plan if: (1) 

Consistency has not been conclusively 

presumed; or (2) the State objects to the 

applicant’s consistency certification, 

and the Secretary of Commerce has not 

found that the permitted activities are 

consistent with the objectives of the 

CZMA or are otherwise necessary in the 

interest of national security. If we 

disapprove your SAP, we will provide 

the reasons for the disapproval, and you 

will have an opportunity to revise and 

resubmit your SAP. If we approve your 

SAP, it will be subject to terms and 

conditions set by MMS. We will specify 

these terms and conditions, and they 

will be incorporated into your SAP. 

Examples of the types of terms and 

conditions we may require include, but 

are not limited to, terms and conditions 

from an ESA incidental take statement; 

conservation recommendations 

resulting from essential fish habitat 

(EFH) consultations; and other safety, 

operational, or environmental 

protection measures. Also, you must 

certify compliance with certain terms 

and conditions identified by MMS. The 

certification would include summary 

reports, a description of mitigation 

measures and monitoring, the 

effectiveness of the mitigation measures, 

and new proposed mitigation measures. 

We revised this section in response to 

comments requesting us to clarify the 

CZMA process that will be followed and 

requests to include affected Indian 

tribes in our consultation process. We 

also renumbered this section. 

Activities Under an Approved SAP 

When may I begin conducting activities 

under my approved SAP? (§ 285.614) 

After MMS approves the SAP, the 

applicant may begin to conduct 

approved activities. However, if you are 

constructing a facility or a combination 

of facilities deemed by MMS to be 

complex or significant, as provided in 

§ 285.613(a)(1), you must comply with 

the requirements of subpart G and 

submit your Safety Management 

System, required by § 285.810, before 

construction may begin. 

This section was revised to state that 

a lessee may begin approved activities 

that are not deemed by MMS to be 

complex or significant following 

approval of the SAP. In the proposed 

rule, MMS did not allow site assessment 

activities to be performed prior to 

approval of a SAP. Now those surveys 

may be conducted under the verification 

of the ACOE and other applicable 

Federal law, as described previously. 

However, MMS strongly encourages 

applicants to coordinate with MMS and 

the ACOE prior to conducting any preor post-lease/grant survey activities. 

Applicants will be required to submit 

the results of their surveys as part of 

their SAP, COP, or GAP. 

When may I construct OCS facilities 

proposed under my SAP? (§ 285.614 

proposed) 

The provisions of this proposed 

section were deleted or combined with 

§ 285.615. 

What other reports or notices must I 

submit to MMS under my approved 

SAP? (§ 285.615) 

This section identifies the various 

reports and notifications that must be 

submitted to MMS and their timing. 

These include the initial survey report, 

an annual summary of findings from site 

assessment activities, notification of 

completion of construction and 

installation activities, and annual 

compliance certification. The 

compliance certification includes a 

listing and description of any mitigation 

measures and monitoring and their 

effectiveness. The MMS will protect the 

annual summary information from 

public disclosure, as provided in 

§ 285.113. 

Reserved Section (§ 285.616) 

Section 285.616 is reserved. 

What activities require a revision to my 

SAP, and when will MMS approve the 

revision? (§ 285.617) 

The lessee or operator must notify 

MMS in writing, including a detailed 

description, prior to conducting any 

activities not described in the SAP, and 

we will determine if those activities 

require a revision to the approved SAP. 

We will also conduct periodic reviews 

of the activities being conducted under 

an approved SAP to ensure that they fall 

within the scope of the SAP. The SAP 

will likely be required to be revised if 

the applicant plans to: 

• Conduct activities not described in 

the approved SAP, 

• Change the size or type of facility or 

equipment used, 

• Change the surface location of a 

facility or structure, 

• Add another facility or structure not 

contemplated in the approved SAP, 

• Change the location of the onshore 

support base from one State to another 

or to a new base requiring expansion, or 

• Change the location of bottom 

disturbances by 500 feet (152 meters), or 

changes to any other activity specified 

by MMS. 

A revision to the SAP may require 

NEPA, CZMA, and other reviews if 

MMS determines that the proposed 

revision could result in a significant 

change in impacts previously identified 

and evaluated; require any additional 

Federal authorizations; or involve 

activities not previously identified and 

evaluated. 

The MMS may approve the revision to 

the SAP if the revision is designed to 

prevent or minimize adverse effects to 

the coastal and marine environments, 

including their physical, atmospheric, 

and biological components to the extent 

practicable; and if the revision is 

otherwise consistent with the provisions 

of subsection 8(p) of the OCS Lands Act. 

We did not make any changes to this 

section. 

What must I do upon completion of 

approved site assessment activities? 

(§ 285.618) 

After completing activities under the 

approved SAP, the lessee must initiate 

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the decommissioning process for any 

facilities built for conducting SAP 

activities. However, if you submit a COP 

to MMS, you may leave the facilities in 

place while MMS reviews the COP. You 

are not required to start 

decommissioning if the facilities are 

authorized to remain in place under 

your approved COP. However, if MMS 

determines that the facilities built for 

conducting SAP activities may not 

remain in place, then the 

decommissioning process described in 

subpart I of this part must be initiated. 

Upon the termination of your lease, you 

must initiate this same 

decommissioning process for all 

facilities authorized by your approved 

COP. 

We made conforming revisions to this 

section relating to FERC’s role in 

regulating hydrokinetic activity. 

Reserved Section (§ 285.619) 

Section 285.619 is reserved. 

Construction and Operations Plan for 

Commercial Leases 

What is a Construction and Operations 

Plan (COP)? (§ 285.620) 

This section provides the basic 

requirements for the COP. The COP 

describes your construction, operations, 

and conceptual decommissioning plans 

under your commercial lease, including 

your project easement. The COP must 

include the location of the operations 

and facilities; the land, labor, material, 

and energy requirements associated 

with such operations and facilities; and 

the environmental and safety 

safeguards. The COP must cover all 

proposed activities and operations, 

including activities associated with 

constructing and maintaining project 

easements. The MMS must approve the 

COP before any construction and 

operation can begin. 

It should be noted that COPs are 

required only for OCS renewable energy 

activities other than hydrokinetic 

activity. Since construction and 

operations relating to OCS hydrokinetic 

activity are regulated under the FERC 

licensing process, the construction and 

operations information for hydrokinetic 

commercial leases will be submitted to 

FERC in the form of a license 

application. 

This section was revised to include a 

provision that MMS will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure 

under exemption 4 of the FOIA and in 

accordance with the terms of § 285.113. 

What must I demonstrate in my COP? 

(§ 285.621) 

This section describes what the lessee 

must demonstrate in the COP. The COP 

must demonstrate how proposed 

activities conform to all applicable laws, 

implementing regulations, lease 

provisions and stipulations or 

conditions of the commercial lease. In 

addition, the COP must demonstrate 

that the proposed activity is: 

• Safe; 

• Does not unreasonably interfere 

with other uses of the OCS; 

• Does not cause undue harm or 

damage; 

• Uses best available and safest 

technology; 

• Uses best management practices; 

and 

• Uses properly trained personnel. 

We did not make any changes to this 

section. One commenter requested that 

MMS not require the strict language 

‘‘Best Available and Safest Technology.’’ 

The commenter stated that this 

requirement is overly restrictive and 

inappropriate for a new industry where 

the economics are challenging, the 

technology is new and evolving, and 

there are no accepted design standards. 

Instead, the commenter suggested, the 

MMS should require use of ‘‘reasonably 

available and safe technology,’’ noting 

that these facilities will be unmanned 

during most of their operation. Further, 

the commenter stated that the proposed 

§ 285.606(a)(2) already requires that 

proposed activities be ‘‘safe,’’ which is 

sufficient to address safety concerns. 

The commenter suggested that 

subsection (a)(5) could be omitted until 

and unless a sufficient record of 

scientific measurement studies 

demonstrates a need for a tighter safety 

standard. We kept the requirement of 

‘‘Best Available and Safest Technology,’’ 

as it is required for activities conducted 

pursuant to the OCS Lands Act. Best 

available and safest technologies are 

those that are economically feasible for 

use when failure of equipment would 

have a significant effect on safety, 

health, or the environment. We believe 

this is a reasonable requirement. 

How do I submit my COP? (§ 285.622) 

This section provides the 

requirements for submitting the COP 

and future revisions. The lessee must 

submit one hard copy and one 

electronic version of the COP to MMS. 

The lessee may submit information to 

cover the project easement with the 

original submission of the COP, or at a 

later time as a revision to the COP. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.623 Through 

285.624) 

Sections 285.623 through 285.624 are 

reserved. 

Contents of the Construction and 

Operations Plan 

What survey activities must I conduct to 

obtain approval for the proposed site of 

facilities? (§ 285.625 proposed) 

We moved the requirements proposed 

in § 285.625 to § 285.626, so that all of 

the information that is required in the 

COP is located together. Section 285.625 

is now reserved. 

What must I include in my COP? 

(§ 285.626) 

This section lists the project-specific 

information that must be included in 

the COP. We incorporated proposed 

§ 285.625 to this section so that all of 

the information that is required in the 

COP is located together. 

Before MMS will approve the site of 

the commercial facilities proposed for 

the project, you must submit the results 

of the listed surveys with supporting 

data to MMS in your COP. The required 

surveys and activities include: 

• Shallow hazard surveys; 

• Geological surveys; 

• Geotechnical surveys; 

• Archaeological resource surveys; 

• Biological surveys; and 

• An overall site investigation. 

You should conduct these surveys 

and activities prior to the preparation of 

your SAP. 

This section was revised to state the 

requirement to include the results and 

supporting data from the listed surveys 

in your COP. Results and supporting 

data from any socioeconomic surveys 

that you might conduct should be 

submitted with your COP, pursuant to 

§ 285.627, to assist MMS in complying 

with NEPA and other Federal laws. The 

COP does not need to repeat 

information that was previously 

submitted in the SAP, but should 

reference such material. 

Additional required information 

includes: 

• Identifying information; 

• The construction and operation 

concept; 

• Designation of an operator; 

• Lease stipulation and compliance 

information; 

• A location plat; 

• General structural and project 

design, fabrication, and installation 

information; including how you will use 

a CVA to review and verify each stage 

of the project (if required); 

• All cables and pipelines, including 

lines on project easements; 

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• A description of the deployment 

activities; 

• A list of solid and liquid wastes 

generated; 

• A listing of chemical products used; 

• A description of any vessels, 

vehicles, and aircraft that will be used 

to support the activities; 

• A general description of the 

operating procedures and systems; 

• Decommissioning and site 

clearance procedures; 

• A listing of all Federal, State, and 

local authorizations, approvals, or 

permits that are required; 

• Proposed measures for avoiding, 

minimizing, reducing, eliminating, and 

monitoring environmental impacts; 

• A summary of information 

incorporated by reference; 

• A list of entities with whom you 

communicated, or with whom you will 

communicate, regarding potential 

impacts associated with the proposed 

activities; 

• Reference information; 

• Financial assurance statements; 

• CVA nominations (if required); 

• Construction schedule; 

• Air quality information as described 

in § 285.659; and 

• Any other information required by 

MMS. 

This section was revised to change the 

word ‘‘consulted’’ to ‘‘communicated’’ 

and the word ‘‘consulting’’ to 

‘‘communicate.’’ This clarifies our 

intent to require communication, not 

consultation, concerning the potential 

impacts of your proposed activities. 

Previously, the air quality requirements 

were in subpart F, and we integrated the 

air quality requirements into this 

section. The MMS will clearly describe 

all plan requirements in guidance to 

applicants after promulgation of the 

rule. The MMS also plans to hold 

workshops to explain the provisions of 

the rule following publication. 

What information and certifications 

must I submit with my COP to assist the 

MMS in complying with NEPA and 

other relevant laws? (§ 285.627) 

This section discusses additional 

submittal requirements to assist MMS in 

complying with NEPA and other 

relevant laws, including MSA, ESA, and 

CZMA. The information must include 

the resources, conditions, and activities 

listed in this subpart that could be 

affected by proposed activities or that 

could affect proposed construction, 

operation, and decommissioning 

activities. A lessee may reference 

information that was included in the 

MMS NEPA review prepared for the 

lease. The lessee must include one copy 

of the consistency certification for the 

project to verify compliance with each 

State’s approved CMP, including 

required ‘‘information’’ and ‘‘analysis’’ 

per § 285.627(a)(9). Also, the lessee 

must submit an oil spill response plan 

and the Safety Management System for 

the project. 

This section was expanded in 

response to comments requesting more 

detail on the information requirements 

for MMS compliance with NEPA and 

other relevant laws. We included a new 

table that describes this information 

more clearly. Additionally, MMS will 

prepare guidance to applicants after the 

rule is promulgated and will hold 

workshops on the final rule. This 

section was also modified to clearly 

state that MMS will require a lessee to 

submit an electronic version of its 

consistency certification so that MMS 

will be able to easily provide it to State 

CZM agencies. 

How will MMS process my COP? 

(§ 285.628) 

This section discusses how MMS will 

review the submitted COP and 

determine if it contains the information 

necessary to conduct the technical and 

environmental reviews. The MMS will 

notify the applicant if the COP lacks any 

information needed for the reviews. We 

will prepare appropriate NEPA 

documentation and forward one copy of 

the COP, consistency certification, and 

associated data and information under 

the CZMA to the State’s CZM agency. 

When appropriate, we will coordinate 

and consult with, and provide relevant, 

nonproprietary data and information to, 

relevant State, Federal, and local 

agencies and affected Indian tribes, as 

directed by subsections 8(p)(4) and (7) 

of the OCS Lands Act and by other 

relevant Federal statutory requirements 

(e.g., ESA and MSA) and Executive 

Orders. We may request additional 

information during the review and 

approval process; if you do not provide 

this information, MMS may disapprove 

your COP. 

After MMS completes the technical 

and environmental reviews, we may 

approve, disapprove, or approve with 

modifications your COP. When a State 

objects to the consistency certification, 

MMS will not approve the plan if: (1) 

Consistency has not been conclusively 

presumed; or (2) the State objects to the 

applicant’s consistency certification, 

and the Secretary of Commerce has not 

found that the permitted activities are 

consistent with the objectives of the 

CZMA or are otherwise necessary in the 

interest of national security. If we 

approve your COP, it will be subject to 

terms and conditions set forth by MMS. 

The lessee must certify compliance with 

certain terms and conditions required 

under § 285.633(b). If MMS disapproves 

your COP, we will inform you of the 

reasons, and you will have an 

opportunity to resubmit a revised plan 

making the necessary corrections. The 

MMS may suspend the term of your 

lease, as appropriate, to allow this to 

occur. If a project easement is approved, 

MMS will issue an addendum to the 

lease specifying the terms of the project 

easement. 

We revised this section to include 

coordination and consultation with 

affected Indian tribes. We also revised 

the section based on comments 

requesting that we clearly state how 

MMS’s decision process will take place 

when a State objects to a consistency 

certification. 

May I develop my lease in phases? 

(§ 285.629) 

In the COP, the lessee may request to 

develop the commercial lease in phases. 

To support this request, the lessee must 

provide details about the portions of the 

lease that will be initially developed for 

commercial operations, and those 

portions of the lease that will be 

reserved for subsequent phased 

development. 

This option to develop a lease in 

phases applies only for nonhydrokinetic lease activities. Those 

lessees conducting hydrokinetic 

activities requiring a FERC license may 

only develop their project per the terms 

of their license. 

We did not make any changes to this 

section. 

Reserved Section (§ 285.630) 

Section 285.639 is reserved. 

Activities Under an Approved COP 

When must I initiate activities under an 

approved COP? (§ 285.631) 

After MMS approves the COP, the 

lessee must commence construction by 

the date given in the construction 

schedule, and included as a part of your 

approved COP, unless MMS approves a 

deviation from the schedule. 

We did not make any changes to this 

section. 

What documents must I submit before I 

may construct and install facilities 

under my approved COP? (§ 285.632) 

This section describes documents that 

must be submitted to MMS for review, 

before construction and installation of 

facilities may begin under an approved 

COP. This includes a Facility Design 

Report and a Fabrication and 

Installation Report for facilities 

proposed for commercial operations. 

The requirements for these reports are 

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found in § 285.701 and 702. The 

activities described in these reports 

must fall within the scope of the 

approved COP. If they are not within the 

scope of the approved COP, the lessee 

will be required to submit a revision to 

the COP for MMS approval, before 

commencing the activity. 

We did not make any changes to this 

section. 

How do I comply with my COP? 

(§ 285.633) 

After completing the environmental 

and technical reviews of the COP, if 

MMS approves your COP, we will 

specify terms and conditions to be 

incorporated into your COP. These 

terms and conditions will be considered 

as part of the COP, and you must 

comply with them. Examples of the 

types of terms and conditions we may 

require include, but are not limited to: 

(1) Terms and conditions from the ESA 

incidental take statement; (2) 

conservation recommendations 

resulting from EFH consultations; and 

(3) other safety, operational, or 

environmental protection measures. 

You must certify compliance with 

certain terms and conditions identified 

by MMS. The certification would 

include summary reports, a description 

of mitigation measures and monitoring, 

the effectiveness of the mitigation 

measures, and new proposed mitigation 

measures. 

We did not make any changes to this 

section. 

What activities require a revision to my 

COP, and when will MMS approve the 

revision? (§ 285.634) 

The lessee or operator must notify 

MMS in writing, including a detailed 

description, prior to conducting any 

activities not described in the COP, and 

we will determine if those activities 

require a revision to the approved COP. 

We will also conduct periodic reviews 

of the activities being conducted under 

an approved COP to ensure that they fall 

within the scope of the COP. The COP 

will likely be required to be revised if 

the lessee plans to: 

• Conduct activities not described in 

the approved COP; 

• Change the size or type of facility or 

equipment used; 

• Change the surface location of a 

facility or structure; 

• Add another facility or structure not 

contemplated in the approved COP; 

• Change the location of the onshore 

support base from one State to another 

or to a new base requiring expansion; 

• Change the location of bottom 

disturbances by 500 feet (152 meters); 

• Respond to structural failure of one 

or more facilities; or 

• Make changes to any other activity 

specified by MMS. 

A revision to the COP may require 

NEPA, CZMA, and other reviews if 

MMS determines that the proposed 

revision could result in a significant 

change in impacts previously identified 

and evaluated; require any additional 

Federal authorizations; or involve 

activities not previously identified and 

evaluated. 

The MMS may approve the revision to 

the COP if the revision is designed to 

prevent or minimize adverse effects to 

the coastal and marine environments, 

including their physical, atmospheric, 

and biological components to the extent 

practicable; and the revision is 

otherwise consistent with the provisions 

of subsection 8(p) of the OCS Lands Act. 

Commenters recommended that a 

distinct recovery plan to address 

structural failure of one or more 

facilities, regardless of the cause, be a 

mandatory component in the rule rather 

than a general description of operating 

procedures in case of emergencies. In 

response to this comment, the rule 

requires that the lessee submit to MMS 

a revised COP (see § 285.634(c)(7)) to 

describe its response to a structural 

failure of one or more facilities. The 

MMS will conduct a NEPA evaluation 

of the proposed revision to the COP and 

develop specific terms and conditions of 

approval for the project. The MMS 

requires certification of compliance 

with certain terms and conditions of 

plans. 

What must I do if I cease activities 

approved in my COP before the end of 

my commercial lease? (§ 285.635) 

The lessee must notify MMS any time 

commercial operations are ceased 

without an MMS approved suspension. 

We may cancel the lease if activities are 

ceased for an indefinite period that is 

longer than 6 months, and you must 

initiate the decommissioning process 

described in subpart I of this part. 

We did not make any changes to this 

section. 

What notices must I provide MMS 

following approval of my COP? 

(§ 285.636) 

The lessee must notify MMS, in 

writing, of the following events within 

the time periods provided: 

• No later than 30 days after 

commencing activities associated with 

the placement of facilities on the lease 

area under a Fabrication and Installation 

Report; 

• No later than 30 days after 

completion of construction and 

installation activities under a 

Fabrication and Installation Report; and 

• At least 7 days before commencing 

commercial operations. 

We did not make any changes to this 

section. 

When may I commence commercial 

operations on my commercial lease? 

(§ 285.637) 

For non-hydrokinetic projects (i.e., 

wind), the lessee may commence 

commercial operations 30 days after the 

CVA or project engineer has submitted 

to MMS the final report for the 

fabrication and installation review. 

If the lessee’s proposed activities 

require a FERC license or exemption 

(i.e., hydrokinetic activities), then the 

terms of the license or exemption 

govern when the lessee may begin 

commercial operations. 

We changed the rule to now allow a 

CVA or a project engineer to submit the 

fabrication and installation review to 

MMS and to acknowledge FERC license 

requirements relating to initiation of 

commercial hydrokinetic operations. 

These revisions were in response to 

comments. 

What must I do upon completion of my 

commercial operations as approved in 

my COP or FERC license? (§ 285.638) 

After completing operations on your 

lease, you must initiate the 

decommissioning process as set forth in 

subpart I of this part. If your project 

activities are instead governed by a 

FERC license, then the terms of your 

FERC license and MMS requirements 

will dictate your decommissioning 

activities. 

We made conforming revisions to this 

section relating to FERC’s role in 

regulating hydrokinetic activity. 

Reserved Section (§ 285.639) 

Section 285.639 is reserved. 

General Activities Plan Requirements 

for Limited Leases, ROW Grants, and 

RUE Grants 

What is a General Activities Plan (GAP)? 

(§ 285.640) 

The GAP describes proposed 

activities and operations for the 

assessment and development of a 

limited lease or grant including, if 

applicable, a project easement. A GAP 

contains the plans for resource data 

gathering, operations, and the testing of 

technology devices to characterize a 

limited lease or grant. A GAP must 

include the results and supporting data 

from surveys such as physical 

characterization surveys and baseline 

surveys. It includes requirements for 

construction, activities, and 

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decommissioning plans for all planned 

facilities, including onshore and 

support facilities that you will construct 

and use for your project including 

project easements. It includes additional 

requirements for both simple and 

complex facilities, or if you intend to 

apply for a project easement. You must 

receive MMS approval of your GAP 

before you can begin activities on your 

lease or grant. For a ROW grant or RUE 

grant that is issued competitively, you 

must submit your GAP within 6 months 

of issuance. For a ROW grant or RUE 

grant issued noncompetitively, you 

must submit your GAP within 60 days 

of the determination of no competitive 

interest. The MMS will evaluate your 

request for a noncompetitive grant and 

GAP simultaneously. 

This section has been substantially 

revised. Based on comments received on 

the proposed rule and a reinterpretation of subsection 8(p) of the 

OCS Lands Act, as amended, MMS has 

determined that geophysical and 

geological surveys, hazards surveys, 

archaeological surveys, and baseline 

collection studies (e.g., biological) 

conducted for the purpose of preparing 

SAPs, COPs, and GAPs are permitted 

under the authority of the ACOE. In 

many instances, these types of activities 

may be verified under the ACOE 

Nationwide Permit program. We have 

revised the rule to remove the MMS 

approval of these types of surveys and 

the requirement to describe the survey 

designs in a SAP, COP, or GAP. Project 

proponents may now conduct these 

surveys pre- or post-lease/grant, subject 

to ACOE verification under the 

Nationwide Permit program or other 

appropriate authorization and other 

applicable Federal law. However, MMS 

strongly encourages applicants to 

coordinate any pre- or post-lease/grant 

survey activities with MMS and the 

ACOE prior to their conduct to ensure 

that the activities being proposed meet 

the conditions of the Nationwide 

Permits. Certain Nationwide Permits 

require that an applicant notify the 

ACOE and receive verification that an 

activity is covered under a Nationwide 

Permit prior to start of construction. 

Lessees will be required to submit the 

results of their surveys and supporting 

data as part of their SAP, COP, or GAP. 

We also added provisions in this 

section stating that MMS will withhold 

trade secrets and commercial or 

financial information that is privileged 

or confidential from public disclosure 

under exemption 4 of the FOIA and in 

accordance with the terms of § 285.113. 

This text was added in response to 

commenters who were concerned about 

the confidentiality of certain proprietary 

information in their plans. 

One commenter did not believe the 

construction of two or three identical 

meteorological towers should trigger 

additional requirements, which will add 

significantly to the time and expense of 

a GAP submission, and requested that 

proposed § 285.640(b) be revised. The 

MMS revised the rule to clarify the 

requirement. We revised § 285.645(c) to 

state that a lessee must comply with the 

requirements of subpart G if the lessee 

proposes to construct a facility or 

combination of facilities which MMS 

determines to be complex or significant. 

What must I demonstrate in my GAP? 

(§ 285.641) 

The GAP must demonstrate that the 

applicant plans and is prepared to 

conduct the proposed activities in a 

manner that: 

• Conforms to all applicable laws 

(e.g., NEPA, MSA, ESA, and CZMA), 

implementing regulations, lease 

provisions, and stipulations; 

• Is safe; 

• Does not unreasonably interfere 

with other uses of the OCS, including 

those involved with national security or 

defense; 

• Does not cause undue 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; 

• Uses best available and safest 

technology; 

• Uses best management practices; 

and 

• Uses properly trained personnel. 

We did not make any changes to this 

section. One commenter requested that 

MMS not require the strict language 

‘‘Best Available and Safest Technology.’’ 

The commenter stated that this 

requirement is overly restrictive and 

inappropriate for a new industry where 

the economics are challenging, the 

technology is new and evolving, and 

there are no accepted design standards. 

Instead, the commenter suggested that 

the MMS should require use of 

‘‘reasonably available and safe 

technology,’’ noting that these facilities 

will be unmanned during most of their 

operation. The commenter stated that 

proposed § 285.641(e) already requires 

that proposed activities be ‘‘safe,’’ and 

this is sufficient to address safety 

concerns. The commenter 

recommended that subsection (a)(5) be 

omitted until and unless a sufficient 

record of scientific measurement studies 

demonstrates a need for a tighter safety 

standard. We kept the requirement of 

‘‘Best Available and Safest Technology,’’ 

as it is required for activities conducted 

pursuant to the OCS Lands Act. 

How do I submit my GAP? (§ 285.642) 

This section provides the 

requirements for submitting the GAP. 

The lessee must submit one paper copy 

and one electronic version of the GAP 

to MMS. The lessee may submit 

information to cover the project 

easement with the original submission 

of the GAP, or at a later time as a 

revision to the GAP. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.643 Through 

285.644) 

Sections 285.643 through 285.644 are 

reserved. 

Contents of the General Activities Plan 

Section 285.645 What must I include in 

my GAP? 

This section lists the project-specific 

information that must be included in 

the GAP. 

This includes: Identifying 

information, a discussion of the 

objectives of the site assessment or 

technology testing proposal, designation 

of operator (if applicable), general 

structural and project design, fabrication 

and installation information, 

deployment activities, air emissions, 

lease stipulations, a listing of all 

Federal, State, and local authorizations 

or approvals for projected site 

assessment activities, a list of entities 

that you have communicated with 

regarding the potential impacts of your 

project, how you will mitigate and 

monitor impacts, CVA nomination (if 

required), decommissioning procedures, 

a statement about other authorizations, 

financial assurance information, and 

additional information as requested by 

MMS. If you are applying for a project 

easement, or constructing a facility or a 

combination of facilities deemed by 

MMS to be complex or significant, you 

must provide the following information 

in addition to what is required in 

paragraphs (a) and (b) of this section 

and comply with the requirements of 

subpart G: The construction and 

operation concept, all cable and 

pipeline plans including cables on 

project easements, a description of the 

deployment activities, a general 

description of the operating procedures 

and systems, contact information, CVA 

information, construction schedule, and 

other information as required by MMS. 

For the installation of any facilities 

(e.g., meteorological tower, 

meteorological buoy, technology testing 

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device, anchored vessels, transmission 

substations), you are required to also 

include survey results and supporting 

data from: Geotechnical, shallow 

hazards, archaeological, geological, and 

biological surveys. 

This section was revised to state the 

requirement for survey results and 

supporting data and descriptions of any 

technology testing activities. 

What information and certifications 

must I submit with my GAP to assist 

MMS in complying with NEPA and 

other relevant laws? (§ 285.646) 

This section discusses the information 

that must be submitted with the GAP to 

assist MMS in complying with NEPA 

and other relevant laws. For NEPA 

compliance, the lessee or grantee must 

provide information on resources, 

conditions, and activities listed in this 

section that could be affected by or 

could affect your proposed activities. In 

addition, the lessee or grantee must 

submit information for CZMA 

compliance including one copy of the 

consistency certification required by 

CZMA and required ‘‘information’’ and 

‘‘analysis’’ as required in § 285.646. 

This section was expanded in 

response to comments requesting more 

detail on the information requirements 

for MMS compliance with NEPA and 

other relevant laws. We included a new 

table that describes this information 

more clearly. Some commenters 

requested us to describe in the rule the 

specific requirements for baseline 

information. The MMS will prepare 

guidance to applicants after the rule is 

promulgated and will hold workshops 

on the final rule. 

How will my GAP be processed for 

Federal consistency under the Coastal 

Zone Management Act? (§ 285.647) 

This section explains that processing 

of your GAP will be dependent upon 

how your limited lease, ROW, or RUE 

was issued. If your limited lease, ROW 

grant, or RUE grant is competitively 

issued, you must submit one copy and 

one electronic copy of your consistency 

certification to MMS along with other 

necessary information and analysis 

required in 15 CFR part 930, subpart E. 

After MMS has determined that all GAP 

information requirements are met and 

has prepared its NEPA compliance 

document, we will forward this 

information to the affected State’s CZM 

Agency. If your limited lease, ROW 

grant, or RUE grant is noncompetitively 

issued, you must furnish your SAP, 

consistency certification, and other 

information and analysis required by 15 

CFR part 930, subpart D, to the State 

CZM Agency and MMS concurrently. 

This is a new section that we added in 

response to comments to clarify the 

CZMA process. 

How will MMS process my GAP? 

(§ 285.648) 

This section discusses how MMS will 

review the submitted GAP and 

determine if it contains the information 

necessary to conduct our technical and 

environmental reviews. The MMS will 

review the submitted GAP and 

determine if it contains all the required 

information necessary to conduct our 

technical and environmental reviews. If 

the GAP lacks information needed for 

the reviews, we will notify the applicant 

and request the necessary information. 

We will prepare appropriate NEPA 

documentation. When appropriate, we 

will coordinate and consult with 

relevant State and Federal agencies as 

directed by subsections 8(p)(4) and (7) 

of the OCS Lands Act and by other 

relevant Federal statutory requirements 

(e.g. ESA and MSA), and provide to 

other State and Federal agencies 

relevant data and information pertaining 

to the proposed site assessment 

activities. We may request additional 

information during the review and 

approval process; if you do not provide 

this information, MMS may disapprove 

your application. 

After MMS completes the technical 

and environmental reviews, MMS may 

approve, disapprove, or approve with 

modifications your GAP. When a State 

objects to the consistency certification, 

MMS will not approve the plan if: (1) 

Consistency has not been conclusively 

presumed; or (2) the State objects to the 

applicant’s consistency certification, 

and the Secretary of Commerce has not 

found that the permitted activities are 

consistent with the objectives of the 

CZMA or are otherwise necessary in the 

interest of national security. If we 

disapprove your GAP, we will provide 

the reasons for the disapproval, and you 

will have an opportunity to revise and 

resubmit your GAP. If we approve your 

GAP, it will be subject to terms and 

conditions set forth by MMS. We will 

specify these terms and conditions, and 

they will be incorporated into your 

GAP. Examples of the types of terms 

and conditions we may require include, 

but are not limited to: (1) Terms and 

conditions from an ESA incidental take 

statement; (2) conservation 

recommendations resulting from EFH 

consultations; and (3) other safety, 

operational, or environmental 

protection measures. Also, you must 

certify compliance with certain of these 

terms and conditions as identified by 

MMS. The certification would include 

summary reports, a description of 

mitigation measures and monitoring, the 

effectiveness of the mitigation measures, 

and new proposed mitigation measures. 

If a project easement is approved, MMS 

will issue an addendum to the lease 

specifying its terms. 

This section was revised in response 

to comments to clarify the CZMA 

process for a GAP. 

Reserved Section (§ 285.649) 

Section 285.649 is reserved. 

Activities Under an Approved GAP 

When may I begin conducting activities 

under my GAP? (§ 285.650) 

After MMS approves the GAP, the 

lessee may begin conducting activities 

that do not involve the construction of 

facilities on the OCS. 

When may I construct complex or 

significant OCS facilities on my limited 

lease or any facilities on my project 

easement proposed under my GAP? 

(§ 285.651) 

After MMS approves the GAP, the 

lessee may begin to conduct approved 

activities. However, the lessee also must 

comply with the requirements of 

subpart G and submit your Safety 

Management System, required by 

§ 285.810, before construction may 

begin, if the lessee is applying for a 

project easement, or installing a facility 

or a combination of facilities deemed by 

MMS to be complex or significant as 

provided in § 285.648(a)(1). 

Additionally, in the proposed rule, 

MMS did not allow site assessment 

activities to be performed prior to 

approval of a GAP. Now those surveys 

may be conducted under the authority 

of the ACOE and other applicable 

Federal law, as described previously. 

However, MMS strongly encourages 

applicants to coordinate any pre- or 

post-lease/grant survey activities with 

MMS and the ACOE prior to conducting 

such activities. Lessees will be required 

to submit the results of their surveys as 

part of their SAP, COP, or GAP. The 

data collected from these surveys must 

meet the technical requirements that 

MMS will set forth in guidance to be 

issued after the rule is promulgated. 

How long do I have to conduct activities 

under an approved GAP? (§ 285.652) 

For a limited lease, after MMS 

approves the GAP, the lessee must 

conduct the approved activities within 

5 years unless MMS renews the term. 

For an ROW grant or RUE grant, the 

time for conducting approved activities 

is provided in the terms of the grant. 

We did not make any changes to this 

section. 

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What other reports or notices must I 

submit to MMS under my approved 

GAP? (§ 285.653) 

This section lists the various reports 

and notifications that must be submitted 

to MMS. These include the initial 

survey report, notice of completion of 

construction and installation activities, 

annual compliance certification, an 

annual report of findings that result 

from conducting the activities approved 

under the GAP, and an annual 

compliance certification of certain terms 

and conditions of your GAP that MMS 

identifies. The compliance certification 

includes a listing and description of any 

mitigation measures and monitoring and 

their effectiveness. If you determine that 

either the measures or monitoring were 

not effective, then you must include 

recommendations for new measures or 

monitoring methods. You must also 

submit an annual summary report of the 

findings from any activities that you 

conduct under your approved GAP and 

the results of those activities. The 

information from this report will be 

protected as provided in § 285.113. 

We did not make any changes to this 

section. 

Reserved Section (§ 285.654) 

Section 285.654 is reserved. 

What activities require a revision to my 

GAP, and when will MMS approve the 

revision? (§ 285.655) 

The lessee or grantee must notify 

MMS in writing prior to conducting any 

activities not documented in the GAP. 

The MMS will determine if those 

activities require a revision to the 

approved GAP. We will also conduct 

periodic reviews of the activities being 

conducted under an approved GAP to 

ensure that they fall within the scope of 

the GAP. The GAP will likely be 

required to be revised if you plan to: 

• Conduct activities not described in 

the approved GAP; 

• Change the size or type of facility or 

equipment used; 

• Change the surface location of a 

facility or structure; 

• Add another facility or structure not 

contemplated in the approved GAP; 

• Change the location of the onshore 

support base from one State to another 

or to a new base requiring expansion; 

• Change the location of bottom 

disturbances by 500 feet (152 meters); 

• Respond to structural failure of one 

or more facilities; or 

• Change to any other activity 

specified by MMS. 

Revisions to the GAP will require 

NEPA and other reviews if MMS 

determines that the proposed revision 

could result in a significant change in 

impacts previously identified and 

evaluated; could require any additional 

Federal authorizations; or could involve 

activities not previously identified and 

evaluated. 

The MMS may approve the revision to 

the GAP if the revision is designed not 

to cause undue harm or damage to 

natural resources; or to sites, structures, 

or objects of historical or archaeological 

significance; and the revision is 

otherwise consistent with the provisions 

of subsection 8(p) of the OCS Lands Act. 

What must I do if I cease activities 

approved in my GAP before the end of 

my term? (§ 285.656) 

The lessee or grantee must notify the 

MMS upon ceasing activities under an 

approved GAP without an approved 

suspension. If activities are ceased for 

an indefinite period that exceeds 6 

months, MMS may cancel the lease or 

grant under § 285.437, and the lessee or 

grantee must initiate the 

decommissioning process, as set forth in 

subpart I of this part. 

We did not make any changes to this 

section. 

What must I do upon completion of 

approved activities under my GAP? 

(§ 285.657) 

After completing the activities 

approved under the GAP, the lessee or 

grantee must initiate the 

decommissioning process, as required 

in subpart I of this part. 

We did not make any changes to this 

section. 

Cable and Pipeline Deviations 

Can my cable or pipeline construction 

deviate from my approved COP or GAP? 

(§ 285.658) 

This section discusses the 

requirements related to the construction 

of cables, pipelines, and facilities so as 

to minimize deviations from the 

approved plan under the limited lease 

or grant. 

If MMS determines that significant 

changes have occurred requiring an 

adjustment to your lease or grant before 

construction of a cable or pipeline, it 

will consider modification to your ROW 

grant, RUE grant, or lease addendum for 

a project easement in connection with 

your COP or GAP. This section has been 

revised to make clear that modifications 

to your grant or lease addendum would 

require MMS and you to agree on such 

modification. If MMS determines that a 

deviation occurred after you have 

constructed your cable or pipeline, you 

would be required to notify affected 

lessees or ROW/RUE grant holders, and 

you would be required to relinquish the 

unused portion of the lease or grant. 

Substantial deviations could result in 

the cancellation of the lease or grant. 

We did not make any changes to this 

section. 

What requirements must I include in my 

SAP, COP, or GAP regarding air quality? 

(§ 285.659) 

This section was relocated from 

subpart H to clarify that the air quality 

requirements are part of the SAP, COP, 

or GAP. This section discusses 

compliance with the Clean Air Act (42 

U.S.C. 7409) and its implementing 

regulations. The section informs the 

applicant of requirements if their project 

is located in the western Gulf of Mexico 

or if it is located anywhere else on the 

OCS. If air quality modeling is needed, 

the section outlines how to establish a 

modeling protocol. Finally, for projects 

located in the Gulf of Mexico, the 

number of copies to be submitted is 

stated and the types of information 

required. 

Subpart G—Facility Design, Fabrication, 

and Installation 

Overview 

As indicated in the discussion of 

subpart F, your plan (SAP, COP, or 

GAP) would include general 

descriptions for project design and 

facility fabrication and installation. 

Subpart G describes the various detailed 

technical reports that the MMS will 

require lessees, operators, and grant 

holders to submit that address the final 

design, fabrication, and installation of 

facilities on a lease or grant. These 

reports will be submitted after MMS 

approves the SAP, COP, or GAP, as 

applicable. 

Subpart G also describes a third-party 

verification process that will require 

lessees, operators, and grant holders to 

use a CVA to verify and certify that 

projects are designed, fabricated, and 

installed in conformance with accepted 

engineering practices and with the 

submitted reports. However, MMS may 

waive the requirement to use a CVA, 

under certain conditions. If you are not 

required to use a CVA, your project 

engineer will perform functions similar 

to the CVA. 

Certified Verification Agent (CVA) 

The CVA is responsible for 

conducting an independent assessment 

of the facility design and the fabrication 

and installation processes to ensure that 

facilities are designed, fabricated, and 

installed in conformance with accepted 

engineering practices and the approved 

plans and applications. 

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The CVA will also ensure that repairs 

and major modifications are completed 

in conformance with accepted 

engineering practices. The CVA will 

certify and report to the lessee, operator, 

or grant holder and MMS on the status 

of each phase included in the Facility 

Design Report and the Fabrication and 

Installation Report. The CVA must 

submit interim reports, as required by 

the Director, and a final report covering 

the adequacy of each phase. 

The MMS received comments 

requesting that we either remove the 

CVA requirement or only require CVAs 

on high-impact or high-risk projects. 

Concerns with cost, redundancy, and 

the fact that most projects will be 

developed under a project-financing 

structure, with the lender providing an 

independent engineer to review design 

and construction, were cited as reasons 

for forgoing the CVA. In response to 

these concerns, MMS is including a 

provision that will allow the lessee, 

grant holders, or operators to request a 

waiver of the CVA requirement. 

The MMS will consider waivers on a 

case-by-case basis. Requests for waivers 

must be submitted with the SAP, COP, 

or GAP, and we will provide a decision 

on the waiver, along with the decision 

on the SAP, COP, or GAP. However, if 

MMS waives the CVA requirement, the 

project engineer will be expected to 

perform the same duties and 

responsibilities as the CVA. 

To receive a waiver, the company 

must demonstrate to MMS the 

following: 

• For design of the structure, you 

must demonstrate that the facility will 

be of a standardized design that has 

been used successfully in a similar 

environment and the installation will be 

designed in conformance with accepted 

engineering practices. 

• For the fabrication of your 

structure(s), you must demonstrate that 

the facility manufacturer has 

successfully manufactured similar 

facilities and the facility will be 

fabricated in conformance with 

accepted engineering practices. 

• For the installation of your 

structure(s), you must demonstrate that 

the contractor has successfully installed 

similar facilities in a similar offshore 

environment and your structure(s) will 

be installed in conformance with 

accepted engineering practices. 

• For repairs and major modifications 

of a structure, you must demonstrate 

that the repairs and major modifications 

are completed in conformance with 

accepted engineering practices. 

Facility Design Report 

This report provides MMS with a 

detailed description of the proposed 

facility or facilities and locations on the 

OCS. The lessee, operator, or grant 

holder is required to provide to MMS a 

complete set of structural drawings, 

structural loading information, detailed 

design criteria, and foundation 

information including mooring or 

tethering systems in the case of a 

floating facility. The CVA, nominated in 

your plan, will conduct an independent 

assessment of the design of the facility 

and ensure that it is designed to 

withstand the environmental and 

functional load conditions appropriate 

for the intended service life at the 

proposed location. The CVA must 

submit interim reports, as required by 

the Director, and a final report covering 

the adequacy of the design phase. 

Fabrication and Installation Report 

Under the final rule, Fabrication and 

Installation Reports will be combined. 

The Fabrication and Installation Report 

describes the plans for both the facility’s 

fabrication (including the manufacture, 

assembly, and construction) and 

installation process. The report will 

include a schedule for fabrication and 

installation as well as detailed 

engineering and environmental 

information. The CVA, nominated in the 

SAP, COP or GAP, or the project 

engineer, will conduct an independent 

assessment of the fabrication and 

installation phases. The CVA or project 

engineer must use good engineering 

judgment and practices in conducting 

an independent assessment of 

fabrication and installation activities 

and ensure that these activities are 

conducted according to the approved 

applications. The CVA or project 

engineer must submit interim reports, as 

required by the Director, and a final 

report covering the adequacy of the 

fabrication and installation phase. 

After fabrication and installation 

activities are completed, the CVA or 

project engineer must submit a 

certification statement certifying that 

the fabrication and installation were 

conducted in accordance with accepted 

engineering practices. 

Section-by-Section Discussion for 

Subpart G 

Reports 

What reports must I submit to MMS 

before installing facilities described in 

my approved SAP, COP, or GAP? 

(§ 285.700) 

This section lists two reports required 

prior to installing facilities: (1) Facility 

Design Report; and (2) Fabrication and 

Installation Report. The MMS has 60 

days to review these reports and notify 

the applicant of any objections. If MMS 

does not have any objections, the 

applicant may begin to construct and 

install the facilities at the end of the 60- 

period. 

If there are any objections, MMS will 

notify you either verbally or in writing 

within 60 days of receipt. After 

notification of objections, MMS may 

follow up with written correspondence 

outlining its specific objections to the 

report and identifying certain actions 

necessary to resolve the agency’s 

objections. You cannot commence 

activities addressed in such report until 

all objections are resolved to MMS’s 

satisfaction. 

The MMS did not make any changes 

to this section. 

What must I include in my Facility 

Design Report? (§ 285.701) 

The Facility Design Report provides 

specific details of the design of all 

facilities, including cables and 

pipelines, outlined in your approved 

SAP, COP, or GAP. This report must 

demonstrate that the design conforms to 

the responsibilities of a lessee contained 

in these regulations. This section 

includes a list of required contents for 

the report and details the required 

contents of each element of the report. 

The report must include: 

• A cover letter; 

• A location plat; 

• Front, side, and plan view 

drawings; 

• A complete set of structural 

drawings; 

• A summary of environmental data 

used for design; 

• A summary of the engineering 

design data; 

• A complete set of design 

calculations; 

• Project-specific studies used in the 

facility design or installation; 

• Description of the loads imposed on 

the facility; 

• A geotechnical report; and 

• A certification statement and 

location of records. 

In response to comments, we added a 

provision to this section that clarifies 

that MMS will withhold trade secrets 

and commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA and in accordance with the 

terms of § 285.113. 

What must I include in my Fabrication 

and Installation Report? (§ 285.702) 

The Fabrication and Installation 

Report describes how facilities will be 

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fabricated and installed in accordance 

with the design criteria identified in the 

Facility Design Report, the approved 

SAP, COP, or GAP; and generally 

accepted industry standards and 

practices. The Fabrication and 

Installation Report must demonstrate 

how your facilities will be fabricated 

and installed in a manner that conforms 

to the responsibilities of a lessee 

contained in these regulations. This 

section includes a list of required 

contents for the report, and details the 

required contents of each element of the 

report. The report must include: 

• A cover letter; 

• A schedule for fabrication and 

installation; 

• Fabrication information; 

• Installation process information; 

• Federal, State, and local permits 

(e.g., EPA, ACOE); 

• Environmental information; and 

• Project easement design. 

In response to comments, we added a 

provision to this section that clarifies 

that MMS will withhold trade secrets 

and commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA and in accordance with the 

terms of § 285.113. We also added a 

provision that will allow MMS to waive 

the requirement for a CVA for the 

Fabrication and Installation Report, 

based on criteria added to § 285.705. 

What reports must I submit for project 

modifications and repairs? (§ 285.703) 

This section requires a report from the 

lessee on major repairs and 

modifications to certify that the repairs 

and modifications to the project 

conform with accepted engineering 

practices. The report must also identify 

the location of all records pertaining to 

the major repairs or major 

modifications. 

A major repair is a corrective action 

involving structural members affecting 

the structural integrity of a portion of or 

all the facility. A major modification is 

an alteration involving structural 

members affecting the structural 

integrity of a portion of or all the 

facility. 

We moved this section from 

§ 285.711, because we changed the 

requirement to always use a CVA for 

project modifications and repairs. We 

revised this section to state that MMS 

may require the lessee to use a CVA for 

project modifications and repairs. 

Reserved Section (§ 285.704) 

Section 285.704 is reserved. 

Certified Verification Agent 

When must I use a Certified Verification 

Agent (CVA)? (§ 285.705) 

This section details the 

responsibilities of the CVA. The CVA 

must ensure that facilities are designed, 

fabricated, and installed in conformance 

with accepted engineering practices, the 

Facility Design Report, and the 

Fabrication and Installation Report, and 

ensure that repairs and major 

modifications are completed in 

conformance with accepted engineering 

practices. The CVA must provide 

reports of all incidents that affect the 

design, fabrication, and installation of 

the project and its components. 

In response to comments, we added a 

provision to this section that allows 

MMS to waive the requirement to use a 

CVA. The new provision describes the 

criteria that MMS will use to decide 

whether to waive the CVA; this revision 

was made in conjunction with those in 

§§ 285.701 and 285.702. In addition, we 

changed the title of this section from 

‘‘What is the function of a Certified 

Verification Agent (CVA)?’’ to ‘‘When 

must I use a Certified Verification Agent 

(CVA)?’’ to reflect the changes made in 

the purpose of this section. Even if 

MMS waives the requirement that you 

use a CVA, the project engineer must 

perform the same duties and 

responsibilities as the CVA. 

How do I nominate a CVA for MMS 

approval? (§ 285.706) 

A CVA must be nominated in the 

SAP, COP, or GAP, as applicable. This 

section describes the process for 

nominating the CVA and the 

information that must be included in 

the qualifications statement. The section 

also requires that the verification be 

conducted by or under the direct 

supervision of registered professional 

engineers and prohibits a CVA from 

functioning in a way to create a conflict 

of interest. 

We did not make any changes to this 

section. 

What are the CVA’s primary duties for 

facility design review? (§ 285.707) 

The CVA must certify to MMS that 

the facility is designed to withstand the 

environmental and functional load 

conditions for the intended life at the 

proposed location. This section lists 

those elements of the design phase that 

the CVA must independently assess. 

These elements include: 

• Planning criteria; 

• Operational requirements; 

• Environmental loading data; 

• Load determinations; 

• Stress analyses; 

• Material designations; 

• Soil and foundation conditions; 

• Safety factors; and 

• Other pertinent parameters of the 

proposed design. 

For floating facilities, the CVA must 

ensure that any requirements of the U.S. 

Coast Guard for structural integrity and 

stability (e.g., verification of center of 

gravity, etc.) are met. 

We did not make any changes to this 

section. 

What are the CVA’s or project engineer’s 

primary duties for fabrication and 

installation review? (§ 285.708) 

The CVA or project engineer must 

certify to the MMS that the facilities are 

fabricated and installed as proposed in 

the approved Facility Design Report and 

the Fabrication and Installation Report. 

This section details the monitoring and 

inspection functions of the CVA or 

project engineer during this phase of the 

project. It also requires the CVA or 

project engineer to inform the lessee 

when procedures or design 

specifications are changed. 

For the fabrication and installation 

review, the CVA or project engineer 

must: 

• Use good engineering judgment and 

practice in conducting an independent 

assessment of the fabrication and 

installation activities; 

• Monitor the fabrication and 

installation of the facility; 

• Make periodic onsite inspections 

while fabrication is in progress; 

• Make periodic onsite inspections 

while installation is in progress; and 

• Certify in a report that project 

components are fabricated and installed 

in accordance with accepted 

engineering practices, the approved 

COP, SAP, or GAP, and the Fabrication 

and Installation Report. 

The report must identify the location 

of all records pertaining to fabrication 

and installation. The lessee or grantee 

may commence commercial operations 

or other approved activities 30 days 

after MMS receives the certification 

report, unless MMS notifies the 

applicant within that time period of 

objections to the certification report. 

The CVA or project engineer must 

monitor the fabrication and installation 

of the facility to ensure that it is built 

and installed according to the Facility 

Design Report and Fabrication and 

Installation Report. If the CVA or project 

engineer finds that fabrication and 

installation procedures are changed or 

design specifications are modified, the 

CVA or project engineer must inform 

the applicant. 

We made minor edits to this section 

to include the applicable project 

engineer functions. 

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When conducting onsite fabrication 

inspections, what must the CVA or 

project engineer verify? (§ 285.709) 

The CVA or project engineer must 

make periodic onsite inspections while 

fabrication of the facility is in progress. 

The CVA or project engineer must verify 

the following items during these 

inspections: 

• Quality control by lessee (or grant 

holder) and builder; 

• Fabrication site facilities; 

• Material quality and identification 

methods; 

• Fabrication procedures specified in 

the Fabrication and Installation Report, 

and adherence to such procedures; 

• Welder and welding procedure 

qualification and identification; 

• Structural tolerances specified, and 

adherence to those tolerances; 

• The nondestructive examination 

requirements, and evaluation results of 

the specified examinations; 

• Destructive testing requirements 

and results; 

• Repair procedures; 

• Installation of corrosion-protection 

systems and splash-zone protection; 

• Erection procedures to ensure that 

overstressing of structural members 

does not occur; 

• Alignment procedures; 

• Dimensional check of the overall 

structure, including any turrets, turretand-hull interfaces, any mooring line 

and chain and riser tensioning line 

segments; and 

• Status of quality-control records at 

various stages of fabrication. 

For any floating facilities, the CVA or 

project engineer must ensure that any 

requirements of the U.S. Coast Guard for 

structural integrity and stability (e.g., 

verification of center of gravity, etc.) 

have been met. The CVA or project 

engineer must also consider 

foundations, foundation pilings and 

templates, and anchoring systems and 

mooring or tethering systems. 

We made minor revisions to this 

section to include the applicable project 

engineer functions. 

When conducting onsite installation 

inspections, what must the CVA or 

project engineer do? (§ 285.710) 

The CVA or project engineer must 

make periodic onsite inspections while 

installation is in progress. The CVA or 

project engineer must verify, survey, 

witness, or check the following items 

during facility installation: 

• Loadout and initial flotation 

procedures; 

• Towing operations procedures to 

the specified location, and review the 

towing records; 

• Launching and uprighting 

activities; 

• Submergence activities; 

• Pile or anchor installations; 

• Installation of mooring and 

tethering systems; 

• Final deck and component 

installations; and 

• Installation at the approved location 

according to the Facility Design Report 

and the Fabrication and Installation 

Report. 

For a fixed or floating facility, the 

CVA or project engineer must verify that 

proper procedures were utilized during 

the loadout of the jacket, decks, piles, or 

structures from each fabrication site; the 

actual installation of the facility or 

major modification; and the related 

installation activities. 

For a floating facility, the CVA or 

project engineer must verify that proper 

procedures were utilized during the 

loadout of the facility; the installation of 

foundation pilings and templates, and 

anchoring systems; and the installation 

of the mooring and tethering systems. 

The CVA or project engineer must 

conduct an onsite survey of the facility 

after transportation to the approved 

location. The CVA or project engineer 

must spot-check the equipment, 

procedures, and recordkeeping as 

necessary to determine compliance with 

the applicable documents incorporated 

by reference and the regulations under 

this part. 

In response to comments, MMS 

changed this section to require the CVA 

or project engineer to verify that proper 

procedures were followed during the 

operations addressed in the section. 

This change no longer requires the CVA 

or project engineer to witness all of the 

activities, but rather to verify that 

proper procedures were used. 

Reserved Section (§ 285.711) 

Section 285.711 is reserved. 

What are the CVA’s or project engineer’s 

reporting requirements? (§ 285.712) 

This section details when the CVA or 

project engineer must submit reports to 

MMS and the lessee or grantee, 

including interim reports, as requested 

by the MMS. For each report, the CVA 

or project engineer must submit one 

electronic copy and one paper copy to 

MMS. In each report, the CVA or project 

engineer must: 

• Give details of how, by whom, and 

when the CVA or project engineer 

activities were conducted; 

• Describe the CVA’s or project 

engineer’s activities during the 

verification process; 

• Summarize the CVA’s or project 

engineer’s findings; and 

• Provide any additional comments 

that the CVA or project engineer deems 

necessary. 

We made minor revisions to this 

section to include the applicable project 

engineer functions. 

What must I do after the CVA or project 

engineer confirms compliance with the 

Fabrication and Installation Report on 

my commercial lease? (§ 285.713) 

After receiving confirmation of 

compliance with the Fabrication and 

Installation Report from the CVA or 

project engineer, the lessee or grantee 

must notify MMS within 10 business 

days after commencing commercial 

operations. 

We made minor edits to this section 

to include the applicable project 

engineer functions. 

What records relating to SAPs, COPs, 

and GAPs must I keep? (§ 285.714) 

This section provides requirements 

for records that the lessee must maintain 

for the duration of the project, until 

MMS releases the required financial 

assurance. The lessee or grantee must 

compile, retain, and make these records 

available to MMS representatives. These 

records include: 

• The as-built drawings; 

• The design assumptions and 

analyses; 

• A summary of the fabrication and 

installation examination records; 

• The inspection results; and 

• Records of repairs not covered in 

the inspection report. 

The lessee or grantee must record and 

retain the original material test results of 

all primary structural materials during 

all stages of construction. The lessee or 

grantee must provide MMS with the 

location of these records in the 

certification statement. 

We did not make any changes to this 

section. 

Subpart H—Environmental and Safety 

Management, Inspections, and Facility 

Assessments for Activities Conducted 

Under SAPs, COPs and GAPs 

Overview 

This subpart describes requirements 

to prevent or minimize the likelihood of 

harm or damage to the marine and 

coastal environments and to promote 

safe operations, including their 

physical, atmospheric, and biological 

components. The MMS intends to use 

adaptive management practices to help 

ensure that renewable energy activities 

are conducted safely. Such a system 

relies on demonstrating and validating 

actual operating performance. The MMS 

then will require adjustments to 

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mitigation and monitoring activities on 

a case-by-case basis based on operating 

experiences. You must certify 

compliance with certain terms and 

conditions that the MMS will specify 

and incorporate into the SAP, COP, or 

GAP. 

We retitled this subpart to reflect 

FERC’s role in regulating hydrokinetic 

activity. Since FERC will regulate 

construction and operations activity on 

hydrokinetic commercial leases, this 

subpart applies only to the renewable 

energy activities that will be regulated 

by MMS under approved SAPs, COPs, 

and GAPs. 

Air Quality 

The air quality requirements were 

moved to subpart F. 

Safety Management System 

The safety management system would 

include, as applicable: 

• Remote monitoring, control, and 

shutdown capabilities; 

• Emergency response procedures; 

• Fire suppression equipment; 

• Testing procedures; and 

• Training. 

These safety management provisions 

also cover maintenance and equipment 

shutdowns, including reporting and 

notification requirements, as well as 

requirements relating to both MMS and 

operator self inspections. The safety 

management system would be required 

to be submitted as part of the COP. 

Maintenance and Shutdowns 

This section describes when operators 

are required to notify MMS of 

shutdowns. Notification is required 

when safety equipment is taken out of 

service for more than 12 hours. If safety 

equipment is removed from service for 

more than 60 days, the operator must 

submit a written notice to MMS. The 

operator must also notify MMS when 

the equipment is returned to service. 

Equipment Failure and Adverse 

Environmental Affects 

These provisions address equipment 

failure and adverse effects of 

environmental or other conditions. 

Operators are required to notify MMS 

and repair any equipment failure, 

including pipelines and cables, as soon 

as practicable. The MMS may require an 

analysis to determine the cause of the 

failure. The final rule has been revised 

to clarify what repairs must be reported 

to MMS. The rule also states that MMS 

may require a lessee to revise its COP 

depending on the magnitude of the 

damages to facilities. If environmental 

or other conditions adversely affect a 

cable, pipeline, or facility, the operator 

must submit a corrective action plan to 

MMS; take the actions described in the 

plan; and submit a report to MMS of the 

actions taken. 

Inspections 

The MMS will conduct periodic 

scheduled and unscheduled inspections 

of OCS renewable energy facilities. The 

purpose of an MMS inspection is to 

ensure that an operator is conducting 

operations in accordance with all laws, 

regulations, and MMS-approved plans 

and to verify that proper safety 

equipment is correctly installed and 

working properly. 

Operators are required to develop a 

self-inspection program for all facilities 

that covers all structures including all 

parts above and below the waterline. 

Each operator must inspect for corrosion 

and other factors affecting the structural 

integrity of the facility. Operators also 

must submit annually a summary of 

inspections, including how they 

conducted the inspections; what 

equipment was used; what repairs were 

made, if any; and the structural 

condition. 

With regard to hydrokinetic activity 

regulated under FERC license, MMS 

will retain a role in inspections under 

the MOU adopted by FERC and MMS. 

We may inspect to ensure compliance 

with any provision of a lease, easement, 

or right-of-way we issue. The MMS will 

coordinate such inspections with FERC. 

Facility Assessments 

This subpart also contains the 

requirements for facility assessments, 

incorporating sections 17.2.1 through 

17.2.5 of the American Petroleum 

Institute Recommended Practice 2A– 

WSD (API RP 2A–WSD), as they relate 

to initiating facility assessments. This 

proposed provision would also require 

mitigation if a facility did not pass the 

assessment process described in API RP 

2A–WSD. We selected the API RP 2A– 

WSD because there is a lack of 

standards for offshore renewable energy 

facilities, and this standard has proven 

to be an effective assessment tool for 

other OCS structures in U.S. waters. 

This relates to the structure only and 

does not include production or 

transmission equipment. 

Incident Reporting 

This final rule will require that 

operators report immediately to the 

Director certain significant incidents 

associated with activities regulated 

under this part. An initial report must 

be followed within 15 days by a written 

report. Significant incidents that require 

immediate notification are identified, 

and include any incidents resulting in 

fire, explosions, or that involve a 

fatality. In addition, MMS requires 

submission of a written incident report 

within 15 days following certain types 

of incidents, including those involving 

injuries that result in the injured not 

being able to resume all duties the 

following day. 

Section-by-Section Discussion for 

Subpart H 

How must I conduct my activities to 

comply with safety and environmental 

requirements? (§ 285.800) 

This section states the performance 

requirements for using trained 

personnel and technologies, 

precautions, and techniques to prevent 

or minimize the likelihood of harm or 

damage to human life and the 

environment. In addition, you must 

certify compliance with those terms and 

conditions identified in your approved 

SAP, COP, or GAP. 

We did not make any changes to this 

section. 

How must I conduct my approved 

activities to protect marine mammals, 

threatened and endangered species, and 

designated critical habitat? (§ 285.801) 

This section describes the actions you 

must take if there is reason to believe 

that protected species or designated 

critical habitat may be affected by your 

operations. If there is reason to believe 

that a threatened or endangered species 

may be present or designated critical 

habitat may be affected while you 

conduct your MMS-approved activities, 

you must notify MMS, and we will 

consult with appropriate agencies and, 

after consultation, shall identify 

whether, and under what conditions, 

you may proceed. If there is reason to 

believe that marine mammals or 

threatened or endangered species may 

be incidentally taken as a result of your 

MMS-approved activities, you must 

agree to secure an authorization from 

NOAA or the FWS for incidental taking, 

including taking by harassment, which 

may result from your actions. This 

section also includes provisions related 

to mitigating and monitoring measures 

you may be required to take. 

We deleted the references to the SAP, 

COP, and GAP to clarify that this 

section applies to conducting activities 

under an approved plan and not to the 

information requirements for those 

plans. 

How must I protect archaeological 

resources? (§ 285.802) 

This section was removed from the 

final rule. The details about how a 

lessee or grant holder should protect 

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archaeological resources will be 

included in a guidance document that 

MMS will develop after the rule is final. 

What must I do if I discover a potential 

archaeological resource while 

conducting my approved activities? 

(§ 285.802) 

This section describes the procedures 

that must be followed if a potential 

archaeological resource is discovered 

while conducting any activity related to 

a project. It also includes additional 

requirements MMS may impose after 

such a discovery, such as conducting 

additional archaeological investigations. 

If a potential archaeological resource is 

discovered, you must immediately halt 

all seafloor disturbing activities within 

the area of the discovery; notify the 

Director of the discovery within 72 

hours; and keep the location of the 

discovery confidential and not take any 

action that may adversely affect the 

archaeological resource until MMS has 

made an evaluation and tells you how 

to proceed. 

The MMS may require additional 

investigations to determine if the 

resource is eligible for listing in the 

National Register of Historic Places 

under 36 CFR 60.4. This will be 

required if either the site has been 

impacted by your project activities or if 

impacts to the site or to the area of 

potential effect cannot be avoided. If 

these investigations indicate that the 

resource is potentially eligible to be 

listed in the National Register of 

Historic Places, MMS will tell you how 

to protect the resource or how to 

mitigate adverse effects to the site. 

Under section 110(g) of the National 

Historic Preservation Act, MMS may 

charge reasonable costs for carrying out 

preservation responsibilities under the 

OCS Lands Act. 

The MMS changed the title from, 

‘‘What must I do if I discover a potential 

archaeological resource?’’ to ‘‘What 

must I do if I discover a potential 

archaeological resource while 

conducting my approved activities?’’ to 

clarify that this section addresses 

activities under approved plans, not 

information requirements for the SAP, 

COP, or GAP. 

How must I conduct my approved 

activities to protect essential fish 

habitats identified and described under 

the Magnuson-Stevens Fishery 

Conservation and Management Act? 

(§ 285.803) 

This section addresses the actions that 

MMS and you must take if, during the 

conduct of approved activities, MMS 

finds an EFH or habitat areas of 

particular concern that may be 

adversely affected by your approved 

activities. The MMS will consult with 

NMFS, and the lessee or grant holder 

will be required to adopt mitigation 

measures designed to avoid or minimize 

the adverse effects. The MMS may 

require additional surveys to define 

boundaries and avoidance distances. If 

MMS requires additional surveys, we 

will specify the requirements at that 

time. 

The MMS renamed this section from, 

‘‘How must I protect essential fish 

habitats identified and described under 

MSA?’’ to ‘‘How must I conduct my 

approved activities to protect essential 

fish habitats identified and described 

under the Magnuson-Stevens Fishery 

Conservation and Management Act?’’ to 

clarify that this section addresses 

activities under approved plans, not 

information requirements for the SAP, 

COP, or GAP. 

Reserved Sections (§ 285.804 Through 

§ 285.806) 

Sections 285.804 through 285.806 are 

reserved. 

Air Quality 

What requirements must I meet 

regarding air quality? (§ 285.807) 

This section was moved to subpart F, 

§ 285.659, and renamed to ‘‘What 

requirements must I include in my SAP, 

COP, or GAP regarding air quality?’’ to 

reflect that this section addresses 

information that must be included in a 

SAP, COP, or GAP. 

Reserved Sections (§ 285.808 Through 

§ 285.809) 

Sections 285.808 through 285.809 are 

reserved. 

Safety Management Systems 

What must I include in my Safety 

Management System? (§ 285.810) 

You must submit a Safety 

Management System with the SAP, 

COP, or GAP. The Safety Management 

System must describe the following for 

all aspects of the project: 

• How you will ensure the safety of 

personnel; 

• Remote monitoring, control, and 

shutdown capabilities; 

• Emergency response procedures; 

• Fire suppression equipment, if 

needed; 

• How and when you will test your 

Safety Management System; and 

• How you will demonstrate that 

personnel are properly trained. 

This section also requires that you 

demonstrate compliance, identify any 

impacts and any mitigation measures 

that are not effective, and make 

recommendations for new mitigation 

measures. 

We did not make any changes to this 

section. 

When must I follow my Safety 

Management System? (§ 285.811) 

This is a new section added to clarify 

when a lessee or grantee must 

implement their Safety Management 

System. 

Reserved Section (§ 285.812) 

Section 285.812 is reserved. 

Maintenance and Shutdowns 

When do I have to report removing 

equipment from service? (§ 285.813) 

This section requires you to notify 

MMS when equipment necessary for 

implementing an approved plan is taken 

out of service for more than 12 hours. 

It also requires that MMS be notified 

after the repairs are complete. 

We revised this section, based on 

comments that stated that the section 

was unclear as to the requirement for 

reporting when safety equipment is 

removed from service. We clarified that 

the lessee/operator must report the 

removal of any equipment that is 

necessary for implementing the 

approved plan. 

Reserved Section (§ 285.814) 

Section 285.814 is reserved. 

Equipment Failure and Adverse 

Environmental Affects 

What must I do if I have facility damage 

or an equipment failure? (§ 285.815) 

This section requires that all facility 

damage or equipment failures be 

repaired as soon as possible, and that 

MMS be notified of the repairs as soon 

as practicable. Based on comments, we 

revised this section to clarify what 

equipment and facility repairs must be 

reported to MMS. We did this by 

requiring repair notifications if you are 

required to report facility damage or 

failure under § 285.381. This section 

also requires that you submit a report 

describing the repairs to MMS, and 

states that MMS may require an analysis 

of the failure necessitating the repairs. 

This section also states that MMS may 

require you to submit a revised COP 

depending on the extent of the damage 

to facilities or other failure. 

What must I do if environmental or 

other conditions adversely affect a 

cable, pipeline, or facility? (§ 285.816) 

If environmental or other conditions 

adversely affect a cable, pipeline, or 

facility, this section requires you to 

submit a plan of corrective action to 

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MMS. In addition, the lessee or grantee 

must take the remedial action described 

in the plan, and submit a report of the 

remedial action taken. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.817 Through 

285.819) 

Sections 285.817 through 285.819 are 

reserved. 

Inspections and Assessments 

Will MMS conduct inspections? 

(§ 285.820) 

The MMS conducts inspections of 

OCS facilities and any vessels engaged 

in activities authorized under this part 

to verify that the applicant is operating 

in accordance with the OCS Lands Act, 

the regulations, lease stipulations, 

conditions of the grant, approved plans, 

and other applicable laws and 

regulations, and to determine whether 

the proper safety equipment is installed 

and operating properly. 

We did not make any changes to this 

section. 

Will MMS conduct scheduled and 

unscheduled inspections? (§ 285.821) 

The MMS will conduct both 

scheduled and unscheduled inspections 

of your facilities. 

We did not make any changes to this 

section. 

What must I do when MMS conducts an 

inspection? (§ 285.822) 

These regulations require you to make 

the area of the lease or grant; all 

facilities on the lease or grant; and 

records of design, construction, 

operation, maintenance, repairs, or 

investigations available to MMS for 

inspection. You must retain all records 

as required, and certain records must be 

retained until MMS releases your 

financial assurance. 

We did not make any changes to this 

section. 

Will MMS reimburse me for my 

expenses related to inspections? 

(§ 285.823) 

Upon request, MMS will reimburse 

your reasonable expenses for the 

expenses related to food, quarters, and 

transportation provided for MMS 

representatives while they inspect the 

project facilities. 

We did not make any changes to this 

section. 

How must I conduct self inspections? 

(§ 285.824) 

This section requires the lessee or 

grantee to develop an annual self 

inspection plan describing both abovewater and below-water structural 

inspections and describing how 

corrosion protection will be monitored. 

It also requires that you submit an 

annual report that summarizes the 

results of the inspections. 

We did not make any changes to this 

section. 

When must I assess my facilities? 

(§ 285.825) 

This section requires the lessee or 

grantee to use the assessment 

requirements of American Petroleum 

Institute Recommended Practice for 

Planning, Designing, and Constructing 

Fixed Offshore Platforms—Working 

Stress Design (API RP 2A–WSD) to 

conduct assessments of structures, when 

needed, based on the platform 

assessment initiators in API RP 2A– 

WSD. The lessee or grantee must initiate 

mitigation actions for structures that do 

not pass the assessment process of API 

RP 2A–WSD and perform other 

assessments as required by MMS. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.826 Through 

285.829) 

Sections 285.826 through 285.829 are 

reserved. 

Incident Reporting and Investigation 

What are my incident reporting 

requirements? (§ 285.830) 

This section requires that all incidents 

listed in § 285.831 that occur on the area 

covered by a lease or grant and that are 

related to operations conducted under 

your lease or grant be reported to MMS. 

We did not make any changes to this 

section. 

What incidents must I report, and when 

must I report them? (§ 285.831) 

This section requires that all fatalities, 

incidents requiring evacuation of a 

person(s) from a facility, fires, 

explosions, incidents, and collisions 

resulting in property damage greater 

than $25,000, incidents resulting in 

structural damage, crane incidents, and 

incidents that damage or disable safety 

systems be reported to MMS 

immediately with written follow up 

within 15 days. It also requires that any 

injuries that result in the injured not 

being able to resume all duties the 

following day and incidents that require 

personnel to muster for evacuation be 

reported in writing within 15 days. 

We did not make any changes to this 

section. 

How do I report incidents requiring 

immediate notification? (§ 285.832) 

This section describes what you must 

do for incidents that require immediate 

notification. You must notify the 

Director orally immediately after aiding 

the injured and stabilizing the situation. 

This section also describes the 

information required in the notification. 

We did not make any changes to this 

section. 

What are the reporting requirements for 

incidents requiring written notification? 

(§ 285.833) 

This section describes the specific 

information regarding incidents that 

must be reported in writing to the MMS. 

It allows you to submit a form prepared 

for another agency to fulfill the 

requirement as long as it contains all the 

information required by MMS. The 

MMS may subsequently require 

additional information about an 

incident on a case-by-case basis. 

We did not make any changes to this 

section. 

Subpart I—Decommissioning 

Overview 

This subpart describes requirements 

for decommissioning OCS renewable 

energy facilities and associated 

structures including the submission of 

advance plans, applications, and notices 

to the MMS. Co-lessees and co-grant 

holders are all jointly and severally 

responsible for meeting 

decommissioning obligations on their 

respective leases or grants. All facilities, 

including pipelines, cables, and other 

structures and obstructions, must be 

removed when they are no longer used 

for operations but no later than 2 years 

after the termination of the lease, ROW 

grant, or RUE grant. 

The MMS made conforming changes 

to the 30 CFR, part 250, subpart Q 

regulations regarding decommissioning 

requirements as they apply to oil and 

gas facilities that could be left in place 

for alternate use. We removed the 

phrase ‘‘or other use’’ from § 250.1730 

because the EPAct amended the OCS 

Lands Act (43 U.S.C. 1337(p)(1)(D)) to 

give DOI authority to allow the use of 

OCS oil and gas platforms for other 

authorized marine-related purposes. For 

uses that MMS authorizes, the structure 

would no longer need to meet the 

requirements of § 250.1730(a). 

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Section-by-Section Discussion for 

Subpart I 

Decommissioning Obligations and 

Requirements 

Who must meet the decommissioning 

obligations in this subpart? (§ 285.900) 

Co-lessees and co-grant holders are 

jointly and severally responsible for the 

decommissioning responsibilities for 

facilities on a lease or grant, including 

all obstructions. 

We did not make any changes to this 

section. 

When do I accrue decommissioning 

obligations? (§ 285.9010) 

Decommissioning obligations accrue 

when the lessee or grant holder installs; 

constructs; or acquires a facility, cable, 

or pipeline; or creates an obstruction. 

We did not make any changes to this 

section. 

What are the general requirements for 

decommissioning for facilities 

authorized under my SAP, COP, or 

GAP? (§ 285.902) 

This section provides a general 

overview of the decommissioning 

process: 

• After your lease terminates, the 

lessee or grant holder has 2 years to 

decommission and clear the seafloor of 

all obstructions created by activities on 

the lease or grant. 

• Before decommissioning, the lessee 

or grant holder must submit a 

decommissioning application. This can 

be submitted at any time, but no later 

than 2 years before any intended 

decommissioning operation. 

• Once MMS approves the 

decommissioning application, a 

decommissioning notice is required 

before beginning any decommissioning 

activity. The decommissioning notice is 

required to keep MMS informed of 

decommissioning activities. 

• If an archaeological resource is 

discovered while decommissioning, 

activities around the resource must stop, 

and the lessee or grantee must inform 

MMS. 

• Biologically sensitive features and 

items of archaeological interest must be 

avoided and protected during 

decommissioning and site clearance 

activities. 

• If biologically sensitive features or 

items of archaeological interest are 

found, MMS will direct the lessee or 

grantee on what action to take. 

• The MMS added a provision to 

document early efforts made by the 

applicant to coordinate with affected 

State, local, and tribal governments. 

This was added to remind project 

operators of the importance of 

coordinating early with affected entities. 

Lessees decommissioning FERClicensed facilities are not required to 

comply with this section. 

Based on comments received, we 

changed the time to complete 

decommissioning on a lease or grant 

from 1 year after termination to 2 years 

after termination. 

What are the requirements for 

decommissioning FERC-licensed 

hydrokinetic facilities? (§ 285.903) 

This is a new section addressing the 

decommissioning requirements for 

FERC-licensed hydrokinetic facilities on 

the OCS. FERC license holders must 

comply with the conditions of their 

MMS-issued lease, including 

decommissioning requirements. 

If you fail to comply with the 

requirements, then MMS may call for 

the forfeiture of your bond or other 

financial assurance and take 

enforcement action under § 285.400 of 

this part. Further, you remain liable for 

removal or disposal costs and 

responsible for accidents or damages 

that might result from such failure. 

Can I request a departure from the 

decommissioning requirements? 

(§ 285.904) 

Based on comments, we added a new 

section to clarify that a lessee or grant 

holder may request a departure from the 

decommissioning requirements under 

§ 285.103. The MMS will consider the 

impacts of leaving the facilities, 

projects, cables, pipelines, and other 

obstructions in place versus the impacts 

of removal when determining whether 

to approve the departure. This also 

applies to circumstances when a limited 

lease holder installs a met tower or 

other equipment, then the lessee 

acquires a commercial lease that 

encompasses the limited lease area. 

Decommissioning Applications 

When must I submit my 

decommissioning application? 

(§ 285.905) 

While the conceptual 

decommissioning plans will be 

included in the SAP, COP, or GAP, in 

many cases the project will not be 

decommissioned until many years after 

approval of the plan; therefore, a 

decommissioning application is 

required. A decommissioning 

application may be submitted at any 

time, but no later than 2 years before 

any intended decommissioning 

operation. However, if a lease or grant 

is cancelled, relinquished, or otherwise 

terminated, the application must be 

submitted within 90 days. 

We did not make any changes to this 

section. 

What must my decommissioning 

application include? (§ 285.906) 

The application will include such 

items as: An identification and 

description of the facilities to be 

removed; a proposed decommissioning 

schedule; a description of the removal 

methods; description of site clearance 

activities; plans for transporting and 

disposing of the removed facilities; a 

description of those resources, 

conditions, and activities that could be 

affected by or could affect the proposed 

decommissioning activities; results of 

any recent biological surveys conducted 

in the vicinity of the structure and 

recent observations of turtles or marine 

mammals at the structure site; 

mitigation measures to protect 

archaeological and sensitive biological 

features during removal activities; and a 

statement on whether or not divers will 

be used to survey the area after removal 

to determine any effects on marine life. 

The MMS revised this section to 

require that the decommissioning 

application include a description of 

measures to prevent unauthorized 

discharge of pollutants including 

marine trash and debris into the 

offshore waters. 

How will MMS process my 

decommissioning application? 

(§ 285.907) 

The MMS will review the proposed 

decommissioning and site clearance 

activities to ensure compliance with all 

applicable laws, regulations, and other 

requirements. The MMS will compare 

the decommissioning application with 

the decommissioning general concept in 

the approved SAP, COP, or GAP to 

determine what technical and 

environmental reviews are needed. The 

operator may be required to revise the 

approved SAP, COP, or GAP, if MMS 

determines the proposed 

decommissioning activities would result 

in a significant change in the SAP, COP, 

or GAP; or requires any additional 

permits; or proposes activities not 

previously identified and evaluated in 

the SAP, COP, or GAP. The MMS may 

begin the appropriate NEPA and other 

regulatory reviews as required. 

After completing the technical and 

environmental reviews, MMS may 

approve, approve with conditions, or 

disapprove the decommissioning 

application. If MMS disapproves 

decommissioning application, the 

operator must resubmit the application 

to address the concerns identified by 

MMS. 

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We did not make any changes to this 

section. 

What must I include in my 

decommissioning notice? (§ 285.908) 

This section describes what needs to 

be included in the decommissioning 

notice. A decommissioning notice is 

separate from the decommissioning 

application and can only be submitted 

after MMS approves the 

decommissioning application. The 

decommissioning notice is submitted at 

least 60 days before you plan to begin 

decommissioning activities. The 

decommissioning notice includes any 

changes from your decommissioning 

application and your decommissioning 

schedule. The MMS will evaluate your 

decommissioning notice and may 

require additional changes to your 

decommissioning application before 

you can begin decommissioning 

activities. 

We did not make any changes to this 

section. 

Facility Removal 

When may MMS authorize facilities to 

remain in place following termination of 

a lease or grant? (§ 285.909) 

In the decommissioning application, 

the operator may request that certain 

facilities authorized in the lease or grant 

remain in place for other activities 

authorized in this part, elsewhere in this 

subchapter, or by other applicable 

Federal laws. The MMS will approve 

such requests on a case-by-case basis 

considering potential impacts to the 

marine environment; competing uses of 

the OCS; impacts on marine safety and 

national defense; maintenance of 

adequate financial assurance; and other 

factors determined by the Director. 

If MMS authorizes facilities to remain 

in place, the former lessee or grantee 

under this part remains jointly and 

severally liable for decommissioning the 

facility unless satisfactory evidence is 

provided to MMS showing that another 

party has assumed that responsibility 

and has secured adequate financial 

assurances. In the decommissioning 

application, the operator may request 

that certain facilities authorized in the 

lease or grant be converted to an 

artificial reef or otherwise toppled in 

place. 

We did not make any changes to this 

section. 

What must I do when I remove my 

facility? (§ 285.910) 

All facilities must be removed to a 

depth of 15 feet below the mudline, and 

you must verify to MMS that you have 

cleared the site within 60 days after you 

remove a facility. 

We did not make any changes to this 

section. 

Reserved Section (§ 285.911) 

Section 285.911 is reserved. 

Decommissioning Report 

After I remove a facility, cable, or 

pipeline, what information must I 

submit? (§ 285.912) 

Within 30 days after removing a 

facility, the operator must submit a 

written report to MMS summarizing 

removal operations. The report must 

include a summary of the removal 

activities including the date it was 

completed; a description of any 

mitigation measures you took; and, if 

explosives were used, a statement 

signed by an authorized representative 

that certifies that the types and amount 

of explosives used in removing the 

facility were consistent with those in 

the approved decommissioning 

application. 

We did not make any changes to this 

section. 

Compliance With an Approved 

Decommission Application 

What happens if I fail to comply with 

my approved decommissioning 

application? (§ 285.913) 

If the lessee, grantee, or operator fails 

to comply with the approved 

decommissioning plan or application, 

MMS may call for the forfeiture of your 

bond or other financial guarantee, and 

the lessees or grantee remain liable for 

removal or disposal costs and 

responsible for accidents or damages 

that might result from such failure. 

We did not make any changes to this 

section. 

Subpart J—Rights-of-Use and Easement 

for Energy and Marine-Related 

Activities Using Existing OCS Facilities 

Overview 

This subpart establishes general 

requirements for how MMS will 

consider proposals for activities that 

involve the alternate use of existing OCS 

facilities. This subpart also includes 

general provisions that explain how 

MMS will approve and regulate such 

alternate use activities on the OCS. We 

will authorize such activities through 

the issuance of an Alternate Use Rightof-Use and Easement (Alternate Use 

RUE). 

This subpart explains how applicants 

request an Alternate Use RUE, how 

MMS will decide whether to issue 

Alternate Use RUEs, and how Alternate 

Use RUEs will be competitively issued 

(if MMS determines that competitive 

interest exists). Once an Alternate Use 

RUE is issued by MMS, this subpart 

provides details on the term of such 

authorizations; required payments to 

MMS; necessary financial assurance; as 

well as other administrative issues such 

as assignment, suspension, and 

termination of Alternate Use RUEs. 

This subpart also includes provisions 

regarding decommissioning of approved 

alternate use facilities. In addition to the 

provisions in this subpart J, MMS has 

associated revisions to MMS’s existing 

oil and gas decommissioning 

regulations found in 30 CFR part 250, 

subpart Q, that clarify and expand on an 

oil and gas platform owner’s obligations 

for decommissioning, and when such 

decommissioning obligations may be 

suspended for approved alternate uses. 

The statutory authority for this 

subpart is paragraph 8(p)(1)(D) of the 

OCS Lands Act (43 U.S.C. 

1337(p)(1)(D)). Under this authority, as 

delegated by the Secretary, the MMS 

may approve activities that use, for 

energy or other marine-related purposes, 

facilities that are currently or were 

previously used for other activities 

authorized under the OCS Lands Act. 

We received numerous comments on 

the proposed rule pertaining to the use 

of OCS facilities for aquaculture 

purposes. We wish to clarify that this 

rule does not authorize aquaculture 

operations. A different agency would be 

responsible for permitting and managing 

actual aquaculture activity under any 

RUE that is granted. In the event that 

legislation is enacted that regulates OCS 

aquaculture, we will reassess this issue 

and ensure coordination will be 

accomplished with all relevant agencies. 

Section-by-Section Discussion for 

Subpart J 

Regulated Activities 

What activities does this subpart 

regulate? (§ 285.1000) 

This provision describes the scope of 

activities regulated by this subpart. The 

authority for Alternate Use Rights-ofUse and Easements (Alternate Use 

RUEs) was established in paragraph 

8(p)(1)(D) of the OCS Lands Act (43 

U.S.C. 1337(p)(1)(D)). Under this 

authority, as delegated by the Secretary, 

the MMS may approve activities that 

use, for energy or other marine-related 

purposes, facilities that are currently or 

were previously used for other activities 

authorized under the OCS Lands Act. 

However, the MMS may not approve 

alternate use activities under subsection 

8(p)(1)(D) of the OCS Lands Act if those 

activities are authorized by another 

statutory authority, including: The OCS 

Lands Act, the Deepwater Port Act of 

1974 (33 U.S.C. 1501 et seq.), the Ocean 

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Thermal Energy Conversion Act of 1980 

(42 U.S.C. 9101 et seq.), or other 

applicable law. 

To illustrate the types of activities 

that will be subject to this subpart, 

examples such as the following are 

useful. In the first example, an 

individual seeks to use an existing oil 

and gas platform in the Gulf of Mexico 

as an offshore emergency rescue training 

facility. Utilizing an existing OCS 

facility for such activities is not 

currently authorized by any other 

statutory authority. Therefore, MMS 

may authorize the use of an existing 

facility for such emergency rescue 

training activities using an Alternate 

Use RUE. In another example, an 

individual seeks to convert an existing 

oil and gas platform in the Gulf of 

Mexico to a deepwater port. Activities 

associated with the construction and 

operation of a deepwater port on the 

OCS are authorized under the 

Deepwater Port Act of 1974, as 

amended, and regulated jointly by the 

U.S. Coast Guard and U.S. Maritime 

Administration. Since such deepwater 

port activities are authorized by the 

Deepwater Port Act, the activities do not 

require an Alternate Use RUE under this 

subpart. While the MMS may not issue 

an Alternate Use RUE for deepwater 

port activities (or other activities that 

are authorized by other Federal law) 

that would use an existing OCS 

structure, MMS approvals may be 

required under either part 250 or part 

282 of this subchapter for activities that 

could impact existing MMS-approved 

operations on an existing facility, as 

well as for deferring decommissioning 

requirements upon the termination of an 

OCS lease. 

Use of the term ‘‘existing facility’’ or 

‘‘existing platform’’ in this subpart is 

not intended to limit such facilities to 

those that are currently in place as of 

the time of publication of this rule. Any 

facility that, at the time of an alternate 

use proposal, is situated on the OCS and 

has been authorized by MMS under the 

OCS Lands Act is potentially eligible for 

consideration under this subpart. 

Therefore, such ‘‘existing facilities’’ may 

include oil and gas facilities, facilities 

constructed in association with sand, 

gravel, sulfur or any other mineral 

resource development approved under 

the OCS Lands Act, as well as 

renewable energy facilities pursuant to 

this part. 

As stated in § 285.1000(c), MMS has 

the discretion to authorize alternate use 

activities on existing OCS structures 

that are currently in active operation, or 

limit alternate use activities to existing 

OCS structures that are no longer in 

operation and would otherwise be 

subject to removal. The MMS will 

consider these issues on a case-by-case 

basis taking into account the unique 

operating considerations for each 

proposed alternate use activity as well 

as the associated operations on the 

existing OCS platform. As explained 

previously, MMS does not intend to 

implement an aquaculture program 

under subpart J. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.1001 Through 

285.1003) 

Sections 285.1001 through 285.1003 

are reserved. 

Requesting an Alternate Use RUE 

What must I do before I request an 

Alternate Use RUE? (§ 285.1004) 

Before submitting a request to the 

MMS for issuance of an Alternate Use 

RUE, the applicant must contact the 

owner of the existing OCS facility as 

well as the current lessee of the area in 

which the facility is located and reach 

preliminary agreement regarding the 

alternate use of the structure. Since the 

platform or other facility is the private 

property of the owner, MMS could not 

issue an Alternate Use RUE unless the 

alternate use was tentatively agreed to 

by the owner of the facility. If the 

alternate use applicant is also the lessee 

and owner of the existing OCS facility, 

a preliminary agreement regarding 

alternate use is not needed. 

This provision does not require the 

owner of the facility and lessee of the 

area in which the facility is located to 

give a final, unconditional approval for 

the proposed alternate use. This initial 

agreement among the parties need only 

state that the owner and lessee are 

aware of the proposed alternate use 

activity, and have no immediate 

objections to such activities. This 

preliminary agreement does not need to 

be in any specific prescribed form. 

We did not make any changes to this 

section. 

How do I request an Alternate Use RUE? 

(§ 285.1005) 

The MMS will consider requests for 

an Alternate Use RUE on a case-by-case 

basis, provided such requests comply 

with the requirements of this provision. 

An applicant’s request for an Alternate 

Use RUE must include a summary of the 

proposed activities that would involve 

use of the existing OCS facility; a 

statement affirming that the proposed 

activities are not otherwise authorized 

by other MMS regulations or any other 

Federal law; and satisfactory evidence 

that the applicant qualifies to hold a 

lease, ROW, or RUE on the OCS. When 

summarizing the proposed activities 

under an Alternate Use RUE, the 

applicant must include all of the 

information identified in § 285.1005(a). 

Any request to MMS for an Alternate 

Use RUE must also include the 

signatures of the alternate use applicant, 

the owner of the existing OCS facility, 

and the lessee of the area in which the 

existing facility is located. 

If an existing OCS facility proposed 

for an Alternate Use RUE is in operation 

on an active OCS lease, the alternate use 

applicant as well as the lessee or owner 

of the structure must consider what 

approvals and plan modifications may 

be required under part 250 or part 282 

of this subchapter with respect to 

impacts on operations regulated by 

those parts. 

We did not make any changes to this 

section. 

How will MMS decide whether to issue 

an Alternate Use RUE? (§ 285.1006) 

The MMS will consider requests for 

an Alternate Use RUE on a case-by-case 

basis. The MMS will evaluate all 

proposals to ensure that the proposed 

activities that would involve the use of 

existing OCS facilities can be conducted 

in a manner that is safe and protects the 

marine, coastal, and human 

environment; does not inhibit or 

otherwise restrain orderly development 

of OCS mineral and energy resources; 

and avoids serious harm or damage to, 

or waste of, any natural resources or 

property. Regardless of whether the 

existing OCS facility is currently in use 

or no longer in use and subject to 

removal, the MMS has the discretion 

whether or not to approve and issue an 

Alternate Use RUE. Since Alternate Use 

RUEs will require the MMS to regulate 

the development, operation, and 

eventual decommissioning of such 

alternate use projects, the MMS may 

determine that it has insufficient 

resources or subject matter expertise to 

properly regulate such projects. 

However, the MMS may partner with 

other Federal agencies with relevant 

expertise to ensure proper regulation of 

certain types of alternate use activities. 

We did not make any changes to this 

section. 

What process will MMS use for 

competitively offering an Alternate Use 

RUE? (§ 285.1007) 

Paragraph 8(p)(3) of the OCS Lands 

Act requires that Alternate Use RUEs be 

issued on a competitive basis unless the 

Secretary determines, after public notice 

of the proposed Alternate Use RUE, that 

there is no competitive interest. 

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Before initiating the competitive 

process, the MMS will first determine 

whether an applicant’s proposal 

contains the information necessary to be 

deemed acceptable, as set forth in 

§ 285.1005. The MMS will then 

determine whether the proposed 

activity that would involve the use of an 

existing OCS facility is one that is (1) 

subject to MMS authority under 

paragraph 8(p)(1)(D) of the OCS Lands 

Act, and (2) the type of activity that the 

MMS has the necessary expertise and 

resources to regulate effectively. If the 

answer is yes to both (1) and (2), the 

MMS will issue a public notice in the 

Federal Register to determine if there is 

competitive interest in using the facility 

for other alternate use activities. The 

MMS will specify a time period (e.g., 30 

days) from the date of issuance of the 

public notice for those who are 

interested in the use of that facility to 

respond to MMS indicating that interest. 

Indications of competitive interest are 

not required to provide all the 

information required in § 285.1005. If 

there is no expression of competitive 

interest within the timeframe expressed 

in the public notice, the MMS will 

presume that there is no competitive 

interest and will commence review of 

the applicant’s proposal for an Alternate 

Use RUE. 

If there are indications of competitive 

interest received by the MMS within the 

timeframe in the public notice, the 

MMS will proceed with a competitive 

offering. The MMS will request that 

each competing applicant submit a 

description of the types of activities 

proposed for the existing facility, as 

well as satisfactory evidence that the 

competing applicant qualifies to hold a 

lease, ROW, or RUE on the OCS. The 

MMS may impose a time period to 

submit the requested information, but 

one that would allow sufficient time for 

competing applicants to prepare the 

necessary information requested. The 

MMS may subsequently request 

additional information to adequately 

evaluate competing proposals. At this 

stage, competing applicants are not 

required to seek or obtain the consent of 

the lessee or owner of the existing OCS 

facility. 

The MMS will evaluate the competing 

proposals to determine whether the 

proposed activities appear to be 

compatible with existing operations at 

the facility and are activities that it has 

the expertise and resources available to 

regulate effectively. If more than one 

proposal initially appears feasible, the 

MMS may commence an environmental 

review under NEPA, where each of the 

proposals is analyzed. Based on its 

NEPA analysis, the MMS may select one 

or more of the alternative proposals as 

potentially acceptable. 

Once the MMS has chosen one or 

more acceptable proposals for activities 

involving the alternate use of an existing 

OCS facility, it will notify the 

competing applicants and submit each 

acceptable proposal to the lessee and 

owner of the existing OCS facility. The 

lessee and owner of the existing OCS 

facility may accept any one of the 

proposals deemed acceptable by the 

MMS. If the lessee and owner of the 

facility agree to accept one of the 

proposals through a written 

acknowledgement submitted to MMS, 

the MMS will complete efforts to issue 

an Alternate Use RUE. If the lessee and 

owner of the facility are unwilling to 

accept any of the proposals deemed 

acceptable by the MMS, the MMS will 

not issue an Alternate Use RUE. 

Activities under subpart J will include 

full analysis as required by NEPA and 

other applicable laws. Compliance with 

the CZMA will follow 15 CFR part 930, 

subpart C, for competitive RUE offerings 

and 15 CFR part 930, subpart D, for 

noncompetitive RUE offerings. 

We did not make any changes to this 

section. 

Reserved Sections (§§ 285.1008 Through 

285.1009) 

Sections 285.1008 through 285.1009 

are reserved. 

Alternate Use RUE Administration 

How long may I conduct activities under 

an Alternate Use RUE? (§ 285.1010) 

This provision explains that MMS 

will determine the duration of Alternate 

Use RUEs on a case-by-case basis 

considering pertinent factors including 

the size, scale, and type of the proposed 

alternate use activities. Considering the 

scope of potential alternate use 

activities that could reasonably occur on 

the OCS, MMS does not believe that it 

is appropriate to set a specific term in 

the regulations for Alternate Use RUEs. 

This provision also provides that 

MMS will consider requests for renewal 

of an Alternate Use RUE on a case-bycase basis, at MMS’s discretion. 

We did not make any changes to this 

section. 

What payments are required for an 

Alternate Use RUE? (§ 285.1011) 

This provision provides that MMS 

will determine rentals or other charges 

on a case-by-case basis, and such rentals 

or other charges will be set forth in the 

Alternate Use RUE. The MMS will 

charge rentals or other charges for 

Alternate Use RUEs to ensure a fair 

return to the United States, as required 

by subsection 8(p)(2) of the OCS Lands 

Act (43 U.S.C. 1337(p)(2)). There are 

many different potential alternate uses 

of the OCS that could be authorized 

(e.g., training, research, education, and 

recreation), and each of these potential 

uses could have different effects in 

terms of the exclusion of other valuable 

uses of the OCS area. Certain alternate 

use activities could require that a 

significant portion of an OCS area be 

excluded from other potentially 

valuable uses. The MMS will consider 

such exclusivity requirements for a 

potential alternate use activity in 

determining a fair return to the United 

States. The MMS will calculate the 

rentals or other charges for Alternate 

Use RUEs taking into account the areal 

extent of the alternate use activity, the 

MMS resources needed for regulating 

such activities, and the exclusion in that 

area of competing uses. 

We did not make any changes to this 

section. 

What financial assurance is required for 

an Alternate Use RUE? (§ 285.1012) 

This provision makes clear that MMS 

will require that holders of Alternate 

Use RUEs provide financial assurance in 

an amount sufficient to cover all 

obligations under the Alternate Use 

RUE, including decommissioning 

obligations. Holders of Alternate Use 

RUEs will be required to retain such 

financial assurance until MMS 

determines that all obligations have 

been fulfilled to MMS satisfaction. The 

provision also provides that MMS may 

increase or decrease required financial 

assurance amounts, as appropriate, 

provided that financial assurance will 

always be required in an amount 

necessary to satisfy all obligations under 

the authorizing instrument. 

The MMS has not defined in the 

regulations what specific forms of 

financial assurance will be deemed 

acceptable. The MMS will consider all 

forms of financial assurance that are 

deemed acceptable by MMS under its 

other regulatory programs, and will 

consider other proposals for financial 

assurance on a case-by-case basis. 

Unlike the provisions for renewable 

energy under this part, and what is 

established for oil and gas leasing under 

part 256, MMS has determined that the 

regulations for alternate use activities 

should not set specific minimum levels 

for financial assurance. Considering the 

range of potential activities that could 

be approved for an Alternate Use RUE, 

MMS has determined that it is more 

appropriate to set required financial 

assurance levels on a case-by-case basis. 

We did not make any changes to this 

section. 

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Is an Alternate Use RUE assignable? 

(§ 285.1013) 

This provision provides that Alternate 

Use RUEs may be assigned to eligible 

assignees. This provision sets forth the 

requirements that must be satisfied for 

MMS to approve an assignment request. 

At this time, it is not clear to what 

extent Alternate Use RUEs will be 

requested and approved by MMS. 

Therefore, we are not creating a 

standard MMS form for assignments at 

this time. 

In §§ 285.1013(d) and (e), we describe 

to what extent assignors and assignees 

are responsible for obligations 

associated with an Alternate Use RUEs 

arising both before and after MMS 

approval of an assignment. This 

provision is intended to be consistent 

with other MMS regulatory precedent 

(See 30 CFR 256.62(d) and (e)). 

We did not make any changes to this 

section. 

When will MMS suspend an Alternate 

Use RUE? (§ 285.1014) 

This section explains that MMS may 

suspend activities authorized under an 

Alternate Use RUE and describes when 

such a suspension may be ordered. It is 

important to note that MMS may 

suspend activities authorized under an 

Alternate Use RUE even if there has 

been no finding of fault by the grantee. 

The holder of an Alternate Use RUE 

may be in full compliance with the 

terms and conditions of the grant, but 

other circumstances outside the control 

of the grantee may require MMS to 

suspend activities in order to comply 

with judicial decrees, for reasons of 

national security or defense, to avoid 

unsafe activities or interference with 

lessee’s operation, and to protect against 

potential environmental damage. For 

this reason, any such suspension will 

extend the term of the Alternate Use 

RUE for the period of the suspension. 

We did not make any changes to this 

section. 

How do I relinquish an Alternate Use 

RUE? (§ 285.1015) 

This provision explains that the 

holder of an Alternate Use RUE may 

relinquish its grant at any time provided 

it complies with the requirements of 

this section. The MMS will officially 

approve any relinquishment after it has 

determined that the requestor has 

complied with all necessary 

requirements, including the payment of 

any outstanding rentals (or other 

payments) and fines. The 

relinquishment will take effect on the 

date that MMS officially approves the 

request. 

We did not make any changes to this 

section. 

When will an Alternate Use RUE be 

cancelled? (§ 285.1016) 

This provision explains under what 

circumstances MMS may cancel an 

Alternate Use RUE. The provisions of 

this section are similar to the 

cancellation provisions under subpart D 

of this part, but include an additional 

provision for cancellation when 

continued activity under an Alternate 

Use RUE is determined to be adversely 

impacting ongoing lease activities on 

the existing OCS facility (e.g., an 

associated oil and gas production 

platform on which alternate use 

activities have been authorized). 

Commenters to the proposed rule 

expressed concern that this provision 

did not provide for notice and 

opportunity to be heard prior to 

cancellation of an Alternate Use RUE. 

The MMS agrees with these comments 

and added a provision to the rule 

concerning notice and an opportunity to 

be heard. 

Reserved Section (§ 285.1017) 

Section 285.1017 is reserved. 

Decommissioning an Alternate Use 

RUE 

Who is responsible for decommissioning 

an OCS facility subject to an Alternate 

Use RUE? (§ 285.1018) 

This provision explains that the 

holder of an Alternate Use RUE will be 

responsible for removing all structures 

and completing all other 

decommissioning activities associated 

with an approved alternate use activity. 

The Alternate Use RUE will set forth 

specific requirements for 

decommissioning, as determined by the 

MMS based on the approved alternate 

use activity. 

As set forth in the conforming 

amendments to part 250, subpart Q, 

included in this final rule, approval of 

an Alternate Use RUE will not relieve 

the original lessee (e.g., the original oil 

and gas lessee) from its accrued 

decommissioning obligations. If the 

MMS approves an Alternate Use RUE 

with respect to an existing facility 

located on a lease that has terminated, 

or a lease that subsequently terminates 

following approval of an Alternate Use 

RUE, the MMS will defer 

commencement of decommissioning 

activities related to that facility for the 

duration of the Alternate Use RUE. Such 

deferral will be limited, however, to the 

facility that is associated with the 

alternate use activities, and the lessee 

will be required to complete all other 

decommissioning activities associated 

with the lease. Unless the lessee and 

owner of the existing facility are also the 

holder of the Alternate Use RUE, the 

lessee and owner of the existing facility 

are not responsible for decommissioning 

requirements associated with an 

Alternate Use RUE. Similarly, the 

holder of an Alternate Use RUE is not 

responsible for decommissioning 

requirements with respect to the 

existing facility. To avoid confusion or 

potential subsequent dispute between 

the parties, MMS anticipates setting 

forth in the Alternate Use RUE grant the 

specific decommissioning obligations 

pertaining to the alternate use activities. 

We did not make any changes to this 

section. 

What are the decommissioning 

requirements for an Alternate Use RUE? 

(§ 285.1019) 

This provision explains that 

decommissioning requirements for 

Alternate Use RUEs will be established 

on a case-by-case basis after considering 

the specific alternate use proposal. 

These specific decommissioning 

requirements will be set forth in detail 

in the grant authorizing instrument. 

This provision also explains that all 

decommissioning activities will be 

required to be completed within 1 year 

of termination of the Alternate Use RUE. 

We did not make any changes to this 

section. 

Comments on the Proposed Rule and 

MMS Responses 

We reviewed all the comments on the 

preamble and proposed rule. We 

categorized and summarized similar 

comments and then responded to those 

comments by subpart subject matter. We 

organized the comments and our 

responses in a table for each subpart as 

follows. 

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BILLING CODE 4310–MR–C Specific Comment Areas Identified in 

the Proposed Rule 

The preamble of the proposed rule (73 

FR 39440) requested public comments 

or all aspects of the proposed rule. In 

addition, the preamble requested 

comments on specific areas in the 

proposed rule that were of particular 

interest to MMS and to the regulated 


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community and other interested parties. 

We planned to use the comments on 

these specific areas as the starting place 

for responding to comments. However, 

we found that very few commenters 

responded directly to the specific areas 

identified in the preamble. Instead, the 

vast majority of commenters provided 

comments on a subpart-by-subpart and 

section-by-section basis. All comments 

that touched on the issues raised by the 

specific areas we identified are 

addressed in our response to comments 

in the comment table. In addition, any 

changes to the rule as a result of 

comments are discussed in the subpartby-subpart and section-by-section 

discussions. 

Procedural Matters 

Regulatory Planning and Review 

(Executive Order (E.O.) 12866) 

This final rule is a significant rule as 

determined by the Office of 

Management and Budget (OMB) and is 

subject to review under E.O. 12866. We 

have made the assessments required by 

E.O. 12866, and the results are as 

follows: 

(1) The final rule will not have an 

annual effect on the economy of $100 

million or more for the first 15 years or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities. The final regulations are 

made necessary by compelling public 

need in that they will be used to oversee 

the nascent offshore renewable energy 

industry consistent with the EPAct. 

The final rule does two things: (1) It 

sets forth clear regulatory requirements; 

and (2) it institutes payments to the 

Government as a fair return for use of 

public lands. Discussions between MMS 

and OMB resulted in a determination 

that the appropriate analysis of the 

rulemaking is one that focuses on the 

financial impacts of the rule over a 20- 

year period (2008–2027). While 

financial revenues (i.e., the revenues the 

Federal Government will receive due to 

economic activity that occurs under this 

rule) are traditionally considered a 

transfer payment, in this analysis they 

are treated as a ‘‘benefit.’’ The cost side 

of the analysis comprises the Federal 

Government’s costs to implement the 

program that will administer the rules. 

While the program will generate new 

receipts for the U.S. Government 

primarily in the form of cash bonuses, 

acquisition fees, rentals, and operating 

fees, the aggregate annual amounts of 

these payments, as estimated in the 

fiscal cost-benefit study supporting this 

rulemaking, were found to be below 

$100 million for at least the next 15 

years, and then slightly above that level 

only in intermediate and high case 

scenarios. Any projections beyond that 

time horizon should be considered 

highly speculative given the early stage 

of development in this industry on the 

OCS. Any economic effects 

characterized by the EA are predicated 

upon the assumption that there is 

available transmission capacity to carry 

the energy generated on the OCS to 

demand centers. The payments to 

Federal agencies represent a transfer of 

money from one set of entities to 

another, not the anticipated effect of the 

regulations on real resources in the 

economy. The MMS finds that the 

benefits of this rule, when weighed 

against the potential payments that may 

exceed $100 million, justify this 

regulation because it will establish a 

new regulatory program intended to 

encourage safe, efficient, and 

environmentally sound development of 

renewable energy sources on the OCS. 

The MMS included a detailed 

discussion of the results of the Final 

Technical report on the ‘‘Fiscal CostBenefit Analysis to Support the 

Rulemaking Process for 30 CFR Part 285 

Governing Alternative Energy 

Production and Alternate Uses of 

Existing Facilities on the Outer 

Continental Shelf,’’ MMS 2007–050, 

February 2008, by Industrial Economics, 

Incorporated, in the NPR, published in 

the Federal Register on July 9, 2008 (73 

FR 39376). The NPR and the Final 

Technical report are available on the 

Regulations.gov Web site. 

(2) The rule will not create a serious 

inconsistency or otherwise interfere 

with the actions taken or planned by 

any other agency. Until March 2009, 

regulatory uncertainty existed regarding 

which Federal agencies had authority to 

regulate wave and current energy 

development on the outer Continental 

Shelf (OCS). Both MMS and the Federal 

Energy Regulatory Commission (FERC) 

claimed this authority based on 

differing interpretations of Part I of the 

Federal Power Act (FPA) and section 

8(p) of OCSLA, as amended by EPAct. 

However, on March 17, 2009, the 

Secretary of the Interior and the Acting 

Chairman of the Federal Energy 

Regulatory Commission issued a joint 

statement on the development of 

renewable energy resources on the OCS. 

In this joint statement, the Secretary and 

the Acting Commissioner requested that 

MMS and FERC staff prepare a 

Memorandum of Understanding (MOU) 

to describe the process by which 

authorizations related to renewable 

energy resources in offshore waters will 

be developed. 

The MMS and FERC finalized this 

MOU on April 09, 2009. This agreement 

clarifies jurisdictional understandings 

regarding renewable energy projects on 

the OCS in order to develop a cohesive, 

streamlined process that would help 

accelerate the development of wind, 

solar, and hydrokinetic energy projects. 

Specifically, the MOU recognizes that 

(1) MMS has exclusive jurisdiction with 

regard to the production, transportation, 

or transmission of energy from nonhydrokinetic alternative energy projects 

on the OCS, including renewable energy 

sources such as wind and solar; (2) 

MMS has exclusive jurisdiction to issue 

leases, easements, and rights-of-way 

regarding OCS lands for hydrokinetic 

projects; and (3) the Commission has 

exclusive jurisdiction to issue licenses 

and exemptions for hydrokinetic 

projects located on the OCS. 

Under this new agreement, those 

entities interested in operating a 

hydrokinetic project on the OCS must 

first obtain a lease from MMS. The MMS 

will issue a public notice to determine 

whether competitive interest exists in 

the area, and will proceed with either 

the competitive or noncompetitive lease 

issuance process depending on 

responses received to this public notice. 

The MMS will conduct the NEPA 

analysis necessary for the lease issuance 

and any site assessment activities that 

will occur on the lease. After an 

applicant acquires a lease from MMS, 

FERC may issue a license or exemption 

for the hydrokinetic project, and 

conduct any necessary NEPA analysis. 

After a license is issued, construction 

and operations of the project may begin 

as per the terms of the license. To 

facilitate efficient processing of the lease 

and license applications, it may be 

helpful for potential lessees to apprise 

both MMS and FERC of their interest in 

hydrokinetic development at the start of 

the process. 

Further, the MOU states that MMS 

and FERC will work together to the 

extent practicable to develop policies 

and regulations with respect to OCS 

hydrokinetic projects, and coordinate to 

ensure that hydrokinetic projects meet 

the public interest, including the 

adequate protection, mitigation, and 

enhancement of fish, wildlife, and 

marine resources and other beneficial 

public uses. The MOU ensures that the 

interests of both agencies are adequately 

represented and that the process of 

developing renewable energy on the 

OCS happens efficiently, in an 

environmentally responsible manner, 

and with appropriate benefit to the 

people of the United States. 

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Importantly, the agreement addresses 

the issue of potential site-banking by 

developers on the OCS by eliminating 

redundant regulatory processes for 

acquiring use of OCS lands. In addition, 

by eliminating dual regulatory 

processes, the agreement addresses the 

potential for granting conflicting awards 

of OCS sites to developers by the two 

agencies. Specifically, FERC has agreed 

not to issue preliminary permits for 

hydrokinetic activities on the OCS, and 

MMS has agreed that FERC will have 

the primary responsibility to issue 

licenses for these activities. The Federal 

Government has effectively eliminated 

the opportunity for abuse by entities 

seeking to reserve, block, or acquire for 

speculative purposes large portions of 

the OCS. These concerns were raised by 

many commenters on the REAU 

rulemaking. The DOI/FERC MOU 

creates a unified, coherent process for 

the authorization of hydrokinetic 

activities on the OCS, ensuring that U.S. 

resources on the OCS will not be subject 

to a ‘‘land rush,’’ and will be developed 

in the most efficient manner possible. 

(3) This final rule would not alter the 

budgetary effects of entitlements, grants, 

user fees or loan programs, or the rights 

or obligations of their recipients. The 

rule does not contain any requirements 

or regulations that will alter the 

budgetary effects of entitlements, grants, 

user fees or loan programs, or the rights 

or obligations of their recipients. 

(4) This final rule raises novel legal or 

policy issues because the rulemaking 

establishes a new regulatory program for 

the development of renewable energy on 

the OCS and to allow for alternate uses 

of existing OCS facilities. For these 

reasons, OMB determined that this is a 

significant rule. 

Prior to the passage of the EPAct, the 

Federal Government lacked the 

authority to oversee all aspects of 

renewable energy project development 

on the OCS, including siting, 

construction, operation, and 

decommissioning. Additionally, prior to 

the passage of the EPAct, the Federal 

Government lacked the authority to seek 

payments from private interests for use 

of our Nation’s OCS for purposes other 

than oil and gas production. These 

regulations will provide the framework 

for MMS’s management of the 

Alternative Energy-Alternate Use 

Program. This program will create a 

system that provides a degree of 

regulatory certainty to those proposing, 

planning, or potentially financing an 

offshore renewable energy project on the 

OCS, as it will address lease and grant 

issuance, activity authorization, 

payment collection, financial assurance, 

and project decommissioning. 

As described previously, MMS 

conducted an economic (‘‘benefit-cost’’) 

analysis of this rulemaking because it 

was determined to be a significant 

regulatory action, as defined in E.O. 

12866. Discussions between MMS and 

OMB resulted in a determination that 

the appropriate analysis of the 

rulemaking is one that focuses on the 

financial impacts of the rule over a 20- 

year period (2008–2027). While 

financial revenues (i.e., the revenues the 

Federal Government will receive due to 

economic activity that occurs under this 

rule) are traditionally considered a 

transfer payment, in this analysis they 

are treated as a ‘‘benefit.’’ The cost side 

of the analysis comprises the Federal 

Government’s costs to implement the 

program that will administer the rules. 

In addition, as required by the 

Regulatory Flexibility Act (RFA) of 1980 

(as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA) and E.O. 13272 (‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking’’), this analysis 

considers whether the financial 

payments made by the developers of 

regulated projects to MMS will 

significantly affect a substantial number 

of small entities. The MMS included a 

detailed discussion of the analysis in 

the NPR published in the Federal 

Register on July 9, 2008 (73 FR 39376). 

The NPR is available on the 

Regulations.gov Web site. 

Regulatory Flexibility Act (RFA) 

Under the requirements of the RFA (5 

U.S.C. 601 et seq.), as amended by the 

SBREFA and E.O. 13272, Federal 

agencies must consider the potential 

distributional impact of new rules on 

small businesses, small governmental 

jurisdictions, and small organizations. 

The MMS prepared an initial regulatory 

flexibility analysis to determine the 

impacts of this regulation on small 

entities. Based on this analysis, we 

concluded that these regulations will 

impact a substantial number of small 

entities; however, the regulations would 

not have a significant economic impact 

on these small entities when compared 

to the economic impact the regulations 

will have on large entities. The MMS 

included a detailed discussion of the 

RFA analysis in the NPR published in 

the Federal Register on July 9, 2008 (73 

FR 39376). The NPR is available on the 

Regulations.gov Web site. We did not 

receive any comments on the RFA 

section of the NPR. 

Discussion of the Regulatory Flexibility 

Act Analysis 

Number of Small Entities to Which the 

Rule Will Apply 

The North American Industry 

Classification System (NAICS) code for 

the industry affected by the rule is 

221119 (Other Electric Power 

Generation). The definition for this code 

is: 

This U.S. industry comprises 

establishments primarily engaged in 

operating electric power generation facilities 

(except hydroelectric, fossil fuel, nuclear). 

These facilities convert other forms of energy, 

such as solar, wind, or tidal power, into 

electrical energy. The electric energy 

produced in these establishments is provided 

to electric power transmission systems or to 

electric power distribution systems. 

An entity within this classification is 

‘‘small’’ if it is ‘‘primarily engaged in the 

generation, transmission, and/or 

distribution of electric energy for sale 

and its total electric output for the 

preceding fiscal year did not exceed 

four million megawatt hours’’ (MWh). 

Some new companies may be created 

solely to develop one or more offshore 

renewable energy projects that 

combined will not have a total electric 

output greater than 4 million MWh. 

Some companies, either through a 

combination of projects or through the 

incorporation of offshore renewable 

energy projects into a larger portfolio of 

electricity generating stations, will 

exceed the 4 million MWh threshold. 

Given the newness of the offshore 

renewable energy industry, it is difficult 

to develop an accurate count of the 

number of entities that will or may be 

subject to this rule in order to determine 

whether the rule will affect a 

‘‘substantial’’ number of small entities. 

Several companies have formally or 

informally expressed interest in being 

granted access to the OCS for electricity 

generation purposes. At least 40 to 50 

entities are identifiable as potential 

project or technology developers with a 

focus on utilizing offshore wind, wave, 

or ocean current resources. The U.S. 

Census Bureau’s 2002 Economic Census 

reported 411 entities within NAICS 

Code 221119. However, for the purposes 

of this analysis MMS assumes that most 

of the relevant entities will be 

considered ‘‘small,’’ and therefore, can 

conclude that a substantial number of 

small entities will be affected. 

It is possible that the final rule may 

eventually govern hydrogen production, 

affecting entities that fall under NAICS 

Code 325120, Industrial Gas 

Manufacturing. The definition for this 

code is: 

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This industry comprises establishments 

primarily engaged in manufacturing 

industrial organic and inorganic gases in 

compressed, liquid, and solid forms. 

However, it is unlikely that hydrogen 

will be produced on the OCS in 

significant amounts during the next 20 

years, given the lack of proposals for 

projects that would produce hydrogen, 

and MMS has no means to predict what 

kinds of entities would likely be 

involved in OCS hydrogen production. 

Impacts of This Rule on Small 

Businesses 

We believe that most affected 

companies will be small businesses 

according to the size standard. While 

large power/energy companies may 

engage in offshore renewable energy, we 

do not see that company size plays a 

factor in the economic impact of our 

rulemaking. 

Both large and small business will be 

subject to the same regulations because 

we do not believe it is necessary to have 

different regulations for large and small 

companies. 

For example, the payments for a 

commercial lease are rentals and 

operating fees. Rentals (during the 

preliminary and site assessment terms) 

are based on the size of the leased area. 

The operating fee is based on the 

potential generation capacity of a 

commercial project. The lease area 

needed will be determined by the size 

of the project, and the operating fee is 

determined by capacity of the actual 

installed project. The applicant 

determines the project size. As a result, 

the applicant’s project size determines 

the fee the applicant pays without 

respect to its business size. Both small 

and large entities bear the equal burden 

of selecting a project for MMS’ 

consideration and submitting all 

appropriate payments. The greater the 

project’s ability to produce, the greater 

the fee, but also the greater the potential 

income from the project to the 

developer. 

One factor that could influence a 

company’s ability to deal with these 

new regulations will be its experience 

and knowledge in working in the 

offshore environment. This knowledge 

is not size dependent, as evidenced by 

the size of the companies that own 

leases and operate oil and gas facilities 

on the OCS. The vast majority of 

companies that operate oil and gas 

facilities on the OCS (70 percent) are 

considered to be small companies 

according the size standards. 

Due to the significant costs involved 

to develop, construct, and produce 

energy in the offshore environment, a 

project would need to generate a 

significant amount of electricity or 

energy to be economical. There are 

provisions in the rule for short-term 

leases that would allow a company to 

do preliminary site work and research 

without the same level of commitment 

as a commercial production lease. This 

is one way a small company could 

approach offshore development without 

committing extensive resources to a 

project. 

In addition, the costs of operating in 

an offshore environment are 

significantly higher than the costs of 

complying with this regulation. For 

example, this final rule will require the 

use of CVAs, in some cases. Although 

this is an additional cost to project 

developers, the cost of the CVA is small 

in comparison to the cost of designing 

and engineering the projects. In 

addition, we added a provision to the 

final rule that will allow a project 

developer to request a waiver of the 

CVA requirement. Much of the data 

required for this final rule will need to 

be gathered by the project developers 

anyway (i.e., site surveys). The rule 

requires the data be provided to MMS 

to ensure protection of the environment 

and endangered species. 

The MMS also has provisions that 

allow for departures from the 

requirements in this rule. The MMS can 

evaluate, on a case-by-case basis, if any 

part of this final regulation places an 

unnecessary burden on a small business 

and can make adjustments to the 

requirements, as appropriate. However, 

MMS cannot waive requirements to 

comply with other Federal laws, such as 

NEPA and CZMA. 

Small Business Regulatory Enforcement 

Fairness Act (SBREFA) 

The final rule is not a major rule 

under 5 U.S.C. 804(2) of the Small 

Business Regulatory Enforcement 

Fairness Act. This final rule: 

a. Will not have an annual effect on 

the economy of $100 million or more, as 

discussed previously under the 

Regulatory Planning and Review 

section. 

b. Will not cause a major increase in 

costs or prices for consumers, 

individual industries, Federal, State, or 

local government agencies, or 

geographic regions. This rule will allow 

greater production of energy from the 

OCS and will make more energy 

available in the United States. 

c. Will not have significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

the ability of U.S.-based enterprises to 

compete with foreign-based enterprises. 

Leasing on the U.S. OCS is limited to 

residents of the United States or 

companies incorporated in the United 

States under this final rule. This final 

rule will encourage competition, 

employment, investment, productivity, 

and innovation, and will not have an 

adverse impact on the ability of U.S.- 

based companies to compete with 

foreign-based enterprises. This rule will 

allow production of energy (e.g., 

electricity) in areas where there is no 

production at this time. It will 

encourage companies to explore new 

avenues for generating electricity and 

other energy from sources other than oil 

and gas. The final rule includes a 

competitive process for leasing. New 

developments and projects will create 

new jobs and investment. Since this is 

a nascent industry in the United States, 

it will also encourage the development 

of new technology. 

The MMS received a comment on the 

NPR requesting that we consider 

reducing or waiving civil penalties for 

small businesses regulated under this 

part. If a civil penalty is assessed, the 

company may submit a request to 

modify the payment schedule to the 

Office of Financial Management, with 

the Mineral Revenue Management 

Program of the MMS. This did not 

require any changes to the final rule. 

Unfunded Mandates Reform Act of 1995 

This final rule will not impose an 

unfunded mandate on State, local, or 

tribal governments or the private sector 

of more than $100 million per year. The 

final rule will not have a significant or 

unique effect on State, local, or tribal 

governments or the private sector. A 

statement containing the information 

required by the Unfunded Mandates 

Reform Act (2 U.S.C. 1501 et seq.) is not 

required. 

Takings Implication Assessment (E.O. 

12630) 

Under the criteria in E.O. 12630, this 

final rule does not have significant 

takings implications. The final rule is 

not a governmental action capable of 

interference with constitutionally 

protected property rights. There are not, 

at present, any property rights in 

renewable energy facilities. Further, the 

rule on alternate use of existing facilities 

will require consent of the owner of the 

existing facility to any RUE that MMS 

might issue. A Takings Implication 

Assessment is not required. 

Federalism (E.O. 13132) 

Under the criteria in E.O. 13132, this 

final rule does not have sufficient 

federalism implications. This final rule 

will not substantially and directly affect 

the relationship between the Federal 

and State governments. To the extent 

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that State and local governments have a 

role in OCS activities, this rule will 

affect that role. A Federalism 

Assessment is not required. 

Civil Justice Reform (E.O. 12988) 

This rule complies with the 

requirements of E.O. 12988. 

Specifically, this rule: 

(a) Meets the criteria of section 3(a) 

requiring that all regulations be 

reviewed to eliminate errors and 

ambiguity and be written to minimize 

litigation; and 

(b) Meets the criteria of section 3(b)(2) 

requiring that all regulations be written 

in clear language and contain clear legal 

standards. 

Consultation With Indian Tribes (E.O. 

13175) 

Under the criteria in E.O. 13175, we 

have evaluated this final rule and 

determined that it may have substantial 

effects on federally recognized Indian 

tribes. Although there are no Indian or 

tribal lands on the OCS, tribes occupy 

land on or near the shoreline that may 

be impacted. The final rule provides 

opportunities for MMS to coordinate 

with affected tribes related to all 

activities that the rule covers. The 

provisions are the same as provisions 

we have for coordination with affected 

States and local communities. 

Paperwork Reduction Act (PRA) 

This rule contains new information 

collection (IC) requirements; therefore, a 

submission to OMB under the PRA is 

required. The OMB has approved the IC 

for the final rulemaking and assigned 

OMB Control Number 1010–0176, 

expiration 4/30/2012, for a total of 

31,124 burden hours and $3,816,000 

non-hour cost burdens. 

The title of the collection of 

information is ‘‘30 CFR 285—Renewable 

Energy and Alternate Uses of Existing 

Facilities on the Outer Continental 

Shelf.’’ Respondents primarily will be 

an estimated 15–25 Federal OCS 

companies that submit unsolicited 

proposals, lessees and designated 

operators, and ROW or RUE grant 

holders. Other potential respondents are 

companies or States and local 

governments that submit information or 

comments relative to renewable energyrelated uses of the OCS; CVAs; and 

surety or third-party guarantors. The 

frequency of response varies depending 

upon the requirement. Responses to this 

collection of information are mandatory 

or are required to obtain or retain a 

benefit. The MMS will protect 

proprietary information according to the 

Freedom of Information Act (5 U.S.C. 

552), its implementing regulations (43 

CFR part 2), and 30 CFR 285.112 

through 285.114. 

Between the proposed and final rule, 

there have been some changes to the 

numbering of sections requiring the 

collection of information, as well as 

some clarifications. The final 

regulations also are more specific with 

respect to several reporting 

requirements. The changes were all 

based on comments received, 

approximately seven that affected IC, 

and were included in the subsequent 

information collection submission that 

OMB approved. The comments are 

addressed in detail in the preamble of 

this rulemaking. 

The following is a description of the 

revisions to the IC in the final rule: 

• § 285.223(a)—Revised section 

eliminates a reporting requirement for 

tied bidders who will now be allowed 

to resubmit revised bids (¥4 burden 

hours). 

• § 285.506(c)(4)—Added 

requirement to allow MMS the ability to 

verify that the numbers we use in our 

formula are accurate to determine the 

operating fee (+1 burden hour). 

• § 285.516(a)(4)—Added 

requirement to provide a separate 

decommissioning bond or other 

financial assurance (+3 burden hours). 

• § 285.526(c)—Added annual 

reporting requirement for new option to 

allow more choices for financial 

assurance security instruments (+1 

burden hour). 

• § 285.527—Added options to allow 

respondents to demonstrate financial 

strength and reliability instead of 

submitting a bond (+10 burden hours). 

• § 285.528—Added option to allow a 

third-party guaranty to meet financial 

assurance requirements (+10 burden 

hours). 

• § 285.612(b)—Clarified CZMA 

process (+4 burden hours). 

• § 285.614—Removed requirement 

as the activities may be conducted 

under U.S. Army Corps of Engineers 

regulations (¥180 burden hours). 

• § 285.705(b)—Added option to 

allow respondents to request a CVA 

requirement waiver (+40 burden hours). 

• § 285.802(a), (b)—Revised section 

eliminates a reporting requirement on 

the protection of archaeological 

resources (¥10 burden hours). 

• § 285.815(b)—Revised section 

eliminates requirement to report 

equipment and facility repairs to MMS 

(¥2 burden hours). 

The following table provides a 

breakdown of the hour burden and nonhour cost estimates. 

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An agency may not conduct or 

sponsor, and you are not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. The public may 

comment, at any time, on the accuracy 

of the IC burden in this rule and may 

submit any comments to the Department 

of the Interior; Minerals Management 

Service; Attention: Regulations and 

Standards Branch; Mail Stop 4024; 381 

Elden Street; Herndon, Virginia 20170– 

4817. 

National Environmental Policy Act 

(NEPA) of 1969 

The MMS has analyzed this rule 

under the criteria of the National 

Environmental Policy Act. This rule 

meets the criteria set forth in 516 

Departmental Manual 3.2 A for the 

preparation of an ‘‘Environmental 

Assessment.’’ The MMS prepared an EA 

analyzing the regulations for the MMS 

Alternative Energy and Alternate Use 

program. The EA incorporates by 

reference the PEIS, Programmatic 

Environmental Impact Statement for 

Alternative Energy Development and 

Production and Alternate Use of 

Facilities on the Outer Continental 

Shelf, Final Environmental Impact 

Statement, October 2007. 

Based on the analysis in the EA, and 

the PEIS that it tiers off of, we have 

determined that the rule would not 

significantly affect the quality of the 

human environment (40 CFR 1508.27) 

and will not cause ‘‘undue or serious 

harm or damage to the human, marine, 

or coastal environment.’’ Therefore, the 

MMS has made a determination that 

results in a Finding of No Significant 

Impact. The EA and the PEIS are 

available on the MMS Web site at: 

http://www.mms.gov/offshore/ 

AlternativeEnergy/ 

RegulatoryInformation.htm. 

Data Quality Act 

In developing this rule we did not 

conduct or use a study, experiment, or 

survey requiring peer review under the 

Data Quality Act (Pub. L. 106–554, app. 

C section 515, 114 Stat. 2763, 2763A– 

153–154). 

Effects on the Energy Supply (E.O. 

13211) 

While this final rule is a significant 

regulatory action under E.O. 12866, the 

final rule will not have a significant 

adverse effect on the supply, 

distribution, or use of energy. In fact, 

this rule is expected to have a positive 

effect on the production, supply, and 

distribution of energy because the rule 

would establish a framework for 

allowing the development and 

production of new energy sources on 

the OCS. Furthermore, the 

Administrator of the Office of 

Information and Regulatory Affairs, 

OMB, has not designated this final rule 

a significant energy action. Therefore, 

this final rule is not a significant energy 

action and does not require a Statement 

of Energy Effects. Executive Order 

13211 requires the agency to prepare a 

Statement of Energy Effects when it 

takes a regulatory action that is 

identified as a significant energy action. 

According to E.O. 13211, a significant 

energy action means any action by an 

agency that promulgates or is expected 

to lead to promulgation of a final rule 

or regulations that is a significant 

regulatory action under E.O. 12866 and 

is likely to have a significant adverse 

effect on the supply, distribution, or use 

of energy. 

List of Subjects 

30 CFR Part 250 

Administrative practice and 

procedure, Continental shelf, 

Environmental protection, Public 

lands—rights-of-way, Reporting and 

recordkeeping requirement. 


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30 CFR Part 285 

Bonding, Coastal zone, Continental 

shelf, Electric power, Energy, 

Environmental impact statements, 

Environmental protection, Incorporation 

by Reference, Marine resources, Natural 

resources, Payments, Public lands, 

Public lands—rights-of-way, Reporting 

and recordkeeping requirements, 

Revenue sharing, Solar energy. 

30 CFR Part 290 

Administrative practice and 

procedure. 

Dated: April 21, 2009. 

Richard T. Cardinale, 

Acting Assistant Secretary—Land and 

Minerals Management. 

■ For the reasons stated in the preamble, 

the Minerals Management Service 

(MMS) amends 30 CFR chapter II as 

follows: 

PART 250—OIL AND GAS AND 

SULPHUR OPERATIONS IN THE 

OUTER CONTINENTAL SHELF 

■ 1. The authority citation for 30 CFR 

part 250 continues to read as follows: 

Authority: 31 U.S.C. 9701, 43 U.S.C. 1334. 

■ 2. Amend § 250.1703 by revising 

paragraph (c) to read as follows: 

§ 250.1703 What are the general 

requirements for decommissioning? 

* * * * * 

(c) Remove all platforms and other 

facilities, except as provided in sections 

1725(a) and 1730. 

* * * * * 

■ 3. Amend § 250.1725 by adding a 

third and fourth sentence to the 

introductory text of paragraph (a), and 

adding new paragraphs (a)(1) and (a)(2) 

to read as follows: 

§ 250.1725 When do I have to remove 

platforms and other facilities? 

(a) * * * Other activities include 

those supporting OCS oil and gas 

production and transportation, as well 

as other energy-related or marine-related 

uses (including LNG) for which 

adequate financial assurance for 

decommissioning has been provided to 

a Federal agency which has given MMS 

a commitment that it has and will 

exercise authority to compel the 

performance of decommissioning within 

a time following cessation of the new 

use acceptable to MMS. The approval 

will specify: 

(1) Whether you must continue to 

maintain any financial assurance for 

decommissioning; and 

(2) Whether, and under what 

circumstances, you must perform any 

decommissioning not performed by the 

new facility owner/user. 

* * * * * 

§ 250.1730 [Amended] 

■ 4. In § 250.1730, amend the 

introductory text by removing the words 

‘‘or other use’’. 

■ 5. Add § 250.1731, to read as follows: 

§ 250.1731 Who is responsible for 

decommissioning an OCS facility subject to 

an Alternate Use RUE? 

(a) The holder of an Alternate Use 

RUE issued under part 285 of this 

subchapter is responsible for all 

decommissioning obligations that 

accrue following the issuance of the 

Alternate Use RUE and which pertain to 

the Alternate Use RUE. See 30 CFR part 

285, subpart J, for additional 

information concerning the 

decommissioning responsibilities of an 

Alternate Use RUE grant holder. 

(b) The lessee under the lease 

originally issued under 30 CFR part 256 

will remain responsible for 

decommissioning obligations that 

accrued before issuance of the Alternate 

Use RUE, as well as for 

decommissioning obligations that 

accrue following issuance of the 

Alternate Use RUE to the extent 

associated with continued activities 

authorized under this part. 

(c) If a lease issued under 30 CFR part 

256 is cancelled or otherwise terminated 

under any provision of this subchapter, 

the lessee, upon our approval, may defer 

removal of any OCS facility within the 

lease area that is subject to an Alternate 

Use RUE. If we elect to grant such a 

deferral, the lessee remains responsible 

for removing the facility upon 

termination of the Alternate Use RUE 

and will be required to retain sufficient 

bonding or other financial assurances to 

ensure that the structure is removed or 

otherwise decommissioned in 

accordance with the provisions of this 

subpart. 

■ 6. Add 30 CFR part 285 to subchapter 

B to read as follows: 

PART 285—RENEWABLE ENERGY 

ALTERNATE USES OF EXISTING 

FACILITIES ON THE OUTER 

CONTINENTAL SHELF 

Subpart A—General Provisions 

Sec. 

285.100 Authority. 

285.101 What is the purpose of this part? 

285.102 What are MMS’s responsibilities 

under this part? 

285.103 When may MMS prescribe or 

approve departures from these 

regulations? 

285.104 Do I need an MMS lease or other 

authorization to produce or support the 

production of electricity or other energy 

product from a renewable energy 

resource on the OCS? 

285.105 What are my responsibilities 

under this part? 

285.106 Who can hold a lease or grant 

under this part? 

285.107 How do I show that I am qualified 

to be a lessee or grant holder? 

285.108 When must I notify MMS if an 

action has been filed alleging that I am 

insolvent or bankrupt? 

285.109 When must I notify MMS of 

mergers, name changes, or changes of 

business form? 

285.110 How do I submit plans, 

applications, reports, or notices required 

by this part? 

285.111 When and how does MMS charge 

me processing fees on a case-by-case 

basis? 

285.112 Definitions. 

285.113 How will data and information 

obtained by MMS under this part be 

disclosed to the public? 

285.114 Paperwork Reduction Act 

statements—information collection. 

285.115 Documents incorporated by 

reference. 

285.116 Requests for information on the 

state of the offshore renewable energy 

industry. 

285.117 [Reserved] 

285.118 What are my appeal rights? 

Subpart B—Issuance of OCS Renewable 

Energy Leases 

General Lease Information 

285.200 What rights are granted with a 

lease issued under this part? 

285.201 How will MMS issue leases? 

285.202 What types of leases will MMS 

issue? 

285.203 With whom will MMS consult 

before issuance of a lease? 

285.204 What areas are available for 

leasing consideration? 

285.205 How will leases be mapped? 

285.206 What is the lease size? 

285.207–285.209 [Reserved] 

Competitive Lease Process 

285.210 How does MMS initiate the 

competitive leasing process? 

285.211 What is the process for 

competitive issuance of leases? 

285.212 What is the process MMS will 

follow if there is reason to believe that 

competitors have withdrawn before the 

Final Sale Notice is issued? 

285.213 What must I submit in response to 

a Request for Interest or a Call for 

Information and Nominations? 

285.214 What will MMS do with 

information from the Requests for 

Information or Calls for Information and 

Nominations? 

285.215 What areas will MMS offer in a 

lease sale? 

285.216 What information will MMS 

publish in the Proposed Sale Notice and 

Final Sale Notice? 

285.217–285.219 [Reserved] 

Competitive Lease Award Process 

285.220 What auction format may MMS 

use in a lease sale? 

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285.221 What bidding systems may MMS 

use for commercial leases and limited 

leases? 

285.222 What does MMS do with my bid? 

285.223 What does MMS do if there is a 

tie for the highest bid? 

285.224 What happens if MMS accepts my 

bid? 

285.225 What happens if my bid is 

rejected, and what are my appeal rights? 

285.226–285.229 [Reserved] 

Noncompetitive Lease Award Process 

285.230 May I request a lease if there is no 

Call? 

285.231 How will MMS process my 

unsolicited request for a noncompetitive 

lease? 

285.232 May I acquire a lease 

noncompetitively after responding to a 

Request for Interest or Call for 

Information and Nominations under 

§ 285.213? 

285.233–285.234 [Reserved] 

Commercial and Limited Lease Terms 

285.235 If I have a commercial lease, how 

long will my lease remain in effect? 

285.236 If I have a limited lease, how long 

will my lease remain in effect? 

285.237 What is the effective date of a 

lease? 

285.238 Are there any other renewable 

energy research activities that will be 

allowed on the OCS? 

Subpart C—Rights-of-Way Grants and 

Rights-of-Use and Easement Grants for 

Renewable Energy Activities 

ROW Grants and RUE Grants 

285.300 What types of activities are 

authorized by ROW grants and RUE 

grants issued under this part? 

285.301 What do ROW grants and RUE 

grants include? 

285.302 What are the general requirements 

for ROW grant and RUE grant holders? 

285.303 How long will my ROW grant or 

RUE grant remain in effect? 

285.304 [Reserved] 

Obtaining ROW Grants and RUE Grants 

285.305 How do I request an ROW grant or 

RUE grant? 

285.306 What action will MMS take on my 

request? 

285.307 How will MMS determine whether 

competitive interest exists for ROW 

grants and RUE grants? 

285.308 How will MMS conduct an auction 

for ROW grants and RUE grants? 

285.309 When will MMS issue a 

noncompetitive ROW grant or RUE 

grant? 

285.310 What is the effective date of an 

ROW grant or RUE grant? 

285.311–285.314 [Reserved] 

Financial Requirements for ROW Grants 

and RUE Grants 

285.315 What deposits are required for a 

competitive ROW grant or RUE grant? 

285.316 What payments are required for 

ROW grants or RUE grants? 

Subpart D—Lease and Grant Administration 

Noncompliance and Cessation Orders 

285.400 What happens if I fail to comply 

with this part? 

285.401 When may MMS issue a cessation 

order? 

285.402 What is the effect of a cessation 

order? 

285.403–285.404 [Reserved] 

Designation of Operator 

285.405 How do I designate an operator? 

285.406 Who is responsible for fulfilling 

lease and grant obligations? 

285.407 [Reserved] 

Lease or Grant Assignment 

285.408 May I assign my lease or grant 

interest? 

285.409 How do I request approval of a 

lease or grant assignment? 

285.410 How does an assignment affect the 

assignor’s liability? 

285.411 How does an assignment affect the 

assignee’s liability? 

285.412–285.414 [Reserved] 

Lease or Grant Suspension 

285.415 What is a lease or grant 

suspension? 

285.416 How do I request a lease or grant 

suspension? 

285.417 When may MMS order a 

suspension? 

285.418 How will MMS issue a suspension? 

285.419 What are my immediate 

responsibilities if I receive a suspension 

order? 

285.420 What effect does a suspension 

order have on my payments? 

285.421 How long will a suspension be in 

effect? 

285.422–285.424 [Reserved] 

Lease or Grant Renewal 

285.425 May I obtain a renewal of my lease 

or grant before it terminates? 

285.426 When must I submit my request for 

renewal? 

285.427 How long is a renewal? 

285.428 What effect does applying for a 

renewal have on my activities and 

payments? 

285.429 What criteria will MMS consider in 

deciding whether to renew a lease or 

grant? 

285.430–285.431 [Reserved] 

Lease or Grant Termination 

285.432 When does my lease or grant 

terminate? 

285.433 What must I do after my lease or 

grant terminates? 

285.434 [Reserved] 

Lease or Grant Relinquishment 

285.435 How can I relinquish a lease or a 

grant or parts of a lease or grant? 

Lease or Grant Contraction 

285.436 Can MMS require lease or grant 

contraction? 

Lease or Grant Cancellation 

285.437 When can my lease or grant be 

canceled? 

Subpart E—Payments and Financial 

Assurance Requirements 

Payments 

285.500 How do I make payments under 

this part? 

285.501 What deposits must I submit for a 

competitively issued lease, ROW grant, 

or RUE grant? 

285.502 What initial payment requirements 

must I meet to obtain a noncompetitive 

lease, ROW grant, or RUE grant? 

285.503 What are the rent and operating fee 

requirements for a commercial lease? 

285.504 How are my payments affected if I 

develop my lease in phases? 

285.505 What are the rent and operating fee 

requirements for a limited lease? 

285.506 What operating fees must I pay on 

a commercial lease? 

285.507 What rent payments must I pay on 

a project easement? 

285.508 What rent payments must I pay on 

ROW grants or RUE grants associated 

with renewable energy projects? 

285.509 Who is responsible for submitting 

lease or grant payments to MMS? 

285.510 May MMS reduce or waive my 

lease or grant payments? 

285.511–285.514 [Reserved] 

Financial Assurance Requirements for 

Commercial Leases 

285.515 What financial assurance must I 

provide when I obtain my commercial 

lease? 

285.516 What are the financial assurance 

requirements for each stage of my 

commercial lease? 

285.517 How will MMS determine the 

amounts of the supplemental and 

decommissioning financial assurance 

requirements associated with 

commercial leases? 

285.518–285.519 [Reserved] 

Financial Assurance for Limited Leases, 

ROW Grants, and RUE Grants 

285.520 What financial assurance must I 

provide when I obtain my limited lease, 

ROW grant, or RUE grant? 

285.521 Do my financial assurance 

requirements change as activities 

progress on my limited lease or grant? 

285.522–285.524 [Reserved] 

Requirements for Financial Assurance 

Instruments 

285.525 What general requirements must a 

financial assurance instrument meet? 

285.526 What instruments other than a 

surety bond may I use to meet the 

financial assurance requirement? 

285.527 May I demonstrate financial 

strength and reliability to meet the 

financial assurance requirement for lease 

or grant activities? 

285.528 May I use a third-party guaranty to 

meet the financial assurance requirement 

for lease or grant activities? 

285.529 Can I use a lease- or grant-specific 

decommissioning account to meet the 

financial assurance requirements related 

to decommissioning? 

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Changes in Financial Assurance 

285.530 What must I do if my financial 

assurance lapses? 

285.531 What happens if the value of my 

financial assurance is reduced? 

285.532 What happens if my surety wants 

to terminate the period of liability of my 

bond? 

285.533 How does my surety obtain 

cancellation of my bond? 

285.534 When may MMS cancel my bond? 

285.535 Why might MMS call for forfeiture 

of my bond? 

285.536 How will I be notified of a call for 

forfeiture? 

285.537 How will MMS proceed once my 

bond or other security is forfeited? 

285.538–285.539 [Reserved] 

Revenue Sharing With States 

285.540 How will MMS equitably distribute 

revenues to States? 

285.541 What is a qualified project for 

revenue sharing purposes? 

285.542 What makes a State eligible for 

payment of revenues? 

285.543 Example of how the inverse 

distance formula works. 

Subpart F—Plans and Information 

Requirements 

285.600 What plans and information must I 

submit to MMS before I conduct 

activities on my lease or grant? 

285.601 When am I required to submit my 

plans to MMS? 

285.602 What records must I maintain? 

285.603–285.604 [Reserved] 

Site Assessment Plan and Information 

Requirements for Commercial Leases 

285.605 What is a Site Assessment Plan 

(SAP)? 

285.606 What must I demonstrate in my 

SAP? 

285.607 How do I submit my SAP? 

285.608–285.609 [Reserved] 

Contents of the Site Assessment Plan 

285.610 What must I include in my SAP? 

285.611 What information must I submit 

with my SAP to assist MMS in 

complying with NEPA and other relevant 

laws? 

285.612 How will my SAP be processed for 

Federal consistency under the Coastal 

Zone Management Act? 

285.613 How will MMS process my SAP? 

Activities Under an Approved SAP 

285.614 When may I begin conducting 

activities under my approved SAP? 

285.615 What other reports or notices must 

I submit to MMS under my approved 

SAP? 

285.616 [Reserved] 

285.617 What activities require a revision to 

my SAP, and when will MMS approve 

the revision? 

285.618 What must I do upon completion of 

approved site assessment activities? 

285.619 [Reserved] 

Construction and Operations Plan for 

Commercial Leases 

285.620 What is a Construction and 

Operations Plan (COP)? 

285.621 What must I demonstrate in my 

COP? 

285.622 How do I submit my COP? 

285.623–285.625 [Reserved] 

Contents of the Construction and Operations 

Plan 

285.626 What must I include in my COP? 

285.627 What information and 

certifications must I submit with my 

COP to assist the MMS in complying 

with NEPA and other relevant laws? 

285.628 How will MMS process my COP? 

285.629 May I develop my lease in phases? 

285.630 [Reserved] 

Activities Under an Approved COP 

285.631 When must I initiate activities 

under an approved COP? 

285.632 What documents must I submit 

before I may construct and install 

facilities under my approved COP? 

285.633 How do I comply with my COP? 

285.634 What activities require a revision to 

my COP, and when will MMS approve 

the revision? 

285.635 What must I do if I cease activities 

approved in my COP before the end of 

my commercial lease? 

285.636 What notices must I provide MMS 

following approval of my COP? 

285.637 When may I commence 

commercial operations on my 

commercial lease? 

285.638 What must I do upon completion of 

my commercial operations as approved 

in my COP or FERC license? 

285.639 [Reserved] 

General Activities Plan Requirements for 

Limited Leases, ROW Grants, and RUE 

Grants 

285.640 What is a General Activities Plan 

(GAP)? 

285.641 What must I demonstrate in my 

GAP? 

285.642 How do I submit my GAP? 

285.643–285.644 [Reserved] 

Contents of the General Activities Plan 

285.645 What must I include in my GAP? 

285.646 What information and 

certifications must I submit with my 

GAP to assist MMS in complying with 

NEPA and other relevant laws? 

285.647 How will my GAP be processed for 

Federal consistency under the Coastal 

Zone Management Act? 

285.648 How will MMS process my GAP? 

285.649 [Reserved] 

Activities Under an Approved GAP 

285.650 When may I begin conducting 

activities under my GAP? 

285.651 When may I construct complex or 

significant OCS facilities on my limited 

lease or any facilities on my project 

easement proposed under my GAP? 

285.652 How long do I have to conduct 

activities under an approved GAP? 

285.653 What other reports or notices must 

I submit to MMS under my approved 

GAP? 

285.654 [Reserved] 

285.655 What activities require a revision to 

my GAP, and when will MMS approve 

the revision? 

285.656 What must I do if I cease activities 

approved in my GAP before the end of 

my term? 

285.657 What must I do upon completion of 

approved activities under my GAP? 

Cable and Pipeline Deviations 

285.658 Can my cable or pipeline 

construction deviate from my approved 

COP or GAP? 

285.659 What requirements must I include 

in my SAP, COP, or GAP regarding air 

quality? 

Subpart G—Facility Design, Fabrication, 

and Installation 

Reports 

285.700 What reports must I submit to 

MMS before installing facilities 

described in my approved SAP, COP, or 

GAP? 

285.701 What must I include in my Facility 

Design Report? 

285.702 What must I include in my 

Fabrication and Installation Report? 

285.703 What reports must I submit for 

project modifications and repairs? 

285.704 [Reserved] 

Certified Verification Agent 

285.705 When must I use a Certified 

Verification Agent (CVA)? 

285.706 How do I nominate a CVA for MMS 

approval? 

285.707 What are the CVA’s primary duties 

for facility design review? 

285.708 What are the CVA’s or project 

engineer’s primary duties for fabrication 

and installation review? 

285.709 When conducting onsite 

fabrication inspections, what must the 

CVA or project engineer verify? 

285.710 When conducting onsite 

installation inspections, what must the 

CVA or project engineer do? 

285.711 [Reserved] 

285.712 What are the CVA’s or project 

engineer’s reporting requirements? 

285.713 What must I do after the CVA or 

project engineer confirms conformance 

with the Fabrication and Installation 

Report on my commercial lease? 

285.714 What records relating to SAPs, 

COPs, and GAPs must I keep? 

Subpart H—Environmental and Safety 

Management, Inspections, and Facility 

Assessments for Activities Conducted 

Under SAPs, COPs and GAPs 

285.800 How must I conduct my activities 

to comply with safety and environmental 

requirements? 

285.801 How must I conduct my approved 

activities to protect marine mammals, 

threatened and endangered species, and 

designated critical habitat? 

285.802 What must I do if I discover a 

potential archaeological resource while 

conducting my approved activities? 

285.803 How must I conduct my approved 

activities to protect essential fish habitats 

identified and described under the 

Magnuson-Stevens Fishery Conservation 

and Management Act? 

285.804–285.809 [Reserved] 

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Safety Management Systems 

285.810 What must I include in my Safety 

Management System? 

285.811 When must I follow my Safety 

Management System? 

285.812 [Reserved] 

Maintenance and Shutdowns 

285.813 When do I have to report removing 

equipment from service? 

285.814 Reserved 

Equipment Failure and Adverse 

Environmental Effects 

285.815 What must I do if I have facility 

damage or an equipment failure? 

285.816 What must I do if environmental or 

other conditions adversely affect a cable, 

pipeline, or facility? 

285.817–285.819 [Reserved] 

Inspections and Assessments 

285.820 Will MMS conduct inspections? 

285.821 Will MMS conduct scheduled and 

unscheduled inspections? 

285.822 What must I do when MMS 

conducts an inspection? 

285.823 Will MMS reimburse me for my 

expenses related to inspections? 

285.824 How must I conduct selfinspections? 

285.825 When must I assess my facilities? 

285.826–285.829 [Reserved] 

Incident Reporting and Investigation 

285.830 What are my incident reporting 

requirements? 

285.831 What incidents must I report, and 

when must I report them? 

285.832 How do I report incidents requiring 

immediate notification? 

285.833 What are the reporting 

requirements for incidents requiring 

written notification? 

Subpart I—Decommissioning 

Decommissioning Obligations and 

Requirements 

285.900 Who must meet the 

decommissioning obligations in this 

subpart? 

285.901 When do I accrue 

decommissioning obligations? 

285.902 What are the general requirements 

for decommissioning for facilities 

authorized under my SAP, COP, or GAP? 

285.903 What are the requirements for 

decommissioning FERC-licensed 

hydrokinetic facilities? 

285.904 Can I request a departure from the 

decommissioning requirements? 

Decommissioning Applications 

285.905 When must I submit my 

decommissioning application? 

285.906 What must my decommissioning 

application include? 

285.907 How will MMS process my 

decommissioning application? 

285.908 What must I include in my 

decommissioning notice? 

Facility Removal 

285.909 When may MMS authorize 

facilities to remain in place following 

termination of a lease or grant? 

285.910 What must I do when I remove my 

facility? 

285.911 [Reserved] 

Decommissioning Report 

285.912 After I remove a facility, cable, or 

pipeline, what information must I 

submit? 

Compliance With an Approved 

Decommissioning Application 

285.913 What happens if I fail to comply 

with my approved decommissioning 

application? 

Subpart J—Rights of Use and Easement for 

Energy and Marine-Related Activities Using 

Existing OCS Facilities 

Regulated Activities 

285.1000 What activities does this subpart 

regulate? 

285.1001–285.1003 [Reserved] 

Requesting an Alternate Use RUE 

285.1004 What must I do before I request an 

Alternate Use RUE? 

285.1005 How do I request an Alternate Use 

RUE? 

285.1006 How will MMS decide whether to 

issue an Alternate Use RUE? 

285.1007 What process will MMS use for 

competitively offering an Alternate Use 

RUE? 

285.1008–285.1009 [Reserved] 

Alternate Use RUE Administration 

285.1010 How long may I conduct activities 

under an Alternate Use RUE? 

285.1011 What payments are required for 

an Alternate Use RUE? 

285.1012 What financial assurance is 

required for an Alternate Use RUE? 

285.1013 Is an Alternate Use RUE 

assignable? 

285.1014 When will MMS suspend an 

Alternate Use RUE? 

285.1015 How do I relinquish an Alternate 

Use RUE? 

285.1016 When will an Alternate Use RUE 

be cancelled? 

285.1017 [Reserved] 

Decommissioning an Alternate Use RUE 

285.1018 Who is responsible for 

decommissioning an OCS facility subject 

to an Alternate Use RUE? 

285.1019 What are the decommissioning 

requirements for an Alternate Use RUE? 

Authority: 43 U.S.C. 1331 et seq., 43 

U.S.C. 1337. 

Subpart A—General Provisions 

§ 285.100 Authority. 

The authority for this part derives 

from amendments to subsection 8 of the 

Outer Continental Shelf Lands Act (OCS 

Lands Act) (43 U.S.C. 1337), as set forth 

in section 388(a) of the Energy Policy 

Act of 2005 (EPAct) (Pub. L. 109–58). 

The Secretary of the Interior delegated 

to the Minerals Management Service 

(MMS) the authority to regulate 

activities under section 388(a) of the 

EPAct. These regulations specifically 

apply to activities that: 

(a) Produce or support production, 

transportation, or transmission of energy 

from sources other than oil and gas; or 

(b) Use, for energy-related purposes or 

for other authorized marine-related 

purposes, facilities currently or 

previously used for activities authorized 

under the OCS Lands Act. 

§ 285.101 What is the purpose of this part? 

The purpose of this part is to: 

(a) Establish procedures for issuance 

and administration of leases, right-ofway (ROW) grants, and right-of-use and 

easement (RUE) grants for renewable 

energy production on the Outer 

Continental Shelf (OCS) and RUEs for 

the alternate use of OCS facilities for 

energy or marine-related purposes; 

(b) Inform you and third parties of 

your obligations when you undertake 

activities authorized in this part; and 

(c) Ensure that renewable energy 

activities on the OCS and activities 

involving the alternate use of OCS 

facilities for energy or marine-related 

purposes are conducted in a safe and 

environmentally sound manner, in 

conformance with the requirements of 

subsection 8(p) of the OCS Lands Act, 

other applicable laws and regulations, 

and the terms of your lease, ROW grant, 

RUE grant, or Alternate Use RUE grant. 

(d) This part will not convey access 

rights for oil, gas, or other minerals. 

§ 285.102 What are MMS’s responsibilities 

under this part? 

(a) The MMS will ensure that any 

activities authorized in this part are 

carried out in a manner that provides 

for: 

(1) Safety; 

(2) Protection of the environment; 

(3) Prevention of waste; 

(4) Conservation of the natural 

resources of the OCS; 

(5) Coordination with relevant Federal 

agencies (including, in particular, those 

agencies involved in planning activities 

that are undertaken to avoid conflicts 

among users and maximize the 

economic and ecological benefits of the 

OCS, including multifaceted spatial 

planning efforts); 

(6) Protection of national security 

interests of the United States; 

(7) Protection of the rights of other 

authorized users of the OCS; 

(8) A fair return to the United States; 

(9) Prevention of interference with 

reasonable uses (as determined by the 

Secretary or Director) of the exclusive 

economic zone, the high seas, and the 

territorial seas; 

(10) Consideration of the location of 

and any schedule relating to a lease or 

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grant under this part for an area of the 

OCS, and any other use of the sea or 

seabed; 

(11) Public notice and comment on 

any proposal submitted for a lease or 

grant under this part; and 

(12) Oversight, inspection, research, 

monitoring, and enforcement of 

activities authorized by a lease or grant 

under this part. 

(b) The MMS will require compliance 

with all applicable laws, regulations, 

other requirements, and the terms of 

your lease or grant under this part and 

approved plans. The MMS will approve, 

disapprove, or approve with conditions 

any plans, applications, or other 

documents submitted to MMS for 

approval under the provisions of this 

part. 

(c) Unless otherwise provided in this 

part, MMS may give oral directives or 

decisions whenever prior MMS 

approval is required under this part. 

The MMS will document in writing any 

such oral directives within 10 business 

days. 

(d) The MMS will establish practices 

and procedures to govern the collection 

of all payments due to the Federal 

Government, including any cost 

recovery fees, rents, operating fees, and 

other fees or payments. The MMS will 

do this in accordance with the terms of 

this part, the leasing notice, the lease or 

grant under this part, and applicable 

Minerals Revenue Management 

regulations or guidance. 

(e) The MMS will provide for 

coordination and consultation with the 

Governor of any State or the executive 

of any local government or Indian tribe 

that may be affected by a lease, 

easement, or ROW under this 

subsection. The MMS may invite any 

affected State Governor, representative 

of an affected Indian tribe, and affected 

local government executive to join in 

establishing a task force or other joint 

planning or coordination agreement in 

carrying out our responsibilities under 

this part. 

§ 285.103 When may MMS prescribe or 

approve departures from these regulations? 

(a) The MMS may prescribe or 

approve departures from these 

regulations when departures are 

necessary to: 

(1) Facilitate the appropriate activities 

on a lease or grant under this part; 

(2) Conserve natural resources; 

(3) Protect life (including human and 

wildlife), property, or the marine, 

coastal, or human environment; or 

(4) Protect sites, structures, or objects 

of historical or archaeological 

significance. 

(b) Any departure approved under 

this section and its rationale must: 

(1) Be consistent with subsection 8(p) 

of the OCS Lands Act; 

(2) Protect the environment and the 

public health and safety to the same 

degree as if there was no approved 

departure from the regulations; 

(3) Not impair the rights of third 

parties; and 

(4) Be documented in writing. 

§ 285.104 Do I need an MMS lease or other 

authorization to produce or support the 

production of electricity or other energy 

product from a renewable energy resource 

on the OCS? 

Except as otherwise authorized by 

law, it will be unlawful for any person 

to construct, operate, or maintain any 

facility to produce, transport, or support 

generation of electricity or other energy 

product derived from a renewable 

energy resource on any part of the OCS, 

except under and in accordance with 

the terms of a lease, easement, or ROW 

issued pursuant to the OCS Lands Act. 

§ 285.105 What are my responsibilities 

under this part? 

As a lessee, applicant, operator, or 

holder of a ROW grant, RUE grant, or 

Alternate Use RUE grant, you must: 

(a) Design your projects and conduct 

all activities in a manner that ensures 

safety and will not cause undue harm or 

damage to natural resources, including 

their physical, atmospheric, and 

biological components to the extent 

practicable; and take measures to 

prevent unauthorized discharge of 

pollutants including marine trash and 

debris into the offshore environment. 

(b) Submit requests, applications, 

plans, notices, modifications, and 

supplemental information to MMS as 

required by this part; 

(c) Follow up, in writing, any oral 

request or notification you made, within 

3 business days; 

(d) Comply with the terms, 

conditions, and provisions of all reports 

and notices submitted to MMS, and of 

all plans, revisions, and other MMS 

approvals, as provided in this part; 

(e) Make all applicable payments on 

time; 

(f) Comply with the DOI’s 

nonprocurement debarment regulations 

at 2 CFR part 1400; 

(g) Include the requirement to comply 

with 2 CFR part 1400 in all contracts 

and transactions related to a lease or 

grant under this part; 

(h) Conduct all activities authorized 

by the lease or grant in a manner 

consistent with the provisions of 

subsection 8(p) of the OCS Lands Act; 

(i) Compile, retain, and make 

available to MMS representatives, 

within the time specified by MMS, any 

data and information related to the site 

assessment, design, and operations of 

your project; and 

(j) Respond to requests from the 

Director in a timely manner. 

§ 285.106 Who can hold a lease or grant 

under this part? 

(a) You may hold a lease or grant 

under this part if you can demonstrate 

that you have the technical and 

financial capabilities to conduct the 

activities authorized by the lease or 

grant and you are a(n): 

(1) Citizen or national of the United 

States; 

(2) Alien lawfully admitted for 

permanent residence in the United 

States as defined in 8 U.S.C. 1101(a)(20); 

(3) Private, public, or municipal 

corporations organized under the laws 

of any State of the United States, the 

District of Columbia, or any territory or 

insular possession subject to U.S. 

jurisdiction; 

(4) Association of such citizens, 

nationals, resident aliens, or 

corporations; 

(5) Executive Agency of the United 

States as defined in section 105 of Title 

5 of the U.S. Code; 

(6) State of the United States; and 

(7) Political subdivision of States of 

the United States. 

(b) You may not hold a lease or grant 

under this part or acquire an interest in 

a lease or grant under this part if: 

(1) You or your principals are 

excluded or disqualified from 

participating in transactions covered by 

the Federal nonprocurement debarment 

and suspension system (2 CFR part 

1400), unless MMS explicitly has 

approved an exception for this 

transaction; 

(2) The MMS determines or has 

previously determined after notice and 

opportunity for a hearing that you or 

your principals have failed to meet or 

exercise due diligence under any OCS 

lease or grant; or 

(3) The MMS determines or has 

previously determined after notice and 

opportunity for a hearing that you: 

(i) Remained in violation of the terms 

and conditions of any lease or grant 

issued under the OCS Lands Act for a 

period extending longer than 30 days (or 

such other period MMS allowed for 

compliance) after MMS directed you to 

comply; and 

(ii) You took no action to correct the 

noncompliance within that time period. 

§ 285.107 How do I show that I am 

qualified to be a lessee or grant holder? 

(a) You must demonstrate your 

technical and financial capability to 

construct, operate, maintain, and 

terminate/decommission projects for 

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which you are requesting authorization. 

Documentation can include: 

(1) Descriptions of international or 

domestic experience with renewable 

energy projects or other types of 

electric-energy-related projects; and 

(2) Information establishing access to 

sufficient capital to carry out 

development. 

(b) An individual must submit a 

written statement of citizenship status 

attesting to U.S. citizenship. It does not 

need to be notarized nor give the age of 

individual. A resident alien may submit 

a photocopy of the Immigration and 

Naturalization Service form evidencing 

legal status of the resident alien. 

(c) A corporation or association must 

submit evidence, as specified in the 

table in paragraph (d) of this section, 

acceptable to MMS that: 

(1) It is qualified to hold leases or 

grants under this part; 

(2) It is authorized to conduct 

business under the laws of its State; 

(3) It is authorized to hold leases or 

grants on the OCS under the operating 

rules of its business; and 

(4) The persons holding the titles 

listed are authorized to bind the 

corporation or association when 

conducting business with MMS. 

(d) Acceptable evidence under 

paragraph (c) of this section includes, 

but is not limited to the following: 

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BILLING CODE 4310–MR–C 

(e) A local, state, or Federal executive 

entity must submit a written statement 

that: 

(1) It is qualified to hold leases or 

grants under this part; and 

(2) The person(s) acting on behalf of 

the entity is authorized to bind the 

entity when conducting business with 

us. 

(f) The MMS may require you to 

submit additional information at any 

time considering your bid or request for 

a noncompetitive lease. 

§ 285.108 When must I notify MMS if an 

action has been filed alleging that I am 

insolvent or bankrupt? 

You must notify MMS within 3 

business days after you learn of any 

action filed alleging that you are 

insolvent or bankrupt. 

§ 285.109 When must I notify MMS of 

mergers, name changes, or changes of 

business form? 

You must notify MMS in writing of 

any merger, name change, or change of 

business form. You must notify MMS as 

soon as practicable following the 

merger, name change, or change in 

business form, but no later than 120 

days after the earliest of either the 

effective date, or the date of filing the 

change or action with the Secretary of 

the State or other authorized official in 

the State of original registry. 

§ 285.110 How do I submit plans, 

applications, reports, or notices required by 

this part? 

(a) You must submit all plans, 

applications, reports, or notices required 

by this part to MMS at the following 

address: Associate Director, OEMM, 

Minerals Management Service, MS– 

4001, 381 Elden Street, Herndon, VA 

20170. 

(b) Unless otherwise stated, you must 

submit one paper copy and one 

electronic copy of all plans, 

applications, reports, or notices required 

by this part. 

§ 285.111 When and how does MMS 

charge me processing fees on a case-bycase basis? 

(a) The MMS will charge a processing 

fee on a case-by-case basis under the 

procedures in this section with regard to 

any application or request under this 

part if we decide at any time that the 

preparation of a particular document or 

study is necessary for the application or 

request and it will have a unique 

processing cost, such as the preparation 

of an Environmental Assessment (EA) or 

Environmental Impact Statement (EIS). 

(1) Processing costs will include 

contract oversight and efforts to review 

and approve documents prepared by 

contractors, whether the contractor is 

paid directly by the applicant or 

through MMS. 

(2) We may apply a standard overhead 

rate to direct processing costs. 

(b) We will assess the ongoing 

processing fee for each individual 

application or request according to the 

following procedures: 

(1) Before we process your application 

or request, we will give you a written 

estimate of the proposed fee based on 

reasonable processing costs. 

(2) You may comment on the 

proposed fee. 

(3) You may: 

(i) Ask for our approval to perform, or 

to directly pay a contractor to perform, 

all or part of any document, study, or 

other activity according to standards we 

specify, thereby reducing our costs for 

processing your application or request; 

or 

(ii) Ask to pay us to perform, or 

contract for, all or part of any document, 

study, or other activity. 

(4) We will then give you the final 

estimate of the processing fee amount 

with payment terms and instructions 

after considering your comments and 

any MMS-approved work you will do. 

(i) If we encounter higher or lower 

processing costs than anticipated, we 

will re-estimate our reasonable 

processing costs following the 

procedures in paragraphs (b)(1), (b)(2), 

(b)(3), and (b)(4) of this section, but we 

will not stop ongoing processing unless 

you do not pay in accordance with 

paragraph (b)(5) of this section. 

(ii) Once processing is complete, we 

will refund to you the amount of money 

that we did not spend on processing 

costs. 

(5)(i) Consistent with the payment 

and billing terms provided in the final 

estimate, we will periodically estimate 

what our reasonable processing costs 

will be for a specific period and will bill 

you for that period. Payment is due to 

us 30 days after you receive your bill. 

We will stop processing your document 

if you do not pay the bill by the date 

payment is due. 

(ii) If a periodic payment turns out to 

be more or less than our reasonable 

processing costs for the period, we will 

adjust the next billing accordingly or 

make a refund. Do not deduct any 

amount from a payment without our 

prior written approval. 

(6) You must pay the entire fee before 

we will issue the final document or take 

final action on your application or 

request. 

(7) You may appeal our estimated 

processing costs in accordance with the 

regulations in 43 CFR part 4. We will 

not process the document further until 

the appeal is resolved, unless you pay 


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the fee under protest while the appeal 

is pending. If the appeal results in a 

decision changing the proposed fee, we 

will adjust the fee in accordance with 

paragraph (b)(5)(ii) of this section. If we 

adjust the fee downward, we will not 

pay interest. 

§ 285.112 Definitions. 

Terms used in this part have the 

meanings as defined in this section: 

Affected local government means with 

respect to any activities proposed, 

conducted, or approved under this part, 

any locality— 

(1) That is, or is proposed to be, the 

site of gathering, transmitting, or 

distributing electricity or other energy 

product, or is otherwise receiving, 

processing, refining, or transshipping 

product, or services derived from 

activities approved under this part; 

(2) That is used, or is proposed to be 

used, as a support base for activities 

approved under this part; or 

(3) In which there is a reasonable 

probability of significant effect on land 

or water uses from activities approved 

under this part. 

Affected State means with respect to 

any activities proposed, conducted, or 

approved under this part, any coastal 

State— 

(1) That is, or is proposed to be, the 

site of gathering, transmitting, or 

distributing energy or is otherwise 

receiving, processing, refining, or 

transshipping products, or services 

derived from activities approved under 

this part; 

(2) That is used, or is scheduled to be 

used, as a support base for activities 

approved under this part; or 

(3) In which there is a reasonable 

probability of significant effect on land 

or water uses from activities approved 

under this part. 

Alternate Use refers to the energy- or 

marine-related use of an existing OCS 

facility for activities not otherwise 

authorized by this subchapter or other 

applicable law. 

Alternate Use RUE means a right-ofuse and easement issued for activities 

authorized under subpart J of this part. 

Archaeological resource means any 

material remains of human life or 

activities that are at least 50 years of age 

and that are of archaeological interest 

(i.e., which are capable of providing 

scientific or humanistic understanding 

of past human behavior, cultural 

adaptation, and related topics through 

the application of scientific or scholarly 

techniques, such as controlled 

observation, contextual measurement, 

controlled collection, analysis, 

interpretation, and explanation). 

Best available and safest technology 

means the best available and safest 

technologies that MMS determines to be 

economically feasible wherever failure 

of equipment would have a significant 

effect on safety, health, or the 

environment. 

Best management practices mean 

practices recognized within their 

respective industry, or by Government, 

as one of the best for achieving the 

desired output while reducing 

undesirable outcomes. 

Certified Verification Agent (CVA) 

means an individual or organization, 

experienced in the design, fabrication, 

and installation of offshore marine 

facilities or structures, who will conduct 

specified third-party reviews, 

inspections, and verifications in 

accordance with this part. 

Coastline means the same as the term 

‘‘coast line’’ in section 2 of the 

Submerged Lands Act (43 U.S.C. 

1301(c)). 

Commercial activities mean, for 

renewable energy leases and grants, all 

activities associated with the generation, 

storage, or transmission of electricity or 

other energy product from a renewable 

energy project on the OCS, and for 

which such electricity or other energy 

product is intended for distribution, 

sale, or other commercial use, except for 

electricity or other energy product 

distributed or sold pursuant to 

technology-testing activities on a 

limited lease. This term also includes 

activities associated with all stages of 

development, including initial site 

characterization and assessment, facility 

construction, and project 

decommissioning. 

Commercial lease means a lease 

issued under this part that specifies the 

terms and conditions under which a 

person can conduct commercial 

activities. 

Commercial operations mean the 

generation of electricity or other energy 

product for commercial use, sale, or 

distribution on a commercial lease. 

Decommissioning means removing 

MMS-approved facilities and returning 

the site of the lease or grant to a 

condition that meets the requirements 

under subpart I of this part. 

Director means the Director of MMS 

of the U.S. Department of the Interior, 

or an official authorized to act on the 

Director’s behalf. 

Distance means the minimum great 

circle distance. 

Eligible State means a coastal State 

having a coastline (measured from the 

nearest point) no more than 15 miles 

from the geographic center of a qualified 

project area. 

Facility means an installation that is 

permanently or temporarily attached to 

the seabed of the OCS. Facilities include 

any structures; devices; appurtenances; 

gathering, transmission, and 

distribution cables; pipelines; and 

permanently moored vessels. Any group 

of OCS installations interconnected 

with walkways, or any group of 

installations that includes a central or 

primary installation with one or more 

satellite or secondary installations, is a 

single facility. The MMS may decide 

that the complexity of the installations 

justifies their classification as separate 

facilities. 

Geographic center of a project means 

the centroid (geometric center point) of 

a qualified project area. The centroid 

represents the point that is the weighted 

average of coordinates of the same 

dimension within the mapping system, 

with the weights determined by the 

density function of the system. For 

example, in the case of a project area 

shaped as a rectangle or other 

parallelogram, the geographic center 

would be that point where lines 

between opposing corners intersect. The 

geographic center of a project could be 

outside the project area itself if that area 

is irregularly shaped. 

Governor means the Governor of a 

State or the person or entity lawfully 

designated by or under State law to 

exercise the powers granted to a 

Governor. 

Grant means a right-of-way, right-ofuse and easement, or alternate use rightof-use and easement issued under the 

provisions of this part. 

Human environment means the 

physical, social, and economic 

components, conditions, and factors 

that interactively determine the state, 

condition, and quality of living 

conditions, employment, and health of 

those affected, directly or indirectly, by 

activities occurring on the OCS. 

Income, unless clearly specified to the 

contrary, refers to the money received 

by the project owner or holder of the 

lease or grant issued under this part. 

The term does not mean that project 

receipts exceed project expenses. 

Lease means an agreement 

authorizing the use of a designated 

portion of the OCS for activities allowed 

under this part. The term also means the 

area covered by that agreement, when 

the context requires. 

Lessee means the holder of a lease, an 

MMS-approved assignee, and, when 

describing the conduct required of 

parties engaged in activities on the 

lease, it also refers to the operator and 

all persons authorized by the holder of 

the lease or operator to conduct 

activities on the lease. 

Limited lease means a lease issued 

under this part that specifies the terms 

and conditions under which a person 

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may conduct activities on the OCS that 

support the production of energy, but do 

not result in the production of 

electricity or other energy product for 

sale, distribution, or other commercial 

use exceeding a limit specified in the 

lease. 

Marine environment means the 

physical, atmospheric, and biological 

components, conditions, and factors 

that interactively determine the 

productivity, state, condition, and 

quality of the marine ecosystem. These 

include the waters of the high seas, the 

contiguous zone, transitional and 

intertidal areas, salt marshes, and 

wetlands within the coastal zone and on 

the OCS. 

Miles mean nautical miles, as opposed 

to statute miles. 

MMS means the Minerals 

Management Service of the Department 

of the Interior. 

Natural resources include, without 

limiting the generality thereof, 

renewable energy, oil, gas, and all other 

minerals (as defined in section 2(q) of 

the OCS Lands Act), and marine animal 

and marine plant life. 

Operator means the individual, 

corporation, or association having 

control or management of activities on 

the lease or grant under this part. The 

operator may be a lessee, grant holder, 

or a contractor designated by the lessee 

or holder of a grant under this part. 

Outer Continental Shelf (OCS) means 

all submerged lands lying seaward and 

outside of the area of lands beneath 

navigable waters, as defined in section 

2 of the Submerged Lands Act (43 

U.S.C. 1301), whose subsoil and seabed 

appertain to the United States and are 

subject to its jurisdiction and control. 

Person means, in addition to a natural 

person, an association (including 

partnerships and joint ventures); a 

Federal agency; a State; a political 

subdivision of a State; a Native 

American tribal government; or a 

private, public, or municipal 

corporation. 

Project, for the purposes of defining 

the source of revenues to be shared, 

means a lease ROW, RUE, or Alternate 

Use RUE on which the activities 

authorized under this part are 

conducted on the OCS. The term 

‘‘project’’ may be used elsewhere in this 

rule to refer to these same authorized 

activities, the facilities used to conduct 

these activities, or to the geographic area 

of the project, i.e., the project area. 

Project area means the geographic 

surface leased, or granted, for the 

purpose of a specific project. If OCS 

acreage is granted for a project under 

some form of agreement other than a 

lease (i.e., a ROW, RUE, or Alternate 

Use RUE issued under this part), the 

Federal acreage granted would be 

considered the project area. To avoid 

distortions in the calculation of the 

geometric center of the project area, 

project easements issued under this part 

are not considered part of the qualified 

project’s area. 

Project easement means an easement 

to which, upon approval of your 

Construction and Operations Plan (COP) 

or General Activities Plan (GAP), you 

are entitled as part of the lease for the 

purpose of installing, gathering, 

transmission, and distribution cables, 

pipelines, and appurtenances on the 

OCS as necessary for the full enjoyment 

of the lease. 

Renewable Energy means energy 

resources other than oil and gas and 

minerals as defined in 30 CFR part 280. 

Such resources include, but are not 

limited to, wind, solar, and ocean 

waves, tides, and current. 

Revenues mean bonuses, rents, 

operating fees, and similar payments 

made in connection with a project or 

project area. It does not include 

administrative fees such as those 

assessed for cost recovery, civil 

penalties, and forfeiture of financial 

assurance. 

Right-of-use and easement (RUE) 

grant means an easement issued by 

MMS under this part that authorizes use 

of a designated portion of the OCS to 

support activities on a lease or other use 

authorization for renewable energy 

activities. The term also means the area 

covered by the authorization. 

Right-of-way (ROW) grant means an 

authorization issued by MMS under this 

part to use a portion of the OCS for the 

construction and use of a cable or 

pipeline for the purpose of gathering, 

transmitting, distributing, or otherwise 

transporting electricity or other energy 

product generated or produced from 

renewable energy, but does not 

constitute a project easement under this 

part. The term also means the area 

covered by the authorization. 

Secretary means the Secretary of the 

Interior or an official authorized to act 

on the Secretary’s behalf. 

Significant archaeological resource 

means an archaeological resource that 

meets the criteria of significance for 

eligibility for listing in the National 

Register of Historic Places, as defined in 

36 CFR 60.4 or its successor. 

Site assessment activities mean those 

initial activities conducted to 

characterize a site on the OCS, such as 

resource assessment surveys (e.g., 

meteorological and oceanographic) or 

technology testing, involving the 

installation of bottom-founded facilities. 

You and your refer to an applicant, 

lessee, the operator, a designated agent 

of the lessee(s) or designated operator, 

ROW grant holder, RUE grant holder, or 

Alternate Use RUE grant holder under 

this part, or the possessive of each, 

depending on the context. 

We, us, and our refer to the Minerals 

Management Service of the Department 

of the Interior, or its possessive, 

depending on the context. 

§ 285.113 How will data and information 

obtained by MMS under this part be 

disclosed to the public? 

(a) The MMS will make data and 

information available in accordance 

with the requirements and subject to the 

limitations of the Freedom of 

Information Act (FOIA) (5 U.S.C. 552), 

the regulations contained in 43 CFR part 

2 (Records and Testimony). 

(b) The MMS will not release such 

data and information that we have 

determined is exempt from disclosure 

under exemption 4 of FOIA. We will 

review such data and information and 

objections of the submitter by the 

following schedule to determine 

whether release at that time will result 

in substantial competitive harm or 

disclosure of trade secrets. 

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(c) After considering any objections 

from the submitter, if we determine that 

release of such data and information 

will result in: 

(1) No substantial competitive harm 

or disclosure of trade secrets, then the 

data and information will be released. 

(2) Substantial competitive harm or 

disclosure of trade secrets, then the data 

and information will not be released at 

that time but will be subject to further 

review every 3 years thereafter. 

§ 285.114 Paperwork Reduction Act 

statements—information collection. 

(a) The Office of Management and 

Budget (OMB) has approved the 

information collection requirements in 

30 CFR part 285 under 44 U.S.C. 3501, 

et seq., and assigned OMB Control 

Number 1010–0176. The table in 

paragraph (e) of this section lists the 

subpart in the rule requiring the 

information and its title, summarizes 

the reasons for collecting the 

information, and summarizes how MMS 

uses the information. 

(b) Respondents are primarily 

renewable energy applicants, lessees, 

ROW grant holders, RUE grant holders, 

Alternate Use RUE grant holders, and 

operators. The requirement to respond 

to the information collection in this part 

is mandated under subsection 8(p) of 

the OCS Lands Act. Some responses are 

also required to obtain or retain a 

benefit, or may be voluntary. 

(c) The Paperwork Reduction Act of 

1995 (44 U.S.C. 3501 et seq.) requires us 

to inform the public that an agency may 

not conduct or sponsor, and you are not 

required to respond to, a collection of 

information unless it displays a 

currently valid OMB control number. 

(d) Comments regarding any aspect of 

the collections of information under this 

part, including suggestions for reducing 

the burden should be sent to the 

Information Collection Clearance 

Officer, Minerals Management Service, 

Mail Stop 5438, 1849 C Street, NW., 

Washington, DC 20240. 

(e) The MMS is collecting this 

information for the reasons given in the 

following table: 

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BILLING CODE 4310–MR–C § 285.115 Documents incorporated by 

reference. 

(a) The MMS is incorporating by 

reference the documents listed in the 

table in paragraph (e) of this section. 

The Director of the Federal Register has 

approved this incorporation by 


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reference according to 5 U.S.C. 552(a) 

and 1 CFR part 51. 

(1) The MMS will publish, as a rule, 

any changes in the documents 

incorporated by reference in the Federal 

Register. 

(2) The MMS may amend by rule the 

list of industry standards incorporated 

by reference of the document effective 

without prior opportunity for public 

comment when MMS determines that 

the revisions to a document result in 

safety improvements or represent new 

industry standard technology and do 

not impose undue costs on the affected 

parties; and 

(3) The MMS may make a rule, 

effective immediately, amending the list 

of industry standards incorporated by 

reference if it determines good cause 

exists for doing so under 5 U.S.C. 553. 

(b) The MMS is incorporating each 

document or specific portion by 

reference in the sections noted. The 

entire document is incorporated by 

reference, unless the text of the 

corresponding sections in this part calls 

for compliance with specific portions of 

the listed documents. In each instance, 

the applicable document is the specific 

edition, or specific edition and 

supplement, or specific addition and 

addendum cited in this section. 

(c) You may comply with a later 

edition of a specific document 

incorporated by reference, only if: 

(1) You show that complying with the 

later edition provides a degree of 

protection, safety, or performance equal 

to or better than what would be 

achieved by compliance with the listed 

edition; and 

(2) You obtain the prior written 

approval for alternative compliance 

from the authorized MMS official. 

(d) You may inspect these documents 

at the Minerals Management Service, 

381 Elden Street, Room 3313, Herndon, 

Virginia, 703–787–1605; or at the 

National Archives and Records 

Administration (NARA). For 

information on the availability of this 

material at NARA, call 202–741–6030, 

or go to: http://www.archives.gov/ 

federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html You may obtain the 

documents from the publishing 

organizations at the addresses given in 

the following table: 

(e) This paragraph lists documents 

incorporated by reference. To easily 

reference text of the corresponding 

sections with the list of documents 

incorporated by reference, the list is in 

alphanumerical order by organization 

and document. 

§ 285.116 Requests for information on the 

state of the offshore renewable energy 

industry. 

(a) The Director may, from time to 

time, and at his discretion, solicit 

information from industry and other 

relevant stakeholders (including State 

and local agencies), as necessary, to 

evaluate the state of the offshore 

renewable energy industry, including 

the identification of potential challenges 

or obstacles to its continued 

development. Such requests for 

information may relate to the 

identification of environmental, 

technical, regulatory, or economic 

matters that promote or detract from 

continued development of renewable 

energy technologies on the OCS. From 

the information received, the Director 

may evaluate potential refinements to 

the OCS Alternative Energy Program 

that promote development of the 

industry in a safe and environmentally 

responsible manner, and that ensure fair 

value for use of the Nation’s OCS. 

(b) The MMS may make such requests 

for information on a regional basis, and 

may tailor the requests to specific types 

of renewable energy technologies. 

(c) The MMS will publish such 

requests for information by the Director 

in the Federal Register. 

§ 285.117 [Reserved] 

§ 285.118 What are my appeal rights? 

(a) Any party adversely affected by an 

MMS official’s final decision or order 

issued under the regulations of this part 

may appeal that decision or order to the 

Interior Board of Land Appeals. The 

appeal must conform with the 

procedures found in 30 CFR part 290 

and 43 CFR part 4, subpart E. Appeal of 

a final decision for bid acceptance is 

covered under paragraph (c) of this 

section. 

(b) A decision will remain in full 

force and effect during the period in 

which an appeal may be filed and 

during an appeal, unless a stay is 

granted pursuant to 43 CFR part 4. 

(c) Our decision on a bid is the final 

action of the Department, except that an 

unsuccessful bidder may apply for 

reconsideration by the Director. 

(1) A bidder whose bid we reject may 

file a written request for reconsideration 

with the Director within 15 days of the 

date of the receipt of the notice of 

rejection, accompanied by a statement 

of reasons, with one copy to us. The 

Director will respond in writing either 

affirming or reversing the decision. 

(2) The delegation of review authority 

given to the Office of Hearings and 

Appeals does not apply to decisions on 

high bids for leases or grants under this 

part. 


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Subpart B—Issuance of OCS 

Renewable Energy Leases 

General Lease Information 

§ 285.200 What rights are granted with a 

lease issued under this part? 

(a) A lease issued under this part 

grants the lessee the right, subject to 

obtaining the necessary approvals, 

including but not limited to those 

required under the FERC hydrokinetic 

licensing process, and complying with 

all provisions of this part, to occupy, 

and install and operate facilities on, a 

designated portion of the OCS for the 

purpose of conducting: 

(1) Commercial activities; or 

(2) Other limited activities that 

support, result from, or relate to the 

production of energy from a renewable 

energy source. 

(b) A lease issued under this part 

confers on the lessee the right to one or 

more project easements without further 

competition for the purpose of installing 

gathering, transmission, and 

distribution cables; pipelines; and 

appurtenances on the OCS as necessary 

for the full enjoyment of the lease. 

(1) You must apply for the project 

easement as part of your COP or GAP, 

as provided under subpart F of this part; 

and 

(2) The MMS will incorporate your 

approved project easement in your lease 

as an addendum. 

(c) A commercial lease issued under 

this part may be developed in phases, 

with MMS approval as provided in 

§ 285.629. 

§ 285.201 How will MMS issue leases? 

The MMS will issue leases on a 

competitive basis, as provided under 

§§ 285.210 through 285.225. However, if 

we determine after public notice of a 

proposed lease that there is no 

competitive interest, we will issue 

leases noncompetitively, as provided 

under §§ 285.230 and 285.232. We will 

issue leases on forms approved by MMS 

and will include terms, conditions, and 

stipulations identified and developed 

through the process set forth in 

§§ 285.211 and 285.231. 

§ 285.202 What types of leases will MMS 

issue? 

The MMS may issue leases on the 

OCS for the assessment and production 

of renewable energy and may authorize 

a combination of specific activities. We 

may issue commercial leases or limited 

leases. 

§ 285.203 With whom will MMS consult 

before issuance of a lease? 

For leases issued under this part, 

through either the competitive or 

noncompetitive process, MMS prior to 

issuing the lease, will coordinate and 

consult with relevant Federal agencies 

(including, in particular, those agencies 

involved in planning activities that are 

undertaken to avoid conflicts among 

users and maximize the economic and 

ecological benefits of the OCS, 

including multifaceted spatial planning 

efforts), the Governor of any affected 

State, the executive of any affected local 

government, and any affected Indian 

tribe, as directed by subsections 8(p)(4) 

and (7) of the OCS Lands Act or other 

relevant Federal laws. Federal statutes 

that require us to consult with or 

respond to findings include the 

Endangered Species Act (ESA), and the 

Magnuson-Stevens Fishery 

Conservation and Management Act 

(MSA). 

§ 285.204 What areas are available for 

leasing consideration? 

The MMS may offer any appropriately 

platted area of the OCS, as provided in 

§ 285.205, for a renewable energy lease, 

except any area within the exterior 

boundaries of any unit of the National 

Park System, National Wildlife Refuge 

System, National Marine Sanctuary 

System, or any National Monument. 

§ 285.205 How will leases be mapped? 

The MMS will prepare leasing maps 

and official protraction diagrams of 

areas of the OCS. The areas included in 

each lease will be in accordance with 

the appropriate leasing map or official 

protraction diagram. 

§ 285.206 What is the lease size? 

(a) The MMS will determine the size 

for each lease based on the area required 

to accommodate the anticipated 

activities. The processes leading to both 

competitive and noncompetitive 

issuance of leases will provide public 

notice of the lease size adopted. We will 

delineate leases by using mapped OCS 

blocks or portions, or aggregations of 

blocks. 

(b) The lease size includes the 

minimum area that will allow the lessee 

sufficient space to develop the project 

and manage activities in a manner that 

is consistent with the provisions of this 

part. The lease may include whole lease 

blocks or portions of a lease block. 

§§ 285.207—285.209 [Reserved] 

Competitive Lease Process 

§ 285.210 How does MMS initiate the 

competitive leasing process? 

The MMS may publish in the Federal 

Register a public notice of Request for 

Interest to assess interest in leasing all 

or part of the OCS for activities 

authorized in this part. The MMS will 

consider information received in 

response to a Request for Interest to 

determine whether there is competitive 

interest for scheduling sales and issuing 

leases. We may prepare and issue a 

national, regional, or more specific 

schedule of lease sales pertaining to one 

or more types of renewable energy. 

§ 285.211 What is the process for 

competitive issuance of leases? 

The MMS will use auctions to award 

leases on a competitive basis. We will 

publish details of the process to be 

employed for each lease sale auction in 

the Federal Register. For each lease 

sale, we will publish a Proposed Sale 

Notice and a Final Sale Notice. 

Individual lease sales will include steps 

such as: 

(a) Call for Information and 

Nominations (Call). The MMS will 

publish in the Federal Register Calls for 

Information and Nominations for 

leasing in specified areas. The comment 

period following issuance of a Call will 

be 45 days. In this document, we may: 

(1) Request comments on areas which 

should receive special consideration 

and analysis; 

(2) Request comments concerning 

geological conditions (including bottom 

hazards); archaeological sites on the 

seabed or nearshore; multiple uses of 

the proposed leasing area (including 

navigation, recreation, and fisheries); 

and other socioeconomic, biological, 

and environmental information; and 

(3) Suggest areas to be considered by 

the respondents for leasing. 

(b) Area Identification. The MMS will 

identify areas for environmental 

analysis and consideration for leasing. 

We will do this in consultation with 

appropriate Federal agencies, States, 

local governments, affected Indian 

tribes, and other interested parties. 

(1) We may consider for lease those 

areas nominated in response to the Call 

for Information and Nominations, 

together with other areas that MMS 

determines are appropriate for leasing. 

(2) We will evaluate the potential 

effect of leasing on the human, marine, 

and coastal environments, and develop 

measures to mitigate adverse impacts, 

including lease stipulations. 

(3) We will consult to develop 

measures, including lease stipulations 

and conditions, to mitigate adverse 

impacts on the environment; and 

(4) We may hold public hearings on 

the environmental analysis after 

appropriate notice. 

(c) Proposed Sale Notice. The MMS 

will publish the Proposed Sale Notice in 

the Federal Register and send it to the 

Governor of any affected State and the 

executive of any local government that 

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might be affected. The comment period 

following issuance of a Proposed Sale 

Notice will be 60 days. 

(d) Final Sale Notice. The MMS will 

publish the Final Sale Notice in the 

Federal Register at least 30 days before 

the date of the sale. 

§ 285.212 What is the process MMS will 

follow if there is reason to believe that 

competitors have withdrawn before the 

Final Sale Notice is issued? 

The MMS may decide to end the 

competitive process before the Final 

Sale Notice if we have reason to believe 

that competitors have withdrawn and 

competition no longer exists. We will 

issue a second public notice of Request 

for Interest and consider comments 

received to confirm that there is no 

competitive interest. 

(a) If, after reviewing comments in 

response to the notice of Request for 

Interest, MMS determines that there is 

no competitive interest in the lease area, 

and one party wishes to acquire a lease, 

we will discontinue the competitive 

process and will proceed with the 

noncompetitive process set forth in 

§ 285.231(d) through (i). Under the 

noncompetitive process, the acquisition 

fee specified in § 285.502(a) must be 

submitted with the Site Assessment 

Plan (SAP) or GAP. 

(b) If, after reviewing comments in 

response to the notice of Request for 

Interest, MMS determines that 

competitive interest in the lease area 

continues to exist, we will continue 

with the competitive process set forth in 

§ 285.211 through 285.225. 

§ 285.213 What must I submit in response 

to a Request for Interest or a Call for 

Information and Nominations? 

If you are a potential lessee, when you 

respond to a Request for Interest or a 

Call, your response must include the 

following items: 

(a) The area of interest for a possible 

lease. 

(b) A general description of your 

objectives and the facilities that you 

would use to achieve those objectives. 

(c) A general schedule of proposed 

activities, including those leading to 

commercial operations. 

(d) Available and pertinent data and 

information concerning renewable 

energy and environmental conditions in 

the area of interest, including energy 

and resource data and information used 

to evaluate the area of interest. The 

MMS will withhold trade secrets and 

commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA and as provided in § 285.113. 

(e) Documentation showing that you 

are qualified to hold a lease, as specified 

in § 285.107. 

(f) Any other information requested 

by MMS in the Federal Register notice. 

§ 285.214 What will MMS do with 

information from the Requests for 

Information or Calls for Information and 

Nominations? 

The MMS will use the information 

received in response to the Requests or 

Calls to: 

(a) Identify the lease area; 

(b) Develop options for the 

environmental analysis and leasing 

provisions (stipulations, payments, 

terms, and conditions); and 

(c) Prepare appropriate 

documentation to satisfy applicable 

Federal requirements, such as NEPA, 

CZMA, the ESA, and the MSA. 

§ 285.215 What areas will MMS offer in a 

lease sale? 

The MMS will offer the areas for 

leasing determined through the process 

set forth in § 285.211 of this part. We 

will not accept nominations after the 

Call for Information and Nominations 

closes. 

§ 285.216 What information will MMS 

publish in the Proposed Sale Notice and 

Final Sale Notice? 

For each competitive lease sale, MMS 

will publish a Proposed Sale Notice and 

a Final Sale Notice in the Federal 

Register. In the Proposed Sale Notice, 

we will request public comment on the 

items listed in this section. We will 

consider all public comments received 

in developing the final lease sale terms 

and conditions. We will publish the 

final terms and conditions in the Final 

Sale Notice. The Proposed Sale Notice 

and Final Sale Notice will include, or 

describe the availability of, information 

pertaining to: 

(a) The area available for leasing. 

(b) Proposed and final lease 

provisions and conditions, including, 

but not limited to: 

(1) Lease size; 

(2) Lease term; 

(3) Payment requirements; 

(4) Performance requirements; and 

(5) Site-specific lease stipulations. 

(c) Auction details, including: 

(1) Bidding procedures and systems; 

(2) Minimum bid; 

(3) Deposit amount; 

(4) The place and time for filing bids 

and the place, date, and hour for 

opening bids; 

(5) Lease award method; and 

(6) Bidding or application 

instructions. 

(d) The official MMS lease form to be 

used or a reference to that form. 

(e) Criteria MMS will use to evaluate 

competing bids or applications and how 

the criteria will be used in decisionmaking for awarding a lease. 

(f) Award procedures, including how 

and when MMS will award leases and 

how MMS will handle unsuccessful 

bids or applications. 

(g) Procedures for appealing the lease 

issuance decision. 

(h) Execution of the lease instrument. 

§§ 285.217–285.219 [Reserved] 

Competitive Lease Award Process 

§ 285.220 What auction format may MMS 

use in a lease sale? 

(a) Except as provided in § 285.231, 

we will hold competitive auctions to 

award renewable energy leases and will 

use one of the following auction 

formats, as determined through the lease 

sale process and specified in the 

Proposed Sale Notice and in the Final 

Sale Notice: 

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(b) You must submit your bid and a 

deposit as specified in §§ 285.500 and 

285.501 to cover the bid for each lease 

area, according to the terms specified in 

the Final Sale Notice. 

§ 285.221 What bidding systems may MMS 

use for commercial leases and limited 

leases? 

(a) For commercial leases, we will 

specify minimum bids in the Final Sale 

Notice and use one of the following 

bidding systems, as specified in the 

Proposed Sale Notice and in the Final 

Sale Notice: 

(b) For limited leases, the bid variable 

will be a cash bonus, with a minimum 

bid as we specify in the Final Sale 

Notice. 

§ 285.222 What does MMS do with my bid? 

(a) If sealed bidding is used: 

(1) We open the sealed bids at the 

place, date, and hour specified in the 

Final Sale Notice for the sole purpose of 

publicly announcing and recording the 

bids. We do not accept or reject any bids 

at that time. 

(2) We reserve the right to reject any 

and all high bids, including a bid for 

any proposal submitted under the 

multiple-factor bidding format, 

regardless of the amount offered or 

bidding system used. The reasons for 

the rejection of a winning bid may 

include, but are not necessarily limited 

to, insufficiency, illegality, anticompetitive behavior, administrative 

error, and the presence of unusual 

bidding patterns. We intend to accept or 

reject all high bids within 90 days, but 

we may extend that time if necessary. 

(b) If we use ascending bidding, we 

may, in the Final Sale Notice, reserve 

the right to accept the winning bid 

solely based on its being the highest bid 

submitted by a qualified bidder 

(qualified to be an OCS lessee under 

§ 285.107). 

(c) If we use two-stage bidding and 

the auction concludes with 


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(i) an ascending bidding stage, the 

winning bid will be determined as 

stated in paragraph (b) of this section; or 

(ii) a sealed bidding stage, the 

winning bid will be determined as 

stated in paragraph (a) of this section. 

(d) If we use multiple-factor bidding, 

determination of the winning bid for 

any proposal submitted will be made by 

a panel composed of members selected 

by MMS. The details of the process will 

be described in the Final Sale Notice. 

(e) We will send a written notice of 

our decision to accept or reject bids to 

all bidders whose deposits we hold. 

§ 285.223 What does MMS do if there is a 

tie for the highest bid? 

(a) Unless otherwise specified in the 

Final Sale Notice, except in the first 

stage of a two-stage bidding auction, if 

more than one bidder on a lease submits 

the same high bid amount, the winning 

bidder will be determined by a further 

round or stage of bidding as described 

in the Final Sale Notice. 

(b) The winning bidder will be subject 

to final confirmation following 

determination of bid adequacy. 

§ 285.224 What happens if MMS accepts 

my bid? 

If we accept your bid, we will send 

you a notice with three copies of the 

lease form. 

(a) Within 10 business days after you 

receive the lease copies, you must: 

(1) Execute the lease; 

(2) File financial assurance as 

required under §§ 285.515 through 

285.537; and 

(3) Pay the balance of the bonus bid 

as specified in the lease sale notice. 

(b) Within 45 days after you receive 

the lease copies, you must pay the first 

6 months rent as required in § 285.503. 

(c) When you execute three copies of 

the lease and return the copies to us, we 

will execute the lease on behalf of the 

United States and send you one fully 

executed copy. 

(d) You will forfeit your deposit if you 

do not execute and return the lease 

within 10 business days of receipt, or 

otherwise fail to comply with applicable 

regulations or terms of the Final Sale 

Notice. 

(e) We may extend the 10 business 

day time period for executing and 

returning the lease if we determine the 

delay to be caused by events beyond 

your control. 

(f) We reserve the right to withdraw 

an OCS area in which we have held a 

lease sale before you and MMS execute 

the lease in that area. If we exercise this 

right, we will refund your bid deposit, 

without interest. 

(g) If the awarded lease is executed by 

an agent acting on behalf of the bidder, 

the bidder must submit, along with the 

executed lease, written evidence that 

the agent is authorized to act on behalf 

of the bidder. 

(h) The MMS will consider the 

highest submitted qualified bid to be the 

winning bid when bidding occurs under 

the systems described in 

§§ 285.221(a)(1) through (5). We will 

determine the winning bid for proposals 

submitted under the multiple-factor 

bidding format on the basis of selection 

by the panel as specified in § 285.222(d) 

when the bidding system under 

§ 285.221(a)(6) is used. We will refund 

the deposit on all other bids. 

§ 285.225 What happens if my bid is 

rejected, and what are my appeal rights? 

(a) If we reject your bid, we will 

provide a written statement of the 

reasons and refund any money 

deposited with your bid, without 

interest. 

(b) You may ask the MMS Director for 

reconsideration, in writing, within 15 

business days of bid rejection, under 

§ 285.118(c)(1). We will send you a 

written response either affirming or 

reversing the rejection. 

§§ 285.226–285.229 [Reserved] 

Noncompetitive Lease Award Process 

§ 285.230 May I request a lease if there is 

no Call? 

You may submit an unsolicited 

request for a commercial lease or a 

limited lease under this part. Your 

unsolicited request must contain the 

following information: 

(a) The area you are requesting for 

lease. 

(b) A general description of your 

objectives and the facilities that you 

would use to achieve those objectives. 

(c) A general schedule of proposed 

activities including those leading to 

commercial operations. 

(d) Available and pertinent data and 

information concerning renewable 

energy and environmental conditions in 

the area of interest, including energy 

and resource data and information used 

to evaluate the area of interest. The 

MMS will withhold trade secrets and 

commercial or financial information 

that is privileged or confidential from 

public disclosure under exemption 4 of 

the FOIA and as provided in § 285.113. 

(e) If available from the appropriate 

State or local government authority, a 

statement that the proposed activity 

conforms with State and local energy 

planning requirements, initiatives, or 

guidance. 

(f) Documentation showing that you 

meet the qualifications to become a 

lessee, as specified in § 285.107. 

(g) An acquisition fee, as specified in 

§ 285.502(a). 

§ 285.231 How will MMS process my 

unsolicited request for a noncompetitive 

lease? 

(a) The MMS will consider 

unsolicited requests for a lease on a 

case-by-case basis and may issue a lease 

noncompetitively in accordance with 

this part. We will not consider an 

unsolicited request for a lease under this 

part that is proposed in an area of the 

OCS that is scheduled for a lease sale 

under this part. 

(b) The MMS will issue a public 

notice of a request for interest relating 

to your proposal and consider 

comments received to determine if 

competitive interest exists. 

(c) If MMS determines that 

competitive interest exists in the lease 

area: 

(1) The MMS will proceed with the 

competitive process set forth in 

§§ 285.210 through 285.225; 

(2) If you submit a bid for the lease 

area in a competitive lease sale, your 

acquisition fee will be applied to the 

deposit for your bonus bid; and 

(3) If you do not submit a bid for the 

lease area in a competitive lease sale, 

MMS will not refund your acquisition 

fee. 

(d) If MMS determines that there is no 

competitive interest in a lease: 

(1) We will publish a notice, in the 

Federal Register, of such determination; 

and 

(2) You must submit within 60 days 

of the date of the notice to MMS: 

(i) For a commercial lease, a SAP, as 

described in §§ 285.605 through 

285.613; or 

(ii) For a limited lease, a GAP, as 

described in §§ 285.640 through 

285.648. 

(e) The MMS will coordinate and 

consult with affected Federal agencies, 

State, and local governments, and 

affected Indian tribes in the review of 

noncompetitive lease requests and 

associated plans. 

(f) If we approve or approve with 

conditions your SAP or GAP, we may 

offer you a noncompetitive lease. 

(g) If you accept the terms and 

conditions of the lease, then we will 

issue the lease, and you must comply 

with all terms and conditions of your 

lease and all applicable provisions of 

this part. If we issue you a lease, we will 

send you a notice with 3 copies of the 

lease form. 

(1) Within 10 business days after you 

receive the lease copies you must: 

(i) Execute the lease; 

(ii) File financial assurance as 

required under §§ 285.515 through 

285.537; and 

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(2) Within 45 days after you receive 

the lease copies, you must pay the first 

6-months rent, as required in § 285.503. 

(h) The MMS will publish in the 

Federal Register a notice announcing 

the issuance of your lease. 

(i) If you do not accept the terms and 

conditions, MMS will not issue a lease, 

and we will not refund your acquisition 

fee. 

§ 285.232 May I acquire a lease 

noncompetitively after responding to a 

Request for Interest or Call for Information 

and Nominations under § 285.213? 

(a) If you submit an area of interest for 

a possible lease and MMS receives no 

competing submissions in response to 

the RFI or Call, we may inform you that 

there does not appear to be competitive 

interest, and ask if you wish to proceed 

with acquiring a lease. 

(b) If you wish to proceed with 

acquiring a lease, you must submit your 

acquisition fee as specified in 

§ 285.502(a). 

(c) After receiving the acquisition fee, 

MMS will follow the process outlined in 

§ 285.231(b) through (i). 

§§ 285.233–285.234 [Reserved] 

Commercial and Limited Lease Terms 

§ 285.235 If I have a commercial lease, 

how long will my lease remain in effect? 

(a) For commercial leases, the lease 

terms and applicable automatic 

extensions are as shown in the 

following table: 

BILLING CODE 4310–MR–P 

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BILLING CODE 4310–MR–C 

(b) If you do not timely submit a SAP, 

COP, or SAP/COP, as appropriate, you 

may request additional time to extend 

the preliminary or site assessment term 

of your commercial lease that includes 

a revised schedule for submission of the 

plan, as appropriate. 

§ 285.236 If I have a limited lease, how 

long will my lease remain in effect? 

(a) For limited leases, the lease terms 

are as shown in the following table: 


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(b) If you do not timely submit a GAP, 

you may request additional time to 

extend the preliminary term of your 

limited lease that includes a revised 

schedule for submission of a GAP. 

§ 285.237 What is the effective date of a 

lease? 

(a) A lease issued under this part must 

be dated and becomes effective as of the 

first day of the month following the date 

a lease is signed by the lessor. 

(b) If the lessee submits a written 

request and MMS approves, a lease may 

be dated and become effective the first 

day of the month in which it is signed 

by the lessor. 

§ 285.238 Are there any other renewable 

energy research activities that will be 

allowed on the OCS? 

(a) The Director may issue OCS leases, 

ROW grants, and RUE grants to a 

Federal agency or a State for renewable 

energy research activities that support 

the future production, transportation, or 

transmission of renewable energy. 

(b) In issuing leases, ROW grants, and 

RUE grants to a Federal agency or a 

State on the OCS for renewable energy 

research activities under this provision, 

MMS will coordinate and consult with 

other relevant Federal agencies, any 

other affected State(s), affected local 

government executives, and affected 

Indian tribes. 

(c) The MMS may issue leases, RUEs, 

and ROWs for research activities 

managed by a Federal agency or a State 

only in areas for which the Director has 

determined, after public notice and 

opportunity to comment, that no 

competitive interest exists. 

(d) The Director and the head of the 

Federal agency or the Governor of a 

requesting State, or their authorized 

representatives, will negotiate the terms 

and conditions of such renewable 

energy leases, RUEs, or ROWs under 

this provision on a case-by-case basis. 

The framework for such negotiations, 

and standard terms and conditions of 

such leases, RUEs, or ROWs may be set 

forth in a memorandum of agreement 

(MOA) or other agreement between 

MMS and a Federal agency or a State. 

The MOA must include the agreement 

of the head of the Federal agency or the 

Governor to assure that all 

subcontractors comply with these 

regulations, other applicable laws, and 

terms and conditions of such leases or 

grants. 

(e) Any lease, RUE, or ROW that MMS 

issues to a Federal agency or to a State 

that authorizes access to an area of the 

OCS for research activities managed by 

a Federal agency or a State must 

include: 

(1) Requirements to comply with all 

applicable Federal laws; and 

(2) Requirements to comply with 

these regulations, except as otherwise 

provided in the lease or grant. 

(f) The MMS will issue a public notice 

of any lease, RUE, ROW issued to a 

Federal agency or to a State, or an 

approved MOA for such research 

activities. 

(g) The MMS will not charge any fees 

for the purpose of ensuring a fair return 

for the use of such research areas on the 

OCS. 

Subpart C—Rights-of-Way Grants and 

Rights-of-Use and Easement Grants 

for Renewable Energy Activities 

ROW Grants and RUE Grants 

§ 285.300 What types of activities are 

authorized by ROW grants and RUE grants 

issued under this part? 

(a) An ROW grant authorizes the 

holder to install on the OCS cables, 

pipelines, and associated facilities that 

involve the transportation or 

transmission of electricity or other 

energy product from renewable energy 

projects. 

(b) An RUE grant authorizes the 

holder to construct and maintain 

facilities or other installations on the 

OCS that support the production, 

transportation, or transmission of 

electricity or other energy product from 

any renewable energy resource. 

(c) You do not need an ROW grant or 

RUE grant for a project easement 

authorized under § 285.200(b) to serve 

your lease. 

§ 285.301 What do ROW grants and RUE 

grants include? 

(a) An ROW grant: 


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(1) Includes the full length of the 

corridor on which a cable, pipeline, or 

associated facility is located; 

(2) Is 200 feet (61 meters) in width, 

centered on the cable or pipeline, unless 

safety and environmental factors during 

construction and maintenance of the 

associated cable or pipeline require a 

greater width; and 

(3) For the associated facility, is 

limited to the area reasonably necessary 

for a power or pumping station or other 

accessory facility. 

(b) An RUE grant includes the site on 

which a facility or other structure is 

located and the areal extent of anchors, 

chains, and other equipment associated 

with a facility or other structure. The 

specific boundaries of an RUE will be 

determined by MMS on a case-by-case 

basis and set forth in each RUE grant. 

§ 285.302 What are the general 

requirements for ROW grant and RUE grant 

holders? 

(a) To acquire an ROW grant or RUE 

grant you must provide evidence that 

you meet the qualifications as required 

in § 285.107. 

(b) An ROW grant or RUE grant is 

subject to the following conditions: 

(1) The rights granted will not prevent 

the granting of other rights by the 

United States, either before or after the 

granting of the ROW or RUE, provided 

that any subsequent authorization 

issued by MMS in the area of a 

previously issued ROW grant or RUE 

grant may not unreasonably interfere 

with activities approved or impede 

existing operations under such a grant; 

and 

(2) The holder agrees that the United 

States, its lessees, or other ROW grant or 

RUE grant holders may use or occupy 

any part of the ROW grant or RUE grant 

not actually occupied or necessarily 

incident to its use for any necessary 

activities. 

§ 285.303 How long will my ROW grant or 

RUE grant remain in effect? 

Your ROW grant or RUE grant will 

remain in effect for as long as the 

associated activities are properly 

maintained and used for the purpose for 

which the grant was made, unless 

otherwise expressly stated in the grant. 

§ 285.304 [Reserved] 

Obtaining ROW Grants and RUE 

Grants 

§ 285.305 How do I request an ROW grant 

or RUE grant? 

You must submit to MMS one paper 

copy and one electronic copy of a 

request for a new or modified ROW 

grant or RUE grant. You must submit a 

separate request for each ROW grant or 

RUE grant you are requesting. The 

request must contain the following 

information: 

(a) The area you are requesting for a 

ROW grant or RUE grant. 

(b) A general description of your 

objectives and the facilities that you 

would use to achieve those objectives. 

(c) A general schedule of proposed 

activities. 

(d) Pertinent information concerning 

environmental conditions in the area of 

interest. 

§ 285.306 What action will MMS take on my 

request? 

The MMS will consider requests for 

ROW grants and RUE grants on a caseby-case basis and may issue a grant 

competitively, as provided in § 285.308, 

or noncompetitively if we determine 

after public notice that there is no 

competitive interest. The MMS will 

coordinate and consult with relevant 

Federal agencies, with the Governor of 

any affected State, and the executive of 

any affected local government. 

(a) In response to an unsolicited 

request for a ROW grant or RUE grant, 

the MMS will first determine if there is 

competitive interest, as provided in 

§ 285.307. 

(b) If MMS determines that there is no 

competitive interest in a ROW grant or 

RUE grant, we will: 

(1) In consultation with you, establish 

the terms and conditions for the grant; 

(2) Require you to submit a GAP, as 

described in §§ 285.640 through 

285.648, within 60 days of the 

determination of no competitive 

interest; and 

(3) Evaluate your request for a 

noncompetitive grant and GAP 

simultaneously. 

(c) If we award your ROW grant or 

RUE grant competitively, you must 

submit and receive MMS approval of 

your GAP, as provided in §§ 285.640 

through 285.648. 

§ 285.307 How will MMS determine 

whether competitive interest exists for ROW 

grants and RUE grants? 

To determine whether or not there is 

competitive interest: 

(a) We will publish a public notice, 

describing the parameters of the project, 

to give affected and interested parties an 

opportunity to comment on the 

proposed ROW grant or RUE grant area. 

(b) We will evaluate any comments 

received on the notice and make a 

determination of the level of 

competitive interest. 

§ 285.308 How will MMS conduct an 

auction for ROW grants and RUE grants? 

(a) If MMS determines that there is 

competitive interest, we will: 

(1) Publish a notice of each grant 

auction in the Federal Register 

describing auction procedures, allowing 

interested persons 30 days to comment; 

and 

(2) Conduct a competitive auction for 

issuing the ROW grant or RUE grant. 

The auction process for ROW grants and 

RUE grants will be conducted following 

the same process for leases set forth in 

§§ 285.211 through 285.225. 

(b) If you are the successful bidder in 

an auction, you must pay the first year’s 

rent, as provided in § 285.316. 

§ 285.309 When will MMS issue a 

noncompetitive ROW grant or RUE grant? 

If we approve or approve with 

conditions your GAP, we may offer you 

a noncompetitive grant. 

(a) If you accept the terms and 

conditions of the grant, then we will 

issue the grant, and you must comply 

with all terms and conditions of your 

grant and all applicable provisions of 

this part. 

(b) If you do not accept the terms and 

conditions, MMS will not issue a grant. 

§ 285.310 What is the effective date of an 

ROW grant or RUE grant? 

Your ROW grant or RUE grant 

becomes effective on the date 

established by MMS on the ROW grant 

or RUE grant instrument. 

§§ 285.311–285.314 [Reserved] 

Financial Requirements for ROW 

Grants and RUE Grants 

§ 285.315 What deposits are required for a 

competitive ROW grant or RUE grant? 

(a) You must make a deposit, as 

required in § 285.501(a), regardless of 

whether the auction is a sealed-bid, oral, 

electronic, or other auction format. The 

MMS will specify in the sale notice the 

official to whom you must submit the 

payment, the time by which the official 

must receive the payment, and the 

forms of acceptable payment. 

(b) If your high bid is rejected, we will 

provide a written statement of reasons. 

(c) For all rejected bids, we will 

refund, without interest, any money 

deposited with your bid. 

§ 285.316 What payments are required for 

ROW grants or RUE grants? 

Before we issue the ROW grant or 

RUE grant, you must pay: 

(a) Any balance on accepted high bids 

to MMS, as provided in the sale notice. 

(b) An annual rent for the first year of 

the grant, as specified in § 285.508. 

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Subpart D—Lease and Grant 

Administration 

Noncompliance and Cessation Orders 

§ 285.400 What happens if I fail to comply 

with this part? 

(a) The MMS may take appropriate 

corrective action under this part if you 

fail to comply with applicable 

provisions of Federal law, the 

regulations in this part, other applicable 

regulations, any order of the Director, 

the provisions of a lease or grant issued 

under this part, or the requirements of 

an approved plan or other approval 

under this part. 

(b) The MMS may issue to you a 

notice of noncompliance if we 

determine that there has been a 

violation of the regulations in this part, 

any order of the Director, or any 

provision of your lease, grant or other 

approval issued under this part. When 

issuing a notice of noncompliance, 

MMS will serve you at your last known 

address. 

(c) A notice of noncompliance will 

tell you how you failed to comply with 

this part, any order of the Director, and/ 

or the provisions of your lease, grant or 

other approval, and will specify what 

you must do to correct the 

noncompliance and the time limits 

within which you must act. 

(d) Failure of a lessee, operator, or 

grant holder under this part to take the 

actions specified in a notice of 

noncompliance within the time limit 

specified provides the basis for MMS to 

issue a cessation order as provided in 

§ 285.401, and/or a cancellation of the 

lease or grant as provided in § 285.437. 

(e) If the MMS determines that any 

incident of noncompliance poses an 

imminent threat of serious or irreparable 

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, MMS may include with its 

notice of noncompliance an order 

directing you to take immediate 

remedial action to alleviate threats and 

to abate the violation and, when 

appropriate, a cessation order. 

(f) The MMS may assess civil 

penalties, as authorized by section 24 of 

the OCS Lands Act, if you fail to comply 

with any provision of this part or any 

term of a lease, grant, or order issued 

under the authority of this part, after 

notice of such failure and expiration of 

any reasonable period allowed for 

corrective action. Civil penalties will be 

determined and assessed in accordance 

with the procedures set forth in 30 CFR 

part 250, subpart N. 

(g) You may be subject to criminal 

penalties as authorized by section 24 of 

the OCS Lands Act. 

§ 285.401 When may MMS issue a 

cessation order? 

(a) The MMS may issue a cessation 

order during the term of your lease or 

grant when you fail to comply with an 

applicable law; regulation; order; or 

provision of a lease, grant, plan, or other 

MMS approval under this part. Except 

as provided in § 285.400(e), MMS will 

allow you a period of time to correct any 

noncompliance before issuing an order 

to cease activities. 

(b) A cessation order will set forth 

what measures you are required to take, 

including reports you are required to 

prepare and submit to MMS, to receive 

approval to resume activities on your 

lease or grant. 

§ 285.402 What is the effect of a cessation 

order? 

(a) Upon receiving a cessation order, 

you must cease all activities on your 

lease or grant, as specified in the order. 

The MMS may authorize certain 

activities during the period of the 

cessation order. 

(b) A cessation order will last for the 

period specified in the order or as 

otherwise specified by MMS. If MMS 

determines that the circumstances 

giving rise to the cessation order cannot 

be resolved within a reasonable time 

period, the Secretary may initiate 

cancellation of your lease or grant, as 

provided in § 285.437. 

(c) A cessation order does not extend 

the term of your lease or grant for the 

period you are prohibited from 

conducting activities. 

(d) You must continue to make all 

required payments on your lease or 

grant during the period a cessation order 

is in effect. 

§§ 285.403–285.404 [Reserved] 

Designation of Operator 

§ 285.405 How do I designate an operator? 

(a) If you intend to designate an 

operator who is not the lessee or grant 

holder, you must identify the proposed 

operator in your SAP (under 

§ 285.610(a)(3)), COP (under 

§ 285.626(b)(2)), or GAP (under 

§ 285.645(b)(3)), as applicable. If no 

operator is designated in a SAP, COP, or 

GAP, MMS will deem the lessee or grant 

holder to be the operator. 

(b) An operator must be designated in 

any SAP, COP, or GAP if there is more 

than one lessee or grant holder for any 

individual lease or grant. 

(c) Once approved in your plan, the 

designated operator is authorized to act 

on your behalf and required to perform 

activities necessary to comply with the 

OCS Lands Act, the lease or grant, and 

the regulations in this part. 

(d) You, or your designated operator, 

must immediately provide MMS with a 

written notification of change of address 

of the lessee or operator. 

(e) If there is a change in the 

designated operator, you must provide 

written notice to MMS and identify the 

new designated operator within 72 

hours on a form approved by MMS. The 

lessee(s) or grantee(s) is the operator and 

responsible for compliance until MMS 

approves designation of the new 

operator. 

(f) Designation of an operator under 

any lease or grant issued under this part 

does not relieve the lessee or grant 

holder of its obligations under this part 

or its lease or grant. 

(g) A designated operator performing 

activities on the lease must comply with 

all regulations governing those activities 

and may be held liable or penalized for 

any noncompliance during the time it 

was operator, notwithstanding its 

subsequent resignation. 

§ 285.406 Who is responsible for fulfilling 

lease and grant obligations? 

(a) When you are not the sole lessee 

or grantee, you and your co-lessee(s) or 

co-grantee(s) are jointly and severally 

responsible for fulfilling your 

obligations under the lease or grant and 

the provisions of this part, unless 

otherwise provided in these regulations. 

(b) If your designated operator fails to 

fulfill any of your obligations under the 

lease or grant and this part, MMS may 

require you or any or all of your colessees or co-grantees to fulfill those 

obligations or other operational 

obligations under the OCS Lands Act, 

the lease, grant, or the regulations. 

(c) Whenever the regulations in this 

part require the lessee or grantee to 

conduct an activity in a prescribed 

manner, the lessee or grantee and 

operator (if one has been designated) are 

jointly and severally responsible for 

complying with the regulations. 

§ 285.407 [Reserved] 

Lease or Grant Assignment 

§ 285.408 May I assign my lease or grant 

interest? 

(a) You may assign all or part of your 

lease or grant interest, including record 

title, subject to MMS approval under 

this subpart. Each instrument that 

creates or transfers an interest must 

describe the entire tract or describe by 

officially designated subdivisions the 

interest you propose to create or 

transfer. 

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(b) You may assign a lease or grant 

interest by submitting one paper copy 

and one electronic copy of an 

assignment application to MMS. The 

assignment application must include: 

(1) The MMS-assigned lease or grant 

number; 

(2) A description of the geographic 

area or undivided interest you are 

assigning; 

(3) The names of both the assignor 

and the assignee, if applicable; 

(4) The names and telephone numbers 

of the contacts for both the assignor and 

the assignee; 

(5) The names, titles, and signatures 

of the authorizing officials for both the 

assignor and the assignee; 

(6) A statement that the assignee 

agrees to comply with and to be bound 

by the terms and conditions of the lease 

or grant; 

(7) The qualifications of the assignee 

to hold a lease or grant under § 285.107; 

and 

(8) A statement on how the assignee 

will comply with the financial 

assurance requirements of §§ 285.515 

through 285.537. No assignment will be 

approved until the assignee provides the 

required financial assurance. 

(c) If you submit an application to 

assign a lease or grant, you will 

continue to be responsible for payments 

that are or become due on the lease or 

grant until the date MMS approves the 

assignment. 

(d) The assignment takes effect on the 

date MMS approves your application. 

(e) You do not need to request an 

assignment for mergers, name changes, 

or changes of business form. You must 

notify MMS of these events under 

§ 285.109. 

§ 285.409 How do I request approval of a 

lease or grant assignment? 

(a) You must request approval of each 

assignment on a form approved by 

MMS, and submit originals of each 

instrument that creates or transfers 

ownership of record title or certified 

copies thereof within 90 days after the 

last party executes the transfer 

agreement. 

(b) Any assignee will be subject to all 

the terms and conditions of your 

original lease or grant, including the 

requirement to furnish financial 

assurance in the amount required in 

§§ 285.515 through 285.537. 

(c) The assignee must submit proof of 

eligibility and other qualifications 

specified in § 285.107. 

(d) Persons executing on behalf of the 

assignor and assignee must furnish 

evidence of authority to execute the 

assignment. 

§ 285.410 How does an assignment affect 

the assignor’s liability? 

As assignor, you are liable for all 

obligations, monetary and nonmonetary, 

that accrued under your lease or grant 

before MMS approves your assignment. 

Our approval of the assignment does not 

relieve you of these accrued obligations. 

The MMS may require you to bring the 

lease or grant into compliance to the 

extent the obligation accrued before the 

effective date of your assignment if your 

assignee or subsequent assignees fail to 

perform any obligation under the lease 

or grant. 

§ 285.411 How does an assignment affect 

the assignee’s liability? 

(a) As assignee, you are liable for all 

lease or grant obligations that accrue 

after MMS approves the assignment. As 

assignee, you must comply with all the 

terms and conditions of the lease or 

grant and all applicable regulations, 

remedy all existing environmental and 

operational problems on the lease or 

grant, and comply with all 

decommissioning requirements under 

subpart I of this part. 

(b) Assignees are bound to comply 

with each term or condition of the lease 

or grant and the regulations in this 

subchapter. You are jointly and 

severally liable for the performance of 

all obligations under the lease or grant 

and under the regulations in this part 

with each prior and subsequent lessee 

who held an interest from the time the 

obligation accrued until it is satisfied, 

unless this part provides otherwise. 

§§ 285.412–285.414 [Reserved] 

Lease or Grant Suspension 

§ 285.415 What is a lease or grant 

suspension? 

(a) A suspension is an interruption of 

the term of your lease or grant that may 

occur: 

(1) As approved by MMS at your 

request, as provided in § 285.416; or 

(2) As ordered by MMS, as provided 

in § 285.417. 

(b) A suspension extends the term of 

your lease or grant for the length of time 

the suspension is in effect. 

(c) Activities may not be conducted 

on your lease or grant during the period 

of a suspension except as expressly 

authorized by MMS under the terms of 

the suspension. 

§ 285.416 How do I request a lease or 

grant suspension? 

You must submit a written request to 

MMS that includes the following 

information no later than 90 days prior 

to the expiration of your appropriate 

lease or grant term: 

(a) The reasons you are requesting 

suspension of your lease or grant term, 

and the length of additional time 

requested. 

(b) An explanation of why the 

suspension is necessary in order to 

ensure full enjoyment of your lease or 

grant and why it is in the lessor’s or 

grantor’s interest to approve the 

suspension. 

(c) If you do not timely submit a SAP, 

COP, or GAP, as required, you may 

request a suspension to extend the 

preliminary or site assessment term of 

your lease or grant that includes a 

revised schedule for submission of a 

SAP, COP, or GAP, as appropriate. 

(d) Any other information MMS may 

require. 

§ 285.417 When may MMS order a 

suspension? 

(a) The MMS may order a suspension 

under the following circumstances: 

(1) When necessary to comply with 

judicial decrees prohibiting some or all 

activities under your lease; 

(2) When 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; or 

(3) When the suspension is necessary 

for reasons of national security or 

defense. 

(b) If MMS orders a suspension under 

paragraph (a)(2) of this section, and if 

you wish to resume activities, we may 

require you to conduct a site-specific 

study that evaluates the cause of the 

harm, the potential damage, and the 

available mitigation measures. Other 

requirements and actions may occur: 

(1) You may be required to pay for the 

study; 

(2) You must furnish one paper copy 

and one electronic copy of the study 

and results to us; 

(3) We will make the results available 

to other interested parties and to the 

public; and 

(4) We will use the results of the 

study and any other information that 

become available: 

(i) To decide if the suspension order 

can be lifted; and 

(ii) To determine any actions that you 

must take to mitigate or avoid any 

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. 

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§ 285.418 How will MMS issue a 

suspension? 

(a) The MMS will issue a suspension 

order orally or in writing. 

(b) The MMS will send you a written 

suspension order as soon as practicable 

after issuing an oral suspension order. 

(c) The written order will explain the 

reasons for its issuance and describe the 

effect of the suspension order on your 

lease or grant and any associated 

activities. The MMS may authorize 

certain activities during the period of 

the suspension, as set forth in the 

suspension order. 

§ 285.419 What are my immediate 

responsibilities if I receive a suspension 

order? 

You must comply with the terms of a 

suspension order upon receipt and take 

any action prescribed within the time 

set forth therein. 

§ 285.420 What effect does a suspension 

order have on my payments? 

(a) While MMS evaluates your request 

for a suspension under § 285.416, you 

must continue to fulfill your payment 

obligation until the end of the original 

term of your lease or grant. If our 

evaluation goes beyond the end of the 

original term of your lease or grant, the 

term of your lease or grant will be 

extended for the period of time 

necessary for MMS to complete its 

evaluation of your request, but you will 

not be required to make payments 

during the time of the extension. 

(b) If MMS approves your request for 

a suspension, as provided in § 285.416, 

we may suspend your payment 

obligation, as appropriate for the term 

that is suspended, depending on the 

reasons for the requested suspension. 

(c) If MMS orders a suspension, as 

provided in § 285.417, your payments, 

as appropriate for the term that is 

suspended, will be waived during the 

suspension period. 

§ 285.421 How long will a suspension be in 

effect? 

A suspension will be in effect for the 

period specified by MMS. 

(a) The MMS will not approve a 

suspension request pursuant to 

§ 285.416 for a period longer than 2 

years. 

(b) If MMS determines that the 

circumstances giving rise to a 

suspension ordered under § 285.417 

cannot be resolved within 5 years, the 

Secretary may initiate cancellation of 

the lease or grant, as provided in 

§ 285.437. 

§§ 285.422–285.424 [Reserved] 

Lease or Grant Renewal 

§ 285.425 May I obtain a renewal of my 

lease or grant before it terminates? 

You may request renewal of the 

operations term of your lease or the 

original authorized term of your grant. 

The MMS, at its discretion, may 

approve a renewal request to conduct 

substantially similar activities as were 

originally authorized under the lease or 

grant. The MMS will not approve a 

renewal request that involves 

development of a type of renewable 

energy not originally authorized in the 

lease or grant. The MMS may revise or 

adjust payment terms of the original 

lease, as a condition of lease renewal. 

§ 285.426 When must I submit my request 

for renewal? 

(a) You must request a renewal from 

MMS: 

(1) No later than 180 days before the 

termination date of your limited lease or 

grant. 

(2) No later than 2 years before the 

termination date of the operations term 

of your commercial lease. 

(b) You must submit to MMS all 

information we request pertaining to 

your lease or grant and your renewal 

request. 

§ 285.427 How long is a renewal? 

The MMS will set the term of a 

renewal at the time of renewal on a 

case-by-case basis. 

(a) For commercial leases, a renewal 

term will not exceed the original 

operations term unless a longer term is 

negotiated by the applicable parties. 

(b) For limited leases, a renewal term 

will not exceed the original operations 

term. 

(c) For RUE and ROW grants, a 

renewal will continue for as long as the 

associated activities are conducted and 

facilities properly maintained and used 

for the purpose for which the grant was 

made, unless otherwise expressly stated. 

§ 285.428 What effect does applying for a 

renewal have on my activities and 

payments? 

If you timely request a renewal: 

(a) You may continue to conduct 

activities approved under your lease or 

grant under the original terms and 

conditions for as long as your request is 

pending decision by MMS. 

(b) You may request a suspension of 

your lease or grant, as provided in 

§ 285.416, while we consider your 

request. 

(c) For the period MMS considers 

your request for renewal, you must 

continue to make all payments in 

accordance with the original terms and 

conditions of your lease or grant. 

§ 285.429 What criteria will MMS consider 

in deciding whether to renew a lease or 

grant? 

The MMS will consider the following 

criteria in deciding whether to renew a 

lease or grant: 

(a) Design life of existing technology. 

(b) Availability and feasibility of new 

technology. 

(c) Environmental and safety record of 

the lessee or grantee. 

(d) Operational and financial 

compliance record of the lessee or 

grantee. 

(e) Competitive interest and fair 

return considerations. 

(f) Effects of the lease or grant on 

generation capacity and reliability 

within the regional electrical 

distribution and transmission system. 

§§ 285.430–285.431 [Reserved] 

Lease or Grant Termination 

§ 285.432 When does my lease or grant 

terminate? 

Your lease or grant terminates on 

whichever of the following dates occurs 

first: 

(a) The expiration of the applicable 

term of your lease or grant, unless your 

term is automatically extended under 

§§ 285.235 or 285.236, a request for 

renewal of your lease or grant is 

pending a decision by MMS, or your 

lease or grant is suspended or renewed 

as provided in this subpart; 

(b) A cancellation, as set forth in 

§ 285.437; or 

(c) Relinquishment, as set forth in 

§ 285.435. 

§ 285.433 What must I do after my lease or 

grant terminates? 

(a) After your lease or grant 

terminates, you must: 

(1) Make all payments due, including 

any accrued rentals and deferred 

bonuses; and 

(2) Perform any other outstanding 

obligations under the lease or grant 

within 6 months. 

(b) Within 2 years following 

termination of a lease or grant, you must 

remove or dispose of all facilities, 

installations, and other devices 

permanently or temporarily attached to 

the seabed on the OCS in accordance 

with a plan or application approved by 

MMS under subpart I of this part. 

(c) If you fail to comply with your 

approved decommissioning plan or 

application: 

(1) The MMS may call for the 

forfeiture of your financial assurance; 

and 

(2) You remain liable for removal or 

disposal costs and responsible for 

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accidents or damages that might result 

from such failure. 

§ 285.434 [Reserved] 

Lease or Grant Relinquishment 

§ 285.435 How can I relinquish a lease or 

a grant or parts of a lease or grant? 

(a) You may surrender the lease or 

grant, or an officially designated 

subdivision thereof, by filing one paper 

copy and one electronic copy of a 

relinquishment application with MMS. 

A relinquishment takes effect on the 

date we approve your application, 

subject to the continued obligation of 

the lessee and the surety to: 

(1) Make all payments due on the 

lease or grant, including any accrued 

rent and deferred bonuses; 

(2) Decommission all facilities on the 

lease or grant to be relinquished to the 

satisfaction of MMS; and 

(3) Perform any other outstanding 

obligations under the lease or grant. 

(b) Your relinquishment application 

must include: 

(1) Name; 

(2) Contact name; 

(3) Telephone number; 

(4) Fax number; 

(5) E-mail address; 

(6) The MMS-assigned lease or grant 

number, and, if applicable, the name of 

any facility; 

(7) A description of the geographic 

area you are relinquishing; 

(8) The name, title, and signature of 

your authorizing official (the name, title, 

and signature must match exactly the 

name, title, and signature in MMS 

qualification records); and 

(9) A statement that you will adhere 

to the requirements of subpart I of this 

part. 

(c) If you have submitted an 

application to relinquish a lease or 

grant, you will be billed for any 

outstanding payments that are due 

before the relinquishment takes effect, 

as provided in paragraph (a) of this 

section. 

Lease or Grant Contraction 

§ 285.436 Can MMS require lease or grant 

contraction? 

At an interval no more frequent than 

every 5 years, the MMS may review 

your lease or grant area to determine 

whether the lease or grant area is larger 

than needed to develop the project and 

manage activities in a manner that is 

consistent with the provisions of this 

part. The MMS will notify you of our 

proposal to contract the lease or grant 

area. 

(a) The MMS will give you the 

opportunity to present orally or in 

writing information demonstrating that 

you need the area in question to manage 

lease or grant activities consistent with 

these regulations. 

(b) Prior to taking action to contract 

the lease or grant area, MMS will issue 

a decision addressing your contentions 

that the area is needed. 

(c) You may appeal this decision 

under § 285.118 of this part. 

Lease or Grant Cancellation 

§ 285.437 When can my lease or grant be 

canceled? 

(a) The Secretary will cancel any lease 

or grant issued under this part upon 

proof that it was obtained by fraud or 

misrepresentation, and after notice and 

opportunity to be heard has been 

afforded to the lessee or grant holder. 

(b) The Secretary may cancel any 

lease or grant issued under this part 

when: 

(1) The Secretary determines after 

notice and opportunity for a hearing 

that, with respect to the lease or grant 

that would be canceled, the lessee or 

grantee has failed to comply with any 

applicable provision of the OCS Lands 

Act or these regulations; any order of 

the Director; or any term, condition or 

stipulation contained in the lease or 

grant, and that the failure to comply 

continued 30 days (or other period 

MMS specifies) after you receive notice 

from MMS. The Secretary will mail a 

notice by registered or certified letter to 

the lessee or grantee at its record post 

office address; 

(2) The Secretary determines after 

notice and opportunity for a hearing 

that you have terminated commercial 

operations under your COP, as provided 

in § 285.635, or other approved 

activities under your GAP, as provided 

in § 285.656; 

(3) Required by national security or 

defense; or 

(4) The Secretary determines after 

notice and opportunity for a hearing 

that continued activity under the lease 

or grant: 

(i) Would cause serious 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; and 

(ii) That the threat of harm or damage 

would not disappear or decrease to an 

acceptable extent within a reasonable 

period of time; and 

(iii) The advantages of cancellation 

outweigh the advantages of continuing 

the lease or grant in force. 

Subpart E—Payments and Financial 

Assurance Requirements 

Payments 

§ 285.500 How do I make payments under 

this part? 

(a) For acquisition fees or the initial 

6-months rent paid for the preliminary 

term of your lease, you must make 

credit card or automated clearing house 

payments through the Pay.gov Web site, 

and you must include one copy of the 

Pay.gov confirmation receipt page with 

your unsolicited request or signed lease 

instrument. You may access the Pay.gov 

Web site through links on the MMS 

Offshore Web site at: http:// 

www.mms.gov/offshore or directly 

through Pay.gov at: https:// 

www.pay.gov/paygov/. 

(b) For rent during the preliminary 

term, subsequent to the first 6-months 

rent, or the site assessment term; or 

operating fees during the operations 

term, you must make your payments as 

required in § 218.51 of this chapter. 

(c) This table summarizes payments 

you must make for leases and grants, 

unless otherwise specified in the Final 

Sale Notice: 

BILLING CODE 4310–MR–P 

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BILLING CODE 4310–MR–C 

§ 285.501 What deposits must I submit for 

a competitively issued lease, ROW grant, or 

RUE grant? 

(a) For a competitive lease or grant 

that we offer through sealed bidding, 

you must submit a deposit of 20 percent 

of the total bid amount, unless some 

other amount is specified in the Final 

Sale Notice. 

(b) For a competitive lease that we 

offer through ascending bidding, you 

must submit a deposit as established in 

the Final Sale Notice. 

(c) You must pay any balances on 

accepted high bids in accordance with 

the Final Sale Notice, this part, and your 

lease or grant instrument. 

(d) The deposit will be forfeited for 

any successful bidder who fails to 

execute the lease within the prescribed 

time, or otherwise does not comply with 

the regulations concerning acquisition 

of a lease or grant or stipulations in the 

Final Sale Notice. 

§ 285.502 What initial payment 

requirements must I meet to obtain a 

noncompetitive lease, ROW grant, or RUE 

grant? 

When requesting a noncompetitive 

lease, you must meet the initial payment 

(acquisition fee) requirements of this 

section, unless specified otherwise in 

your lease instrument. No initial 

payment is required when requesting 

noncompetitive ROW grants and RUE 

grants. 

(a) If you request a noncompetitive 

lease, you must submit an acquisition 

fee of $0.25 per acre, unless otherwise 

set by the Director, as provided in 

§ 285.500. 

(b) If MMS determines there is no 

competitive interest, we will then: 

(1) Retain your acquisition fee if we 

issue you a lease; or 

(2) Refund your acquisition fee, 

without interest, if we do not issue your 

requested lease. 

(c) If we determine that there is a 

competitive interest in an area you 

requested, then we will proceed with a 

competitive lease sale process provided 

for in subpart B of this part, and we will: 

(1) Apply your acquisition fee to the 

required deposit for your bid amount if 

you submit a bid; 

(2) Apply your acquisition fee to your 

bonus bid if you acquire the lease; or 

(3) Retain your acquisition fee if you 

do not bid for or acquire the lease. 

§ 285.503 What are the rent and operating 

fee requirements for a commercial lease? 

(a) The rent for a commercial lease is 

$3 per acre per year, unless otherwise 

established in the Final Sale Notice or 

lease. 

(1) You must pay the first 6-months 

rent, as provided in § 285.500, 45 days 

after we issue your lease. 


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(2) You must pay rent at the beginning 

of each subsequent 1-year period in 

accordance with the regulations at 

§ 218.51 of this chapter for the entire 

lease area until the facility begins to 

generate commercially, as specified in 

§ 285.506 or as otherwise specified in 

the Final Sale Notice or lease 

instrument: 

(i) For leases issued competitively, the 

MMS will specify in the Final Sale 

Notice and lease any adjustment to the 

rent fee to take effect during the 

operations term and prior to the 

commercial generation. 

(ii) For leases issued 

noncompetitively, the MMS will specify 

in the lease any adjustment to the rent 

fee to take effect during the operations 

term and prior to the commercial 

generation. 

(3) You must pay the rent for a project 

easement in addition to the lease rent, 

as provided in § 285.507. You must 

commence rent payments for your 

project easement upon our approval of 

your COP or GAP. 

(b) After your lease begins commercial 

generation of electricity or on the date 

specified by MMS, you must pay 

operating fees in the amount specified 

in § 285.506: 

(1) For leases issued competitively, 

MMS will specify in the Final Sale 

Notice and lease the date when 

operating fees commence; and 

(2) For leases issued 

noncompetitively, MMS will specify in 

the lease the date when operating fee 

commences. 

§ 285.504 How are my payments affected if 

I develop my lease in phases? 

If you develop your commercial lease 

in phases, as approved by us in your 

COP under § 285.629, you must pay: 

(a) Rent on the portion of the lease 

that is not authorized for commercial 

operations. 

(b) Operating fees on the portion of 

the lease that is authorized for 

commercial operations, in the amount 

specified in § 285.506 and as described 

in § 285.503(b). 

(c) Rent for a project easement in 

addition to lease rent, as provided in 

§ 285.507. You must commence rent 

payments for your project easement 

upon our approval of your COP. 

§ 285.505 What are the rent and operating 

fee requirements for a limited lease? 

(a) The rent for a limited lease is $3 

per acre per year, unless otherwise 

established in the Final Sale Notice and 

your lease instrument. 

(b) You must pay the first 6-months 

rent when MMS issues your limited 

lease, as provided in § 285.500. 

(c) You must pay rent at the beginning 

of each subsequent 1-year period on the 

entire lease area for the duration of your 

operations term in accordance with the 

regulations at § 218.51 of this chapter. 

(d) The MMS will not charge an 

operating fee for the authorized sale of 

power from a limited lease. 

§ 285.506 What operating fees must I pay 

on a commercial lease? 

If you are generating electricity, you 

must pay operating fees on your 

commercial lease when you begin 

commercial generation, as described in 

§ 285.503. 

(a) The MMS will determine the 

annual operating fee for activities 

relating to the generation of electricity 

on your lease based on the following 

formula, 

F = M * H * c * P * r, where: 

(1) F is the dollar amount of the 

annual operating fee; 

(2) M is the nameplate capacity 

expressed in megawatts; 

(3) H is the number of hours in a year, 

equal to 8,760, used to calculate an 

annual payment; 

(4) c is the ‘‘capacity factor’’ 

representing the anticipated efficiency 

of the facility’s operation expressed as a 

decimal between zero and one; 

(5) P is a measure of the annual 

average wholesale electric power price 

expressed in dollars per megawatt hour, 

as provided in paragraph (c)(2) of this 

section; and 

(6) r is the operating fee rate 

expressed as a decimal between zero 

and one. 

(b) The annual operating fee formula 

relating to the value of annual electricity 

generation is restated as: 

F 

(annual operating 

fee) 

= 

M 

(nameplate 

capacity) 

* H 

(hours per year) * c (capacity factor) * P (power price) * 

r 

(operating fee 

rate) 

(c) The MMS will specify operating 

fee parameters in the Final Sale Notice 

for commercial leases issued 

competitively and in the lease for those 

issued noncompetitively. 

(1) Unless MMS specifies otherwise, 

in the operating fee rate, (r) is 0.02 for 

each year the operating fee applies 

when you begin commercial generation 

of electricity. We may apply a different 

fee rate for new projects (i.e., a new 

generation based on new technology) 

after considering factors such as 

program objectives, state of the industry, 

project type, and project potential. Also, 

we may agree to reduce or waive the fee 

rate under § 285.510. 

(2) The power price (P), for each year 

when the operating fee applies, will be 

determined annually. The process by 

which the power price will be 

determined will be specified in the 

Final Sale Notice and/or in the lease. 

The MMS: 

(i) Will use the most recent annual 

average wholesale power price in the 

State in which a project’s transmission 

cables make landfall, as published by 

the DOE, Energy Information 

Administration (EIA), or other publicly 

available wholesale power price indices; 

and 

(ii) May adjust the published average 

wholesale power price to reflect 

documented variations by State or 

within a region and recent market 

conditions. 

(3) The MMS will select the capacity 

factor (c) based upon applicable analogs 

drawn from present and future domestic 

and foreign projects that operate in 

comparable conditions and on 

comparable scales. 

(i) Upon the completion of the first 

year of commercial operations on the 

lease, MMS may adjust the capacity 

factor as necessary (to accurately 

represent a comparison of actual 

production over a given period of time 

with the amount of power a facility 

would have produced if it had run at 

full capacity) in a subsequent year. 

(ii) After the first adjustment, MMS 

may adjust the capacity factor (to 

accurately represent a comparison of 

actual generation over a given period of 

time with the amount of power a facility 

would have generated if it had run at 

full capacity) no earlier than in 5-year 

intervals from the most recent year that 

MMS adjusts the capacity factor. 

(iii) The process by which MMS will 

adjust the capacity factor, including any 

calculations (incorporating an average 

capacity factor reflecting actual 

operating experience), will be specified 

in the lease. The operator or lessee may 

request review and adjustment of the 

capacity factor under § 285.510. 

(4) Ten days after the anniversary date 

of when you began to commercially 

generate electricity, you must submit to 

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MMS documentation of the gross annual 

generation of electricity produced by the 

generating facility on the lease. You 

must use the same information 

collection form as authorized by the EIA 

for this information. 

(5) For the nameplate capacity (M), 

MMS will use the total installed 

capacity of the equipment you install, as 

specified in your approved COP. 

(d) You must submit all operating fee 

payments to MMS in accordance with 

the provisions under § 218.51 of this 

chapter. 

(e) The MMS will establish the 

operating fee in the Final Sale Notice or 

in the lease on a case-by-case basis for: 

(1) Activities that do not relate to the 

generation of electricity (e.g., hydrogen 

production), and 

(2) Leases issued for hydrokinetic 

activities requiring a FERC license. 

§ 285.507 What rent payments must I pay 

on a project easement? 

(a) You must pay MMS a rent fee for 

your project easement of $5 per acre, 

subject to a minimum of $450 per year, 

unless specified otherwise in the Final 

Sale Notice or lease: 

(1) The size of the project easement 

area for a cable or a pipeline is the full 

length of the corridor and a width of 200 

feet (61 meters), centered on the cable 

or pipeline; and 

(2) The size of a project easement area 

for an accessory platform is limited to 

the aerial extent of anchor chains and 

other facilities and devices associated 

with the accessory. 

(b) You must commence rent 

payments for your project easement 

upon our approval of your COP or GAP: 

(1) You must make the first rent 

payment when the operations term 

begins, as provided in § 285.500; 

(2) You must submit all subsequent 

rent payments in accordance with the 

regulations at § 218.51 of this chapter; 

and 

(3) You must continue to pay annual 

rent for your project easement until your 

lease is terminated. 

§ 285.508 What rent payments must I pay 

on ROW grants or RUE grants associated 

with renewable energy projects? 

(a) For each ROW grant MMS 

approves under subpart C of this part, 

you must pay an annual rent as follows, 

unless specified otherwise in the Final 

Sale Notice: 

(1) A fee of $70 for each nautical mile 

or part of a nautical mile of the OCS that 

your ROW crosses; and 

(2) An additional $5 per acre, subject 

to a minimum of $450 for use of the 

entire affected area, if you hold a ROW 

grant that includes a site outside the 

corridor of a 200-foot width (61 meters), 

centered on the cable or pipeline. The 

affected area includes the areal extent of 

anchor chains, risers, and other devices 

associated with a site outside the 

corridor. 

(b) For each RUE grant MMS approves 

under subpart C of this part, you must 

pay a rent of: 

(1) $5 per acre per year; or 

(2) A minimum of $450 per year. 

(c) You must make the rent payments 

required by paragraphs (a) and (b) of 

this section on: 

(1) An annual basis; 

(2) For a 5-year period; or 

(3) For multiples of 5 years. 

(d) You must make the first annual 

rent payment upon approval of your 

ROW grant or RUE grant request, as 

provided in § 285.500, and all 

subsequent rent payments to MMS in 

accordance with the regulations at 

§ 218.51 of this chapter. 

§ 285.509 Who is responsible for 

submitting lease or grant payments to 

MMS? 

(a) For each lease, ROW grant, or RUE 

grant issued under this part, you must 

identify one person who is responsible 

for all payments due and payable under 

the provisions of the lease or grant. The 

responsible person identified is 

designated as the payor, and you must 

document acceptance of such 

responsibilities, as provided in § 218.52 

of this chapter. 

(b) All payors must submit payments 

and maintain auditable records in 

accordance with guidance we issue or 

any applicable regulations in subchapter 

A of this chapter. In addition, the lessee 

or grant holder must also maintain such 

auditable records. 

§ 285.510 May MMS reduce or waive my 

lease or grant payments? 

(a) The MMS Director may reduce or 

waive the rent or operating fee or 

components of the operating fee, such as 

the fee rate or capacity factor, when the 

Director determines that it is necessary 

to encourage continued or additional 

activities. 

(b) When requesting a reduction or 

waiver, you must submit an application 

to us that includes all of the following: 

(1) The number of the lease, ROW 

grant, or RUE grant involved; 

(2) Name of each lessee or grant 

holder of record; 

(3) Name of each operator; 

(4) A demonstration that: 

(i) Continued activities would be 

uneconomic without the requested 

reduction or waiver, or 

(ii) A reduction or waiver is necessary 

to encourage additional activities; and 

(5) Any other information required by 

the Director. 

(c) No more than 6 years of your 

operations term will be subject to a full 

waiver of the operating fee. 

§ 285.511–285.514 [Reserved] 

Financial Assurance Requirements for 

Commercial Leases 

§ 285.515 What financial assurance must I 

provide when I obtain my commercial 

lease? 

(a) Before MMS will issue your 

commercial lease or approve an 

assignment of an existing commercial 

lease, you (or, for an assignment, the 

proposed assignee) must guarantee 

compliance with all terms and 

conditions of the lease by providing 

either: 

(1) A $100,000 minimum, leasespecific bond; or 

(2) Another approved financial 

assurance instrument guaranteeing 

performance up to $100,000, as 

specified in §§ 285.526 through 285.529. 

(b) You meet the financial assurance 

requirements under this subpart if your 

designated lease operator provides a 

$100,000 minimum, lease-specific bond 

or other approved financial assurance 

that guarantees compliance with all 

terms and conditions of the lease. 

(1) The dollar amount of the 

minimum, lease-specific financial 

assurance in paragraphs (a)(1) and (b) of 

this section will be adjusted to reflect 

changes in the Consumer Price IndexAll Urban Consumers (CPI–U) or a 

substantially equivalent index if the 

CPI–U is discontinued; and 

(2) The first CPI–U-based adjustment 

can be made no earlier than the 5-year 

anniversary of the adoption of this rule. 

Subsequent CPI–U-based adjustments 

may be made every 5 years thereafter. 

§ 285.516 What are the financial assurance 

requirements for each stage of my 

commercial lease? 

(a) The basic financial assurance 

requirements for each stage of your 

commercial lease are as follows: 

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(b) Each bond or other financial 

assurance must guarantee compliance 

with all terms and conditions of the 

lease. You may provide a new bond or 

increase the amount of your existing 

bond, to satisfy any additional financial 

assurance requirements. 

(c) For hydrokinetic commercial 

leases, supplemental financial assurance 

may be required in an amount 

determined by MMS before FERC issues 

a license. 

§ 285.517 How will MMS determine the 

amounts of the supplemental and 

decommissioning financial assurance 

requirements associated with commercial 

leases? 

(a) The MMS will base the 

determination for the amounts of the 

SAP, COP, and decommissioning 

financial assurance requirements on 

estimates of the cost to meet all accrued 

lease obligations. 

(b) We determine the amount of the 

supplemental and decommissioning 

financial assurance requirements on a 

case-by-case basis. The amount of the 

financial assurance must be no less than 

the amount required to meet all lease 

obligations, including: 

(1) The projected amount of rent and 

other payments due the Government 

over the next 12 months; 

(2) Any past due rent and other 

payments; 

(3) Other monetary obligations; and 

(4) The estimated cost of facility 

decommissioning, as required by 

subpart I of this part. 

(c) If your cumulative potential 

obligations and liabilities increase or 

decrease, we may adjust the amount of 

supplemental or the decommissioning 

financial assurance. 

(1) If we propose adjusting your 

financial assurance amount, we will 

notify you of the proposed adjustment 

and give you an opportunity to 

comment; and 

(2) We may approve a reduced 

financial assurance amount if you 

request it and if the reduced amount 

that you request continues to be greater 

than the sum of: 

(i) The projected amount of rent and 

other payments due the Government 

over the next 12 months; 

(ii) Any past due rent and other 

payments; 

(iii) Other monetary obligations; and 

(iv) The estimated cost of facility 

decommissioning. 

§ 285.518–285.519 [Reserved] 

Financial Assurance for Limited 

Leases, ROW Grants, and RUE Grants 

§ 285.520 What financial assurance must I 

provide when I obtain my limited lease, 

ROW grant, or RUE grant? 

(a) Before MMS will issue your 

limited lease, ROW grant, or RUE grant, 

you or a proposed assignee must 

guarantee compliance with all terms 

and conditions of the lease or grant by 

providing either: 

(1) A $300,000 minimum, lease- or 

grant-specific bond; or 

(2) Another approved financial 

assurance instrument of such minimum 

level as specified in §§ 285.526 through 

285.529. 

(b) You meet the financial assurance 

requirements under this subpart if your 

designated lease or grant operator 

provides a minimum limited leasespecific or grant-specific bond in an 

amount sufficient to guarantee 

compliance with all terms and 

conditions of the limited lease or grant. 

(1) The dollar amount of the 

minimum, lease- or grant-specific 

financial assurance in paragraph (a)(1) 

of this section will be adjusted to reflect 

changes in the CPI–U or a substantially 

equivalent index if the CPI–U is 

discontinued; and 

(2) The first CPI–U-based adjustment 

can be made no earlier than the 5-year 

anniversary of the adoption of this rule. 

Subsequent CPI–U-based adjustments 

may be made every 5 years thereafter. 

§ 285.521 Do my financial assurance 

requirements change as activities progress 

on my limited lease or grant? 

(a) The MMS may require you to 

increase the level of your financial 

assurance as activities progress on your 

limited lease or grant. We will base the 

determination for the amount of 

financial assurance requirements on our 

estimate of the cost to meet all accrued 

lease or grant obligations, including: 

(1) The projected amount of rent and 

other payments due the Government 

over the next 12 months; 

(2) Any past due rent and other 

payments; 

(3) Other monetary obligations; and 

(4) The estimated cost of facility 

decommissioning. 

(b) You may satisfy the requirement 

for increased financial assurance levels 

for the limited lease or grant by 

increasing the amount of your existing 

bond or replacing your existing bond. 


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(c) The MMS will authorize you to 

establish a separate decommissioning 

bond or other financial assurance for 

your limited lease or grant. 

(1) The separate decommissioning 

bond or other financial assurance 

instrument must meet the requirements 

specified in §§ 285.525 through 285.529. 

(2) The MMS will allow you to 

provide your financial assurance for 

decommissioning in accordance with 

the number of facilities installed or 

being installed. The MMS must approve 

the schedule for providing the 

appropriate financial assurance 

coverage. 

§§ 285.522–285.524 [Reserved] 

Requirements for Financial Assurance 

Instruments 

§ 285.525 What general requirements must 

a financial assurance instrument meet? 

(a) Any bond or other acceptable 

financial assurance instrument that you 

provide must: 

(1) Be payable to MMS upon demand; 

and 

(2) Guarantee compliance of all 

lessees, grant holders, operators, and 

payors with all terms and conditions of 

the lease or grant, any subsequent 

approvals and authorizations, and all 

applicable regulations. 

(b) All bonds and other forms of 

financial assurance must be on or in a 

form approved by MMS. You may 

submit this on an approved form that 

you have reproduced or generated by 

use of a computer. If the document you 

submit omits any terms and conditions 

that are included on the MMS-approved 

form, your bond is deemed to contain 

the omitted terms and conditions. 

(c) Surety bonds must be issued by an 

approved surety listed in the current 

Treasury Circular 570, as required by 31 

CFR 223.16. You may obtain a copy of 

Circular 570 from the Treasury Web site 

at http://www.fms.treas.gov/c570/. 

(d) Your surety bond cannot exceed 

the underwriting limit listed in the 

current Treasury Circular 570, except as 

permitted therein. 

(e) You and a qualified surety must 

execute your bond. When the surety is 

a corporation, an authorized corporate 

officer must sign the bond and attest to 

it over the corporate seal. 

(f) You may not terminate the period 

of liability of your bond or cancel your 

bond, except as provided in this 

subpart. Bonds must continue in full 

force and effect even though an event 

has occurred that could diminish or 

terminate a surety’s obligation under 

State law. 

(g) Your surety must notify you and 

MMS within 5 business days after: 

(1) It initiates any judicial or 

administrative proceeding alleging its 

insolvency or bankruptcy; or 

(2) The Treasury decertifies the 

surety. 

§ 285.526 What instruments other than a 

surety bond may I use to meet the financial 

assurance requirement? 

(a) You may use other types of 

security instruments, if MMS 

determines that such security protects 

MMS to the same extent as the surety 

bond. The MMS will consider pledges 

of the following: 

(1) U.S. Department of Treasury 

securities identified in 31 CFR part 225; 

(2) Cash in an amount equal to the 

required dollar amount of the financial 

assurance, to be deposited and 

maintained in a Federal depository 

account of the U.S. Treasury by MMS; 

(3) Certificates of deposit or savings 

accounts in a bank or financial 

institution organized or authorized to 

transact business in the United States 

with: 

(i) Minimum net assets of 

$500,000,000; and 

(ii) Minimum Bankrate.com Safe & 

Sound rating of 3 Stars, and 

Capitalization, Assets, Equity and 

Liquidity (CAEL) rating of 3 or less; 

(4) Negotiable U.S. Government, State, 

and municipal securities or bonds 

having a market value of not less than 

the required dollar amount of the 

financial assurance and maintained in a 

Securities Investors Protection 

Corporation insured trust account by a 

licensed securities brokerage firm for 

the benefit of the MMS; 

(5) Investment-grade rated securities 

having a Standard and Poor’s rating of 

AAA or an equivalent rating from a 

nationally recognized securities rating 

service having a market value of not less 

than the required dollar amount of the 

financial assurance and maintained in a 

Securities Investors Protection 

Corporation insured trust account by a 

licensed securities brokerage firm for 

the benefit of MMS; and 

(6) Insurance, if its form and function 

is such that the funding or enforceable 

pledges of funding are used to guarantee 

performance of regulatory obligations in 

the event of default on such obligations 

by the lessee. Insurance must have an 

A.M. Best rating of ‘‘superior’’ or an 

equivalent rating from a nationally 

recognized insurance rating service. 

(b) If you use a Treasury security: 

(1) You must post 115 percent of your 

financial assurance amount; 

(2) You must monitor the collateral 

value of your security. If the collateral 

value of your security as determined in 

accordance with the 31 CFR part 203 

Collateral Margins Table (which can be 

found at http://www.treasurydirect.gov) 

falls below the required level of 

coverage, you must pledge additional 

security to provide 115 percent of the 

required amount; and 

(3) You must include with your 

pledge authority for us to sell the 

security and use the proceeds if we 

determine that you have failed to 

comply with any of the terms and 

conditions of your lease or grant, any 

subsequent approval or authorization, or 

applicable regulations. 

(c) If you use the instruments 

described in paragraphs (a)(4) or (a)(5) 

of this section, you must provide MMS 

by the end of each calendar year a 

certified statement describing the nature 

and market value of the instruments 

maintained in that account, and 

including any current statements or 

reports furnished by the brokerage firm 

to the lessee concerning the asset value 

of the account. 

§ 285.527 May I demonstrate financial 

strength and reliability to meet the financial 

assurance requirement for lease or grant 

activities? 

The MMS may allow you to use your 

financial strength and reliability to meet 

financial assurance requirements. We 

will make this determination based on 

audited financial statements, business 

stability, reliability, and compliance 

with regulations. 

(a) You must provide the following 

information if you want to demonstrate 

financial strength and reliability to meet 

your financial assurance requirements: 

(1) Audited financial statements 

(including auditor’s certificate, balance 

sheet, and profit and loss sheet) that 

show you have financial capacity 

substantially in excess of existing and 

anticipated lease and other obligations; 

(2) Evidence that shows business 

stability based on 5 years of continuous 

operation and generation of renewable 

energy on the OCS or onshore; 

(3) Evidence that shows reliability in 

meeting obligations based on credit 

ratings or trade references, including 

names and addresses of other lessees, 

contractors, and suppliers with whom 

you have dealt; and 

(4) Evidence that shows a record of 

compliance with laws, regulations, and 

lease, ROW, or RUE terms. 

(b) If we approve your request to use 

your financial strength and reliability to 

meet your financial assurance 

requirements, you must submit annual 

updates to the information required by 

paragraph (a) of this section. You must 

submit this information no later than 

March 31 of each year. 

(c) If the annual updates to the 

information required by paragraph (a) of 

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this section do not continue to 

demonstrate financial strength and 

reliability or MMS has reason to believe 

that you are unable to meet the financial 

assurance requirements of this section, 

after notice and opportunity for a 

hearing, MMS will terminate your 

ability to use financial strength and 

reliability for financial assurance and 

require you to provide another type of 

financial assurance. You must provide 

this new financial assurance instrument 

within 90 days after we terminate your 

use of financial strength and reliability. 

§ 285.528 May I use a third-party guaranty 

to meet the financial assurance requirement 

for lease or grant activities? 

(a) You may use a third-party 

guaranty if the guarantor meets the 

criteria prescribed in paragraph (b) of 

this section and submits an agreement 

meeting the criteria prescribed in 

paragraph (c) of this section. The 

agreement must guarantee compliance 

with the obligations of all lessees and 

operators and grant holders. 

(b) The MMS will consider the 

following factors in deciding whether to 

accept an agreement: 

(1) The length of time that your 

guarantor has been in continuous 

operation as a business entity. You may 

exclude periods of interruption that are 

beyond the guarantor’s control by 

demonstrating, to the satisfaction of the 

Director, that the interruptions do not 

affect the likelihood of your guarantor 

remaining in business during the SAP, 

COP, and decommissioning stages of 

activities covered by the indemnity 

agreement. 

(2) Financial information available in 

the public record or submitted by your 

guarantor in sufficient detail to show us 

that your guarantor meets the criterion 

stated in paragraph (b)(4) of this section. 

Such detail includes: 

(i) The current rating for your 

guarantor’s most recent bond issuance 

by a generally recognized bond rating 

service such as Moody’s Investor 

Service or Standard and Poor’s 

Corporation; 

(ii) Your guarantor’s net worth, taking 

into account liabilities for compliance 

with all terms and conditions of your 

lease, regulations, and other guarantees; 

(iii) Your guarantor’s ratio of current 

assets to current liabilities, taking into 

account liabilities for compliance with 

all terms and conditions of your lease, 

regulations, and other guarantees; and 

(iv) Your guarantor’s unencumbered 

domestic fixed assets. 

(3) If the information in paragraph 

(b)(2) of this section is not publicly 

available, your guarantor must submit 

the information in the following table, 

to be updated annually within 90 days 

of the end of the fiscal year (FY) or as 

otherwise prescribed. 

(4) Your guarantor’s total outstanding 

and proposed guarantees must not 

exceed 25 percent of its unencumbered 

domestic net worth. 

(c) Your guarantor must submit an 

agreement executed by the guarantor 

and all parties bound by the agreement. 

All parties are bound jointly and 

severally and must meet the 

qualifications set forth in § 285.107. 

(1) When any party is a corporation, 

two corporate officers authorized to 

execute the guaranty agreement on 

behalf of the corporation must sign the 

agreement. 

(2) When any party is a partnership, 

joint venture, or syndicate, the guaranty 

agreement must bind each party who 

has a beneficial interest in your 

guarantor and provide that, upon MMS 

demand under your guaranty, each 

party is jointly and severally liable for 

compliance with all terms and 

conditions of your lease(s) or grant(s) 

covered by the agreement. 

(3) When forfeiture of the guaranty is 

called for, the agreement must provide 

that your guarantor will either bring 

your lease(s) or grant(s) into compliance 

or provide, within 7 days, sufficient 

funds to permit MMS to complete 

corrective action. 

(4) The guaranty agreement must 

contain a confession of judgment, 

providing that, if we determine that you 

are, or your operator or operating rights 

owner is, in default, the guarantor must 

not challenge the determination and 

must remedy the default. 

(5) If you fail, or your operator or 

operating rights owner fails, to comply 

with any law, term, or regulation, your 

guarantor must either take corrective 

action or provide, within 7 days or other 

agreed upon time period, sufficient 

funds for MMS to complete corrective 

action. Such compliance must not 

reduce your guarantor’s liability. 

(6) If your guarantor wants to 

terminate the period of liability, your 

guarantor must notify you and us at 

least 90 days before the proposed 

termination date, obtain our approval 

for termination of all or a specified 

portion of the guarantee for liabilities 

arising after that date, and remain liable 

for all your work performed during the 

period the agreement is in effect. 

(7) Each guaranty submitted pursuant 

to this section is deemed to contain all 

the above terms, even if they are not 

actually in the agreement. 

(d) Before the termination of your 

guaranty, you must provide an 

acceptable replacement in the form of a 

bond or other security. 

§ 285.529 Can I use a lease- or grantspecific decommissioning account to meet 

the financial assurance requirements 

related to decommissioning? 

(a) In lieu of a surety bond, MMS may 

authorize you to establish a lease-, ROW 

grant-, or RUE grant-specific 

decommissioning account in a federallyinsured institution. The funds may not 

be withdrawn from the account without 

our written approval. 

(1) The funds must be payable to 

MMS and pledged to meet your lease or 

grant decommissioning and site 

clearance obligations; and 

(2) You must fully fund the account 

within the time MMS prescribes to 

cover all costs of decommissioning 

including site clearance. The MMS will 

estimate the cost of decommissioning, 

including site clearance. 


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(b) Any interest paid on the account 

will be treated as account funds unless 

we authorize in writing that any interest 

be paid to the depositor. 

(c) We may allow you to pledge 

Treasury securities, payable to MMS on 

demand, to satisfy your obligation to 

make payments into the account. 

Acceptable Treasury securities and their 

collateral value are determined in 

accordance with 31 CFR part 203, 

Collateral Margins Table (which can be 

found at http://www.treasurydirect.gov). 

(d) We may require you to commit a 

specified stream of revenues as payment 

into the account so that the account will 

be fully funded, as prescribed in 

paragraph (a)(2) of this section. The 

commitment may include revenue from 

other operations. 

Changes in Financial Assurance 

§ 285.530 What must I do if my financial 

assurance lapses? 

(a) If your surety is decertified by the 

Treasury, becomes bankrupt or 

insolvent, or if your surety’s charter or 

license is suspended or revoked, or if 

any other approved financial assurance 

expires for any reason, you must: 

(1) Inform MMS within 3 business 

days about the financial assurance 

lapse; and 

(2) Provide new financial assurance in 

the amount set by MMS, as provided in 

this subpart. 

(b) You must notify MMS within 3 

business days after you learn of any 

action filed alleging that you, your 

surety, or third-party guarantor, is 

insolvent or bankrupt. 

§ 285.531 What happens if the value of my 

financial assurance is reduced? 

If the value of your financial 

assurance is reduced below the required 

financial assurance amount because of a 

default or any other reason, you must 

provide additional financial assurance 

sufficient to meet the requirements of 

this subpart within 45 days or within a 

different period as specified by MMS. 

§ 285.532 What happens if my surety 

wants to terminate the period of liability of 

my bond? 

(a) Terminating the period of liability 

of a bond ends the period during which 

surety liability continues to accrue. The 

surety continues to be responsible for 

obligations and liabilities that accrued 

during the period of liability and before 

the date on which MMS terminates the 

period of liability under paragraph (b) of 

this section. The liabilities that accrue 

during a period of liability include: 

(1) Obligations that started to accrue 

before the beginning of the period of 

liability and have not been met; and 

(2) Obligations that began accruing 

during the period of liability. 

(b) Your surety must submit to MMS 

its request to terminate the period of 

liability under its bond and notify you 

of that request. If you intend to continue 

activities, or have not met all obligations 

of your lease or grant, you must provide 

a replacement bond or alternative form 

of financial assurance of equivalent or 

greater value. The MMS will terminate 

that period of liability within 90 days 

after MMS receives the request. 

§ 285.533 How does my surety obtain 

cancellation of my bond? 

(a) The MMS will release a bond or 

allow a surety to cancel a bond, and will 

relieve the surety from accrued 

obligations only if: 

(1) The MMS determines that there 

are no outstanding obligations covered 

by the bond; or 

(2) The following occurs: 

(i) The MMS accepts a replacement 

bond or an alternative form of financial 

assurance in an amount equal to or 

greater than the bond to be cancelled to 

cover the terminated period of liability; 

(ii) The surety issuing the new bond 

has expressly agreed to assume all 

outstanding liabilities under the original 

bond that accrued during the period of 

liability that was terminated; and 

(iii) The surety issuing the new bond 

has agreed to assume that portion of the 

outstanding liabilities that accrued 

during the terminated period of liability 

that exceeds the coverage of the bond 

prescribed under §§ 285.515, 285.516, 

285.520, or 285.521, and of which you 

were notified. 

(b) When your lease or grant ends, 

your surety(ies) remain(s) responsible, 

and MMS will retain any financial 

assurance as follows: 

(1) The period of liability ends when 

you cease all operations and activities 

under the lease or grant, including 

decommissioning and site clearance; 

(2) Your surety or collateral financial 

assurance will not be released until 7 

years after the lease ends, or a longer 

period as necessary to complete any 

appeals or judicial litigation related to 

your bonded obligation, or for MMS to 

determine that all of your obligations 

under the lease or grant have been 

satisfied; and 

(3) The MMS will reduce the amount 

of your bond or return a portion of your 

financial assurance if we determine that 

we need less than the full amount of the 

bond or financial assurance to meet any 

possible future obligations. 

§ 285.534 When may MMS cancel my 

bond? 

When your lease or grant ends, your 

surety(ies) remain(s) responsible, and 

MMS will retain any pledged security as 

shown in the following table: 

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§ 285.535 Why might MMS call for 

forfeiture of my bond? 

(a) The MMS may call for forfeiture of 

all or part of the bond, pledged security, 

or other form of guaranty if: 

(1) After notice and demand for 

performance by MMS, you refuse or fail, 

within the timeframe we prescribe, to 

comply with any term or condition of 

your lease or grant, other authorization 

or approval, or applicable regulations; 

or 

(2) You default on one of the 

conditions under which we accepted 

your bond. 

(b) We may pursue forfeiture without 

first making demands for performance 

against any co-lessee or holder of an 

interest in your ROW or RUE, or other 

person approved to perform obligations 

under your lease or grant. 

§ 285.536 How will I be notified of a call for 

forfeiture? 

(a) The MMS will notify you and your 

surety, including any provider of 

financial assurance, in writing of the 

call for forfeiture and provide the 

reasons for the forfeiture and the 

amount to be forfeited. We will base the 

amount upon an estimate of the total 

cost of corrective action to bring your 

lease or grant into compliance. 

(b) We will advise you and your 

surety that you may avoid forfeiture if, 

within 10 business days: 

(1) You agree to and demonstrate in 

writing to MMS that you will bring your 

lease or grant into compliance within 

the timeframe we prescribe, and you do 

so; or 

(2) Your surety agrees to and 

demonstrates that it will bring your 

lease or grant into compliance within 

the timeframe we prescribe, even if the 

cost of compliance exceeds the face 

amount of the bond. 

§ 285.537 How will MMS proceed once my 

bond or other security is forfeited? 

(a) If MMS determines that your bond 

or other security is forfeited, we will 

collect the forfeited amount and use the 

funds to bring your lease or grant(s) into 

compliance and correct any default. 

(b) If the amount collected under your 

bond or other security is insufficient to 

pay the full cost of corrective action, 

MMS may take or direct action to obtain 

full compliance and recover all costs in 

excess of the forfeited bond from you or 

any co-lessee or co-grantee. 

(c) If the amount collected under your 

bond or other security exceeds the full 

cost of corrective action to bring your 

lease or grant(s) into compliance, we 

will return the excess funds to the party 

from whom the excess was collected. 

§§ 285.538–285.539 [Reserved] 

Revenue Sharing With States 

§ 285.540 How will MMS equitably 

distribute revenues to States? 

(a) The MMS will distribute among 

the eligible coastal States 27 percent of 

the following revenues derived from 

qualified projects, where a qualified 

project and qualified project area is 

determined in § 285.541 and an eligible 

State is determined in § 285.542, with 

each term defined in § 285.112. 

Revenues subject to distribution to 

eligible States include all bonuses, 

acquisition fees, rentals, and operating 

fees derived from the entire qualified 

project area and associated project 

easements not limited to revenues 

attributable to the portion of the project 

area within 3 miles of the seaward 

boundary of a coastal State. The 

revenues to be shared do not include 

administrative fees such as service fees 

and those assessed for civil penalties 

and forfeiture of bond or other surety 

obligations. 

(b) The project area is the area 

included within a single lease or grant. 

For each qualified project, MMS will 

determine and announce the project 

area and its geographic center at the 

time it grants or issues a lease, 

easement, or right-of-way on the OCS. If 

a qualified project lease or grant’s 

boundaries change significantly due to 


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actions pursuant to §§ 285.435 or 

285.436, MMS will re-evaluate the 

project area to determine whether the 

geographic center has changed. If it has, 

MMS will re-determine State eligibility 

and shares accordingly. 

(c) To determine each eligible State’s 

share of the 27 percent of the revenues 

for a qualified project, MMS will use the 

inverse distance formula, which 

apportions shares according to the 

relative proximity of the nearest point 

on the coastline of each eligible State to 

the geographic center of the qualified 

project area. If Si is equal to the nearest 

distance from the geographic center of 

the project area to the i = 1, 2, ... nth 

eligible State’s coastline, then eligible 

State i would be entitled to the fraction 

Fi of the 27-percent aggregate revenue 

share due to all the eligible States 

according to the formula: 

Fi = (1/Si) ÷ (S i=1 ... n (1/Si)). 

§ 285.541 What is a qualified project for 

revenue sharing purposes? 

A qualified project for the purpose of 

revenue sharing with eligible coastal 

States is one authorized under 

subsection 8(p) of the OCS Lands Act, 

which includes acreage within the area 

extending 3 nautical miles seaward of 

State submerged lands. A qualified 

project is subject to revenue sharing 

with those States that are eligible for 

revenue sharing under § 285.542. The 

entire area within a lease or grant for the 

qualified project, excluding project 

easements, is considered the qualified 

project area. 

§ 285.542 What makes a State eligible for 

payment of revenues? 

A State is eligible for payment of 

revenues if any part of the State’s 

coastline is located within 15 miles of 

the announced geographic center of the 

project area of a qualified project. A 

State is not eligible for revenue sharing 

if all parts of that State’s coastline are 

more than 15 miles from the announced 

geographic center of the qualified 

project area. This is the case even if the 

qualified project area is located wholly 

or partially within an area extending 3 

nautical miles seaward of the 

submerged lands of that State or if there 

are no States with a coastline less than 

15 miles from the announced 

geographic center of the qualified 

project area. 

§ 285.543 Example of how the inverse 

distance formula works. 

(a) Assume that the geographic center 

of the project area lies 12 miles from the 

closest coastline point of State A and 4 

miles from the closest coastline point of 

State B. The MMS will round dollar 

shares to the nearest whole dollar. The 

proportional share due each State would 

be calculated as follows: 

(1) State A’s share = [(1⁄12) ÷ (1⁄12 + 1⁄4)] 

= 1⁄4. 

(2) State B’s share = [1⁄4) ÷ (1⁄12 + 1⁄4)] 

= 3⁄4. 

(b) Therefore, State B would receive a 

share of revenues that is three times as 

large as that awarded to State A, based 

on the finding that State B’s nearest 

coastline is one-third the distance to the 

geographic center of the qualified 

project area as compared to State A’s 

nearest coastline. Eligible States share 

the 27 percent of the total revenues from 

the qualified project as mandated under 

the OCS Lands Act. Hence, if the 

qualified project generates $1,000,000 of 

Federal revenues in a given year, the 

Federal Government would distribute 

the States’ 27-percent share as follows: 

(1) State A’s share = $270,000 × 1⁄4 = 

$67,500. 

(2) State B’s share = $270,000 × 3⁄4 = 

$202,500. 

Subpart F—Plans and Information 

Requirements 

§ 285.600 What plans and information 

must I submit to MMS before I conduct 

activities on my lease or grant? 

You must submit a SAP, COP, or GAP 

and receive MMS approval as set forth 

in the following table: 

§ 285.601 When am I required to submit 

my plans to MMS? 

Your plan submission requirements 

depend on whether your lease or grant 

was issued competitively or 

noncompetitively under subpart B or 

subpart C of this part. 

(a) If your lease or grant is issued 

competitively, you must submit your 

SAP or your GAP within 6 months of 

issuance. 

(b) If you request that a lease or grant 

be issued noncompetitively, you must 

submit your SAP or your GAP within 60 

days after the Director issues a 

determination that there is no 

competitive interest. 

(c) If you intend to continue your 

commercial lease with an operations 

term, you must submit a COP, or a FERC 

license application, at least 6 months 

before the end of your site assessment 

term. 

(d) You may submit your COP or 

FERC license application with your 

SAP. 

(1) You must provide sufficient data 

and information with your COP for 

MMS to complete the needed reviews 

and NEPA analysis; and 

(2) The MMS may need to conduct 

additional reviews, including NEPA 

analysis, if significant new information 

becomes available after you complete 

your site assessment activities or you 

revise your COP. As a result of the 

additional reviews, we may require 

modification of your COP. 

§ 285.602 What records must I maintain? 

Until MMS releases your financial 

assurance under § 285.534, you must 

maintain and provide to MMS, upon 

request, all data and information related 

to compliance with required terms and 

conditions of your SAP, COP, or GAP. 

§§ 285.603–285.604 [Reserved] 

Site Assessment Plan and Information 

Requirements for Commercial Leases 

§ 285.605 What is a Site Assessment Plan 

(SAP)? 

(a) A SAP describes the activities (e.g., 

installation of meteorological towers, 

meteorological buoys) you plan to 

perform for the characterization of your 

commercial lease, including your 

project easement, or to test technology 

devices. 

(1) Your SAP must describe how you 

will conduct your resource assessment 

(e.g., meteorological and oceanographic 


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data collection) or technology testing 

activities; and 

(2) The MMS will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure 

under exemption 4 of the FOIA and as 

provided in § 285.113. 

(b) Your SAP must include data from: 

(1) Physical characterization surveys 

(e.g., geological and geophysical surveys 

or hazards surveys); and 

(2) Baseline environmental surveys 

(e.g., biological or archaeological 

surveys). 

(c) You must receive MMS approval 

of your SAP before you can begin any 

of the approved activities on your lease, 

as provided in § 285.613. 

(d) If you propose to construct a 

facility or combination of facilities 

deemed by MMS to be complex or 

significant, as provided in 

§ 285.613(a)(1), you must also comply 

with the requirements of subpart G of 

this part and submit your Safety 

Management System as required by 

§ 285.810. 

§ 285.606 What must I demonstrate in my 

SAP? 

(a) Your SAP must demonstrate that 

you have planned and are prepared to 

conduct the proposed site assessment 

activities in a manner that conforms to 

your responsibilities listed in 

§ 285.105(a) and: 

(1) Conforms to all applicable laws, 

regulations, and lease provisions of your 

commercial lease; 

(2) Is safe; 

(3) Does not unreasonably interfere 

with other uses of the OCS, including 

those involved with national security or 

defense; 

(4) Does not cause undue 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; 

(5) Uses best available and safest 

technology; 

(6) Uses best management practices; 

and 

(7) Uses properly trained personnel. 

(b) You must also demonstrate that 

your site assessment activities will 

collect the necessary information and 

data required for your COP, as provided 

in § 285.626(a). 

§ 285.607 How do I submit my SAP? 

You must submit one paper copy and 

one electronic version of your SAP to 

MMS at the address listed in 

§ 285.110(a). 

§§ 285.608–285.609 [Reserved] 

Contents of the Site Assessment Plan 

§ 285.610 What must I include in my SAP? 

Your SAP must include the following 

information, as applicable. 

(a) For all activities you propose to 

conduct under your SAP, you must 

provide the following information: 

BILLING CODE 4310–MR–P 

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(b) You must provide the results of 

geophysical and geological surveys, 

hazards surveys, archaeological surveys 

(if required), and baseline collection 

studies (e.g., biological) with the 

supporting data in your SAP: 


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BILLING CODE 4310–MR–C 

(c) If you submit your COP or FERC 

license application with your SAP then: 

(1) You must provide sufficient data 

and information with your COP or FERC 

license application for MMS and/or 

FERC to complete the needed reviews 

and NEPA analysis. 

(2) You may need to revise your COP 

or FERC license application and MMS 

and/or FERC may need to conduct 

additional reviews, including NEPA 

analysis, if new information becomes 

available after you complete your site 

assessment activities. 

§ 285.611 What information must I submit 

with my SAP to assist MMS in complying 

with NEPA and other relevant laws? 

(a) You must submit with your SAP 

detailed information to assist MMS in 

complying with NEPA and other 

relevant laws, as appropriate. For a 

noncompetitive commercial lease, you 

must submit a SAP that describes those 

resources, conditions, and activities 

listed in the following table that could 

be affected by your proposed activities, 

or that could affect the activities 

proposed in your SAP. 

(b) For competitively issued 

commercial leases, MMS will have 

prepared a NEPA document and 

consistency determination for the lease 

sale and site assessment activities. 

However, if you submit a SAP that 

shows changes in impacts from those 

identified in the NEPA document or 

consistency determination prepared for 

the lease, MMS may determine that your 

SAP is subject to a new NEPA/CZMA 


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and other relevant Federal reviews. In 

that case, MMS will notify you of the 

determination, and you must submit a 

SAP that describes those resources, 

conditions, and activities listed in the 

following table that could be affected by 

your proposed activities, or that could 

affect the activities proposed in your 

SAP, including: 

§ 285.612 How will my SAP be processed 

for Federal consistency under the Coastal 

Zone Management Act? 

Your SAP will be processed based on 

how your commercial lease was issued: 


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§ 285.613 How will MMS process my SAP? 

(a) The MMS will review your 

submitted SAP, and additional 

information provided pursuant to 

§ 285.611, to determine if it contains the 

information necessary to conduct our 

technical and environmental reviews. 

(1) We will notify you if we deem 

your proposed facility or combination of 

facilities to be complex or significant; 

(2) We will notify you if your 

submitted SAP lacks any necessary 

information; 

(b) The MMS will prepare NEPA 

analysis, as appropriate. 

(c) As appropriate, we will coordinate 

and consult with relevant Federal and 

State agencies, executives of relevant 

local governments, and affected Indian 

tribes and will provide to other Federal, 

State, and local agencies and affected 

Indian tribes relevant nonproprietary 

data and information pertaining to your 

proposed activities. 

(d) During the review process, we may 

request additional information if we 

determine that the information provided 

is not sufficient to complete the review 

and approval process. If you fail to 

provide the requested information, 

MMS may disapprove your SAP. 

(e) Upon completion of our technical 

and environmental reviews and other 

reviews required by Federal laws (e.g., 

CZMA), MMS may approve, disapprove, 

or approve with modifications your 

SAP. 

(1) If we approve your SAP, we will 

specify terms and conditions to be 

incorporated into your SAP. You must 

certify compliance with those terms and 

conditions required under § 285.615(c); 

and 

(2) If we disapprove your SAP, we 

will inform you of the reasons and allow 

you an opportunity to submit a revised 

plan making the necessary corrections, 

and may suspend the term of your lease, 

as appropriate, to allow this to occur. 

Activities Under an Approved SAP 

§ 285.614 When may I begin conducting 

activities under my approved SAP? 

(a) You may begin conducting the 

activities approved in your SAP 

following MMS approval of your SAP. 

(b) If you are installing a facility or a 

combination of facilities deemed by 

MMS to be complex or significant, as 

provided in § 285.613(a)(1), you must 

comply with the requirements of 

subpart G of this part and submit your 

Safety Management System required by 

§ 285.810 before construction may 

begin. 

§ 285.615 What other reports or notices 

must I submit to MMS under my approved 

SAP? 

(a) You must notify MMS in writing 

within 30 days of completing 

installation activities approved in your 

SAP. 

(b) You must prepare and submit to 

MMS a report annually on November 1 

of each year that summarizes your site 

assessment activities and the results of 

those activities. The MMS will withhold 

trade secrets and commercial or 

financial information that is privileged 

or confidential from public disclosure 

under exemption 4 of the FOIA and as 

provided in § 285.113. 

(c) You must submit a certification of 

compliance annually (or other 

frequency as determined by MMS) with 

certain terms and conditions of your 

SAP that MMS identifies under 

§ 285.613(e)(1). Together with your 

certification, you must submit: 

(1) Summary reports that show 

compliance with the terms and 

conditions which require certification; 

and 

(2) A statement identifying and 

describing any mitigation measures and 

monitoring methods and their 

effectiveness. If you identified measures 

that were not effective, you must 

include your recommendations for new 

mitigation measures or monitoring 

methods. 

§ 285.616 [Reserved] 

§ 285.617 What activities require a revision 

to my SAP, and when will MMS approve the 

revision? 

(a) You must notify MMS in writing 

before conducting any activities not 

described in your approved SAP, 

describing in detail the type of activities 

you propose to conduct. We will 

determine whether the activities you 

propose are authorized by your existing 

SAP or require a revision to your SAP. 

We may request additional information 

from you, if necessary, to make this 

determination. 

(b) The MMS will periodically review 

the activities conducted under an 

approved SAP. The frequency and 

extent of the review will be based on the 

significance of any changes in available 

information and on onshore or offshore 

conditions affecting, or affected by, the 

activities conducted under your SAP. If 

the review indicates that the SAP 

should be revised to meet the 

requirements of this part, we will 

require you to submit the needed 

revisions. 

(c) Activities for which a proposed 

revision to your SAP will likely be 

necessary include: 

(1) Activities not described in your 

approved SAP; 

(2) Modifications to the size or type of 

facility or equipment you will use; 

(3) Changes in the surface location of 

a facility or structure; 


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(4) Addition of a facility or structure 

not contemplated in your approved 

SAP; 

(5) Changes in the location of your 

onshore support base from one State to 

another, or to a new base requiring 

expansion; 

(6) Changes in the location of bottom 

disturbances (anchors, chains, etc.) by 

500 feet (152 meters) or greater from the 

approved locations. If a specific anchor 

pattern was approved as a mitigation 

measure to avoid contact with bottom 

features, any change in the proposed 

bottom disturbances would likely trigger 

the need for a revision; 

(7) Structural failure of one or more 

facilities; or 

(8) Changes to any other activity 

specified by MMS. 

(d) We may begin the appropriate 

NEPA analysis and other relevant 

consultations when we determine that a 

proposed revision could: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated; 

(2) Require any additional Federal 

authorizations; or 

(3) Involve activities not previously 

identified and evaluated. 

(e) When you propose a revision, we 

may approve the revision if we 

determine that the revision is: 

(1) Designed not to cause undue 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; and 

(2) Otherwise consistent with the 

provisions of subsection 8(p) of the OCS 

Lands Act. 

§ 285.618 What must I do upon completion 

of approved site assessment activities? 

(a) If, prior to the expiration of your 

site assessment term, you timely submit 

a COP meeting the requirements of this 

subpart, or a complete FERC license 

application, that describes the 

continued use of existing facilities 

approved in your SAP, you may keep 

such facilities in place on your lease 

during the time that MMS reviews your 

COP for approval or FERC reviews your 

license application for approval. 

(b) You are not required to initiate the 

decommissioning process for facilities 

that are authorized to remain in place 

under your approved COP or approved 

FERC license. 

(c) If, following the technical and 

environmental review of your submitted 

COP, MMS determines that such 

facilities may not remain in place, you 

must initiate the decommissioning 

process, as provided in subpart I of this 

part. 

(d) If FERC determines that such 

facilities may not remain in place, you 

must initiate the decommissioning 

process as provided in subpart I of this 

part. 

(e) You must initiate the 

decommissioning process, as set forth in 

subpart I of this part, upon the 

termination of your lease. 

§ 285.619 [Reserved] 

Construction and Operations Plan for 

Commercial Leases 

§ 285.620 What is a Construction and 

Operations Plan (COP)? 

The COP describes your construction, 

operations, and conceptual 

decommissioning plans under your 

commercial lease, including your 

project easement. The MMS will 

withhold trade secrets and commercial 

or financial information that is 

privileged or confidential from public 

disclosure under exemption 4 of the 

FOIA and in accordance with the terms 

of § 285.113. 

(a) Your COP must describe all 

planned facilities that you will 

construct and use for your project, 

including onshore and support facilities 

and all anticipated project easements. 

(b) Your COP must describe all 

proposed activities including your 

proposed construction activities, 

commercial operations, and conceptual 

decommissioning plans for all planned 

facilities, including onshore and 

support facilities. 

(c) You must receive MMS approval 

of your COP before you can begin any 

of the approved activities on your lease. 

§ 285.621 What must I demonstrate in my 

COP? 

Your COP must demonstrate that you 

have planned and are prepared to 

conduct the proposed activities in a 

manner that conforms to your 

responsibilities listed in § 285.105(a) 

and: 

(a) Conforms to all applicable laws, 

implementing regulations, lease 

provisions, and stipulations or 

conditions of your commercial lease; 

(b) Is safe; 

(c) Does not unreasonably interfere 

with other uses of the OCS, including 

those involved with National security or 

defense; 

(d) Does not cause undue 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; 

(e) Uses best available and safest 

technology; 

(f) Uses best management practices; 

and 

(g) Uses properly trained personnel. 

§ 285.622 How do I submit my COP? 

(a) You must submit one paper copy 

and one electronic version of your COP 

to MMS at the address listed in 

§ 285.110(a). 

(b) You may submit information and 

a request for any project easement as 

part of your original COP submission or 

as a revision to your COP. 

§§ 285.623–285.625 [Reserved] 

Contents of the Construction and 

Operations Plan 

§ 285.626 What must I include in my COP? 

(a) You must submit the results of the 

following surveys for the proposed 

site(s) of your facility(ies). Your COP 

must include the following information: 

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(b) Your COP must include the 

following project-specific information, 

as applicable. 


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§ 285.627 What information and 

certifications must I submit with my COP to 

assist the MMS in complying with NEPA 

and other relevant laws? 

(a) You must submit with your COP 

detailed information to assist MMS in 

complying with NEPA and other 

relevant laws. Your COP must describe 

those resources, conditions, and 

activities listed in the following table 

that could be affected by your proposed 

activities, or that could affect the 

activities proposed in your COP, 

including: 


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(b) You must submit one paper copy 

and one electronic copy of your 

consistency certification. Your 

consistency certification must include: 

(1) One copy of your consistency 

certification under subsection 

307(c)(3)(B) of the CZMA (16 U.S.C. 

1456(c)(3)(B)) and 15 CFR 930.76 stating 

that the proposed activities described in 

detail in your plans comply with the 

State(s) approved coastal management 

program(s) and will be conducted in a 

manner that is consistent with such 

program(s); and 

(2) ‘‘Information,’’ as required by 15 

CFR 930.76(a) and 15 CFR 930.58(a)(2), 

and ‘‘Analysis,’’ as required by 15 CFR 

930.58(a)(3). 

(c) You must submit your oil spill 

response plan, as required by part 254 

of this subchapter. 

(d) You must submit your Safety 

Management System as required by 

§ 285.810. 

§ 285.628 How will MMS process my COP? 

(a) The MMS will review your 

submitted COP, and the information 

provided pursuant to § 285.627, to 

determine if it contains all the required 

information necessary to conduct our 

technical and environmental reviews. 

We will notify you if your submitted 

COP lacks any necessary information. 

(b) The MMS will prepare an 

appropriate NEPA analysis. 

(c) The MMS will forward one copy 

of your COP, consistency certification, 

and associated data and information 

under the CZMA to the State’s CZM 

agency after all information 

requirements for the COP are met. 

(d) As appropriate, MMS will 

coordinate and consult with relevant 

Federal, State, and local agencies and 

affected Indian tribes, and provide to 

them relevant nonproprietary data and 

information pertaining to your proposed 

activities. 

(e) During the review process, we may 

request additional information if we 

determine that the information provided 

is not sufficient to complete the review 

and approval process. If you fail to 

provide the requested information, 

MMS may disapprove your COP. 

(f) Upon completion of our technical 

and environmental reviews and other 

reviews required by Federal law (e.g., 

CZMA), MMS may approve, disapprove, 

or approve with modifications your 

COP. 

(1) If we approve your COP, we will 

specify terms and conditions to be 

incorporated into your COP. You must 

certify compliance with certain of those 

terms and conditions, as required under 

§ 285.633(b); and 

(2) If we disapprove your COP, we 

will inform you of the reasons and allow 

you an opportunity to resubmit a 

revised plan addressing the concerns 

identified, and may suspend the term of 

your lease, as appropriate, to allow this 

to occur. 

(g) If MMS approves your project 

easement, MMS will issue an addendum 

to your lease specifying the terms of the 

project easement. A project easement 

may include off-lease areas that: 

(1) Contain the sites on which cable, 

pipeline, or associated facilities are 

located; 


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(2) Do not exceed 200 feet (61 meters) 

in width, unless safety and 

environmental factors during 

construction and maintenance of the 

associated cables or pipelines require a 

greater width; and 

(3) For associated facilities, are 

limited to the area reasonably necessary 

for power or pumping stations or other 

accessory facilities. 

§ 285.629 May I develop my lease in 

phases? 

In your COP, you may request 

development of your commercial lease 

in phases. In support of your request, 

you must provide details as to what 

portions of the lease will be initially 

developed for commercial operations 

and what portions of the lease will be 

reserved for subsequent phased 

development. 

§ 285.630 [Reserved] 

Activities Under an Approved COP 

§ 285.631 When must I initiate activities 

under an approved COP? 

After your COP is approved, you must 

commence construction by the date 

given in the construction schedule 

required by § 285.626(b)(21), and 

included as a part of your approved 

COP, unless MMS approves a deviation 

from your schedule. 

§ 285.632 What documents must I submit 

before I may construct and install facilities 

under my approved COP? 

(a) You must submit to MMS the 

documents listed in the following table: 

(b) You must submit your Safety 

Management System, as required by 

§ 285.810 of this part. 

(c) These activities must fall within 

the scope of your approved COP. If they 

do not fall within the scope of your 

approved COP, you will be required to 

submit a revision to your COP, under 

§ 285.634, for MMS approval before 

commencing the activity. 

§ 285.633 How do I comply with my COP? 

(a) Based on MMS’s environmental 

and technical reviews, we will specify 

terms and conditions to be incorporated 

into your COP. 

(b) You must submit a certification of 

compliance annually (or other 

frequency as determined by MMS) with 

certain terms and conditions of your 

COP that MMS identifies. Together with 

your certification, you must submit: 

(1) Summary reports that show 

compliance with the terms and 

conditions which require certification; 

and 

(2) A statement identifying and 

describing any mitigation measures and 

monitoring methods, and their 

effectiveness. If you identified measures 

that were not effective, then you must 

make recommendations for new 

mitigation measures or monitoring 

methods. 

(c) As provided at § 285.105(i), MMS 

may require you to submit any 

supporting data and information. 

§ 285.634 What activities require a revision 

to my COP, and when will MMS approve the 

revision? 

(a) You must notify MMS in writing 

before conducting any activities not 

described in your approved COP, 

describing in detail the type of activities 

you propose to conduct. We will 

determine whether the activities you 

propose are authorized by your existing 

COP or require a revision to your COP. 

We may request additional information 

from you, if necessary, to make this 

determination. 

(b) The MMS will periodically review 

the activities conducted under an 

approved COP. The frequency and 

extent of the review will be based on the 

significance of any changes in available 

information, and on onshore or offshore 

conditions affecting, or affected by, the 

activities conducted under your COP. If 

the review indicates that the COP 

should be revised to meet the 

requirement of this part, we will require 

you to submit the needed revisions. 

(c) Activities for which a proposed 

revision to your COP will likely be 

necessary include: 

(1) Activities not described in your 

approved COP; 

(2) Modifications to the size or type of 

facility or equipment you will use; 

(3) Change in the surface location of 

a facility or structure; 

(4) Addition of a facility or structure 

not described in your approved COP; 

(5) Change in the location of your 

onshore support base from one State to 

another or to a new base requiring 

expansion; 

(6) Changes in the location of bottom 

disturbances (anchors, chains, etc.) by 

500 feet (152 meters) or greater from the 

approved locations (e.g., if a specific 

anchor pattern was approved as a 

mitigation measure to avoid contact 

with bottom features, any change in the 

proposed bottom disturbances would 

likely trigger the need for a revision); 

(7) Structural failure of one or more 

facilities; or 

(8) Change in any other activity 

specified by MMS. 

(d) We may begin the appropriate 

NEPA analysis and relevant 

consultations when we determine that a 

proposed revision could: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated; 

(2) Require any additional Federal 

authorizations; or 

(3) Involve activities not previously 

identified and evaluated. 

(e) When you propose a revision, we 

may approve the revision if we 

determine that the revision is: 

(1) Designed not to cause undue 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; and 

(2) Otherwise consistent with the 

provisions of subsection 8(p) of the OCS 

Lands Act. 

§ 285.635 What must I do if I cease 

activities approved in my COP before the 

end of my commercial lease? 

You must notify the MMS, within 5 

business days, any time you cease 

commercial operations, without an 

approved suspension, under your 

approved COP. If you cease commercial 

operations for an indefinite period 

which extends longer than 6 months, we 

may cancel your lease under § 285.437, 

and you must initiate the 

decommissioning process, as set forth in 

subpart I of this part. 

§ 285.636 What notices must I provide 

MMS following approval of my COP? 

You must notify MMS in writing of 

the following events, within the time 

periods provided: 

(a) No later than 30 days after 

commencing activities associated with 

the placement of facilities on the lease 

area under a Fabrication and Installation 

Report. 


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(b) No later than 30 days after 

completion of construction and 

installation activities under a 

Fabrication and Installation Report. 

(c) At least 7 days before commencing 

commercial operations. 

§ 285.637 When may I commence 

commercial operations on my commercial 

lease? 

If you are conducting activities on 

your lease that: 

(a) Do not require a FERC license (i.e. 

wind), then you may commence 

commercial operations 30 days after the 

CVA or project engineer has submitted 

to MMS the final Fabrication and 

Installation Report for the fabrication 

and installation review, as provided in 

§ 285.708. 

(b) Require a FERC license or 

exemption, then you may commence 

commercial operations when permitted 

by the terms of your license or 

exemption. 

§ 285.638 What must I do upon completion 

of my commercial operations as approved 

in my COP or FERC license? 

(a) Upon completion of your approved 

activities under your COP, you must 

initiate the decommissioning process as 

set forth in subpart I of this part. You 

must submit your decommissioning 

application as provided in §§ 285.905 

and 285.906. 

(b) Upon completion of your 

approved activities under your FERC 

license, the terms of your FERC license 

will govern your decommissioning 

activities. 

§ 285.639 [Reserved] 

General Activities Plan Requirements 

for Limited Leases, ROW Grants, and 

RUE Grants 

§ 285.640 What is a General Activities Plan 

(GAP)? 

(a) A GAP describes your proposed 

construction, activities, and conceptual 

decommissioning plans for all planned 

facilities, including testing of 

technology devices and onshore and 

support facilities that you will construct 

and use for your project, including any 

project easements for the assessment 

and development of your limited lease 

or grant. 

(b) You must receive MMS approval 

of your GAP before you can begin any 

of the approved activities on your lease 

or grant. For a ROW grant or RUE grant 

issued competitively, you must submit 

your GAP within 6 months of issuance. 

§ 285.641 What must I demonstrate in my 

GAP? 

Your GAP must demonstrate that you 

have planned and are prepared to 

conduct the proposed activities in a 

manner that: 

(a) Conforms to all applicable laws, 

implementing regulations, lease 

provisions and stipulations; 

(b) Is safe; 

(c) Does not unreasonably interfere 

with other uses of the OCS, including 

those involved with national security or 

defense; 

(d) Does not cause undue 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; 

(e) Uses best available and safest 

technology; 

(f) Uses best management practices; 

and 

(g) Uses properly trained personnel. 

§ 285.642 How do I submit my GAP? 

(a) You must submit one paper copy 

and one electronic version of your GAP 

to MMS at the address listed in 

§ 285.110(a). 

(b) If you have a limited lease, you 

may submit information on any project 

easement as part of your original GAP 

submission or as a revision to your GAP. 

§§ 285.643–285.644 [Reserved] 

Contents of the General Activities Plan 

§ 285.645 What must I include in my GAP? 

(a) You must provide the following 

results of geophysical and geological 

surveys, hazards surveys, archaeological 

surveys (if required), and baseline 

collection studies (e.g., biological) with 

the supporting data in your GAP: 

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(b) For all activities you propose to 

conduct under your GAP, you must 

provide the following information: 


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(c) If you are applying for a project 

easement or constructing a facility, or a 

combination of facilities deemed by 

MMS to be complex or significant, you 

must provide the following information 

in addition to what is required in 

paragraphs (a) and (b) of this section 

and comply with the requirements of 

subpart G of this part: 


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(d) The MMS will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure in 

accordance with the terms of § 285.113. 

§ 285.646 What information and 

certifications must I submit with my GAP to 

assist MMS in complying with NEPA and 

other relevant laws? 

You must submit with your GAP 

detailed information to assist MMS in 

complying with NEPA and other 

relevant laws. Your GAP must describe 

those resources, conditions, and 

activities listed in the following table 

that could be affected by your proposed 

activities, or that could affect the 

activities proposed in your GAP, 

including: 


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BILLING CODE 4310–MR–C § 285.647 How will my GAP be processed 

for Federal consistency under the Coastal 

Zone Management Act? 

Your GAP will be processed based on 

how your limited lease, ROW grant, or 

RUE grant was issued: 

§ 285.648 How will MMS process my GAP? 

(a) The MMS will review your 

submitted GAP, along with the 

information and certifications provided 

pursuant to § 285.646, to determine if it 

contains all the required information 

necessary to conduct our technical and 

environmental reviews. 


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(1) We will notify you if we deem 

your proposed facility or combination of 

facilities to be complex or significant; 

and 

(2) We will notify you if your 

submitted GAP lacks any necessary 

information. 

(b) The MMS will prepare appropriate 

NEPA analysis. 

(c) When appropriate, we will 

coordinate and consult with relevant 

State and Federal agencies and affected 

Indian tribes and provide to other local, 

State, and Federal agencies and affected 

Indian tribes relevant nonproprietary 

data and information pertaining to your 

proposed activities. 

(d) During the review process, we may 

request additional information if we 

determine that the information provided 

is not sufficient to complete the review 

and approval process. If you fail to 

provide the requested information, 

MMS may disapprove your GAP. 

(e) Upon completion of our technical 

and environmental reviews and other 

reviews required by Federal law (e.g., 

CZMA), MMS may approve, disapprove, 

or approve with modifications your 

GAP. 

(1) If we approve your GAP, we will 

specify terms and conditions to be 

incorporated into your GAP. You must 

certify compliance with certain of those 

terms and conditions, as required under 

§ 285.653(c); and 

(2) If we disapprove your GAP, we 

will inform you of the reasons and allow 

you an opportunity to resubmit a 

revised plan making the necessary 

corrections, and may suspend the term 

of your lease or grant, as appropriate, to 

allow this to occur. 

§ 285.649 [Reserved] 

Activities Under an Approved GAP 

§ 285.650 When may I begin conducting 

activities under my GAP? 

After MMS approves your GAP, you 

may begin conducting the approved 

activities that do not involve a project 

easement or the construction of facilities 

on the OCS that MMS has deemed to be 

complex or significant. 

§ 285.651 When may I construct complex 

or significant OCS facilities on my limited 

lease or any facilities on my project 

easement proposed under my GAP? 

If you are applying for a project 

easement, or installing a facility or a 

combination of facilities on your limited 

lease deemed by MMS to be complex or 

significant, as provided in 

§ 285.648(a)(1), you also must comply 

with the requirements of subpart G of 

this part and submit your Safety 

Management System required by 

§ 285.810 before construction may 

begin. 

§ 285.652 How long do I have to conduct 

activities under an approved GAP? 

After MMS approves your GAP, you 

have: 

(a) For a limited lease, 5 years to 

conduct your approved activities, unless 

we renew the term under §§ 285.425 

through 285.429. 

(b) For a ROW grant or RUE grant, the 

time provided in the terms of the grant. 

§ 285.653 What other reports or notices 

must I submit to MMS under my approved 

GAP? 

(a) You must notify MMS in writing 

within 30 days after completing 

installation activities approved in your 

GAP. 

(b) You must prepare and submit to 

MMS annually a report that summarizes 

the findings from any activities you 

conduct under your approved GAP and 

the results of those activities. We will 

protect the information from public 

disclosure as provided in § 285.113. 

(c) You must annually (or other 

frequency as determined by MMS) 

submit a certification of compliance 

with those terms and conditions of your 

GAP that MMS identifies under 

§ 285.648(e)(1). Together with your 

certification, you must submit: 

(1) Summary reports that show 

compliance with the terms and 

conditions which require certification; 

and 

(2) A statement identifying and 

describing any mitigation measures and 

monitoring methods and their 

effectiveness. If you identified measures 

that were not effective, you must 

include your recommendations for new 

mitigation measures or monitoring 

methods. 

§ 285.654 [Reserved] 

§ 285.655 What activities require a revision 

to my GAP, and when will MMS approve the 

revision? 

(a) You must notify MMS in writing 

before conducting any activities not 

described in your approved GAP, 

describing in detail the type of activities 

you propose to conduct. We will 

determine whether the activities you 

propose are authorized by your existing 

GAP or require a revision to your GAP. 

We may request additional information 

from you, if necessary, to make this 

determination. 

(b) The MMS will periodically review 

the activities conducted under an 

approved GAP. The frequency and 

extent of the review will be based on the 

significance of any changes in available 

information and on onshore or offshore 

conditions affecting, or affected by, the 

activities conducted under your GAP. If 

the review indicates that the GAP 

should be revised to meet the 

requirement of this part, we will require 

you to submit the needed revisions. 

(c) Activities for which a proposed 

revision to your GAP will likely be 

necessary include: 

(1) Activities not described in your 

approved GAP; 

(2) Modifications to the size or type of 

facility or equipment you will use; 

(3) Change in the surface location of 

a facility or structure; 

(4) Addition of a facility or structure 

not contemplated in your approved 

GAP; 

(5) Change in the location of your 

onshore support base from one State to 

another or to a new base requiring 

expansion; 

(6) Changes in the locations of bottom 

disturbances (anchors, chains, etc.) by 

500 feet (152 meters) or greater from the 

approved locations. If a specific anchor 

pattern was approved as a mitigation 

measure to avoid contact with bottom 

features, any change in the proposed 

bottom disturbances would likely trigger 

the need for a revision; 

(7) Structural failure of one or more 

facilities; or 

(8) Change to any other activity 

specified by MMS. 

(d) We may begin the appropriate 

NEPA analysis and any relevant 

consultations when we determine that a 

proposed revision could: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated; 

(2) Require any additional Federal 

authorizations; or 

(3) Involve activities not previously 

identified and evaluated. 

(e) When you propose a revision, we 

may approve the revision if we 

determine that the revision is: 

(1) Designed not to cause undue 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; and 

(2) Otherwise consistent with the 

provisions of subsection 8(p) of the OCS 

Lands Act. 

§ 285.656 What must I do if I cease 

activities approved in my GAP before the 

end of my term? 

You must notify the MMS any time 

you cease activities under your 

approved GAP without an approved 

suspension. If you cease activities for an 

indefinite period that exceeds 6 months, 

MMS may cancel your lease or grant 

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under § 285.437, as applicable, and you 

must initiate the decommissioning 

process, as set forth in subpart I of this 

part. 

§ 285.657 What must I do upon completion 

of approved activities under my GAP? 

Upon completion of your approved 

activities under your GAP, you must 

initiate the decommissioning process as 

set forth in subpart I of this part. You 

must submit your decommissioning 

application as provided in §§ 285.905 

and 285.906. 

Cable and Pipeline Deviations 

§ 285.658 Can my cable or pipeline 

construction deviate from my approved 

COP or GAP? 

(a) You must make every effort to 

ensure that all cables and pipelines are 

constructed in a manner that minimizes 

deviations from the approved plan 

under your lease or grant. 

(b) If MMS determines that a 

significant change in conditions has 

occurred that would necessitate an 

adjustment to your ROW, RUE or lease 

before the commencement of 

construction of the cable or pipeline on 

the grant or lease, MMS will consider 

modifications to your ROW grant, RUE 

grant, or your lease addendum for a 

project easement in connection with 

your COP or GAP. 

(c) If, after construction, it is 

determined that a deviation from the 

approved plan has occurred, you must: 

(1) Notify the operators of all leases 

(including mineral leases issued under 

this subchapter) and holders of all ROW 

grants or RUE grants (including all 

grants issued under this subchapter) 

which include the area where a 

deviation has occurred and provide 

MMS with evidence of such 

notification; 

(2) Relinquish any unused portion of 

your lease or grant; and 

(3) Submit a revised plan for MMS 

approval as necessary. 

(d) Construction of a cable or pipeline 

that substantially deviates from the 

approved plan may be grounds for 

cancellation of the lease or grant. 

§ 285.659 What requirements must I 

include in my SAP, COP, or GAP regarding 

air quality? 

(a) You must comply with the Clean 

Air Act (42 U.S.C. 7409) and its 

implementing regulations, according to 

the following table. 

(b) For air quality modeling that you 

perform in support of the activities 

proposed in your plan, you should 

contact the appropriate regulatory 

agency to establish a modeling protocol 

to ensure that the agency’s needs are 

met and that the meteorological files 

used are acceptable before initiating the 

modeling work. In the western Gulf of 

Mexico (west of 87.5° west longitude), 

you must submit to MMS three copies 

of the modeling report and three sets of 

digital files as supporting information. 

The digital files must contain the 

formatted meteorological files used in 

the modeling runs, the model input file, 

and the model output file. 

Subpart G—Facility Design, 

Fabrication, and Installation 

Reports 

§ 285.700 What reports must I submit to 

MMS before installing facilities described in 

my approved SAP, COP, or GAP? 

(a) You must submit the following 

reports to MMS before installing 

facilities described in your approved 

COP (§ 285.632(a)) and, when required 

by this part, your SAP (§ 285.614(b)) or 

GAP (§ 285.651): 

(1) A Facility Design Report; and 

(2) A Fabrication and Installation 

Report. 

(b) You may begin to fabricate and 

install the approved facilities after MMS 

notifies you that it has received your 

reports and has no objections. If MMS 

receives the reports, but does not 

respond with objections within 60 days 

of receipt or 60 days after we approve 

your SAP, COP, or GAP, if you 

submitted your report with the plan, 

MMS is deemed not to have objections 

to the reports, and you may commence 

fabrication and installation of your 

facility or facilities. 

(c) If MMS has any objections, we will 

notify you verbally or in writing within 

60 days of receipt of the report. 

Following initial notification of 

objections, MMS may follow up with 

written correspondence outlining its 

specific objections to the report and 

request that certain actions be 

undertaken. You cannot commence 

activities addressed in such report until 

you resolve all objections to MMS’s 

satisfaction. 

§ 285.701 What must I include in my 

Facility Design Report? 

(a) Your Facility Design Report 

provides specific details of the design of 

any facilities, including cables and 

pipelines, that are outlined in your 

approved SAP, COP, or GAP. Your 

Facility Design Report must 

demonstrate that your design conforms 

to your responsibilities listed in 

§ 285.105(a). You must include the 

following items in your Facility Design 

Report: 

BILLING CODE 4310–MR–P 


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BILLING CODE 4310–MR–C 

(b) For any floating facility, your 

design must meet the requirements of 

the U.S. Coast Guard for structural 

integrity and stability (e.g., verification 

of center of gravity). The design must 

also consider: 

(1) Foundations, foundation pilings 

and templates, and anchoring systems; 

and 

(2) Mooring or tethering systems. 

(c) You must provide the location of 

records, as required in § 285.714(c). 

(d) If you are required to use a CVA, 

the Facility Design Report must include 

one paper copy of the following 

certification statement: ‘‘The design of 

this structure has been certified by a 

MMS approved CVA to be in 

accordance with accepted engineering 

practices and the approved SAP, GAP, 

or COP as appropriate. The certified 

design and as-built plans and 

specifications will be on file at (given 

location).’’ 

(e) The MMS will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure 

under exemption 4 of the FOIA and in 

accordance with the terms of § 285.113. 

§ 285.702 What must I include in my 

Fabrication and Installation Report? 

(a) Your Fabrication and Installation 

Report must describe how your facilities 

will be fabricated and installed in 

accordance with the design criteria 

identified in the Facility Design Report; 

your approved SAP, COP, or GAP; and 

generally accepted industry standards 

and practices. Your Fabrication and 

Installation Report must demonstrate 

how your facilities will be fabricated 

and installed in a manner that conforms 

to your responsibilities listed in 

§ 285.105(a). You must include the 

following items in your Fabrication and 

Installation Report: 


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(b) You must provide the location of 

records, as required in § 285.714(c). 

(c) If you are required to use a CVA, 

the Fabrication and Installation Report 

must include one paper copy of the 

following certification statement: ‘‘The 

fabrication and installation of this 

structure has been certified by a MMS 

approved CVA to be in accordance with 

accepted engineering practices and the 

approved SAP, GAP, or COP as 

appropriate. The certified design and asbuilt plans and specifications will be on 

file at (given location).’’ 

(d) The MMS will withhold trade 

secrets and commercial or financial 

information that is privileged or 

confidential from public disclosure 

under exemption 4 of the FOIA and in 

accordance with the terms of § 285.113. 

§ 285.703 What reports must I submit for 

project modifications and repairs? 

(a) You must verify and, in a report 

to us, certify that major repairs and 

major modifications to the project 

conform to accepted engineering 

practices. 

(1) A major repair is a corrective 

action involving structural members 

affecting the structural integrity of a 

portion of or all the facility. 

(2) A major modification is an 

alteration involving structural members 

affecting the structural integrity of a 

portion of or all the facility. 

(b) The report must also identify the 

location of all records pertaining to the 

major repairs or major modifications, as 

required in § 285.714(c). 

(c) The MMS may require you to use 

a CVA for project modifications and 

repairs. 

§ 285.704 [Reserved] 

Certified Verification Agent 

§ 285.705 When must I use a Certified 

Verification Agent (CVA)? 

You must use a CVA to review and 

certify the Facility Design Report, the 

Fabrication and Installation Report, and 

the Project Modifications and Repairs 

Report. 

(a) You must use a CVA to: 

(1) Ensure that your facilities are 

designed, fabricated, and installed in 

conformance with accepted engineering 

practices and the Facility Design Report 

and Fabrication and Installation Report; 

(2) Ensure that repairs and major 

modifications are completed in 

conformance with accepted engineering 

practices; and 

(3) Provide MMS immediate reports of 

all incidents that affect the design, 

fabrication, and installation of the 

project and its components. 

(b) The MMS may waive the 

requirement that you use a CVA if you 

can demonstrate the following: 


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(c) You must submit a request to 

waive the requirement to use a CVA to 

MMS in writing, along with your SAP 

under § 285.610(a)(9), COP under 

§ 285.626(b)(20), or GAP under 

§ 285.645(c)(5). 

(1) The MMS will review your request 

to waive the use of the CVA and notify 

you of our decision along with our 

decision on your SAP, COP, or GAP. 

(2) If MMS does not waive the 

requirement for a CVA, you may file an 

appeal under § 285.118. 

(3) If MMS waives the requirement 

that you use a CVA, your project 

engineer must perform the same duties 

and responsibilities as the CVA, except 

as otherwise provided. 

§ 285.706 How do I nominate a CVA for 

MMS approval? 

(a) As part of your COP (as provided 

in § 285.626(b)(20) and, when required 

by this part, your SAP (§ 285.610(a)(9)) 

or GAP (§ 285.645(c)(5)), you must 

nominate a CVA for MMS approval. You 

must specify whether the nomination is 

for the Facility Design Report, 

Fabrication and Installation Report, 

Modification and Repair Report, or for 

any combination of these. 

(b) For each CVA that you nominate, 

you must submit to MMS a list of 

documents used in your design that you 

will forward to the CVA and a 

qualification statement that includes the 

following: 

(1) Previous experience in third-party 

verification or experience in the design, 

fabrication, installation, or major 

modification of offshore energy 

facilities; 

(2) Technical capabilities of the 

individual or the primary staff for the 

specific project; 

(3) Size and type of organization or 

corporation; 

(4) In-house availability of, or access 

to, appropriate technology (including 

computer programs, hardware, and 

testing materials and equipment); 

(5) Ability to perform the CVA 

functions for the specific project 

considering current commitments; 

(6) Previous experience with MMS 

requirements and procedures, if any; 

and 

(7) The level of work to be performed 

by the CVA. 

(c) Individuals or organizations acting 

as CVAs must not function in any 

capacity that will create a conflict of 

interest, or the appearance of a conflict 

of interest. 

(d) The verification must be 

conducted by or under the direct 

supervision of registered professional 

engineers. 

(e) The MMS will approve or 

disapprove your CVA as part of its 

review of the COP or, when required, of 

your SAP or GAP. 

(f) You must nominate a new CVA for 

MMS approval if the previously 

approved CVA: 

(1) Is no longer able to serve in a CVA 

capacity for the project; or 

(2) No longer meets the requirements 

for a CVA set forth in this subpart. 

§ 285.707 What are the CVA’s primary 

duties for facility design review? 

If you are required to use a CVA: 

(a) The CVA must use good 

engineering judgment and practices in 

conducting an independent assessment 

of the design of the facility. The CVA 

must certify in the Facility Design 

Report to MMS that the facility is 

designed to withstand the 

environmental and functional load 

conditions appropriate for the intended 

service life at the proposed location. 

(b) The CVA must conduct an 

independent assessment of all proposed: 

(1) Planning criteria; 

(2) Operational requirements; 

(3) Environmental loading data; 

(4) Load determinations; 

(5) Stress analyses; 

(6) Material designations; 

(7) Soil and foundation conditions; 

(8) Safety factors; and 

(9) Other pertinent parameters of the 

proposed design. 

(c) For any floating facility, the CVA 

must ensure that any requirements of 

the U.S. Coast Guard for structural 

integrity and stability (e.g., verification 

of center of gravity), have been met. The 

CVA must also consider: 

(1) Foundations, foundation pilings 

and templates, and anchoring systems; 

and 

(2) Mooring or tethering systems. 

§ 285.708 What are the CVA’s or project 

engineer’s primary duties for fabrication 

and installation review? 

(a) The CVA or project engineer must 

do all of the following: 

(1) Use good engineering judgment 

and practice in conducting an 

independent assessment of the 

fabrication and installation activities; 

(2) Monitor the fabrication and 

installation of the facility as required by 

paragraph (b) of this section; 

(3) Make periodic onsite inspections 

while fabrication is in progress and 

verify the items required by § 285.709; 

(4) Make periodic onsite inspections 

while installation is in progress and 

satisfy the requirements of § 295.710; 

and 

(5) Certify in a report that project 

components are fabricated and installed 

in accordance with accepted 

engineering practices; your approved 

COP, SAP, or GAP (as applicable); and 

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(i) The report must also identify the 

location of all records pertaining to 

fabrication and installation, as required 

in § 285.714(c); and 

(ii) You may commence commercial 

operations or other approved activities 

30 days after MMS receives that 

certification report, unless MMS notifies 

you within that time period of its 

objections to the certification report. 

(b) To comply with paragraph (a)(5) of 

this section, the CVA or project engineer 

must monitor the fabrication and 

installation of the facility to ensure that 

it has been built and installed according 

to the Facility Design Report and 

Fabrication and Installation Report. 

(1) If the CVA or project engineer 

finds that fabrication and installation 

procedures have been changed or design 

specifications have been modified, the 

CVA or project engineer must inform 

you; and 

(2) If you accept the modifications, 

then you must also inform MMS. 

§ 285.709 When conducting onsite 

fabrication inspections, what must the CVA 

or project engineer verify? 

(a) To comply with § 285.708(a)(3), 

the CVA or project engineer must make 

periodic onsite inspections while 

fabrication is in progress and must 

verify the following fabrication items, as 

appropriate: 

(1) Quality control by lessee (or grant 

holder) and builder; 

(2) Fabrication site facilities; 

(3) Material quality and identification 

methods; 

(4) Fabrication procedures specified 

in the Fabrication and Installation 

Report, and adherence to such 

procedures; 

(5) Welder and welding procedure 

qualification and identification; 

(6) Structural tolerances specified, 

and adherence to those tolerances; 

(7) Nondestructive examination 

requirements and evaluation results of 

the specified examinations; 

(8) Destructive testing requirements 

and results; 

(9) Repair procedures; 

(10) Installation of corrosionprotection systems and splash-zone 

protection; 

(11) Erection procedures to ensure 

that overstressing of structural members 

does not occur; 

(12) Alignment procedures; 

(13) Dimensional check of the overall 

structure, including any turrets, turretand-hull interfaces, any mooring line 

and chain and riser tensioning line 

segments; and 

(14) Status of quality-control records 

at various stages of fabrication. 

(b) For any floating facilities, the CVA 

or project engineer must ensure that any 

requirements of the U.S. Coast Guard for 

structural integrity and stability (e.g., 

verification of center of gravity) have 

been met. The CVA or project engineer 

must also consider: 

(1) Foundations, foundation pilings 

and templates, and anchoring systems; 

and 

(2) Mooring or tethering systems. 

§ 285.710 When conducting onsite 

installation inspections, what must the CVA 

or project engineer do? 

To comply with § 285.708(a)(4), the 

CVA or project engineer must make 

periodic onsite inspections while 

installation is in progress and must, as 

appropriate, verify, witness, survey, or 

check, the installation items required by 

this section. 

(a) The CVA or project engineer must 

verify, as appropriate, all of the 

following: 

(1) Loadout and initial flotation 

procedures; 

(2) Towing operation procedures to 

the specified location, and review the 

towing records; 

(3) Launching and uprighting 

activities; 

(4) Submergence activities; 

(5) Pile or anchor installations; 

(6) Installation of mooring and 

tethering systems; 

(7) Final deck and component 

installations; and 

(8) Installation at the approved 

location according to the Facility Design 

Report and the Fabrication and 

Installation Report. 

(b) For a fixed or floating facility, the 

CVA or project engineer must verify that 

proper procedures were used during the 

following: 

(1) The loadout of the jacket, decks, 

piles, or structures from each fabrication 

site; and 

(2) The actual installation of the 

facility or major modification and the 

related installation activities. 

(c) For a floating facility, the CVA or 

project engineer must verify that proper 

procedures were used during the 

following: 

(1) The loadout of the facility; 

(2) The installation of foundation 

pilings and templates, and anchoring 

systems; and 

(3) The installation of the mooring 

and tethering systems. 

(d) The CVA or project engineer must 

conduct an onsite survey of the facility 

after transportation to the approved 

location. 

(e) The CVA or project engineer must 

spot-check the equipment, procedures, 

and recordkeeping as necessary to 

determine compliance with the 

applicable documents incorporated by 

reference and the regulations under this 

part. 

§ 285.711 [Reserved] 

§ 285.712 What are the CVA’s or project 

engineer’s reporting requirements? 

(a) The CVA or project engineer must 

prepare and submit to you and MMS all 

reports required by this subpart. The 

CVA or project engineer must also 

submit interim reports to you and MMS, 

as requested by the MMS. 

(b) For each report required by this 

subpart, the CVA or project engineer 

must submit one electronic copy and 

one paper copy of each final report to 

MMS. In each report, the CVA or project 

engineer must: 

(1) Give details of how, by whom, and 

when the CVA or project engineer 

activities were conducted; 

(2) Describe the CVA’s or project 

engineer’s activities during the 

verification process; 

(3) Summarize the CVA’s or project 

engineer’s findings; and 

(4) Provide any additional comments 

that the CVA or project engineer deems 

necessary. 

§ 285.713 What must I do after the CVA or 

project engineer confirms conformance 

with the Fabrication and Installation Report 

on my commercial lease? 

After the CVA or project engineer files 

the certification report, you must notify 

MMS within 10 business days after 

commencing commercial operations. 

§ 285.714 What records relating to SAPs 

COPs and GAPs must I keep? 

(a) Until MMS releases your financial 

assurance under § 285.534, you must 

compile, retain, and make available to 

MMS representatives, within the time 

specified by MMS, all of the following: 

(1) The as-built drawings; 

(2) The design assumptions and 

analyses; 

(3) A summary of the fabrication and 

installation examination records; 

(4) The inspection results from the 

inspections and assessments required by 

§§ 285.820 through 285.825; and 

(5) Records of repairs not covered in 

the inspection report submitted under 

§ 285.824(b)(3). 

(b) You must record and retain the 

original material test results of all 

primary structural materials during all 

stages of construction until MMS 

releases your financial assurance under 

§ 285.534. Primary material is material 

that, should it fail, would lead to a 

significant reduction in facility safety, 

structural reliability, or operating 

capabilities. Items such as steel 

brackets, deck stiffeners and secondary 

braces or beams would not generally be 

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considered primary structural members 

(or materials). 

(c) You must provide MMS with the 

location of these records in the 

certification statement, as required in 

§§ 285.701(c), 285.703(b), and 

285.708(a)(5)(i). 

Subpart H—Environmental and Safety 

Management, Inspections, and Facility 

Assessments for Activities Conducted 

Under SAPs, COPs and GAPs 

§ 285.800 How must I conduct my 

activities to comply with safety and 

environmental requirements? 

(a) You must conduct all activities on 

your lease or grant under this part in a 

manner that conforms with your 

responsibilities in § 285.105(a), and 

using: 

(1) Trained personnel; and 

(2) Technologies, precautions, and 

techniques that will not cause undue 

harm or damage to natural resources, 

including their physical, atmospheric, 

and biological components. 

(b) You must certify compliance with 

those terms and conditions identified in 

your approved SAP, COP, or GAP, as 

required under §§ 285.615(c), 

285.633(b), or 285.653(c). 

§ 285.801 How must I conduct my 

approved activities to protect marine 

mammals, threatened and endangered 

species, and designated critical habitat? 

(a) You must not conduct any activity 

under your lease or grant that may affect 

threatened or endangered species or that 

may affect designated critical habitat of 

such species until the appropriate level 

of consultation is conducted, as 

required under the ESA, as amended (16 

U.S.C. 1531 et seq.), to ensure that your 

actions are not likely to jeopardize a 

threatened or endangered species and 

are not likely to destroy or adversely 

modify designated critical habitat. 

(b) You must not conduct any activity 

under your lease or grant that may result 

in an incidental taking of marine 

mammals until the appropriate 

authorization has been issued under the 

Marine Mammal Protection Act of 1972 

(MMPA) as amended (16 U.S.C. 1361 et 

seq.). 

(c) If there is reason to believe that a 

threatened or endangered species may 

be present while you conduct your 

MMS approved activities or may be 

affected by the direct or indirect effects 

of your actions: 

(1) You must notify us that 

endangered or threatened species may 

be present in the vicinity of the lease or 

grant or may be affected by your actions; 

and 

(2) We will consult with appropriate 

State and Federal fish and wildlife 

agencies and, after consultation, shall 

identify whether, and under what 

conditions, you may proceed. 

(d) If there is reason to believe that 

designated critical habitat of a 

threatened or endangered species may 

be affected by the direct or indirect 

effects of your MMS approved activities: 

(1) You must notify us that designated 

critical habitat of a threatened or 

endangered species in the vicinity of the 

lease or grant may be affected by your 

actions; and 

(2) We will consult with appropriate 

State and Federal fish and wildlife 

agencies and, after consultation, shall 

identify whether, and under what 

conditions, you may proceed. 

(e) If there is reason to believe that 

marine mammals may be incidentally 

taken as a result of your proposed 

activities: 

(1) You must agree to secure an 

authorization from National Oceanic 

and Atmospheric Administration 

(NOAA) or the U.S. Fish and Wildlife 

Service (FWS) for incidental taking, 

including taking by harassment, that 

may result from your actions; and 

(2) You must comply with all 

measures required by the NOAA or 

FWS, including measures to affect the 

least practicable impact on such species 

and its habitat and to ensure no 

unmitigable adverse impact on the 

availability of the species for 

subsistence use. 

(f) Submit to us: 

(1) Measures designed to avoid or 

minimize adverse effects and any 

potential incidental take of the 

endangered or threatened species or 

marine mammals; 

(2) Measures designed to avoid likely 

adverse modification or destruction of 

designated critical habitat of such 

endangered or threatened species; and 

(3) Your agreement to monitor for the 

incidental take of the species and 

adverse effects on the critical habitat, 

and provide the results of the 

monitoring to MMS as required; and 

(4) Your agreement to perform any 

relevant terms and conditions of the 

Incidental Take Statement that may 

result from the ESA consultation. 

(5) Your agreement to perform any 

relevant mitigation measures under an 

MMPA incidental take authorization. 

§ 285.802 What must I do if I discover a 

potential archaeological resource while 

conducting my approved activities? 

(a) If you, your subcontractors, or any 

agent acting on your behalf discovers a 

potential archaeological resource while 

conducting construction activities, or 

any other activity related to your 

project, you must: 

(1) Immediately halt all seafloordisturbing activities within the area of 

the discovery; 

(2) Notify MMS of the discovery 

within 72 hours; and 

(3) Keep the location of the discovery 

confidential and not take any action that 

may adversely affect the archaeological 

resource until we have made an 

evaluation and instructed you on how to 

proceed. 

(b) We may require you to conduct 

additional investigations to determine if 

the resource is eligible for listing in the 

National Register of Historic Places 

under 36 CFR 60.4. We will do this if: 

(1) The site has been impacted by 

your project activities; or 

(2) Impacts to the site or to the area 

of potential effect cannot be avoided. 

(c) If investigations under paragraph 

(b) of this section indicate that the 

resource is potentially eligible for listing 

in the National Register of Historic 

Places, we will tell you how to protect 

the resource, or how to mitigate adverse 

effects to the site. 

(d) If we incur costs in protecting the 

resource, under section 110(g) of the 

NHPA, we may charge you reasonable 

costs for carrying out preservation 

responsibilities under the OCS Lands 

Act. 

§ 285.803 How must I conduct my 

approved activities to protect essential fish 

habitats identified and described under the 

Magnuson-Stevens Fishery Conservation 

and Management Act? 

(a) If, during the conduct of your 

approved activities, MMS finds that 

essential fish habitat or habitat areas of 

particular concern may be adversely 

affected by your activities, MMS must 

consult with National Marine Fisheries 

Service. 

(b) Any conservation 

recommendations adopted by MMS to 

avoid or minimize adverse affects on 

Essential Fish Habitat will be 

incorporated as terms and conditions in 

the lease and must be adhered to by the 

applicant. The MMS may require 

additional surveys to define boundaries 

and avoidance distances. 

(c) If required, MMS will specify the 

survey methods and instrumentations 

for conducting the biological survey and 

will specify the contents of the 

biological report. 

§§ 285.804–285.809 [Reserved] 

Safety Management Systems 

§ 285.810 What must I include in my Safety 

Management System? 

You must submit a description of the 

Safety Management System you will use 

with your COP (provided under 

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§ 285.627(d)) and, when required by this 

part, your SAP (as provided in 

§ 285.614(b)) or GAP (as provided in 

§ 285.651). You must describe: 

(a) How you will ensure the safety of 

personnel or anyone on or near your 

facilities; 

(b) Remote monitoring, control, and 

shut down capabilities; 

(c) Emergency response procedures; 

(d) Fire suppression equipment, if 

needed; 

(e) How and when you will test your 

Safety Management System; and 

(f) How you will ensure personnel 

who operate your facilities are properly 

trained. 

§ 285.811 When must I follow my Safety 

Management System? 

Your Safety Management System 

must be fully functional when you begin 

activities described in your approved 

COP, SAP, or GAP. You must conduct 

all activities described in your approved 

COP, SAP, or GAP in accordance with 

the Safety Management System you 

described, as required by § 285.810. 

§ 285.812 [Reserved] 

Maintenance and Shutdowns 

§ 285.813 When do I have to report 

removing equipment from service? 

(a) The removal of any equipment 

from service may result in MMS 

applying remedies, as provided in this 

part, when such equipment is necessary 

for implementing your approved plan. 

Such remedies may include an order 

from MMS requiring you to replace or 

remove such equipment or facilities. 

(b)(1) You must report within 24 

hours when equipment necessary for 

implementing your approved plan is 

removed from service for more than 12 

hours. If you provide an oral 

notification, you must submit a written 

confirmation of this notice within 3 

business days, as required by 

§ 285.105(c); 

(2) You do not have to report 

removing equipment necessary for 

implementing your plan if the removal 

is part of planned maintenance or repair 

activities; and 

(3) You must notify MMS when you 

return the equipment to service. 

§ 285.814 [Reserved] 

Equipment Failure and Adverse 

Environmental Effects 

§ 285.815 What must I do if I have facility 

damage or an equipment failure? 

(a) If you have facility damage or the 

failure of a pipeline, cable, or other 

equipment necessary for you to 

implement your approved plan, you 

must make repairs as soon as 

practicable. If you have a major repair, 

you must submit a report of the repairs 

to MMS, as required in § 285.711. 

(b) If you are required to report any 

facility damage or failure under 

§ 285.831, MMS may require you to 

revise your SAP, COP, or GAP to 

describe how you will address the 

facility damage or failure as required by 

§ 285.634 (COP), § 285.617 (SAP), 

§ 285.655 (GAP). You must submit a 

report of the repairs to MMS, as 

required in § 285.703. 

(c) The MMS may require that you 

analyze cable, pipeline, or facility 

damage or failure to determine the 

cause. If requested by MMS, you must 

submit a comprehensive written report 

of the failure or damage to MMS as soon 

as available. 

§ 285.816 What must I do if environmental 

or other conditions adversely affect a cable, 

pipeline, or facility? 

If environmental or other conditions 

adversely affect a cable, pipeline, or 

facility so as to endanger the safety or 

the environment, you must: 

(a) Submit a plan of corrective action 

to MMS within 30 days of the discovery 

of the adverse effect. 

(b) Take remedial action as described 

in your corrective action plan. 

(c) Submit to the MMS a report of the 

remedial action taken within 30 days 

after completion. 

§§ 285.817–285.819 [Reserved] 

Inspections and Assessments 

§ 285.820 Will MMS conduct inspections? 

The MMS will inspect OCS facilities 

and any vessels engaged in activities 

authorized under this part. We conduct 

these inspections: 

(a) To verify that you are conducting 

activities in compliance with subsection 

8(p) of the OCS Lands Act; the 

regulations in this part; the terms, 

conditions, and stipulations of your 

lease or grant; approved plans; and 

other applicable laws and regulations. 

(b) To determine whether proper 

safety equipment has been installed and 

is operating properly according to your 

Safety Management System, as required 

in § 285.810. 

§ 285.821 Will MMS conduct scheduled 

and unscheduled inspections? 

The MMS will conduct both 

scheduled and unscheduled 

inspections. 

§ 285.822 What must I do when MMS 

conducts an inspection? 

(a) When MMS conducts an 

inspection, you must: 

(1) Provide access to all facilities on 

your lease (including your project 

easement) or grant; and 

(2) Make the following available for 

MMS to inspect: 

(i) The area covered under a lease, 

ROW grant, or RUE grant; 

(ii) All improvements, structures, and 

fixtures on these areas; and 

(iii) All records of design, 

construction, operation, maintenance, 

repairs, or investigations on or related to 

the area. 

(b) You must retain these records in 

paragraph (a)(2)(iii) of this section until 

MMS releases your financial assurance 

under § 285.534 and provide them to 

MMS upon request, within the time 

period specified by MMS. 

(c) You must demonstrate to the 

inspector how you are in compliance 

with your Safety Management System. 

§ 285.823 Will MMS reimburse me for my 

expenses related to inspections? 

Upon request, MMS will reimburse 

you for food, quarters, and 

transportation that you provide for our 

representatives while they inspect your 

lease or grant facilities and associated 

activities. You must send us your 

reimbursement request within 90 days 

of the inspection. 

§ 285.824 How must I conduct selfinspections? 

(a) You must develop a 

comprehensive annual self-inspection 

plan covering all of your facilities. You 

must keep this plan wherever you keep 

your records and make it available to 

MMS inspectors upon request. Your 

plan must specify: 

(1) The type, extent, and frequency of 

in-place inspections that you will 

conduct for both the above-water and 

the below-water structures of all 

facilities and pertinent components of 

the mooring systems for any floating 

facilities; and 

(2) How you are monitoring the 

corrosion protection for both the abovewater and below-water structures. 

(b) You must submit a report annually 

to us no later than November 1 that 

must include: 

(1) A list of facilities inspected in the 

preceding 12 months; 

(2) The type of inspection employed, 

(i.e., visual, magnetic particle, 

ultrasonic testing); and 

(3) A summary of the inspection 

indicating what repairs, if any, were 

needed and the overall structural 

condition of the facility. 

§ 285.825 When must I assess my 

facilities? 

(a) You must perform an assessment 

of the structure, when needed, based on 

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the platform assessment initiators listed 

in sections 17.2.1–17.2.5 of API RP 2A– 

WSD, Recommended Practice for 

Planning, Designing and Constructing 

Fixed Offshore Platforms—Working 

Stress Design (incorporated by 

reference, as specified in § 285.115). 

(b) You must initiate mitigation 

actions for structures that do not pass 

the assessment process of API RP 2A– 

WSD. 

(c) You must perform other 

assessments as required by MMS. 

§§ 285.826–285.829 [Reserved] 

Incident Reporting and Investigation 

§ 285.830 What are my incident reporting 

requirements? 

(a) You must report all incidents 

listed in § 285.831 to MMS, according to 

the reporting requirements for these 

incidents in §§ 285.832 and 285.833. 

(b) These reporting requirements 

apply to incidents that occur on the area 

covered by your lease or grant under 

this part and that are related to activities 

resulting from the exercise of your rights 

under your lease or grant under this 

part. 

(c) Nothing in this subpart relieves 

you from providing notices and reports 

of incidents that may be required by 

other regulatory agencies. 

(d) You must report all spills of oil or 

other liquid pollutants in accordance 

with 30 CFR 254.46. 

§ 285.831 What incidents must I report, 

and when must I report them? 

(a) You must report the following 

incidents to us immediately via oral 

communication, and provide a written 

follow-up report (paper copy or 

electronically transmitted) within 15 

business days after the incident: 

(1) Fatalities; 

(2) Incidents that require the 

evacuation of person(s) from the facility 

to shore or to another offshore facility; 

(3) Fires and explosions; 

(4) Collisions that result in property 

or equipment damage greater than 

$25,000 (Collision means the act of a 

moving vessel (including an aircraft) 

striking another vessel, or striking a 

stationary vessel or object. Property or 

equipment damage means the cost of 

labor and material to restore all affected 

items to their condition before the 

damage, including, but not limited to, 

the OCS facility, a vessel, a helicopter, 

or the equipment. It does not include 

the cost of salvage, cleaning, dry 

docking, or demurrage); 

(5) Incidents involving structural 

damage to an OCS facility that is severe 

enough so that activities on the facility 

cannot continue until repairs are made; 

(6) Incidents involving crane or 

personnel/material handling activities, 

if they result in a fatality, injury, 

structural damage, or significant 

environmental damage; 

(7) Incidents that damage or disable 

safety systems or equipment (including 

firefighting systems); 

(8) Other incidents resulting in 

property or equipment damage greater 

than $25,000; and 

(9) Any other incidents involving 

significant environmental damage, or 

harm. 

(b) You must provide a written report 

of the following incidents to us within 

15 days after the incident: 

(1) Any injuries that result in the 

injured person not being able to return 

to work or to all of their normal duties 

the day after the injury occurred; and 

(2) All incidents that require 

personnel on the facility to muster for 

evacuation for reasons not related to 

weather or drills. 

§ 285.832 How do I report incidents 

requiring immediate notification? 

For an incident requiring immediate 

notification under § 285.831(a), you 

must notify MMS verbally after aiding 

the injured and stabilizing the situation. 

Your verbal communication must 

provide the following information: 

(a) Date and time of occurrence; 

(b) Identification and contact 

information for the lessee, grant holder, 

or operator; 

(c) Contractor, and contractor 

representative’s name and telephone 

number (if a contractor is involved in 

the incident or injury/fatality); 

(d) Lease number, OCS area, and 

block; 

(e) Platform/facility name and 

number, or cable or pipeline segment 

number; 

(f) Type of incident or injury/fatality; 

(g) Activity at time of incident; and 

(h) Description of the incident, 

damage, or injury/fatality. 

§ 285.833 What are the reporting 

requirements for incidents requiring written 

notification? 

(a) For any incident covered under 

§ 285.831, you must submit a written 

report within 15 days after the incident 

to MMS. The report must contain the 

following information: 

(1) Date and time of occurrence; 

(2) Identification and contact 

information for each lessee, grant 

holder, or operator; 

(3) Name and telephone number of 

the contractor and the contractor’s 

representative, if a contractor is 

involved in the incident or injury; 

(4) Lease number, OCS area, and 

block; 

(5) Platform/facility name and 

number, or cable or pipeline segment 

number; 

(6) Type of incident or injury; 

(7) Activity at time of incident; 

(8) Description of incident, damage, or 

injury (including days away from work, 

restricted work, or job transfer), and any 

corrective action taken; and 

(9) Property or equipment damage 

estimate (in U.S. dollars). 

(b) You may submit a report or form 

prepared for another agency in lieu of 

the written report required by paragraph 

(a) of this section if the report or form 

contains all required information. 

(c) The MMS may require you to 

submit additional information about an 

incident on a case-by-case basis. 

Subpart I—Decommissioning 

Decommissioning Obligations and 

Requirements 

§ 285.900 Who must meet the 

decommissioning obligations in this 

subpart? 

(a) Lessees are jointly and severally 

responsible for meeting 

decommissioning obligations for 

facilities on their leases, including all 

obstructions, as the obligations accrue 

and until each obligation is met. 

(b) Grant holders are jointly and 

severally liable for meeting 

decommissioning obligations for 

facilities on their grant, including all 

obstructions, as the obligations accrue 

and until each obligation is met. 

§ 285.901 When do I accrue 

decommissioning obligations? 

You accrue decommissioning 

obligations when you are or become a 

lessee or grant holder, and you either 

install, construct, or acquire by an 

MMS-approved assignment a facility, 

cable, or pipeline, or you create an 

obstruction to other uses of the OCS. 

§ 285.902 What are the general 

requirements for decommissioning for 

facilities authorized under my SAP, COP, or 

GAP? 

(a) Except as otherwise authorized by 

MMS under § 285.909, within 2 years 

following termination of a lease or grant, 

you must: 

(1) Remove or decommission all 

facilities, projects, cables, pipelines, and 

obstructions; 

(2) Clear the seafloor of all 

obstructions created by activities on 

your lease, including your project 

easement, or grant, as required by the 

MMS. 

(b) Before decommissioning the 

facilities under your SAP, COP, or GAP, 

you must submit a decommissioning 

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application and receive approval from 

the MMS. 

(c) The approval of the 

decommissioning concept in the SAP, 

COP, or GAP is not an approval of a 

decommissioning application. However, 

you may submit your complete 

decommissioning application 

simultaneously with the SAP, COP, or 

GAP so that it may undergo appropriate 

technical and regulatory reviews at that 

time. 

(d) Following approval of your 

decommissioning application, you must 

submit a decommissioning notice under 

§ 285.908 to MMS at least 60 days before 

commencing decommissioning 

activities. 

(e) If you, your subcontractors, or any 

agent acting on your behalf discover any 

archaeological resource while 

conducting decommissioning activities, 

you must immediately halt bottomdisturbing activities within 1,000 feet of 

the discovery and report the discovery 

to us within 72 hours. We will inform 

you how to conduct investigations to 

determine if the resource is significant 

and how to protect it. You, your 

subcontractors, or any agent acting on 

your behalf must keep the location of 

the discovery confidential and must not 

take any action that may adversely affect 

the archaeological resource until we 

have made an evaluation and told you 

how to proceed. 

(f) Provide MMS with documentation 

of any coordination efforts you have 

made with the affected States, local, and 

tribal governments. 

§ 285.903 What are the requirements for 

decommissioning FERC-licensed 

hydrokinetic facilities? 

You must comply with the 

decommissioning requirements in your 

MMS-issued lease. If you fail to comply 

with the decommissioning requirements 

of your lease then: 

(a) The MMS may call for the 

forfeiture of your bond or other financial 

assurance; 

(b) You remain liable for removal or 

disposal costs and responsible for 

accidents or damages that might result 

from such failure; and 

(c) The MMS may take enforcement 

action under § 285.400 of this part. 

§ 285.904 Can I request a departure from 

the decommissioning requirements? 

You may request a departure from the 

decommissioning requirements under 

§ 285.103. 

Decommissioning Applications 

§ 285.905 When must I submit my 

decommissioning application? 

You must submit your 

decommissioning application upon the 

earliest of the following dates: 

(a) 2 years before the expiration of 

your lease. 

(b) 90 days after completion of your 

commercial activities on a commercial 

lease. 

(c) 90 days after completion of your 

approved activities under a limited 

lease on a ROW grant or RUE grant. 

(d) 90 days after cancellation, 

relinquishment, or other termination of 

your lease or grant. 

§ 285.906 What must my decommissioning 

application include? 

You must provide one paper copy and 

one electronic copy of the application. 

Include the following information in the 

application, as applicable. 

(a) Identification of the applicant 

including: 

(1) Lease operator, ROW grant holder, 

or RUE grant holder; 

(2) Address; 

(3) Contact person and telephone 

number; and 

(4) Shore base. 

(b) Identification and description of 

the facilities, cables, or pipelines you 

plan to remove or propose to leave in 

place, as provided in § 285.909. 

(c) A proposed decommissioning 

schedule for your lease, ROW grant, or 

RUE grant, including the expiration or 

relinquishment date and proposed 

month and year of removal. 

(d) A description of the removal 

methods and procedures, including the 

types of equipment, vessels, and 

moorings (i.e., anchors, chains, lines, 

etc.) you will use. 

(e) A description of your site 

clearance activities. 

(f) Your plans for transportation and 

disposal (including as an artificial reef) 

or salvage of the removed facilities, 

cables, or pipelines and any required 

approvals. 

(g) A description of those resources, 

conditions, and activities that could be 

affected by or could affect your 

proposed decommissioning activities. 

The description must be as detailed as 

necessary to assist MMS in complying 

with the NEPA and other relevant 

Federal laws. 

(h) The results of any recent biological 

surveys conducted in the vicinity of the 

structure and recent observations of 

turtles or marine mammals at the 

structure site. 

(i) Mitigation measures you will use 

to protect archaeological and sensitive 

biological features during removal 

activities. 

(j) A description of measures you will 

take to prevent unauthorized discharge 

of pollutants, including marine trash 

and debris, into the offshore waters. 

(k) A statement of whether or not you 

will use divers to survey the area after 

removal to determine any effects on 

marine life. 

§ 285.907 How will MMS process my 

decommissioning application? 

(a) Based upon your inclusion of all 

the information required by § 285.906, 

MMS will compare your 

decommissioning application with the 

decommissioning general concept in 

your approved SAP, COP, or GAP to 

determine what technical and 

environmental reviews are needed. 

(b) You will likely have to revise your 

SAP, COP, or GAP, and MMS will begin 

the appropriate NEPA analysis and 

other regulatory reviews as required, if 

MMS determines that your 

decommissioning application would: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated in your SAP, COP, or GAP; 

(2) Require any additional Federal 

permits; or 

(3) Propose activities not previously 

identified and evaluated in your SAP, 

COP, or GAP. 

(c) During the review process, we may 

request additional information if we 

determine that the information provided 

is not sufficient to complete the review 

and approval process. 

(d) Upon completion of the technical 

and environmental reviews, we may 

approve, approve with conditions, or 

disapprove your decommissioning 

application. 

(e) If MMS disapproves your 

decommissioning application, you must 

resubmit your application to address the 

concerns identified by MMS. 

§ 285.908 What must I include in my 

decommissioning notice? 

(a) The decommissioning notice is 

distinct from your decommissioning 

application and may only be submitted 

following approval of your 

decommissioning application, as 

described in §§ 285.905 through 

285.907. You must submit a 

decommissioning notice at least 60 days 

before you plan to begin 

decommissioning activities. 

(b) Your decommissioning notice 

must include: 

(1) A description of any changes to 

the approved removal methods and 

procedures in your approved 

decommissioning application, including 

changes to the types of vessels and 

equipment you will use; and 

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(2) An updated decommissioning 

schedule. 

(c) We will review your 

decommissioning notice and may 

require you to resubmit a 

decommissioning application if MMS 

determines that your decommissioning 

activities would: 

(1) Result in a significant change in 

the impacts previously identified and 

evaluated; 

(2) Require any additional Federal 

permits; or 

(3) Propose activities not previously 

identified and evaluated. 

Facility Removal 

§ 285.909 When may MMS authorize 

facilities to remain in place following 

termination of a lease or grant? 

(a) In your decommissioning 

application, you may request that 

certain facilities authorized in your 

lease or grant remain in place for other 

activities authorized in this part, 

elsewhere in this subchapter, or by 

other applicable Federal laws. 

(b) The MMS may approve such 

requests on a case-by-case basis 

considering the following: 

(1) Potential impacts to the marine 

environment; 

(2) Competing uses of the OCS; 

(3) Impacts on marine safety and 

national defense; 

(4) Maintenance of adequate financial 

assurance; and 

(5) Other factors determined by the 

Director. 

(c) Except as provided in paragraph 

(d) of this section, if MMS authorizes 

facilities to remain in place, the former 

lessee or grantee under this part remains 

jointly and severally liable for 

decommissioning the facility unless 

satisfactory evidence is provided to 

MMS showing that another party has 

assumed that responsibility and has 

secured adequate financial assurances. 

(d) In your decommissioning 

application, you may request that 

certain facilities authorized in your 

lease or grant be converted to an 

artificial reef or otherwise toppled in 

place. The MMS will evaluate all such 

requests, as provided in § 250.1730 of 

this subchapter. 

§ 285.910 What must I do when I remove 

my facility? 

(a) You must remove all facilities to 

a depth of 15 feet below the mudline, 

unless otherwise authorized by MMS. 

(b) Within 60 days after you remove 

a facility, you must verify to MMS that 

you have cleared the site. 

§ 285.911 [Reserved] 

Decommissioning Report 

§ 285.912 After I remove a facility, cable, or 

pipeline, what information must I submit? 

Within 60 days after you remove a 

facility, cable, or pipeline, you must 

submit a written report to MMS that 

includes the following: 

(a) A summary of the removal 

activities, including the date they were 

completed; 

(b) A description of any mitigation 

measures you took; and 

(c) If you used explosives, a statement 

signed by your authorized 

representative that certifies that the 

types and amount of explosives you 

used in removing the facility were 

consistent with those in the approved 

decommissioning application. 

Compliance with an Approved 

Decommissioning Application 

§ 285.913 What happens if I fail to comply 

with my approved decommissioning 

application? 

If you fail to comply with your 

approved decommissioning plan or 

application: 

(a) The MMS may call for the 

forfeiture of your bond or other financial 

assurance; 

(b) You remain liable for removal or 

disposal costs and responsible for 

accidents or damages that might result 

from such failure; and 

(c) The MMS may take enforcement 

action under § 285.400. 

Subpart J—Rights of Use and 

Easement for Energy- and MarineRelated Activities Using Existing OCS 

Facilities 

Regulated Activities 

§ 285.1000 What activities does this 

subpart regulate? 

(a) This subpart provides the general 

provisions for authorizing and 

regulating activities that use (or propose 

to use) an existing OCS facility for 

energy- or marine-related purposes, that 

are not otherwise authorized under any 

other part of this subchapter or any 

other applicable Federal statute. 

Activities authorized under any other 

part of this subchapter or under any 

other Federal law that use (or propose 

to use) an existing OCS facility are not 

subject to this subpart. 

(b) The MMS will issue an Alternate 

Use RUE for activities authorized under 

this subpart. 

(c) At the discretion of the Director, 

an Alternate Use RUE may: 

(1) Permit alternate use activities to 

occur at an existing facility that is 

currently in use under an approved OCS 

lease; or 

(2) Limit alternate use activities at the 

existing facility until after previously 

authorized activities at the facility have 

ceased and the OCS lease terminates. 

§§ 285.1001—285.1003 [Reserved] 

Requesting an Alternate Use RUE 

§ 285.1004 What must I do before I request 

an Alternate Use RUE? 

If you are not the owner of the 

existing facility on the OCS and the 

lessee of the area in which the facility 

is located, you must contact the lessee 

and owner of the facility and reach a 

preliminary agreement as to the 

proposed activity for the use of the 

existing facility. 

§ 285.1005 How do I request an Alternate 

Use RUE? 

To request an Alternate Use RUE, you 

must submit to MMS all of the 

following: 

(a) The name, address, e-mail address, 

and phone number of an authorized 

representative. 

(b) A summary of the proposed 

activities for the use of an existing OCS 

facility, including: 

(1) The type of activities that would 

involve the use of the existing OCS 

facility; 

(2) A description of the existing OCS 

facility, including a map providing its 

location on the lease block; 

(3) The names of the owner of the 

existing OCS facility, the operator, the 

lessee, and any owner of operating 

rights on the lease at which the facility 

is located; 

(4) A description of additional 

structures or equipment that will be 

required to be located on or in the 

vicinity of the existing OCS facility in 

connection with the proposed activities; 

(5) A statement indicating whether 

any of the proposed activities are 

intended to occur before existing 

activities on the OCS facility have 

ceased; and 

(6) A statement describing how 

existing activities at the OCS facility 

will be affected if proposed activities are 

to occur at the same time as existing 

activities at the OCS facility. 

(c) A statement affirming that the 

proposed activities sought to be 

approved under this subpart are not 

otherwise authorized by other 

provisions in this subchapter or any 

other Federal law. 

(d) Evidence that you meet the 

requirements of § 285.106, as required 

by § 285.107. 

(e) The signatures of the applicant, the 

owner of the existing OCS facility, and 

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the lessee of the area in which the 

existing facility is located. 

§ 285.1006 How will MMS decide whether 

to issue an Alternate Use RUE? 

(a) We will consider requests for an 

Alternate Use RUE on a case-by-case 

basis. In considering such requests, we 

will consult with relevant Federal 

agencies and evaluate whether the 

proposed activities involving the use of 

an existing OCS facility can be 

conducted in a manner that: 

(1) Ensures safety and minimizes 

adverse effects to the coastal and marine 

environments, including their physical, 

atmospheric, and biological 

components, to the extent practicable; 

(2) Does not inhibit or restrain orderly 

development of OCS mineral or energy 

resources; and 

(3) Avoids serious harm or damage to, 

or waste of, any natural resource 

(including OCS mineral deposits and 

oil, gas, and sulphur resources in areas 

leased or not leased), any life (including 

fish and other aquatic life), or property 

(including sites, structures, or objects of 

historical or archaeological 

significance); 

(4) Is otherwise consistent with 

subsection 8(p) of the OCS Lands Act; 

and 

(5) MMS can effectively regulate. 

(b) Based on the evaluation that we 

perform under paragraph (a) of this 

section, the MMS may authorize or 

reject, or authorize with modifications 

or stipulations, the proposed activity. 

§ 285.1007 What process will MMS use for 

competitively offering an Alternate Use 

RUE? 

(a) An Alternate Use RUE must be 

issued on a competitive basis unless 

MMS determines, after public notice of 

the proposed Alternate Use RUE, that 

there is no competitive interest. 

(b) We will issue a public notice in 

the Federal Register to determine if 

there is competitive interest in using the 

proposed facility for alternate use 

activities. The MMS will specify a time 

period for members of the public to 

express competitive interest. 

(c) If we receive indications of 

competitive interest within the 

published timeframe, we will proceed 

with a competitive offering. As part of 

such competitive offering, each 

competing applicant must submit a 

description of the types of activities 

proposed for the existing facility, as 

well as satisfactory evidence that the 

competing applicant qualifies to hold a 

lease or grant on the OCS, as required 

in §§ 285.106 and 285.107, by a date we 

specify. We may request additional 

information from competing applicants, 

as necessary, to adequately evaluate the 

competing proposals. 

(d) We will evaluate all competing 

proposals to determine whether: 

(1) The proposed activities are 

compatible with existing activities at the 

facility; and 

(2) We have the expertise and 

resources available to regulate the 

activities effectively. 

(e) We will evaluate all proposals 

under the requirements of NEPA, 

CZMA, and other applicable laws. 

(f) Following our evaluation, we will 

select one or more acceptable proposals 

for activities involving the alternate use 

of an existing OCS facility, notify the 

competing applicants, and submit each 

acceptable proposal to the lessee and 

owner of the existing OCS facility. If the 

lessee and owner of the facility agree to 

accept a proposal, we will proceed to 

issue an Alternate Use RUE. If the lessee 

and owner of the facility are unwilling 

to accept any of the proposals that we 

deem acceptable, we will not issue an 

Alternate Use RUE. 

§§ 285.1008—285.1009 [Reserved] 

Alternate Use RUE Administration 

§ 285.1010 How long may I conduct 

activities under an Alternate Use RUE? 

(a) We will establish on a case-by-case 

basis, and set forth in the Alternate Use 

RUE, the length of time for which you 

are authorized to conduct activities 

approved in your Alternate Use RUE 

instrument. 

(b) In establishing this term, MMS 

will consider the size and scale of the 

proposed alternate use activities, the 

type of alternate use activities, and any 

other relevant considerations. 

(c) The MMS may authorize renewal 

of Alternate Use RUEs at its discretion. 

§ 285.1011 What payments are required for 

an Alternate Use RUE? 

We will establish rental or other 

payments for an Alternate Use RUE on 

a case-by-case basis, as set forth in the 

Alternate Use RUE grant, depending on 

our assessment of the following factors: 

(a) The effect on the original OCS 

Lands Act approved activity; 

(b) The size and scale of the proposed 

alternate use activities; 

(c) The income, if any, expected to be 

generated from the proposed alternate 

use activities; and 

(d) The type of alternate use activities. 

§ 285.1012 What financial assurance is 

required for an Alternate Use RUE? 

(a) The holder of an Alternate Use 

RUE will be required to secure financial 

assurances in an amount determined by 

MMS that is sufficient to cover all 

obligations under the Alternate Use 

RUE, including decommissioning 

obligations, and must retain such 

financial assurance amounts until all 

obligations have been fulfilled, as 

determined by MMS. 

(b) We may revise financial assurance 

amounts, as necessary, to ensure that 

there is sufficient financial assurance to 

secure all obligations under the 

Alternate Use RUE. 

(c) We may reduce the amount of the 

financial assurance that you must retain 

if it is not necessary to cover existing 

obligations under the Alternate Use 

RUE. 

§ 285.1013 Is an Alternate Use RUE 

assignable? 

(a) The MMS may authorize 

assignment of an Alternate Use RUE. 

(b) To request assignment of an 

Alternate Use RUE, you must submit a 

written request for assignment that 

includes the following information: 

(1) The MMS-assigned Alternate Use 

RUE number; 

(2) The names of both the assignor 

and the assignee, if applicable; 

(3) The names and telephone numbers 

of the contacts for both the assignor and 

the assignee; 

(4) The names, titles, and signatures 

of the authorizing officials for both the 

assignor and the assignee; 

(5) A statement affirming that the 

owner of the existing OCS facility and 

lessee of the lease in which the facility 

is located approve of the proposed 

assignment and assignee; 

(6) A statement that the assignee 

agrees to comply with and to be bound 

by the terms and conditions of the 

Alternate Use RUE; 

(7) Evidence required by § 285.107 

that the assignee satisfies the 

requirements of § 285.106; and 

(8) A statement on how the assignee 

will comply with the financial 

assurance requirements set forth in the 

Alternate Use RUE. 

(c) The assignment takes effect on the 

date we approve your request. 

(d) The assignor is liable for all 

obligations that accrue under an 

Alternate Use RUE before the date we 

approve your assignment request. An 

assignment approval by MMS does not 

relieve the assignor of liability for 

accrued obligations that the assignee, or 

a subsequent assignee, fail to perform. 

(e) The assignee and each subsequent 

assignee are liable for all obligations 

that accrue under an Alternate Use RUE 

after the date we approve the 

assignment request. 

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Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 19871 

§ 285.1014 When will MMS suspend an 

Alternate Use RUE? 

(a) The MMS may suspend an 

Alternate Use RUE if: 

(1) Necessary to comply with judicial 

decrees; 

(2) Continued activities pursuant to 

the Alternate Use RUE 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; 

(3) The suspension is necessary for 

reasons of national security or defense; 

or 

(4) We have suspended or temporarily 

prohibited operation of the existing OCS 

facility that is subject to the Alternate 

Use RUE, and have determined that 

continued activities under the Alternate 

Use RUE are unsafe or cause undue 

interference with the operation of the 

original OCS Lands Act approved 

activity. 

(b) A suspension will extend the term 

of your Alternate Use RUE grant for the 

period of the suspension. 

§ 285.1015 How do I relinquish an 

Alternate Use RUE? 

(a) You may voluntarily surrender an 

Alternate Use RUE by submitting a 

written request to us that includes the 

following: 

(1) The name, address, e-mail address, 

and phone number of an authorized 

representative; 

(2) The reason you are requesting 

relinquishment of the Alternate Use 

RUE; 

(3) The MMS-assigned Alternate Use 

RUE number; 

(4) The name of the associated OCS 

facility, its owner, and the lessee for the 

lease in which the OCS facility is 

located; 

(5) The name, title, and signature of 

your authorizing official (which must 

match exactly the name, title, and 

signature in the MMS qualification 

records); and 

(6) A statement that you will adhere 

to the decommissioning requirements in 

the Alternate Use RUE. 

(b) We will not approve your 

relinquishment request until you have 

paid all outstanding rentals (or other 

payments) and fines. 

(c) The relinquishment takes effect on 

the date we approve your request. 

§ 285.1016 When will an Alternate Use 

RUE be cancelled? 

The Secretary may cancel an 

Alternate Use RUE if it is determined, 

after notice and opportunity to be heard: 

(a) You no longer qualify to hold an 

Alternate Use RUE; 

(b) You failed to provide any 

additional financial assurance required 

by MMS, replace or provide additional 

coverage for a de-valued bond, or 

replace a lapsed or forfeited bond 

within the prescribed time period; 

(c) Continued activity under the 

Alternate Use RUE is likely to cause 

serious 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; 

(d) Continued activity under the 

Alternate Use RUE is determined to be 

adversely impacting the original OCS 

Lands Act approved activities on the 

existing OCS facility; 

(e) You failed to comply with any of 

the terms and conditions of your 

approved Alternate Use RUE or your 

approved plan; or 

(f) You otherwise failed to comply 

with applicable laws or regulations. 

§ 285.1017 [Reserved] 

Decommissioning an Alternate Use 

RUE 

§ 285.1018 Who is responsible for 

decommissioning an OCS facility subject to 

an Alternate Use RUE? 

(a) The holder of an Alternate Use 

RUE is responsible for all 

decommissioning obligations that 

accrue following the issuance of the 

Alternate Use RUE and which pertain to 

the Alternate Use RUE. 

(b) The lessee under the lease 

originally issued under part 250 of this 

chapter will remain responsible for 

decommissioning obligations that 

accrued before issuance of the Alternate 

Use RUE, as well as for 

decommissioning obligations that 

accrue following issuance of the 

Alternate Use RUE to the extent 

associated with continued activities 

authorized under other parts of this 

subchapter. 

§ 285.1019 What are the decommissioning 

requirements for an Alternate Use RUE? 

(a) Decommissioning requirements 

will be determined by MMS on a caseby-case basis, and will be included in 

the terms of each Alternate Use RUE. 

(b) Decommissioning activities must 

be completed within 1 year of 

termination of the Alternate Use RUE. 

(c) If you fail to satisfy all 

decommissioning requirements within 

the prescribed time period, we will call 

for the forfeiture of your bond or other 

financial guarantee, and you will remain 

liable for all accidents or damages that 

might result from such failure. 

PART 290—APPEAL PROCEDURES 

■ 7. Revise the authority citation for part 

290 to read as follows: 

Authority: 5 U.S.C. 301 et seq.; 43 U.S.C. 

1331 

■ 8. Revise the last sentence in § 290.2 

to read as follows: 

§ 290.2 Who may appeal? 

* * * A request for reconsideration of 

an MMS decision concerning a lease 

bid, authorized in 30 CFR 256.47(e)(3), 

281.21(a)(1), or 285.118(c), is not subject 

to the procedures found in this part. 

[FR Doc. E9–9462 Filed 4–22–09; 1:15 pm] 

BILLING CODE 4310–MR–P 

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