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The Outer Continental Shelf Lands Act and Offshore Wind Contract Disputes

Dueling Executive Orders

In recent weeks, outgoing President Joe Biden and incoming President Donald Trump each issued a Presidential Memorandum to withdraw extensive areas of the Outer Continental Shelf (OCS) for future energy development. President Biden withdrew over 625 million acres from future leasing for offshore oil and gas development on January 6, 2025. On January 20, 2025, President Trump temporarily withdrew all unleased areas of the OCS from future leasing for offshore wind. President Trump’s memorandum also directed the Secretary of the Interior to conduct a review of the “ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases.”[1]

Both presidents used their authority under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1341(a), to “withdraw from disposition any of the unleased lands of the Outer Continental Shelf.” The statute allows the president to withdraw lease areas but does not provide for presidential reinstatement. Recent caselaw supports the notion that only an act of Congress can reinstate lease areas, all but making President Trump’s temporary withdrawal a permanent one absent legislation from Congress.[2]

The pending review of existing offshore wind leases by the Secretary of the Interior also places at risk projects already in development. Projects that received agency approvals or have taken financing decisions may now face new risks and the threat of lease termination may have wide-ranging impacts on projects already in the contracting stage. OCSLA may also impact contract disputes related to development on the OCS because of the Act’s influence over jurisdiction and choice of law.

OCSLA Jurisdiction and Choice of Law

The Outer Continental Shelf Lands Act (OCSLA) plays an outsize role in offshore wind development. The Act provides the authority for BOEM to lease OCS development areas, addresses health and safety regulations, outlines the role of state governments in offshore development, and also establishes the jurisdiction and choice of law for all contracts related to development on the OCS.

OCSLA applies the law of the adjacent state, to the extent that state laws are not inconsistent with federal law, to “that portion of the subsoil and seabed of the Outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the Outer Continental Shelf.”[3]

That is, if federal law, such as maritime law, does not apply to a contract, the law of the adjacent state is used. State laws including state civil and criminal law, contract law, and tort law all become surrogate federal law.[4] Courts interpret that the application of adjacent state law preempts parties’ own choice of law within their contracts, meaning that a contract is formed applying the law dictated by OCSLA and not by the parties’ own directives or intent.[5]

Parties facing questions related to their contracting status should be aware of the impact that OCSLA may have on the jurisdiction and choice of law of their contracts. Whether the law of the adjacent state applies often turns on whether a contract falls under maritime law. If maritime law does not apply, any choice of law provision in a contract may may be overridden by OCLSA and parties could find that clauses they agreed to take on different meanings under another state’s law.

Please reach out for further information if you have questions on how OCSLA could impact your offshore wind contracts or operations.

[1] Withdrawal of Certain Areas of the United States Outer Continental Shelf From Oil and Natural Gas Leasing, 90 Fed. Reg. 6743 (Jan. 6, 2025); Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing, The Whitehouse, (Jan. 20, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/temporary-withdrawal-of-all-areas-on-the-outer-continental-shelf-from-offshore-wind-leasing-and-review-of-the-federal-governments-leasing-and-permitting-practices-for-wind-projects/.

[2] League of Conservation Voters v. Trump, 363 F. Supp. 3d 1013, 1030 (D. Alaska 2019), found moot and vacated League of Conservation Voters v. Biden, 843 F. App’x 937 (9th Cir. 2021).

[3] 43 U.S.C. § 1333(a)(2)(A).

[4] 43 U.S.C. § 1333(a)(2)(A); Parker Drilling Mgmt. Servs., Ltd. v. Newton, 587 U.S. 601, 604 (2019).

[5] Petrobras Am., Inc. v. Vicinay Cadenas, S.A., 815 F.3d 211, 215 (5th Cir. 2016); Snyder Oil Corp. v. Samedan Oil Corp., 208 F.3d 521, 524 (5th Cir. 2000).

About The Author

amaral

Todd D. Amaral

Todd is a member of the firm’s Litigation group and assists clients with energy, environmental, and maritime issues, along with financial… Read More

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