Offshore Energy Modernization Act of 2025

Bill Number

H.R. 3742

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Public Lands and Natural Resources

Status

Introduced

Latest Action

2025-06-04: Referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2025-07-24T20:25:24Z

AI-Generated Summary

Purpose

The Offshore Energy Modernization Act of 2025 aims to promote the responsible development of offshore renewable energy projects (such as wind, solar, wave, and tidal energy) on the outer Continental Shelf (the area of the ocean floor beyond state waters but within U.S. jurisdiction). It seeks to accelerate permitting, ensure environmental and cultural protections, support transmission infrastructure, and address impacts on affected communities, while establishing a new federal agency to manage offshore power transmission.

Key Provisions

• National Permitting Goals (Sec. 2): Sets targets for the Secretary of the Interior to issue permits enabling at least 30 gigawatts (GW) of offshore wind energy production by 2030 and 50 GW by 2035, in consultation with the Secretary of Energy, other federal agencies, states, and Tribes.
• Amendments to Outer Continental Shelf Lands Act (OCSLA) for Responsible Development (Sec. 3):
• Defines "offshore renewable energy project" to include wind, solar, wave, or tidal activities.
• Updates national policy to prioritize zero-emission electricity generation, coexistence with other ocean users, and achievement of renewable energy mandates.
• Revises leasing processes: Allows competitive or non-competitive leases based on interest; requires a public schedule for future lease areas; permits multi-factor bidding that considers non-monetary commitments (e.g., workforce training, community benefits, supply chain development, ecosystem mitigation, Tribal resource protection).
• Mandates project requirements including safety, environmental protection, waste prevention, Tribal cultural resource conservation, national security, and public/Tribal input.
• Requires project labor agreements (pre-hire collective bargaining deals with labor unions for construction) starting in 2027 and domestic content rules (U.S.-produced iron/steel and 65% of manufactured components) for projects starting after 2033, with waivers possible for public interest, availability, or cost reasons.
• Enhances coordination with states, local governments, and Tribes, including confidential Tribal consultations on sensitive cultural information.
• Allocates 10% of revenues from leases/easements to grants for habitat protection/restoration and mitigation, and another 10% to a compensation fund (detailed in Sec. 4).
• Exempts national parks, wildlife refuges, marine sanctuaries, and monuments from leasing but allows transmission infrastructure in sanctuaries with minimized impacts.
• Requires pre-lease environmental/cultural impact studies using best science and Tribal knowledge; funds capacity-building grants for states, Tribes, and ocean users ($25 million annually, 2026–2030).
• Limits presidential withdrawals of lands to allow modifications only for renewable leasing if public interest warrants.
• Restricts judicial review of certain approvals to courts in affected states or Tribal areas.
• Offshore Renewable Energy Compensation Fund (Sec. 4): Creates a fund in the U.S. Treasury, funded by 10% of lease revenues, to pay verified claims for damages (e.g., lost fishing gear/income) and provide mitigation grants (e.g., gear upgrades) to "covered entities" like communities, Tribes, fishers, or their representatives. Includes an advisory group with diverse stakeholders; allows assessments on leaseholders if funds are insufficient (capped at $3/acre); up to 15% for administration; annual reporting to Congress.
• Improved Reviews and Permitting (Sec. 5): Appropriates $50 million to the Bureau of Ocean Energy Management (Interior) and $45 million to NOAA (Commerce) for fiscal year 2026 to hire/train staff, develop environmental documents, enhance Tribal consultations, improve data systems, and streamline permitting.
• Decommissioning Report (Sec. 6): Requires a report to Congress within 10 years evaluating options for removing or repurposing (e.g., as artificial reefs) offshore facilities at end-of-life, ensuring no harm to navigation, security, environment, or Tribal uses.
• Offshore Power Administration (Sec. 7): Establishes a new entity within the Department of Energy (headed by an Administrator) to plan, finance, build, and operate shared offshore transmission infrastructure (including onshore connections) if states and stakeholders fail to coordinate (after a 3-year delay). Provides up to $10 billion in no-interest loans from Treasury (forgivable at end-of-life); requires prevailing wages; mandates state/Tribal consultations; annual reports to Congress.
• Transmission Studies and Interoperability (Secs. 8–9): Directs the Secretary of Energy to study and recommend offshore transmission siting ($10 million authorized) and assess/develop standards for interoperable grid components to support shared networks and reduce delays ($5 million authorized), including grants for industry collaboration.
• Shipbuilding Support (Sec. 10): Authorizes $100 million in grants for upgrading shipyards to build/repair vessels for offshore wind projects (with prevailing wage and cost-sharing rules); expands loan guarantees for wind turbine installation vessels.
• Access Sense of Congress (Sec. 11): Expresses intent to maintain fishing, boating, and Tribal cultural access around projects, except during construction/maintenance.
• Definitions (Sec. 12): Clarifies terms like "offshore renewable energy project" and "outer Continental Shelf" per OCSLA.

Significant Changes to Existing Law

• OCSLA Amendments: Expands leasing authority beyond oil/gas to renewables with new revenue allocations (20% total for conservation/compensation, bypassing appropriations); shifts from strictly monetary bidding to include social/environmental commitments; mandates labor agreements and domestic content (absent in prior law); strengthens Tribal consultation protections (e.g., confidentiality for sacred sites); adds pre-lease impact studies not requiring full environmental impact statements under NEPA (National Environmental Policy Act); limits venue for lawsuits to local circuits.
• New Entities and Funds: Creates the Compensation Fund and Offshore Power Administration, filling gaps in transmission planning and impact mitigation not previously addressed.
• Permitting and Goals: Introduces binding production targets and appropriations for streamlined reviews, contrasting with prior discretionary approaches.
• Decommissioning and Access: Adds reporting on non-removal options and a congressional statement on access, evolving from fossil fuel-focused rules.

Potential Impacts

• Government Agencies: Increases workload and funding for Interior (BOEM), Energy, and Commerce (NOAA) to manage permitting, studies, and a new administration; enables coordinated transmission development, potentially reducing inter-agency conflicts.
• Citizens and Economy: Boosts clean energy production toward national climate goals, creating jobs in renewables, shipbuilding, and supply chains (e.g., apprenticeships, domestic manufacturing); provides compensation/mitigation for affected fishers and communities, but may raise energy costs if domestic rules increase project expenses.
• International Relations: Domestic content requirements could affect trade with allies (e.g., Europe for turbines), but the bill ensures consistency with U.S. trade agreements; supports global renewable transitions without direct foreign policy changes.

Main Stakeholders Affected

• Federal Agencies: Department of the Interior (leasing/permitting), Department of Energy (transmission/administration), Department of Commerce/NOAA (environmental reviews).
• States and Local Governments: Involved in consultations, benefit from revenue grants and capacity building; may see economic growth from projects but face coastal impacts.
• Indian Tribes: Enhanced consultations and protections for cultural resources; prioritized for grants and compensation as "covered entities."
• Renewable Energy Developers: Easier permitting and transmission access, but new labor/domestic rules and bidding factors increase compliance costs.
• Fishing and Ocean Users: Compensation fund addresses gear/income losses; maintained access emphasized, with mitigation for navigation/safety.
• Labor Unions and Workers: Required project labor agreements and apprenticeships promote union jobs and training.
• Communities and Nonprofits: Eligible for community benefit agreements, grants for engagement, and impact mitigation.
• Shipbuilders and Manufacturers: Grants/loans support domestic vessel/component production.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens NEPA efficiencies (e.g., studies not triggering full reviews) and judicial venue limits, potentially reducing delays/litigation but raising fairness concerns; domestic content and labor mandates align with Buy American laws but include waiver processes to avoid trade disputes; compensation fund creates new claims process, possibly inviting challenges on fund sufficiency or assessments.
• Constitutional: Reinforces federal trust responsibility to Tribes via mandatory, confidential consultations (per Executive Order 13175), protecting sovereignty and cultural rights; balances property interests (e.g., correlative rights in OCS) with public energy needs.
• Political: Advances Democratic-led clean energy priorities (e.g., zero-emission goals, workforce equity) while incorporating bipartisan elements like fishing protections and domestic industry support; could face opposition from fossil fuel interests or over concerns about federal overreach in state waters/transmission, but promotes energy independence and climate action without partisan bias in text.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Tonko, Paul [D-NY-20]

Recent Actions

• 2025-06-04: Referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-04: Referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-04: Referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-04: Introduced in House
• 2025-06-04: Introduced in House

Bill Versions

• Offshore Energy Modernization Act of 2025 — issued 2025-06-04 — PDF (53 pages)