3.9   Apply for Regulatory Permits

All regulatory permits that are required as part of the project and required to be obtained prior to closing the sale or issuance of the lease should be applied for. Numerous local, state, and federal regulatory agencies and permits may be involved. Permitting requirements are site and project-specific and must be determined on a case-by-case basis. The receipt or ability to receive needed regulatory permits should be made a contingency for closing on the sale or entering into the lease.

Ocean and Coastal-specific Issues: Regulatory permitting requirements for activities being undertaken in ocean and coastal waters can be complicated, confusing, and controversial. Early and frequent contact with regulatory agencies should facilitate permitting. Project proponents should expect delays and numerous, iterative discussions and permit applications. The Country Summaries and U.S. State Summaries provide information on possible permitting requirements as well as agency contact information.

Lease-specific Issues: Leasing agencies may require that project proponents have all regulatory permits in-hand prior to issuance of the lease. However, regulatory agencies may not be able to issue permits in the timeframe required of the acquisition or project proponents may not be prepared (for a number of reasons) to apply for the permits. If this is the case, project proponents may have to seek an exception to the permitting requirement based on the expectation that regulatory permits will likely be received at a later time. A contingency clause in the lease or letters from regulatory agencies may allow for this later receipt of permits.

Generally speaking, public agencies may be reluctant to move to final execution (i.e., issuance) of a lease before the regulatory permits have been issued. However, this does not mean that a lease application cannot be submitted and negotiated, pending the issuance of the regulatory permits. This is the difference between an application being “filed” and one being “perfected.” Also, in some cases where the process of lease issuance may be protracted, a public agency may be willing to issue a lesser use authorization (e.g., right of entry) for the purposes of expediting on-site inspections and preparatory work in anticipation of lease negotiations.

Moreover, a project proponent can find themselves in a Catch-22 if they do not approach both the leasing agency and the regulatory agencies in a coordinated fashion. Regulators may ask for design elements that are not acceptable to the leasing entity or vice versa. Constant project re-designs can greatly reduce the cost-effectiveness of a project. Pre-permitting conferences and discussions with agency staff can help avoid such situations.