Leases are back and taking the wind out of the wind turbines sails.
President Joe Biden’s administration is tapping the brakes on offshore wind energy development in the Gulf of Mexico to make way for a new fast-tracked effort to open more federal waters to oil and gas drilling. The move, which runs counter to Biden’s ambitious goals for cutting greenhouse gas emissions and speeding the growth of renewable energy, will delay the first-ever auction of wind energy lease areas in the Gulf by at least six months. Wind energy companies had been lining up to bid on a 174,000-acre area south of Lake Charles and a 508,000-acre area near Galveston, Texas in late December. The two lease areas have the potential to generate enough power for almost 3 million homes, according to the U.S. Bureau of Ocean Energy Management. But Biden’s signing of the Inflation Reduction Act put those plans on hold, likely until sometime this summer, federal regulators confirmed this week.nola.com
Conflicting aims – clean or dirty energy.
The nearly $370 billion spending package has what some critics say are conflicting aims. On one hand, it offers a historic investment in clean energy, mostly through tax credits for solar and wind energy projects. But buried at the end of the 725-page law are special provisions for fossil fuel extraction in the Gulf. The act requires that the government offer new drilling opportunities across a vast area of the Gulf and mandates that wind energy projects take a back seat to oil and gas projects on public lands and waters. The provision was included to secure the support of Sen. Joe Manchin, a West Virginia Democrat who often sides with Republicans and receives strong financial backing from the oil and gas industry. Manchin praised the provision, saying increased drilling is “critical to American energy security” and will help “ease the pain Americans are feeling from record inflation and high energy prices.” Environmental groups blasted the Biden administration for hindering progress on its own climate and renewable energy goals. “It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction,” said Brett Hartl, government affairs director at the Center for Biological Diversity. “It’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”
Lease sales were canceled last year but not for good.
Last year, the Biden administration canceled a pair of oil and gas lease sales, citing conflicting court rulings on proposed lease sales. The Inflation Reduction Act revived both sales as well as a previously nullified lease sale from 2021. BOEM has had to take staff off other projects to meet upcoming leasing deadlines set by the act, a bureau spokesman said. The Biden administration’s goal of generating 30 gigawatts of offshore wind energy by 2030 will require pushing more than a dozen large wind farms through a new and convoluted regulatory process for offshore wind energy. So far, only two offshore wind farms are operating in U.S. waters. Two projects are under construction near Massachusetts and New York, and several more are planned along the East Coast. Wind development on the West Coast recently jumped ahead of the Gulf Coast. In December, while the Gulf auction stalled, BOEM sold off five lease areas near California. The two lease areas in the Gulf could produce enough electricity for the combined populations of Houston, New Orleans and Baton Rouge, according to BOEM.
Businesses and the state want well paying jobs.
Louisiana business leaders welcome good-paying engineering and construction jobs from wind projects, especially in coastal communities hit hard by recent hurricanes and changes in the oil and gas industry, which has lately focused on cheaper fossil fuel sources outside the state. A study conducted by the National Renewable Energy Laboratory predicted that a 600-megawatt wind project near Lake Charles would create 4,470 construction jobs and generate about $450 million in goods and services. Once constructed, the modest-sized wind farm would support 150 jobs and an annual infusion of $14 million into the economy from operations, maintenance and materials. BOEM’s most recent timeline for the Gulf includes a multi-year process involving site assessments, surveys and environmental review. Barring any more slowdowns, wind developers could begin installing turbines in 2030. Wind industry leaders say they never counted on BOEM to stick to their initial auction schedule in the Gulf, which appeared more hopeful than realistic. “When BOEM releases a five-year plan, we think of it more as a road map,” said Katharine Kollins, president of the Southeastern Wind Coalition. The recent delay is a “bump” that many project managers expected in a planning, permitting and construction process that can sometimes take more than a decade.
Don’t focus only on the Gulf.
Even if things slow in the Gulf, the overall pace has been fine elsewhere, said Sam Salustro, vice president of strategic communications for the Business Network for Offshore Wind. “BOEM’s been sticking well to their initial timeline and are still projected to lease seven areas by 2025,” he said. “This overall consistency and commitment is very important to the industry even if there’s a lapse of a few months.”
Manchin is doing more damage.