The Gulf of Mexico is full of energy infrastructure, but offshore wind could be added to the mix after the U.S. Department of the Interior on Wednesday announced plans to auction off leases to build turbines in its federal waters.
“America’s clean energy transition is happening right here and now. At the department, we are taking action to jumpstart our offshore wind industry and harness American innovation to deliver reliable, affordable power to homes and businesses,” Interior Secretary Deb Haaland said. “There is no time to waste in making bold investments to address the climate crisis, and building a strong domestic offshore wind industry is key to meeting that challenge head on.”
The department’s Bureau of Ocean Management released a Proposed Sale Notice that includes three separate areas in the gulf, including a 102,480-acre area off Lake Charles, La., and two areas off Galveston, Texas: one with 102,480 acres, and the other with 96,786 acres. BOEM is asking for public comment on which, if either, of the two areas off Galveston should be included in the final sale notice.
The areas altogether have the potential to power almost 1.3 million homes with offshore wind power, according to the department. They were narrowed down from broader areas that DOI had considered earlier in its process, and it never considered areas with ocean depths greater than 1,300 meters, the notice said.
BOEM first published a request for interest on offshore wind leases in federal waters in the Gulf of Mexico in June 2021, and so far, eight firms have responded, including Avangrid Renewables (NYSE:AGR), Shell New Energies US (NYSE:SHEL) and TotalEnergies Renewables USA (NYSE:TTE), the sale notice said.
Other companies that want to participate will have to submit required qualification materials to BOEM by the end of the 60-day comment period of the notice.
BOEM Considering Stipulations to Mitigate Development’s Impact
BOEM wants comments on several lease stipulations that would reaffirm its commitment to create well paying jobs and engagement with ocean users and other stakeholders. Those include credits for bidders that commit to supporting workforce training programs for the industry, developing a domestic supply chain for offshore wind or a combination of both.
The agency is also considering the establishment of a compensatory mitigation fund for the fishing industry, or contributing to an existing fund to mitigate any negative impacts that new offshore wind plants have on the commercial and for-hire recreational fisheries.
Another stipulation would require that lessees provide a regular progress report summarizing their engagement with tribes and ocean users that could be impacted by developing offshore wind in the Gulf of Mexico.
“BOEM is committed to ensuring any offshore wind activities are done in a manner that avoids or minimizes potential impacts to the ocean and ocean users,” Director Elizabeth Klein said. “Today’s announcement comes after years of engagement with tribes, other government agencies, ocean users and stakeholders, and this proposed sale notice provides another opportunity for them to weigh in on potential offshore wind leasing in the Gulf of Mexico.”
The notice will be published in the Federal Register this Friday, which starts the 60-day comment period. If the department decides to move ahead, BOEM will publish a final sales notice 30 days before it happens, which would announce its time and date, as well as the firms that qualified for it.
Announcement Welcomed by Trade Associations
The announcement was welcomed by the American Clean Power Association, calling it another significant milestone in the development of domestic offshore wind production.
“This proposed lease sale will continue the legacy of energy production in the Gulf of Mexico, providing Americans with an affordable clean energy supply,” ACP Vice President for Offshore Wind Josh Kaplowitz said. “It will also help secure our nation’s energy independence while reducing costs for consumers. By harnessing our abundance of renewable natural resources, these projects will unleash economic growth here at home and create good paying jobs.”
The Business Network for Offshore Wind noted that the energy-rich region was already contributing to others’ offshore industries, and that 24% of all contracts in the offshore wind industry are going to local businesses, including major shipbuilding around the gulf and the construction of the first substation for offshore wind in Texas.
“The advancement of an offshore wind lease sale in the Gulf of Mexico is a game-changer,” BNOW CEO Liz Burdock said. “Gulf companies are already instrumental in the development of the U.S. market and by opening new lease areas on their doorstep, we will leverage our unique domestic expertise even further. The result will be industry-wide innovations making offshore wind development more efficient and less expensive while maintaining strong safety and environmental protections and leading to substantial export opportunities for American businesses.”
