United States – The Biden administration announced on Wednesday its auctioning plans for offshore wind energy deals through 2028, with four upcoming fives before the end of this year.
Predictability and Growth
The Interior Department stated in its communication that the schedule will guide entities when the projects they are to conduct require huge investments and infrastructure, as reported by Reuters.
“Our offshore wind leasing schedule will provide predictability to help developers and communities plan ahead and will provide the confidence needed to continue building on the tremendous offshore wind supply chain and manufacturing investments that we’ve already seen,” Interior Secretary Deb Haaland said in a statement.
Challenges and Determination
The administration is determined to meet the challenge of nurturing a nascent U.S. offshore wind industry, which has recently encountered several obstacles, such as increased costs due to inflation, interest rates, and supply shortages.
Last week in New York, they delayed three large state offshore wind farms.
If we follow the Interior’s plan, this year, the agency will manage the sales for areas located in the Central Atlantic, Gulf of Maine, Gulf of Mexico, and Oregon.
Detailed Auction Schedule Unveiled
In 2025, just one auction will be conducted in the Gulf of Mexico. In 2026, the targeted sale will be conducted in the Central Atlantic. The next two markets that we have primed for sales are the Gulf of Mexico and the New York Bight, which are planned for 2027. By 2028, the Interior plans to have already put in a bid for four auctions—one in California, a certain U.S. territory, the Gulf of Maine, and Hawaii.
Implications for Oil and Gas Exploration
This impedes exploration in the first year of the five-year schedule that oil and gas companies get acreage from the administration to conduct offshore development. The law, passed by Congress in 2018, is the major legislative exchange that stipulates that the Interior should lease at least sixty million acres for oil and gas at least a year before issuing offshore wind leases.
The USA has been holding the last oil and gas auction in December of the previous year and won’t conduct another one until 2025 under a reduced five-year drilling program that was set in place last year, as reported by Reuters.
The Interior has carried out only four offshore wind leases since Biden was elected to the White House in 2021. For example, the last one in the Gulf of Mexico in August last year did not gather enough interest from the industry participants.