BOEM proposes 2nd offshore wind auction in Gulf of Mexico
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Dive Brief:
The Bureau of Ocean Energy Management, or BOEM, plans to auction four offshore wind energy areas totaling 410,060 acres offshore Louisiana and Texas — its second offshore wind auction in the Gulf of Mexico, the Department of the Interior said Wednesday.
Two of the lease areas that will be offered were included in the first Gulf of Mexico offshore wind auction last year, said John Filostrat, BOEM’s director of public affairs for its Gulf of Mexico Regional Office, in an email. The areas went unsold in that auction.
BOEM is accepting comments on the proposed sale notice, as well as submissions of qualification materials from prospective bidders, through May 20.
Dive Insight:
The first offshore wind lease area auction held in the Gulf of Mexico received a more tepid response than similar auctions in the Northeast U.S. had gotten, with only one of three lease areas receiving a bid.
The 102,480-acre lease area that was sold offshore Lake Charles, Louisiana, in the first Gulf of Mexico auction went to RWE Offshore US Gulf for a winning bid of $5.6 million without any competitive bidding. This equated to around $54.64 per acre, while the previous four offshore wind auctions in the U.S. had each seen winning bids of more than $1,000 per acre.
The two unsold areas are both offshore Texas, and comprise 102,500 acres and 96,786 acres. In addition to those areas, BOEM also plans to auction a 108,230 acre area offshore Texas and a 102,544 acre area offshore Louisiana.
“The Gulf is well-positioned to transition to a renewable energy future,” said Filostrat. “The region’s existing energy infrastructure, workforce, and businesses expertise in offshore operations can immediately advance and benefit offshore wind development. BOEM’s objective in the Gulf of Mexico is to provide a predictable schedule to allow developers to effectively plan an investment strategy.”
The existing infrastructure in the Gulf has been a bulwark for offshore wind development in the region. Several BOEM officials have reiterated the agency’s commitment to offshore wind in the region despite the results of the first auction, with director Liz Klein calling it a “tremendously important” area for offshore wind.
Lacy McManus, executive director of future energy at economic development agency Greater New Orleans, noted that “of the 15 original [wind energy areas] designated by BOEM, the four areas included in this announcement are the closest to the Louisiana coast.”
“This comes on the heels of the first-ever Gulf of Mexico offshore wind auction held just seven months ago, marking a rapid progression in the region's energy initiatives,” she said.
Despite the nascence of its own offshore wind sector, the Gulf area is already a significant contributor to the industry overall thanks to its institutional offshore energy knowledge and existing facilities, McManus said in an interview last month. The Oceantic Network estimated in May 2023 that Gulf Coast contractors made up 26% of the U.S. offshore wind supply chain.
“The Gulf Coast continues to be the engine of the U.S. offshore wind industry,” John Begala, vice president of federal and state policy at Oceantic Network said in an email. “Every day, crews, vessels, engineers, and fabricated components are coming out of the Gulf to build our first wind projects off the East Coast.”
“Companies in the region have unparalleled experience in offshore construction, and innovative solutions developed there will continue to drive not just the U.S. but the global offshore wind industry forward,” he said.
