It’s clear that just weeks into 2022, this year may be a watershed moment for US offshore wind. The Home Office has positioned 2022 as a record year in terms of offshore wind lease offers and green light for projects.
In late 2021, the Bureau of Ocean Energy Management (BOEM), the regulatory agency responsible for offshore wind lease sales, released the Offshore Wind Leasing Path Forward 2021–2025. The document maps potential new wind lease sales. According to the document, four new lease sales could be offered this year alone.
In places like New England, where energy consumers are beleaguered by high energy prices, offshore wind offers a new avenue to help keep energy affordable. In states like California and North Carolina, offshore wind can advance ambitious renewable energy goals. In the Gulf of Mexico, offshore wind can diversify the already impressive low-carbon offshore oil and gas basin.
The first of the new offshore wind lease sales is scheduled for February 2022 in the New York Bight area. This lease sale off New York and New Jersey will be a pivotal moment for a one-of-a-kind energy and economic opportunity.
More than three years have passed since the last ease sale, the $405 million “auction bargain” off Massachusetts. In the three years since the sale of the lease in Massachusetts, companies have invested, the market has matured and the regulatory framework has become more certain.
A 2020 study by Wood Mackenzie estimates that the sale of the New York Bight offshore wind lease could end up supporting 32,2000 jobs during the development and construction phase of the projects, with more than $3.3 billion in annual wages. and $45.9 billion in total capital investment. The Biden administration estimates the proposed leases in the New York Bight sale could eventually power more than 2 million homes.
As the millions of Americans who live ashore from potential offshore wind concession areas await new wind opportunities with open arms, workers and businesses across America are ready for the jobs and investments that new offshore wind projects will boost.
According to the American Clean Power Association, proposed investments for existing U.S. offshore wind projects total nearly $3.3 billion in manufacturing, ports, vessels, workforce development and research, and many more are in progress. These investments extend beyond states adjacent to wind concession areas and impact communities across America.
In Ingleside, Texas, Kiewit is building the first offshore wind substation built in the United States. The high voltage cable for the Vineyard Wind 1 project is being manufactured in Huntersville, North Carolina. Nexans has invested $310 million in a new plant in Goose Creek, South Carolina, to produce new undersea cables.
We are closer than ever to “we are here” moment for US offshore wind.
Federal support will be essential to keep US offshore wind on track. Offshore wind has been a bipartisan business. Last year’s bipartisan Infrastructure Investment and Jobs Act provided $17 billion in funding for river and coastal infrastructure. These funds include $450 million per year for the next five years for the Department of Transportation’s Port Infrastructure Development Program, a critical investment that will help US ports keep pace with growing offshore wind needs.
Before the huge budget reconciliation package was apparently tabled, offshore wind-friendly provisions, including production tax credits and investment tax credits, appeared set to be included. in the Build Back Better Act. These provisions could find a second life if and when Congress decides to propose a separate, smaller legislative package on energy and the environment.
As the Biden administration revises and reworks regulations, such as the National Environmental Policy Act (NEPA) and the Migratory Bird Treaty Act (MBTA), it will be important to ensure that changes to the basic environmental policy be carried out so as to improve environmental protection and energy development. Environmental stewardship and energy and economic progress are not mutually exclusive; NOIA members have always been leaders in both fields.
Promulgating rules that balance the need for energy development with effective environmental management will provide the certainty that massive investments require. A more efficient, effective, and timely regulatory process will help ensure NOIA members continue to build a better world through energy security, economic growth, and reduced energy emissions.
Opportunity and action align. If smart and balanced regulatory reforms are pursued, Congress maintains its support, and leasing and permitting momentum is maintained, we are looking at a banner year for US offshore wind.