US Gulf of Mexico Offshore Wind – Louisiana and Federal Updates
The Gulf of Mexico, an area where companies have decades of experience in producing energy offshore and that comprises 32 percent of the shallow-water offshore wind potential in the United States, may experience significant offshore wind development in the near future. On June 15, 2022, Louisiana Governor John Bel Edwards signed into law House Bill 165 to establish a general framework for offshore wind leasing in state coastal waters. The law includes a maximum of 25,000 acres for wind energy production leases, allows the State Mineral and Energy Board to enter into operating agreements for wind energy production and removes restrictions on the process of awarding wind leases. In addition, the law gives the Louisiana Department of Natural Resources authority to receive part of the project revenue, as well as charge for the wind energy leases. Any lease granted under the law must have a decommissioning plan for the end of the facility’s expected life or upon other circumstances that would require closure. The decommissioning plan must include the estimated cost of site closure and remediation that includes removing the wind energy production facility and any necessary infrastructure facilities, and restoring the property to as near as reasonably possible to its pre-construction condition. The finalized rules will be set by the Louisiana Department of Natural Resources by January 1, 2023.
Federal renewable energy activities in the Gulf of Mexico have also been picking up. On January 11, 2022, the Bureau of Ocean Energy Management (BOEM) announced it is preparing a draft environmental assessment (EA) to consider potential offshore wind leasing in federal waters of the gulf. The Gulf of Mexico area includes approximately 30 million acres of federal lands on the Outer Continental Shelf and covers areas in what is commonly known as the Western and Central Planning Areas of the Gulf of Mexico. The draft EA will analyze the affected environment in the gulf, namely, physical and chemical resources; social and economic factors; and impact-producing factors (e.g., air emissions, discharges, noise, habitat modification, vessel strikes, etc.). The draft EA is expected to be issued later this summer and will commence a public review-and-comment period.
In early February 2022, just several weeks before House Bill 165 was introduced in Louisiana, BOEM held its second virtual Gulf of Mexico Intergovernmental Renewable Energy Task Force meeting. Established last year, the task force is a partnership between federal, state and local agencies and tribal governments tasked with coordinating renewable energy planning activities on the Outer Continental Shelf in the gulf. It serves as a forum to discuss stakeholder issues, exchange data and information about ocean use and resources, and facilitate collaboration opportunities.
Next, after BOEM considers all comments submitted, it will publish a final EA, which will help BOEM decide whether to move forward with any of the areas in the Gulf of Mexico for a proposed lease sale. At this point, BOEM estimates that it will have a proposed lease auction in December 2022.
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