Feds set first offshore wind lease sale in Gulf of Mexico, including area off Louisiana

The federal government announced the first offshore wind energy development rights sale in the Gulf of Mexico on Thursday, setting the stage for a late summer auction that could eventually generate enough power for almost 1.3 million homes.

The U.S. Interior Department has set Aug. 29 to auction off up to 300,000 acres of federal waters near Lake Charles and Galveston, Texas. If fully developed, the areas could turn wind energy into 3.7 gigawatts for electricity each year, according to the department.

“By catalyzing the offshore wind energy potential of the Gulf of Mexico, we can tackle the climate crisis, lower energy costs for families and create good-paying jobs,” Interior Secretary Deb Haaland said.

A sale notice will be published in the Federal Register on July 21. Under consideration are more than 102,000 acres offshore from Lake Charles and two areas of about 100,000 acres each near Galveston. The sale notice will provide additional details about lease provisions and conditions. It will also identify which companies are qualified to participate in the auction.

Some of the world’s largest wind energy developers, including Orsted of Denmark and RWE of Germany, have expressed interest in building wind farms in the Gulf. Royal Dutch Shell, Talos, Total Energies and other companies steeped in the oil and gas industry have also submitted letters of interest.

Thursday’s announcement has been eagerly anticipated by the Louisiana business community, said Michael Hecht, president of regional economic development organization Greater New Orleans, Inc.

“After years of planning, this announcement officially identifies Louisiana as a hub for offshore wind activity,” he said, noting that many GNO Inc-affiliated business leaders have been “involved in this process every step of the way, sharing insights and enthusiasm for a balanced, clean energy, pro-job future.”

Several Louisiana companies that long served the offshore oil and gas industry are involved in the design and construction of offshore wind farms and support vessels on the East Coast. Louisiana engineers, metal fabricators and boat operators helped build the U.S.’s first offshore wind farm, a project completed off the coast of Rhode Island in 2016.

The Bureau of Ocean Energy Management has added several stipulations on potential wind lease holders in the Gulf. Companies must agree to support workforce training programs to bolster the region’s offshore wind industry. They must also contribute to compensation funds benefitting commercial and recreational fisheries affected by wind farms.

President Joe Biden’s administration has been ramping up wind farm development to meet an ambitious goal of deploying 30 gigawatts of offshore wind energy by 2030. The administration recently approved a large wind farm off the coast of New Jersey, and two other projects are under construction off the coasts of Massachusetts and New York.

Meanwhile, Louisiana is negotiating deals that could erect smaller-scale wind farms in state-managed waters. At least five near-shore projects led by Danish, Norwegian and Japanese companies could take shape off Cameron, Vermillion, St. Mary and Terrebonne parishes.