In a recent statement, the U.S. Interior Department has affirmed its commitment to achieving the Biden administration's ambitious offshore wind energy goals. Despite setbacks in preparatory work and dwindling industry demand, the administration remains resolute in its pursuit of a cleaner energy future.
President Joe Biden's administration has made offshore wind energy a linchpin in its efforts to combat climate change and decarbonize the nation's power sector. The administration aims to install 30 gigawatts of offshore wind energy by the end of this decade, a pivotal step toward achieving its climate goals.
The administration unveiled its offshore wind plan in October 2021, which included the offering of lease sales in seven regions across the United States before 2025. So far, auctions have been successfully held in four of these regions, namely off New York and New Jersey, the Carolinas, California, and in the Gulf of Mexico.
According to a spokesperson for the Interior Department's Bureau of Ocean Energy Management, lease sales for the remaining three regions—the Central Atlantic, the Pacific coast of Oregon, and the Gulf of Maine—are scheduled for 2024. However, concerns arose due to delays in preparatory work for these auctions.
For example, the Central Atlantic sale, initially expected this year, has been delayed as the 1.7-million-acre area is yet to be divided into proposed lease areas—a process that requires several months. Similarly, in the Gulf of Maine, the division of a 10 million-acre area into smaller “wind energy areas” and subsequent lease areas has encountered delays, partly due to multiple rounds of public comment.
Further complications could arise if the administration fails to complete this work and hold auctions by the end of the third quarter of 2024. Federal law mandates that offshore wind lease auctions occur within 12 months of the most recent oil and gas lease sale. The Interior Department is set to hold an oil and gas lease sale in the Gulf of Mexico shortly, marking the last in its current five-year plan. The content of the upcoming five-year plan for oil and gas leasing, to be released this month, remains uncertain.
U.S. Senator Joe Manchin, a Democrat representing conservative West Virginia, played a role in linking oil and offshore wind lease sales in last year's Inflation Reduction Act as an incentive for the Biden administration to continue holding drilling auctions.
Despite these challenges, BOEM spokesperson Tracey Moriarty emphasized the agency's commitment to finalizing the five-year oil and gas plan while working toward achieving the offshore wind goals. Moriarty also noted that BOEM would act in compliance with the Inflation Reduction Act in carrying out its activities.
The offshore wind industry has faced headwinds of its own, with cost inflation affecting its outlook. Major wind developer Orsted recently announced potential U.S. impairments of $2.3 billion, underscoring the challenges facing the industry. Moreover, a lease sale in the Gulf of Mexico in August resulted in only one winning bid of $5.6 million, reflecting the current state of demand for offshore wind leases.
