September 2, 2023 — The Biden administration on Tuesday held the first ever auction for the right to develop offshore wind in the Gulf of Mexico, with just one of the three available leases provisionally awarded and only two bidders.
The historic sale fell on the anniversaries of 2005’s Hurricane Katrina and 2021’s Hurricane Ida, climate crisis-fueled disasters that devastated Gulf communities. It also comes the day after the Gulf cities of New Orleans and Houston saw their hottest temperatures in recorded history, and as the largest wildfire in state history ravages Louisiana.
The Bureau of Ocean Energy Management held auctions on one lease area off the coast of Lake Charles, Louisiana, and two others off the coast of Galveston, Texas, which together have the capacity to power almost 1.3m homes. Last month, officials said the sale would show that the Gulf – currently the nation’s primary source of offshore oil and gas – can become a key player in a new green economy.
But the result was anti-climatic, with neither of the two lease areas off the Texas coast receiving bids. The German developer RWE was provisionally awarded the third area off Louisiana, beating out just one other bidder.
Several factors may have put a damper on developer interest, the newsletter Heatmap reported last week. Gulf wind speeds are often lower than other coastal areas’, requiring the use of specific turbines for which a robust supply chain must be developed. No Gulf states’ energy policies specifically require the use of offshore wind. And analysts say building out offshore wind in the Gulf will be more expensive than in the north-east, making it harder for wind projects to compete in local energy markets, where existing energy prices are lower.