June 29, 2023 — The two-pronged offshore energy sector appears to be playing off the real estate adage “location, location, location.”
For now, the oil-rich Gulf of Mexico is in the driver’s seat though prices have not reached the triple digit highs expected this summer because of the OPEC cartel’s April decision to cut production.
The picture is quite different in the Northeast, where the fledgling offshore wind market is sustaining heavy blows from inflation, infrastructure limitations and, more recently, judicial scrutiny. An unworkable cost imbalance has forced the temporary scrapping of at least one developing wind farm, while developers also must face something oil and gas operators have been all too familiar with over the years: lawsuits.
Concerns over energy security and affordability have of late overshadowed transition to offshore wind and other renewable energy sources. To point, in what is described as a “short-term course correction,” BP, which holds a 50% interest with partner Equinor in the Beacon Wind and Empire Wind offshore wind farms off New York, dialed back its widely proclaimed renewable investments in favor of capturing the exponentially higher returns from core oil and gas assets. “We plan to invest up to $8 billion more this decade in our transition growth engines and about $1 billion more each year in today’s energy system, which depends on oil and gas,” said CEO Bernard Looney.