Federal Government Opens Two Areas in Gulf of Mexico for Wind Farms, but No Companies Bid on Leases

By | August 30, 2023

The federal government for the first time on Tuesday opened two areas in the Gulf of Mexico off the Texas coast to build wind farms. Groups representing supply chain businesses hailed the chance for the new offshore leases to create more work. Clean power advocates cheered the opportunity for more renewable energy to be generated.

But not a single firm bid on the leases.

Companies reached by The Texas Tribune that expressed early interest didn’t explain exactly why they declined to pursue them. Shell and Equinor said they looked forward to considering future opportunities in the Gulf. Mainstream Renewable Power said it was scaling back its U.S. offshore work in favor of projects in Europe and Asia.

A ripple of surprise among offshore wind advocates gave way to finger-pointing at Texas’ antagonistic political climate.

During this year’s legislative session, Texas lawmakers proposed a bill that would have strictly regulated renewable energy projects. It didn’t pass but it raised concerns that Texas — which is the top state for wind energy nationally — was souring on clean energy. Politicians instead passed a law aimed at incentivizing companies to build more natural gas-fueled power plants.

More recently, Railroad Commissioner Wayne Christian, whose agency regulates oil and gas in Texas, publicly opposed offshore wind farms, as did Texas Land Commissioner Dawn Buckingham, whose agency oversees the state’s coast.

The Texas Public Policy Foundation, a powerful conservative think tank, made a case in a blog post against offshore wind near Texas and filed a lawsuit aimed at halting offshore wind development in New England.

Two companies did compete for a lease offered Tuesday off the coast of Louisiana, where state leaders have supported offshore wind development by setting a goal for offshore wind energy production, said Jenny Netherton, senior program manager for the advocacy group Southeastern Wind Coalition.

The auction results showed how important a state’s choices can be, Netherton said.

Helen Rose Patterson, senior campaign manager for offshore wind energy at the National Wildlife Federation, wrote to colleagues: “This points to the need for state level policy” — such as setting goals in Texas for how much offshore wind power the state wants to obtain.

The organization supports offshore wind as a way to slow the burning of fossil fuels that is driving climate change, though wind turbines pose a threat to migratory birds, especially in the Gulf.

Economic factors might also have hindered developer interest because Texas already has abundant, cheap renewable power built on land that could be difficult to compete against, said Becky Diffen, a project finance partner with law firm Norton Rose Fulbright.

“Maybe you have the normal worries that any developer has building renewables in Texas right now, with who knows what the Legislature will do in two more years,” Diffen said. “But then you have cheap power that you are competing against.”

The Bureau of Ocean and Energy Management could offer the leases again as it strives to meet President Joe Biden’s goal of getting 30 gigawatts of offshore wind deployed by 2030. The Texas and Louisiana leases were expected to be able to generate some 3.7 gigawatts.

“We look forward to holding more offshore wind lease sales in the future,” BOEM spokesperson John Filostrat said in a statement.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2023/08/29/texas-offshore-wind-farms-leases-gulf-of-mexico-bids/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Photo: The Ørsted Block Island Wind Farm in the water off Block Island, Rhode Island, U.S.

Topics Texas Agribusiness Mexico

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