US offshore wind set to overtake oil & gas
US offshore wind will come close to overtaking offshore oil and gas over the next 10 years in terms of new capital expenditures, according to consultancy Wood Mackenzie. The group projects $78 billion in spending on offshore wind compared to $82 billion on offshore oil and gas development through the end of the decade.
Projects in federal waters off the Atlantic coast have been in limbo since August 9, 2019 when the US Department of Interior placed a hold on issuing final environmental impact statements needed to start construction of individual projects until it could complete a cumulative-impacts analysis of all the projects that are expected to be built as a result of foreseeable state procurements. The department lifted the hold in June. The first “record of decision” is expected by December 18, 2020 for the Vineyard project off Massachusetts. Other construction permits should follow for other projects.
Meanwhile, offshore wind companies managed to strip a provision from the defense authorization bill in the House in late July that would have required specialized vessels used to install offshore wind turbines to comply with the Jones Act, meaning only US-flag vessels could be used. There are no such US-flag vessels currently. The first specialized US-flag vessel is not expected to be available until 2023 and has been ordered built to assist with installation of a Dominion Energy project off the Virginia coast.
US developers must reserve specialized installation vessels from Europe well in advance of need.
The House provision would have included a waiver mechanism, but the ability to get a waiver and for how long would have remained uncertain.