Bud's Offshore Energy (BOE)

In the wake of last week’s lackluster Atlantic wind lease auction (summarized above), an excellent Renewable Energy World article documents the sharp decline in participation and bidding since the massive February 2022 sale of 6 leases offshore NY and NJ. That sale garnered bids ranging from $285 million to an astounding $1.1 billion, with total high bids of $4.37 billion! The sale was touted as the “nation’s highest grossing competitive energy lease sale in history.” The extravagant bidding, which made little sense then, seems downright irrational now.

Even the December 2022 California offshore lease sale, where development will be dependent on more expensive floating turbines, attracted substantially higher bids for leases (5) smaller than those auctioned last week.

The highly promoted Gulf of Mexico wind auctions were busts with the first sale receiving only one bid for $6.5 million and the second being cancelled due to lack of interest.

Major oil companies like bp and Shell seem to have exited the market for new US offshore wind leases. That leaves Equinor (2/3 Norwegian govt ownership) as the only major oil company pursuing US offshore wind leases.

In just 2 years, cost increases, coastal resident opposition, a troubling blade failure, and developer uncertainty have dramatically changed the outlook for US offshore wind. Nonetheless, the Administration’s wind advocates continue to sing from the same song sheet:

“Today’s lease sale reflects the forward momentum we are seeing to power millions of American homes with clean energy and create good-paying, climate jobs,” said White House National Climate Advisor Ali Zaidi. “With nine commercial-scale projects approved in the last three years and more to go, we are using every available tool to grow the American offshore wind industry as we strengthen the nation’s power grid and tackle the climate crisis.”