Per a provision in the “Inflation Reduction Act,” no offshore wind leases may be issued after 12/20/2024, the one year anniversary of the last oil and gas lease sale (no. 261).
Although the 4 leases receiving bids at the most recent wind sale (10/29/2024, Gulf of Maine) have presumably been issued, BOEM’s lease table does not reflect that. If those leases have not been issued, it’s too late now.
Assuming that the Gulf of Maine leases have in fact already been issued, the legislative restriction on issuing new leases should not be an issue. A qualifying oil and gas lease sale will likely be held in the Gulf of Mexico in the first half of 2025.
The bigger question is whether the new administration will hold any wind lease sales. Pre-election energy policy comments imply that new wind sales are unlikely.
“At the heart of the dispute are rules from the federal Bureau of Ocean Energy Management – BOEM – which require energy producers in the Outer Continental Shelf to provide a bond to pay for well, platform, pipeline and facilities cleanup if the operating company fails to do so.”
“These insurance companies and their unreasonable demands for increased collateral pose an existential threat to independent operators like W&T.”
Comment: If insuring offshore decommissioning is so risk-free and lucrative, why aren’t other companies entering the market?
“Several states, including Texas, are challenging the BOEM rule and in one case they specifically cite W&T as an example of how the rule could be misused to irreparably harm energy producers.“
Comment:As previously posted, the concerned States should propose alternative solutions that would promote production while also protecting taxpayer interests. Arguing that decommissioning financial risks are not a problem is neither accurate nor a solution.
“In over 70 years of producer operations in the Gulf of Mexico, the federal government has never been forced to pay for any abandonment cleanup operations associated with well, platform facility, or pipeline operations.”
Comment: Shamefully, from the standpoints of both the offshore industry and the Federal government, that statement is no longer true. The taxpayer has now funded decommissioning operations in the Matagorda Island Area offshore Texas (BSEE photo below) and more significant decommissioning liabilities loom.
The Town of Nantucket calls on you to help safeguard one of the nation’s most treasured National Historic Landmarks. We ask that you contact the Advisory Council on Historic Preservation (ACHP) and the Massachusetts State Historic Preservation Officer (SHPO) to urge them to decline signing the Section 106 Memorandum of Agreement (MOA) for SouthCoast Wind. Section 106 requires federal agencies to consider the effects on historic properties of projects they carry out, assist, fund, permit, license, or approve throughout the country, and to find ways to avoid, minimize, or mitigate adverse effects on those properties.
BusinessWire: “These turbines destroy our culturally sacred viewshed, destroy our traditional and historic fishing grounds, and threaten the continued existence of the North Atlantic right whale,” said William “Buddy” Vanderhoop, a member of the Wampanoag Tribe of Gay Head.
“We are known as ‘The People of the First Light,’” said Tribal Chairwoman Cheryl Andrews-Maltais. “The unobstructed eastern view of the ocean from our ancestral lands from Nantucket, Cape Cod, Martha’s Vineyard (‘Noepe’) and southeastern Massachusetts is inextricably intertwined with who we are as a people and our cosmology, and is essential to our spiritual beliefs and practices.”
Jens Christiansen offers this explanation for the absence of bids for wind leases offered in the recent Danish sale:
“The value of offshore wind energy in Denmark has declined.
The capture price remains consistently lower than the market price throughout 2024. When the wind blows, the market saturates and the capture price drops This is why the latest offshore wind tender yielded nothing.”
A related BOE post points to the sharp decline in bids for US offshore wind leases.
No bids for the 3 large North Sea tracts(yellow) west of Denmark.
Danish Energy Agency: “The deadline for bidding on the first 3 GW of Denmark’s 6 GW offshore wind tendering procedure expired on Thursday. The Danish Energy Agency has not received bids for any of the three offshore wind farms in the North Sea put out to tender. The Minister for Climate, Energy, and Utilities has asked The Danish Energy Agency to engage in dialogue with the market to identify why no bids have been submitted.“
Even Orsted, which is 50.1% Danish govt owned, failed to submit a bid. Perhaps the economic realities of offshore wind, as reflected in Orsted’s share price (below) are sinking in.
“Offshore wind, I have decided to put the project on pause” with Trump’s return, Total Chief Executive Officer Patrick Pouyanne said at an energy industry conference in London on Tuesday.
“I said to my team, the project in New York, we’ll see that in four years,”he said. “But the advantage is it’s only for four years.”
Perhaps Mr. Pouyanne thinks Total owns those 84,332 acres in the Atlantic or that they have the right to hold the leased area indefinitely. They do not. The OCS Lands Act calls for diligent development of leases and BOEM has promulgated implementing regulations.
The Total (Attentive Energy) lease was issued on 5/1/2022. Per 30 CFR § 585.235(a)(1), the company must submit a Construction and Operations Plant (COP) no later than 5/1/2027, more than 20 months before the end of the Trump administration. BOEM will have ample time to act on the plan prior to the next administration.
BOEM could also call for progress updates and an earlier COP submittal if there is evidence that the lessee is not moving forward with development plans (as would already seem to be the case given Mr. Pouyanne’s public statements in London).
In the absence of progress in developing the lease, BOEM could seek cancellation (§ 556.1102) for failure to comply with the diligence mandate in OCSLA (556.1102 (a)). Cancellation could also be pursued based on misrepresentations in acquiring the lease (556.1102 (c)) or the threat of unacceptable harm to the environment or national security (556.1102 (d)).
Rather than making rash comments at a public forum in London, perhaps Mr. Pouyanne would have been wise to first meet with energy officials of the new administration early next year. At a minimum, the CEO’s comments will help justify any attempts to cancel the Total (Attentive Energy) lease on diligence grounds.
A recent Nantucket Current piece criticizes the Nantucket Select Board for failing to address community concerns about the attached Good Neighbor Agreement (GNA) with Vineyard Wind. In particular, any discussion about the GNA was throttled at a recent public forum on the SouthCoast Wind project.
Some key points from the article and related thoughts:
The GNA established a long-term relationship between Vineyard Wind and Nantucket. In essence, Nantucket became a partner and an advocate for the projects.
Sections 5.2 and 5.3 of the GNA are particularly striking and believed to be unprecedented in the history of Federal offshore energy programs.
Section 5.3 stipulates that “the Nantucket Parties shall use their reasonable best efforts to inform federal, state, and local elected officials of their support for the Projects” throughout the environmental, historical, and state review processes. Wow, nothing subtle about that directive!
By signing the GNA with Vineyard Wind, Nantucket withdrew from the important National Historic Preservation Act consulting process for these projects.
Vineyard Wind, New England Wind, and the other projects that are covered under the GNA will add approximately 350 turbines off Nantucket’s south shore beaches.
Given the partnership with Vineyard Wind, it’s difficult for Nantucket to challenge the mitigations for another project, SouthCoast Wind, which is not covered by the GNA.
The Nantucket GNA controversy should be carefully considered by other communities that are tempted by developer incentives to enter into agreements that may not be in their best long-term interest.
Will Nantucket exit (Nexit) the GNA? The pressure is building.
Vom Winde verweht: Germany will pay as much as €20 billion to wind and solar operators through the end of 2024, twice what grid operators had forecast in last October.
Bud's Offshore Energy (BOE) 
Total wants to sit on their wind lease until the next administration (2029). Can they do that?
Posted in energy policy, Offshore Wind, tagged Attentive Energy, BOEM, CEO comments, COP deadline, diligent development, lease cancellation, OCSLA, Total, wind lease on December 3, 2024| Leave a Comment »
Impressive arrogance from the CEO of a foreign company that paid $795 million for a lease (OCS-A 0538) that was worth pennies on the dollar even before the Presidential election:
“Offshore wind, I have decided to put the project on pause” with Trump’s return, Total Chief Executive Officer Patrick Pouyanne said at an energy industry conference in London on Tuesday.
“I said to my team, the project in New York, we’ll see that in four years,” he said. “But the advantage is it’s only for four years.”
Perhaps Mr. Pouyanne thinks Total owns those 84,332 acres in the Atlantic or that they have the right to hold the leased area indefinitely. They do not. The OCS Lands Act calls for diligent development of leases and BOEM has promulgated implementing regulations.
The Total (Attentive Energy) lease was issued on 5/1/2022. Per 30 CFR § 585.235(a)(1), the company must submit a Construction and Operations Plant (COP) no later than 5/1/2027, more than 20 months before the end of the Trump administration. BOEM will have ample time to act on the plan prior to the next administration.
BOEM could also call for progress updates and an earlier COP submittal if there is evidence that the lessee is not moving forward with development plans (as would already seem to be the case given Mr. Pouyanne’s public statements in London).
In the absence of progress in developing the lease, BOEM could seek cancellation (§ 556.1102) for failure to comply with the diligence mandate in OCSLA (556.1102 (a)). Cancellation could also be pursued based on misrepresentations in acquiring the lease (556.1102 (c)) or the threat of unacceptable harm to the environment or national security (556.1102 (d)).
Rather than making rash comments at a public forum in London, perhaps Mr. Pouyanne would have been wise to first meet with energy officials of the new administration early next year. At a minimum, the CEO’s comments will help justify any attempts to cancel the Total (Attentive Energy) lease on diligence grounds.
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