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Posts Tagged ‘offshore wind lease sale’

Today’s Gulf of Maine offering may be the last wind sale for some time.

Posted in Offshore Wind, tagged , , , , , , on October 29, 2024| 2 Comments »

Gulf of Maine Final Lease Areas, Acres, and Assigned Region

Lease Area ID Total Acres Developable Acres 
OCS-A 0562 97,854 97,854 
OCS-A 0563 105,682 105,682 
OCS-A 0564 98,565 93,756 
OCS-A 0565 103,191 103,191 
OCS-A 0566 96,075 96,075 
OCS-A 0567 117,780 113,208 
OCS-A 0568 124,897 116,363 
OCS-A 0569 106,038 101,757 
Total 850,082 827,886 
Average106,260103,486
Note that the ave. lease size is 18.4 times larger than a typical Gulf of Mexico oil and gas lease

Today’s Gulf of Maine sale will likely be the last wind lease sale for at least a year.

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).

Perhaps as a result of the legislative restriction, their desire to maximize wind leasing, and their plan to hold the fewest oil and gas lease sales in the history of the OCS program, BOEM front-loaded the 5 year wind leasing plan to include 4 sales from Aug. – Sept. 2024 (see schedule below). However, contrary to plan, the Gulf of Mexico sale was cancelled for lack of interest and the Oregon sale was cancelled at the request of the Governor in response to tribal and coastal county opposition.

The date of the next oil and gas lease sale is anyone’s guess. Next week’s elections are, of course, the elephant in the room. However, there is also an enormous ruling by a Federal judge in Maryland that would halt the issuance of Gulf of Mexico oil and gas leases and the approval of operating plans effective Dec. 20, 2024. Ironically (or perhaps not?), this is the same date after which no wind leases may be issued absent an oil and gas lease sale.

Chevron and industry trade associations have appealed Judge Boardman’s ruling. (Given the enormous implications of that ruling on current and future Gulf of Mexico production, I’m curious as to why Chevron is the only major producer that is a party in this appeal. Chevron was also the only producer that was a party in the litigation overturning the restrictive Sale 261 lease sale provisions. I’m assuming there is some legal or tactical reason for the absence of participation by Shell, bp, and Oxy?)

Finally, given the legislation linking future wind sales with oil and gas sales, are the Sierra Club et al, the plaintiffs in this case, comfortable with Judge Boardman’s decision? Perhaps they are okay with the judge’s ruling given the absence of any planned Atlantic wind leasing until 2026?

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California offshore wind lease sale rolls on (sort of)

Posted in California, Offshore Wind, tagged , , on December 7, 2022| Leave a Comment »

After 20 rounds yesterday, the sale resumes today.

The biggest difference between the wind and the oil and gas programs may be the way the sales are conducted. For oil and gas leases, you submit a single sealed bid. Here is a simplified description of how a wind lease sale is conducted:

  • At the start of each round, BOEM will state an asking price for each Lease Area. A bid at the full asking price is referred to as a “live bid.”
  • If the bidder has qualified for a non-monetary credit, it will meet the asking price by submitting a multiple-factor bid—that is, a live bid that consists of a monetary (cash) element and a non-monetary credit.
  • To participate in the next round of the auction, a bidder is required to have submitted a live bid for one of the Lease Areas (or have a carried-forward bid) in each previous round.
  • As long as there are two or more live bids (including carried-forward bids) for at least one of the Lease Areas, the auction moves to the next round
  • If there was only one live bid (including carried-forward bids) or no live bids for a Lease Area in the previous round, the asking price would not be increased.
  • A live bid would automatically be carried forward if it was uncontested in the previous round, and the bidder who placed the uncontested bid would not be permitted to place any other bid in the current round of the auction.
  • Conversely, if a live bid was contested in the previous round, the bidder who placed the contested bid would be free to bid on any Lease Area in the auction in the next round, at the new asking price.
  • If a bidder decides to stop bidding before the final round of the auction, there are circumstances in which the bidder could nonetheless win a lease.
  • Between rounds, BOEM will disclose to all bidders that submitted bids: (1) the number of live bids (including carried-forward bids) for each Lease Area in the previous round of the auction.
  • In any round after the first round, a bidder may submit an “exit bid” only for the same Lease Area as the bidder’s contested live bid in the previous round. An exit bid is a bid that is greater than the previous round’s asking price, but less than the current round’s asking price.
  • The auction ends (finally) when a round occurs in which each of the Lease Areas in the auction receives one or zero live bids (including carried-forward bids), regardless of the number of exit bids on any Lease Area.

Perfectly clear? You can read the full description in the Sale Notice.

Is this the best way to award offshore wind leases?

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