Offshore wind looks beyond ‘nascent’ label in oil capital

Source: Edward Klump, E&E News reporter • Posted: Wednesday, September 26, 2018

HOUSTON — To Randall Luthi, the crowd here yesterday was a sign of how much offshore energy has changed.

“It wasn’t that long ago that we could’ve had a conference of all those interested in the synergy between offshore wind and the oil and gas industry in a phone booth on the corner,” he said. “And that was provided we could even find a phone booth.”

Luthi, president of the National Ocean Industries Association, was among the keynote speakers for day one of this week’s Offshore Wind Executive Summit. The event, which returned after its debut in 2017 and continues today, aims to help connect people in the wind and oil and gas industries.

It reflects continuing interest in U.S. offshore wind, if not a revolution in this longtime oil and gas hub. Billions of dollars of work could be on the table in the years ahead. That could mean business for service and supply companies in the Gulf Coast region or at sites in the eastern United States.

Bullishness coursed through sessions even as speakers acknowledged challenges ranging from needing to build relationships with the fishing community to navigating permitting. People pointed to the 30-megawatt Block Island Wind Farm off the coast of Rhode Island as an example of the industry’s progress. Yet that development served also as a reminder that there’s ample room for growth.

Tom Kiernan, CEO of the American Wind Energy Association, said the United States could see offshore wind climb from 30 MW in the water today to perhaps 2,000 MW in five years and 8,000 MW in 10 years. If state and federal policies support it, Kiernan projected possibly 25,000 MW of wind power off the U.S. coast.

Kiernan ticked off the benefits of offshore wind. On the East Coast, for example, offshore turbines can deliver a lot of electricity when demand is high. He said the emissions-free energy could provide job growth for manufacturers while boosting energy security and fuel diversity.

Offshore wind is helped by a federal investment tax credit and support from states such as Maryland and Massachusetts. Costs are expected to come down, Kiernan noted, and the industry has benefited from a friendly Trump administration, which through the Interior Department has lumped the development of large-scale offshore wind in with its “energy dominance” agenda.

“We are no longer a nascent industry,” Luthi declared at one point, saying he expects to see offshore wind and offshore oil and gas interests continue interacting.

In an interview, he said: “What you’re going to see in the next five to 10 years is actual construction.”

‘Things are happening’

The comments from Luthi were notable in part because the Department of Influence website, set up by the Western Values Project, calls him “a staunch oil and gas ally.” It notes his work at the Interior Department under President George W. Bush and today as a member of the Royalty Policy Committee under Interior Secretary Ryan Zinke.

Luthi credited changes in energy to economic and cultural shifts and cited “a natural evolution of energy development and consumption.” He promoted the idea of access for all types of offshore energy.

Michael Celata, a regional director with the Bureau of Ocean Energy Management, hit a familiar Trump administration talking point when he said the United States is working toward a “goal of energy dominance.” Celata also said the outer continental shelf will continue to play a role in energy policy to help bolster energy production.

“And offshore wind is a major part of this policy,” he said, calling it “essential to our future economic well-being.”

Celata noted that there are leases along the East Coast, while in the Pacific region, he said, BOEM is in the early stages of planning for possible offshore wind development. Along the Gulf of Mexico, Celata described engaging stakeholders about potential offshore wind development and alternative uses of platforms.

“And I’m a very patient person,” he said. “So I’m happy to wait for the development to occur on the East Coast and on the West Coast. But, eventually, the Gulf of Mexico will be sitting there, and we will be ready to work with y’all to develop renewables.”

Stephanie Kolodziej, chairwoman of the Offshore Wind Executive Summit, said it’s valuable to have hundreds of people in both the wind and oil industries attend and learn at the conference. The event is produced and owned by PennWell Corp.

“I think generally there is a need for the industry to understand what’s going on,” Kolodziej said.

In July, the potential for the oil and gas industry to participate in offshore wind came up during a different Houston event (Energywire, July 12).

Jim Bennett, renewable energy program manager with BOEM, said U.S. offshore wind isn’t going away.

“It’s still early compared to the maturity of the oil and gas industry in the Gulf of Mexico,” he said in an interview yesterday, but “things are happening.”