Louisiana’s Gulf Coast Sold to Foreign Companies for Offshore Wind Turbine Farms
Portions of Louisiana’s Gulf Coast have been sold off to two foreign companies for the development of offshore wind turbine farms. The Danish firm Vestas has been granted 60,000 acres off the coast of Cameron Parish, while the Japanese company Diamond Offshore Wind (DOW), owned by Mitsubishi, has been granted 6,162 acres off the coast of Terrebonne and Lafourche parishes.
Expanding Clean Energy Production
Governor John Bel Edwards and the state Department of Natural Resources Secretary Tom Harris announced the approval by the Mineral and Energy Board. Governor Edwards expressed his excitement about expanding clean energy production and opening new avenues for the state’s economy. He referred to the wind farms as the next chapter in Louisiana’s history of energy production.
Different Payment Structures
The agreements with Vestas and DOW have different pay structures. DOW, which covers less acreage, will pay 1.5 percent of gross revenues in energy royalty but will have higher up-front costs and rental fees per acre. On the other hand, Vestas will pay 2.2 percent and lower fees per acre. Secretary Harris explained that one agreement offers more on the front end, while the other pays more over time. These agreements mark the state’s first wind energy operating agreements.
‘A Natural Fit’ for Louisiana’s Gulf Coast
According to Governor Edwards, the incoming wind farms are a natural fit for Louisiana’s Gulf Coast due to its existing offshore infrastructure for oil and gas. The state’s transportation, fabrication, and engineering expertise that has supported the traditional offshore industry will benefit wind energy projects. Additionally, existing ports and offshore support companies will have new opportunities to work and grow jobs.
Vestas and DOW’s Presence in the United States
Vestas, headquartered in Portland, Oregon, has primarily been involved in manufacturing in the United States. It operates several manufacturing facilities in Colorado. DOW, on the other hand, is developing a floating wind farm off the coast of Maine.
Support for Wind Energy
American Clean Policy (ACP), a pro-wind energy advocacy organization, has praised Governor Edwards’ efforts to open the Gulf Coast for wind energy. ACP considers the Gulf a pioneer region and emphasizes the need for local, state, and national support to fully mature the market.
Environmental Concerns
Environmental groups have raised concerns about the potential harm to whale species along the Atlantic coast caused by offshore wind farms. However, the U.S. Court of Appeals for the 5th Circuit recently dismissed environmental groups’ challenge of an offshore oil and gas lease in Louisiana, which they believed would harm the habitat of the endangered Rice’s whale exclusive to the Gulf of Mexico.
Overall, the approval of these wind energy operating agreements marks a significant step towards clean energy production and economic development for Louisiana’s Gulf Coast.
