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Gulf of Mexico Wind Farms Could Create 17,500 New Jobs

Not only would offshore wind farms bring economic opportunities to southern Louisiana, they would also propel the state towards its 2050 climate goals. The Bureau of Ocean Energy Management plans to begin leasing Gulf waters by 2025.

(TNS) — The economic outlook for offshore wind energy in the Gulf of Mexico is getting rosier, with as many as 17,500 jobs likely to be created if two wind farms take shape off the coasts of Texas and Louisiana, according to a new report by the American Clean Power Association.

The industry group estimates a pair of offshore wind projects would create between 7,300 and 14,700 jobs during a likely three-year construction period and up to 2,800 permanent positions associated with operations and maintenance.

"The (report) further validates the economic opportunity for south Louisiana in offshore wind," said Michael Hecht, CEO of the economic development organization Greater New Orleans Inc.

Because the Port of Houston has space limitations and is already congested with ship traffic, Hecht believes Louisiana ports, including New Orleans, Avondale and Port Fourchon, "are perfectly positioned to attract the lion's share of the wind operations in the Gulf of Mexico."

Many Louisiana ports and industrial hubs that long served the offshore oil and gas industry could use an infusion of jobs. In Lafayette and Houma, the number of oil and gas jobs has been cut in half over the past decade. The industry now employs just 1.5 percent of the state's workforce.

The association's offshore wind employment estimates are almost 50 percent higher than a similar Gulf-focused assessment published by the National Renewable Energy Laboratory in early 2020. But much has changed in the U.S.'s burgeoning offshore wind industry over the past two years. Turbines have grown bigger and more efficient, and proposed wind farm projects have increased in numbers and size. Two projects are now operating on the East Coast and 15 more are planned or under construction.

The Bureau of Ocean Energy Management plans to begin leasing the Gulf's deep waters for offshore wind projects by 2025. Turbines could be spinning in the Gulf by 2028.

Leasing in the Gulf and other federal waters off the East and West coasts is likely to encompass between 2,500 and 4,400 square miles. The association estimates this combined lease area could support 40,000 megawatts of energy production and at least 73,000 construction jobs and 28,000 operations and maintenance positions.

The federal government also stands to benefit financially from offshore wind. Lease sales, rents and operating fees could generate more than $2.7 billion over four years, according to the report. These funds are directed to the U.S. Treasury, four Gulf states ( Texas, Louisiana, Mississippi and Alabama), the Land and Water Conservation Fund and the Historic Preservation Fund.

The Gulf's forecasted lease rates are on the low end compared to lease areas near New York, California and Oregon. That's because Gulf winds are weaker and energy prices in the region are relatively low. Also, Gulf states have expressed less support for renewable energy targets, which give wind developers a more stable market for their investments. These three factors mean Gulf wind projects may generate less electricity and earn less money for every megawatt sold, making developers less likely to pay the prices BOEM may set for the East and West coasts, said Brendan Casey, one of the report's authors.

Despite the Gulf's shortcomings, several wind developers have expressed interest in building wind farms off the Texas and Louisiana coasts. The world's two largest such firms — Orsted of Denmark and RWE of Germany — are particularly keen on sites off the Louisiana coast, thanks in part to Gov. John Bel Edwards' goal of "net zero" carbon emissions by 2050 and his Climate Initiatives Task Force's recommendation that the state draw at least 5,000 megawatts of electricity per year from offshore wind by 2035.

Hecht of GNO Inc. believes the association's report may actually underestimate the offshore wind industry's power to create jobs in Louisiana. He notes that several Louisiana companies with ties to the offshore oil and gas industry have helped design and build wind projects on the East Coast. Hosting a workforce so adept at building industrial structures in deep water means Louisiana will benefit regardless of where the projects take shape.

"Thanks to its long history in offshore oil and gas, Louisiana has the unique capacity to engineer, construct, install, and service offshore wind structures not just in the Gulf, but on both U.S. coasts, as well," Hecht said.

(c)2022 The Times-Picayune | The New Orleans Advocate. Distributed by Tribune Content Agency, LLC.
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