Published on December 19th, 2016 | by Tina Casey0
Statoil Bails On Canadian Tar Sands Oil, Dives Into Offshore Wind Power
December 19th, 2016 by Tina Casey
Norway’s state-owned Statoil oil and gas company won the right to develop an offshore wind farm in US waters last week, practically within hours of selling off its tar sands oil assets in Canada. The new wind area is off the coast of New York State, hard by New York City, which makes it a high status, high visibility site for the global energy giant.
Bidding for the offshore lease was “intense,” which brings up the question: exactly what kind of great deals will President-elect Donald Trump bring to the US public, as steward of the nation’s vast fossil and renewable energy resources?
Offshore Wind Taking Off In The US
The new wind lease is part of a coordinated program to develop wind farms off the Atlantic Coast. Including the new New York lease, the US Department of the Interior has now leased 11 offshore areas for development through its Bureau of Ocean Energy Management.
Much of the 3,000-mile-long coast is ideal for renewable energy development. The relatively shallow waters of the Continental Shelf are one attraction.
Another plus is the proximity of major population centers all along the coast, from Boston to New York City and on down to Miami.
The warm, electricity-hungry southern coastal states form another added bonus in terms of demand growth. Climate change is one factor (think: more air conditioning). Another factor is the region’s notoriously lax worker protections, which have helped to spark a resurgence of industrial activity.
As for Statoil, the company is still a leading oil and gas developer with recent investments in the Gulf of Mexico, and its US shale assets are problematic to say the least. Some are located in the Bakken play, starting point of the proposed (and temporarily stalled) Dakota Access oil pipeline.
79,350 Acres for New York Wind
When Interior Secretary Sally Jewell announced the results of last week’s New York offshore wind auction she underscored the “strong” industry interest in developing the Atlantic coast.
That’s evident from the number of companies involved in the auction, which toted up to 14. The bidding itself went on for 33 rounds. According to BOEM, that’s the most of any of the lease sales so far.
The new wind area is off the coast of Long Island, about 11.5 nautical miles from the Jones Beach area (a nautical mile is slightly longer than a land mile, because it refers to the distance between two parallels of latitude):
On the other hand, things could move along at a relatively rapid clip from now on. The nation’s first wind farm, Block Island, recently went online. Now that the technology is proven in US waters, the Obama Administration is anticipating 86 gigawatts of wind energy development by 2050.
Right Back At You, Chris Christie
On the other other hand, with President-elect Donald Trump set to take office in just a few weeks, the Obama Administration’s ambitious plans could go up in smoke.
Trump has established an antipathy to renewable energy and climate science in general, and wind energy in particular (especially in Scotland, but that’s a whole ‘nother can of worms).
Be that as it may, so far the major obstacle faced by offshore wind energy developers in the US has not come from Trump, but from state officials connected to the industrialist Koch family.
The Obama Administration got practically every Atlantic Coast state to sign on to a coordinated plan for offshore wind back in 2010, but several states have been lollygagging, especially those in the south.
The northern state of New Jersey is a notable member of this group. The state established an ambitious renewable energy plan and it has upped the ante even farther this year.
The solar component has survived, but after Governor Chris Christie (this guy) began his first term, the wind energy part of the equation died on the vine along with other important regional clean energy initiatives. Clean energy advocates are eagerly anticipating more progress after 2017, when term limits force the startlingly unpopular Governor out of office.
Taking a less than subtle dig at Governor Christie, the American Wind Energy Association had this to say about Statoil’s New York lease (emphasis mine):
“New York has shown the promise of offshore wind power for energy developers…Combining top-notch wind resources, strong demand from some of our biggest cities, and a firmly committed state government, New York has the winning recipe to build these job-creating power plants.”
For that matter, take another look at the thumbnail in the lower left corner of that lease map. Though the wind farm is technically off the coast of New York State, it is in a little pocket that also happens to be situated right off the Jersey Shore.
Meanwhile, it will be interesting to see what a President Trump, the self-described expert dealmaker, will bring to the energy table.
That probably depends on your perspective. From a taxpayer’s point of view, a great deal would be to price federal energy leases to include the full extent of risk, including local public health impacts as well as climate change.