Gulf of Mexico
Louisiana and Texas are poised to leap from zero to hero in the US offshore wind industry (image credit: US BOEM).

TX - The Next Big US Offshore Wind Winners Are Texas & Louisiana

Louisiana and Texas are poised to leap from zero to hero in the US offshore wind industry, which is quite a trick considering that wind resources in the Gulf of Mexico are less than optimal.

The Interior Department has just tapped Texas and Louisiana for offshore wind development, which at first glance seems like an exercise in futility. All things being equal, policy makers in the two “red” states would be expected to slow-walk the offshore lease process. However, the era of  hand sitting may be over. States without fossil resources are jockeying for position in the new hydrogen economy, and both Texas and Louisiana will have to scramble to keep up with them.

The US Offshore Wind Race Is On…

The US has been achingly slow to develop its offshore wind resources compared to other nations, even though the Atlantic coast states  should be first in line. Aside from some challenges off the coast of Maine, the Atlantic states are blessed with all the right ingredients: relatively shallow waters, high coastal populations, copious inland transportation networks, and existing seaports.

Efforts to jolt the Atlantic states into action during the Obama presidency fell flat, for reasons that we’ll not go into here, except to say that the usual suspects were involved.

If you’re thinking fossil energy stakeholders had something to do with that, you are partly correct. In addition, there was no streamlined, standardizedfederal leasing process for offshore wind areas during the Obama years. That also contributed to a  logjam.

Now there is a standard federal leasing process. The Interior Department’s Bureau of Ocean Energy Management fine tuned the process during the Trump years, despite the former President’s well-known animosity towards wind power in general, and offshore wind in particular.

BOEM has also begun leasing areas off the Pacific coast, with an assist from new floating turbine technology that also did not exist during the Obama administration.

…Aided & Abetted By The Green Hydrogen Race

Also, there was no green hydrogen industry to speak of during the Obama years. Now everyone is talking about green hydrogen. Made possible by the low cost of renewable energy, green hydrogen mainly refers to hydrogen produced through electrolysis systems, which apply an electrical current to push hydrogen gas from plain water (biogas and other renewable resources are also emerging, to a lesser extent).

The US Department of Energy added fuel to the green hydrogen fire this year, when it announced a competitive program aimed at establishing a network of regional hydrogen hubs around the country.

The regional element is a key part of the program. The regional hub format encourages states to form consortia for hydrogen production, storage, transportation and end use. Hydrogen from natural gas is part of the program as proscribed by federal law, though the main emphasis is on water and other renewable sources.

Offshore wind is already playing a significant role in electrolysis end of the green hydrogen industry, and that’s where things get interesting.

The fossil-free Atlantic coast states of New York and New Jersey have already put aside their bridge-and-tunnel rivalry to promote offshore wind development as a joint endeavor. This year the two also states hooked up with Massachusetts, Connecticut, Rhode Island and Maine to compete for a share of the hydrogen hub pie.

None of the states in this consortium have recoverable fossil energy resources of any significant size, either because they don’t exist or because voters and policy makers have come out against fossil projects with overwhelming force.

Why Fossil States Must Pursue Offshore Wind, Now

The one-two punch of offshore wind and green hydrogen is a significant challenge to fossil-sourced hydrogen networks elsewhere in the US.

Under this new energy scenario, legacy fossil states like Texas and Louisiana are practically forced to ratchet up their renewable energy profiles, if they want to keep a hand in the renewable hydrogen economy.

In terms of offshore wind, the setup for Texas and Louisiana is less than ideal. In the fall of 2020, the Energy Department’s National Renewable Energy Laboratory assessed the potential to grow a viable offshore wind industry in the Gulf of Mexico. None of the Gulf states fared particularly well, mainly because wind resources are relatively weak in the Gulf of Mexico.

However, Louisiana received a passing grade, and the state’s governor has already been assembling a task force to plan for offshore wind. In addition, the state’s fertilizer industry is also prepping for a pivot into the related field of green ammonia.

Last year, Texas also began exploring the potential for a green hydrogen network leveraging onshore wind farms as well as solar arrays and other assets.

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