Daily Archives: March 29, 2021

March 28, 2021

Like all Californians, I care deeply about our environment. Our state's natural beauty and diverse ecosystems are something to treasure and protect. Shifting toward more renewable energy is essential to meeting California's air quality and climate mandates.

California's growing population continuously requires new electricity generation. Renewable energy, largely from wind and solar sources, is key to meeting California's growing energy requirements while accomplishing important environmental challenges.

To meet California's goal of 100% renewable electricity by 2045, offshore wind energy needs to be a significant part of the plan. New offshore wind energy legislation in Assembly Bill 525 is exactly what we need.

California is positioned to lead the west coast in this innovative technology. With the second longest coastline in the lower 48 states, our potential is enormous. Similar potential on America's eastern shores has already caused seven coastal eastern states to join together to achieve their offshore wind energy goals. Our state's 2045 goal is attainable and can even be surpassed.

Californians need safe, reliable power that is both clean and affordable. Offshore wind development will create over 10,000 well-paying professional jobs during the construction phase, and several thousand permanent positions, all while delivering energy to California's citizens at the lowest possible cost: Far lower than electricity generated from coal, gas, oil or nuclear power.

I am pleased to see the emphasis on coordination for new wind projects at sea laid out within AB 525. The bill emphasizes working with the California Coastal Commission, the Ocean Protection Council, the State Lands Commission and other relevant agencies to ensure a successful, sensible plan that serves all Californians and the environment.

If passed and implemented, this bill will kick-start a vital industry that will serve the electricity needs of Californians for decades to come while improving the health of our communities.

Ace Hoffman is a San Diego-based software developer and environmental activist

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Opinion: California Can Cleanly Power Its Future With Offshore Wind Energy - Patch.com

President Joe Biden entered office pledging to deliver the federal policy framework needed to launch US offshore wind at commercial scale and unlock a potential $50bn-plus clean energy and economic opportunity this decade along the east coast.

His administrations leadership is critical. The federal government owns the seabed on the outer continental shelf where offshore wind projects will be built, and the Bureau of Ocean Energy Management (BOEM), an arm of the Department of Interior, regulates its use through lease area sales and construction permits.

Given slow-rolling progress on both under Donald Trump, the states took the lead. They have invested in port infrastructure, research, and workforce training, while soliciting and awarding capacity 11.6GW to date despite lack of clarity if, or when, contracted projects could win federal approvals to get built.

New England, northeastern and mid-Atlantic states have committed to procure 30GW of capacity by 2035, a hint of the sectors growth potential as it moves to add to the pioneering Block Island project that entered service in 2016 and the two-turbine Coastal Virginia Offshore Wind pilot completed last year.

Amanda Lefton, the New York environmental official Biden appointed as BOEM director, faces two pressing near-term challenges with offshore wind. The first, by her own admission, is to develop efficient and effective processes for reviewing project plans by existing leaseholders. Her second priority is developing an inclusive and expeditious process for identifying areas for potential future lease sales, she says. The last one was in December 2018.

Despite the ongoing challenges, the US is poised for a first wave led by the projects below America's offshore wind pioneers.

Vineyard Wind I

Owners: Avangrid Renewables and Copenhagen Infrastructure Partners. Nameplate capacity: 800MW. Location: south of Massachusetts.

The US flagship large-scale projects 38-month odyssey to secure a federal green light appears to be nearing an end. BOEM on 8 March completed its final environmental review for the $3bn array, a critical step toward expected Record of Decision (RoD) issuance with approval in the second quarter.

The developer would then need to submit two reports covering facility design, fabrication and installation that provide specifics as to how the project will be built and installed in accordance with its Construction and Operations Plan (COP), and best design and engineering practices. If BOEM approves them within a mandatory 60-day review period, as expected, construction can then begin.

Plans call for financial close in second half of 2021 and electricity deliveries to begin in 2023. The project will use between 57 and 62 GE Haliade-X turbines.

South Fork

Owned by Orsted and Eversource Energy. Nameplate capacity: 130MW. Location: south of Rhode Island and Massachusetts.

BOEM recently published a draft environmental review, expects a final version out in August and RoD issuance in January 2022. If favourable, full commercial service is possible as early as Q4 2023.

The commercial fishing industry, which plays an important role in the New England economy, has been critical of BOEMs environmental review process for the project. Potential impacts for the permitting timeline are uncertain. Siemens Gamesa is the turbine supplier. South Fork has a 20-year PPA with Long Island Power Authority (LIPA).

Skipjack

Owned by Orsted. Nameplate capacity: 120MW. Location: east of Delaware.

In 2017, this small project won a 20-year contract from Maryland for offshore wind renewable energy credits (ORECs), the industrys earliest for firm off-take.

Last August, Maryland utility regulators gave the project a major boost when they backed Orsteds controversial decision to switch turbines from an 8MW Siemens Gamesa to the much larger GE Haliade-X at 12MW rating.

BOEM is reviewing the projects COP and opponents will have opportunities to make their case that Skipjack should be moved further out to sea to avoid viewshed impacts at Ocean City and other seaside resorts. Orsted will invest at least $13.2m to stage the project at Sparrows Point near Baltimore. Permitting delays have pushed the in-service date back to Q2 of 2026, the developer confirmed in March.

MarWin

Majority owned by US Wind, a unit of Italys Renexia. Nameplate capacity: 270MW. Location: east of Maryland.

This often-delayed project is gaining momentum under new CEO Jeff Grybowski, an industry pioneer who led development last decade of the 30MW Block Island project, the nations first, in Rhode Island waters. Last August, funds controlled by New York-based Apollo Asset Management took a $265m equity stake.

MarWin, the first European-backed project here, also won Maryland ORECs in 2017, a deal US Wind values at $3.3bn over 20 years. The developer tells Recharge that it is actively evaluating turbine options including the larger, latest generation machines.

BOEM is reviewing the $1.5bn projects COP but there is no indication when it will complete a draft environmental review. Permitting delays have pushed back in-service start several times and the latest early 2023 target appears ambitious.

Revolution Wind

Owned by Orsted and Eversource Energy. Nameplate capacity: 704MW. Location: south of Rhode Island Massachusetts.

This project is unique in having contracted off-take (20 years) with two states. Rhode Island is taking 400MW of capacity and Connecticut 304MW.

The developer filed the projects COP in March 2020 and expects BOEM to release a review schedule this year. Permitting delays have pushed the in-service date to 2024 at the earliest.

Orsted and Eversource have committed $57.5m toward redeveloping State Pier in Connecticuts New London port into a major offshore wind hub with heavy lift capability that will serve Revolution Wind and their other offshore projects in the region.

Ocean Wind

Owned 75% by Orsted, 25% by PSEG. Nameplate capacity: 1.1GW. Location: southeast of New Jersey.

Among the largest US projects, Ocean Wind won a 20-year power supply contract in New Jerseys first competitive solicitation in 2019. Orsted will stage the facility at a new $400m purpose-built offshore wind port on the eastern shore of the Delaware River that Governor Phil Murphy says will begin partial operation by 2023.

German fabrication specialist EEW will supply monopile foundations from a new $250m plant in the Port of Paulsboro scheduled to also open in 2023. Ocean Wind will employ 90 GE Haliade-X turbines at 12MW rating.

Orsted is optimistic that BOEM later this year will set a clear project permitting timeline and advance its COP. The original 2024 in-service date is unlikely to be met, according to Orsted CEO Mads Nipper.

Empire Wind I

Owned 50-50 by BP and Equinor. Nameplate capacity: 816MW. Location: south of Long Island.

Empire Wind I was one of two projects chosen by New York in its inaugural July 2019 competitive offshore wind tender, winning a 25-year contract for ORECs. The lease areas proximity to metropolitan New York City makes it among the most valuable along the east coast. Equinor later sold a 50% interest to BP.

The developer will partner with the state to upgrade part of the South Brooklyn Marine Terminal into a facility to stage and service the project. Gravity-based foundations, towers, and transition pieces will be manufactured by third parties at new plants in the Hudson River ports of Albany and Coeymans.

BOEM has not published a timeline for permitting the project and the original 2024 in-service date is unlikely.

Sunrise Wind

Owned by Orsted and Eversource Energy. Nameplate capacity: 880MW. Location: south of Rhode Island Massachusetts.

The other winner in New Yorks first tender. The project has a 25-year off-take contract for ORECs. Orsted and Eversource expect to create more than 900 jobs annually through development, construction, and initial operation of Sunrise Wind, and will establish an operations and maintenance hub in Port Jefferson, Long Island.

The developer filed the projects COP on 1 September 2020 and expects BOEM to issue a review schedule this year. Commercial start is not anticipated before 2025.

Mayflower Wind.

Owner: Ocean Winds and Shell New Energies. Nameplate capacity: 804MW. Location. South of Massachusetts.

The joint venture set a US industry record by paying $135m in the last federal lease area sale in December 2018. Less than one year later, it won Massachusetts second competitive solicitation, signing a 20-year PPA with a levelised price of $77.76/MWh the lowest for any US offshore wind project thus far.

That should decline to $70.26/MWh, a $25m savings each year for ratepayers, as the developer agreed to convert the 30% value of the federal investment tax credit passed by Congress in December into a price reduction.

BOEM has not published a timeline for permitting the project. The joint venture is targeting commercial start in the mid-2020s.

Park City Wind

Owner: Avangrid Renewables and Copenhagen Infrastructure Partners. Nameplate capacity: 804MW. Location: south of Massachusetts.

Park City was selected by Connecticut after a competitive solicitation in December 2019 and a 20-year PPA is pending approval. The array will supply the equivalent of 14% of the states electric power when potentially in service in 2025.

The joint venture has proposed to re-develop waterfront industrial property in Bridgeport for transition piece steel fabrication and final outfitting for turbine foundations and as a base for operations and maintenance for the project. There would also be heavy-lift barge/vessel loading capability and outdoor lay-down space.

New England Aqua Ventus I

Owners: University of Maine, Diamond Offshore Wind and RWE Renewables. Nameplate capacity: 12MW. Location: Maine state waters.

After numerous setbacks, the nations only industrial-scale floating offshore wind project with firm off-take has new life. With strong political support from Governor Janet Mills, regulators approved a 20-year PPA, while the project obtained a $100m investment pledge from Mitsubishi-owned Diamond Offshore Wind and developer RWE Renewables.

The University of Maine Composites Center, the projects driving force, is targeting 2023 to demonstrate its VolturnUS concept - a multi-patented, modular concrete semisubmersible design that would be the countrys first industrial-scale floating wind project.

UMaines foreign partners will oversee permitting, construction, assembly, and deployment responsibilities. If successful, plans call for development of a 100MW array in deeper federal waters later this decade.

Coastal Virginia Offshore Wind

Owner: Dominion. Nameplate capacity: 2.64GW. Location: east of Virginia.

The nations largest offshore wind project and the most expensive with an estimated $8bn price tag. Dominion, an investor-owned utility, will seek to recover costs from the existing rate base in Virginia as it would any large infrastructure project a first for a developer in the US industry.

The project will consist of three 880MW phases. Dominion anticipates a 2024 construction start and full commercial operation by 2026. It will use Siemens Gamesa 14MW turbines. In December, the company filed a COP with BOEM.

Note: Vineyard Wind and South Fork are the only projects with relatively firm timelines for BOEM to issue a Record of Decision (RoD) to approve or deny a construction permit. New England Aqua Ventus is the only project in state waters but will require BOEM approvals to lay power line under the seabed to link with the onshore grid.

Continued here:

Ocean's Twelve! America's first wave of offshore wind farms starts to build | Recharge - Recharge

In summary

Heres why environmental justice experts and advocates from organized labor think California needs to go all in on offshore wind farms.

Jeff Hunerlach is a district representative at Operating Engineers Local #3, jhunerlach@oe3.org.

Standing on the beach, the giant blades of an offshore wind turbine 20 miles off the coast appear miniscule a white pinprick floating on the blue horizon. But up close, the turbines are massive taller, sometimes, than the Washington Monument and with blades that can span the length of a football field.

The impact of these turbines in transitioning California to 100% clean energy could be massive in just seven seconds, the powerful rotation of a single offshore wind turbine can generate enough renewable electricity to power a home for an entire day.

In Europe, thousands of these turbines spin off the coast of 12 different nations, generating more than 22,000 megawatts of clean, pollution-free electricity. U.S. coastal waters, in contrast, are home to only two offshore wind farms, with a grand total of seven turbines, but President Joe Biden seeks to change that. Earlier this year, the new administration issued an executive order calling for a doubling of the nations offshore wind capacity.

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Heres why Californias environmental justice experts and advocates from organized labor think California needs to go all in on offshore wind.

In 2021, this multibillion-dollar industry is poised for explosive growth and for the states who move to capitalize on this clean energy resource, the economic and jobs benefits will be enormous. By tapping offshore wind, California could create more than 17,500 good-paying jobs by 2045 in key regions that lack high-skilled job opportunities while also improving air quality in frontline communities and delivering on our promise of 100% clean energy.

The East Coast may have a head start on offshore wind development, but our state is poised to move quickly. The Bureau of Ocean Energy Management has already initiated the leasing process for three potential offshore wind sites off the coast of California in Humboldt Bay, Morro Bay and Diablo Canyon and two additional sites have been identified in studies for potential future development. If California built all five of these sites to their total generation capacity, they could provide 25% of our electricity needs with clean, pollution-free power.

Developing each of these sites will create thousands of jobs through shovel-ready projects. The first step to development port revitalization can create up to 6,000 local, full-time equivalent jobs per port right off the bat, according to a report from Brightline Defense. And thats just the beginning investing in offshore wind will generate thousands of additional jobs in construction, manufacturing, turbine demonstration and transmission line projects.

Many of the jobs created will require mandated apprenticeship training programs creating new career pathways in the trades for workers who may have been displaced during the COVID-19 downturn. These opportunities will also prepare the states workforce for building, operating and maintaining Californias 100% clean energy electricity grid.

By meeting our electricity needs through clean, pollution-free offshore wind energy, California can also deliver vital air quality improvements in frontline communities. About 78% of Californias gas power plants reside in communities identified by CalEPA as having the states highest burden of poverty and cumulative environmental health burdens.

This legislative session, California policymakers have a fantastic opportunity to advance Californias progress toward 100% clean energy and capitalize on the economic and air quality opportunities by voting to pass Assembly Bill 525, introduced by Assemblymember David Chiu, a Democrat from San Francisco. The bill would set a target of producing 10 gigawatts of offshore wind energy by 2040.

By investing in offshore wind energy, California can kickstart our economic recovery, create good jobs in hard-hit communities and cut lung-damaging pollution across the state. The Golden State can still lead the nation on offshore wind but we need to move quickly. This opportunity is ours to lose.

Read more here:

California could lead the nation in offshore wind energy - CalMatters

Gov. Mills moratorium on new offshore wind projects in state-managed waters is a dazzling mistake.

Yes, when new ideas are being explored along the coast, all stakeholders including our fishing families need to sit down together at the table. Thats only fair. The ocean is a commons, and it belongs to all of us.

But meanwhile, wind projects elsewhere along the East Coast are gearing up rapidly. Projects in the North Sea are fully 10 years ahead of us. The developers worked closely with their fishing industries, government agencies and other stakeholders and made it right. Today theyre already long since improving the fishing resource, cutting the cost of home energy for everyday citizens and reducing the use of fossil fuels.

Thats a win-win for everyone and theres no reason we cant do it, too.

Existing research shows that wind turbines create a sanctuary for sea life that increases the fish population and benefits the industry. Whats more, the Gulf of Maine has one of the worlds best natural wind resources. Theres cheap energy waiting to be made! Our other big advantage is in the University of Maines floating wind turbines, which work without disturbing the seabed.

Banning offshore wind projects will hurt our economy and jobs and will needlessly delay our much-needed transition to clean energy. Lets not do that. Acidification and warming of the Gulf are much more significant threats to the industry than wind turbines.

Theres a better future straight ahead for all of us.

George SimonsonHarpswell

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Letter to the editor: Maine moratorium on offshore wind projects a mistake - pressherald.com

Standing on the beach, the giant blades of an offshore wind turbine 20 miles off the coast appear miniscule a white pinprick floating on the blue horizon. But up close, the turbines are massive taller, sometimes, than the Washington Monument and with blades that can span the length of a football field.

The impact of these turbines in transitioning California to 100% clean energy could be massive in just seven seconds, the powerful rotation of a single offshore wind turbine can generate enough renewable electricity to power a home for an entire day.

In Europe, thousands of these turbines spin off the coast of 12 different nations, generating more than 22,000 megawatts of clean, pollution-free electricity. U.S. coastal waters, in contrast, are home to only two offshore wind farms, with a grand total of seven turbines, but President Joe Biden seeks to change that. Earlier this year, the new administration issued an executive order calling for a doubling of the nations offshore wind capacity.

Heres why Californias environmental justice experts and advocates from organized labor think California needs to go all in on offshore wind.

In 2021, this multibillion-dollar industry is poised for explosive growth and for the states who move to capitalize on this clean energy resource, the economic and jobs benefits will be enormous. By tapping offshore wind, California could create more than 17,500 good-paying jobs by 2045 in key regions that lack high-skilled job opportunities while also improving air quality in frontline communities and delivering on our promise of 100% clean energy.

Read the original:

Eddie Ahn and Jeff Hunerlach: California could lead the nation in offshore wind energy - Lompoc Record

Published in the Marine Policy journal, its authors argue that offshore aquaculture growth depends on whether aquaculture stakeholders and policymakers can balance growth goals alongside social and ecological trade-offs.

Aquaculture has huge growth potential in the US it currently accounts for only 8 percent of domestic seafood production. Proponents of the EO say that the deregulation will make the US aquaculture industry more competitive and seize offshore production opportunities. However, the EO came at a challenging time for the US seafood sector. Unresolved trade wars and the Covid-19 pandemic meant that the industry was restructuring. Imagining the upshots of a new EO is difficult. There is a chance that, if aquaculture expands without proper oversight, it could undermine environmental gains and lose public support.

Turbulent might be the best way to characterise 2020 for the US seafood sector. An on-going trade war with China meant that the US was cut off from the worlds largest seafood consumer. The start of the Covid-19 pandemic in March of that year was another body blow for the sector. The lockdowns and closure of the food service sector caused huge economic losses. The researchers estimate that 75 percent of seafood consumption in the US takes place in restaurants fish and shellfish farmers had to quickly adapt their business models to stay in the black.

For many finfish producers, this meant shifting from restaurant to retail sales while shellfish farmers either downsized or delayed selling their crops until the pandemic reached a low ebb. Though the federal government provided pandemic relief with the $1.8 trillion CARES Act, only 0.017 percent of the aid money went to aquaculture producers.

The researchers highlighted five ways to ensure the EO balances the social and ecological trade-offs of the deregulated industry.

The EO calls for fisheries to increase catch levels while maintaining sustainability targets this is easier said than done. Currently, 85 percent of wild-caught fisheries are fished at, or near, maximum sustainable levels. Deregulation needs to be strategic and specific to achieve both goals. From the researchers perspective, changes in regulation might make fisheries more profitable, but increasing wild production may not be feasible.

Before the EO, fisheries and aquaculture activities were managed by two separate agencies, NOAA and USDA. Putting both sectors within the remit of NOAA gives the agency the opportunity to adopt an integrated management approach, specifically an ecosystem approach to aquaculture (EAA).

This model prioritises ecosystem health, community well-being, profitability and overall environmental health when developing aquaculture projects. Managing aquaculture this way is crucial: well-managed and spatially planned fish farms can reduce environmental impacts. Ill-executed developments will degrade the surrounding ecosystem.

Public pushback against new aquaculture projects has been a hallmark of the industry for years. Despite high consumption of imported farmed seafood in the US, many communities remain resistant to local fish and shellfish farms. Industry-led efforts to improve aquacultures public image havent been hugely successful either.

For the EO to achieve its goals, aquaculture development must include local stakeholders in decision-making. The researchers urged the industry to think of the social carrying capacity of communities to minimise objections to new developments. In their view, NOAA is well-equipped to manage these interests when selecting potential sites.

The EOs clause concerning suitable reporting from aquaculture operators is a welcome one. Aquaculture rules vary between states and there arent any uniform production standards at the federal level. Federal reporting occurs in five-year census increments theres a gap in the national aquaculture data.

Creating a reporting mechanism that tracks annual production and on-farm metrics like feed sources, efficiencies, survival rates and environmental indicators would help aquaculture establish a baseline and build towards future success. The researchers believe that strong data collection will build public confidence and allow secondary industries (like processing and insurance) to thrive.

One unanticipated consequence of the Covid-19 pandemic has been an increase in food nationalism and a renewed focus on the US seafood deficit. This growing concern could be a stumbling block for the EO and the Seafood Trade Task Force.

The Task Force needs to maintain the support of sustainable aquaculture producers while gaining access to lucrative foreign markets. The aquaculture market is global protectionism tends to punish consumers and frustrate growth. Despite its status as the top seafood importer, the US is also among the top five seafood exporters. Identifying opportunities in foreign markets drives the industrys expansion and will make the US food system more resilient going forward.

Read more about this assessment in Marine Policy.

See the article here:

Ensuring the sustainable growth of the US offshore aquaculture sector - The Fish Site

Now, the Boston area is known the world over for its biopharmaceutical innovations, he said. We must pursue the same strategy to make Massachusetts the leader of our clean-energy future.

Mariano made the promise during a speech on Thursday to the Greater Boston Chamber of Commerce. In pre-pandemic times, these annual speeches gave the House speaker an opportunity to highlight legislative priorities of interest to the business community. This one was no different, though it was Marianos first major speech outside of the Legislature in his new role he took over for longtime speaker Robert DeLeo roughly three months ago and it took place via videoconference, as opposed to in a hotel ballroom.

Mariano rattled off a long list of legislative actions in the past year to help businesses endure the COVID-19 pandemic: providing tax relief for recipients of federal stimulus payments, giving restaurants permissin to sell mixed alcoholic drinks to go, and allowing notarization of legal transactions.

The subject that received the most attention on Thursday, though, was offshore wind farm development. The 800-megawatt Vineyard Wind project is close to receiving its final federal permit, he said, and the 62-turbine project south of Marthas Vineyard could provide enough power for more than 400,000 homes.

That project is the direct result of a 2016 state law requiring major electric utilities to buy up to 1,600 megawatts worth of offshore wind power. The Legislature essentially doubled that amount in 2018, and it just passed a new climate bill that would bring the total to 5,600 megawatts in offshore wind capacity.

Mariano told the chamber the state cant stop there. He said the House will include $10 million in its budget proposal for the next fiscal year for the quasi-public Massachusetts Clean Energy Center, to prioritize job-training programs that will prepare workers for offshore wind farm construction. That money would be on top of $12 million of additional ratepayer funds allocated for the MassCEC in the climate bill. (Most of the agencys $27 million in revenue this fiscal year is coming from an electric ratepayer surcharge.)

Mariano has asked Representative Jeff Roy, the House chair of the energy committee, to focus on improving the states wind-energy workforce.

Mariano also said he plans to authorize a large-scale bonding effort to establish the South Coast as a regional hub for the wind-energy industry. This effort would build on the offshore wind terminal that the MassCEC constructed with state funds in New Bedford. It could also address concerns raised by South Coast leaders that the states bidding approach isnt doing enough to encourage economic development in the region, especially when compared to criteria used in other states when evaluating offshore wind bids.

The House speaker said offshore wind is just one of many industries that could be held back by a mismatch of skills in the workforce. Toward that end, Mariano said he will work to establish a formal skills-credentialing system, possibly with the help of federal stimulus funds, to launch careers for people who choose not to pursue traditional college degrees and to spur educated professionals to refine their skills. He didnt provide any details about the next steps he would like the Legislature to take toward this goal.

But Mariano did offer a strong endorsement for another nascent industry: sports betting. The House last year had approved legislation to legalize sports betting as part of an economic development bill, but it was dropped in negotiations over the broader bill because Senate leaders wanted to address the issue separately.

Mariano said he remains hopeful that taxes on sports bets could bring in more than $50 million in annual revenue to the state. He will continue to support legislation to create in-person and mobile sports-betting licenses for the casinos and tracks in the state, as well as for the Boston fantasy-sports company DraftKings. It offers sports betting in 14 states, but not Massachusetts.

DraftKings was created here, theyve stayed here, and theyve grown here, Mariano said. Its time Massachusetts allows them a future here.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.

Original post:

House speaker vows to increase states investment in offshore wind energy - BetaBoston

The Noble Jim Day dwarfed the small tugboats pushing the hulking offshore oil rig down the Corpus Christi Ship Channel and out into the Gulf of Mexico.

The floating rig one of the worlds largest at 40,000 metric tons had been moored for five years in Port Aransas after its drilling contract with Royal Dutch Shell ended in 2016. When it was moved in early March, the rig wasnt going back into the Gulfs deep waters but to Turkey to be dismantled, its steel and other metals sold.

Scrapping rigs is not something we like to do, said a spokesman for Noble Corp., which owned the rig. As we re-evaluated our business and forward cash-flow potential after the utter collapse in energy markets last year, (Noble Jim Day) no longer met the test for keeping it in the fleet.

The rig named for a former Noble chief executive was built just 11 years ago and, like most, had another 20 years of reliable service ahead of it. But in the wake of the pandemic and the worst oil bust in decades, offshore companies are discarding ever newer rigs some less than a decade old and threatening hundreds of jobs.

The Gulf Coast, where most of the nations 60,000 offshore workers are based, is the center of the offshore industry, and Houston is home to some of the largest offshore operations, such as Transocean, Schlumberger and Halliburton.

2014: 15

2015: 30

2016: 23

2017: 30

2018: 22

2019: 11

2020: 22

2021: 5

TOTAL: 159

SOURCE: IHS Markit

Nobles rig was among 26 oil rigs scrapped since the start of the pandemic last March, including half in service for about 10 years, according to global energy research firm IHS Markit. By contrast, just two of the 69 rigs discarded during the 2014-16 oil crash were as new.

Weve reached a point where quite often we see rigs built in 2011 and 2012 scrapped, said Matthew Donovan, IHS Markits principal research analyst. Anything a decade old is now a candidate for scrapping.

Offshore companies have idled rigs, laid off hundreds of workers and, in some cases, sought bankruptcy protection to weather the global pandemic, which slashed demand for crude and petroleum products such as gasoline and jet fuel.

Even though oil prices have rebounded to above $60 a barrel, the outlook for the sector remains uncertain. Offshore oil is among the most expensive to produce globally, requiring massive upfront capital and many years to recoup the investment, making it less competitive than oil produced on land.

On HoustonChronicle.com: 'Not for the faint of heart': Oil bust lashes offshore industry still in recovery

Adding to the sectors troubles, demand for oil could start waning this decade, some analysts say, with the rise of electric vehicles and a societal shift from fossil fuels amid concerns about climate change. The Biden administrations climate policies, including a one-year moratorium on new offshore leases, has only added to offshores troubles. If producers cant get new leases to drill in the Gulf of Mexico, the pipeline of offshore drilling contracts will dry up.

In light of these challenges, its no surprise offshore companies are evaluating their fleets of rigs, scrapping those that are unlikely to secure a drilling contract after the pandemic ends, said Tom Kellock, IHS Markits director of offshore rig market consulting. In total, 159 floating rigs and drillships have been pulled from service since 2014.

They dont see a future for them, Kellock said, referring to companies that have scrapped rigs. Theres absolutely no point in hanging on to something that wont see work again at day rates that are attractive.

Transocean, the worlds largest offshore drilling contractor, has scrapped 61 rigs, more than half of its fleet since 2014. Houston-based Diamond Offshore has scrapped 22, Sugar Land-based Noble, 13; and U.K.-based Valaris, 8, according to IHS Markit data.

Over the past year, Noble scrapped four rigs that had been in operation for 11 years or fewer. In the same time, Valaris has scrapped five rigs in operation for a decade or less, including one after just eight years.

Transocean said it is now focused on offshore rigs that have deepwater and harsh environment capabilities. The Switzerland-based company owns or has partial ownership interests in 37 mobile offshore drilling units, including 27 ultra-deepwater rigs and 10 harsh environment rigs.

Certainly, moving forward, theres fewer and fewer ability or desire to keep those rigs warm, somewhat active, Roddie Mackenzie, Transoceans senior vice president of marketing, told analysts last year. So scrapping or retiring, it really is the name of the game.

Oil majors, such as Shell and Exxon Mobil, hire offshore companies to drill for and extract oil from reservoirs deep under the ocean. Producers pay daily rates to rent the crew and rigs.

When crude prices were over $100 a barrel, offshore drilling rigs commanded high daily rates that justified the construction of new rigs. Companies rushed to build floating rigs and drillships early in the last decade.

When crude prices crashed in 2014, 2018 and 2020, however, it made less economic sense to produce oil from expensive deepwater wells. U.S. oil production in the Gulf last year fell by 13 percent to 1.65 million barrels per day compared with 2019, the largest decline of any major American oil field on land or at sea, according to the Energy Department.

After producers cut short contracts or didnt renew them, offshore companies mothballed rigs and laid off hundreds of workers.

The number of floating rigs under contract worldwide has fallen to 110 from 261 in 2014, according to IHS Markit. There are 13 offshore rigs operating in the Gulf of Mexico, down from 19 a year ago, according to oil-field services firm Baker Hughes and research firm Enverus.

Seadrill, which in February filed for its second bankruptcy in four years, this month began laying off 162 workers on its West Neptune drillship after a contract ended in the Gulf of Mexico. The U.K.-based offshore company last summer laid off 135 workers on its Sevan Louisiana Rig and 168 workers on its West Auriga Rig, both in the Gulf of Mexico. Switzerland-based Transocean last year laid off a combined 220 workers on its Deepwater Asgard and Discoverer Inspiration Drillships in the Gulf of Mexico.

On HoustonChronicle.com: Deep-water drilling squeezed by oil busts, climate change fight

Even idled rigs cost about $4 million a year to maintain at port. And when rigs are called back into service, it can cost $50 million to $80 million to make them seaworthy again. The longer the rig is mothballed, the more it costs to reactivate it.

When the 2014-16 oil bust ended, offshore companies were hopeful they could put idled rigs back to work. But last years crash left them questioning if the cost of maintaining and reactivating idle rigs can be recouped with future production.

In order to justify spending $50 million to $80 million, you need pretty robust day rates, a Noble spokesman said.

Its a financial decision when it comes back, IHS Markits Donovan said. Youre looking at the market now and what it will be, and deciding is it worth it to keep it around?

Most retired rigs end up in large scrap yards in Asia; some are scrapped in Brownsville.

Others have found new life in different industries. SpaceX, for example, acquired two semi-submersible rigs last year from Valaris to convert into floating commercial rocket platforms. Some rigs end up being sunken to the ocean floor to be reused as marine life habitats.

Meanwhile, most scrapped rigs arent being replaced. There are 25 floating rigs under construction, according to IHS Markit, and few orders for new ones since 2014. One of the largest marine manufacturers, Singapore-based Keppel Corp., recently said it will exit the rig building business.

The longer the downturn lasts, the more pressure offshore companies will be under to keep scrapping rigs.

Selling rigs to a scrap yard is not a big money maker, Donovan said. Youre getting scrap prices.

paul.takahashi@chron.com

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Even new offshore rigs aren't immune to the pandemic oil bust - Houston Chronicle

Kris Ohleth

I have found great joy in devoting the past 15 years of my professional life to developing offshore-wind energy projects. Working in a field that brings clean energy, increases environmental progress, improves public health and boosts economic opportunity makes me proud to do what I do every day.

Thankfully, the majority of New Jersey residents agree with me, as poll after poll shows that offshore wind is very popular among New Jerseyans. With so many benefits, it is not surprising that a large majority of residents support offshore wind for the Garden State.

However, there is a vocal minority of part-time Jersey Shore residents who continue to make unfounded claims about offshore wind. They claim that it will harm the tourism economy in the Shore towns where they spend the summer. In response, I thought some of the clear facts and data would shed further light on the reality of offshore wind and tourism both domestically and abroad.

Lets start off the coast of Rhode Island, a significant recreational destination. Built in 2016, the Block Island Wind Farm is the only offshore-wind project that is visible from shore in the United States. A study published by the University of Rhode Island confirmed that tourism on Block Island where the turbines are easily within view actually increased the year after the wind farm was built. In fact, there was, on average, a 19% increase in occupancy rates upon completion of the wind farm.

A different study published by the University of Delaware in 2020 concluded that not only would beachgoers be indifferent to offshore wind farms that are more than five miles from shore, but also tourists may be interested enough to visit them. That means offshore-wind farms in New Jersey and elsewhere could potentially generate millions of curiosity trips, and the sightseeing revenue that comes with them.

There are other demonstrated benefits. The Block Island Wind Farm has already become a focal point for the regions recreational fishing community because it provides habitat for the base of the food web that attracts larger fish sought by locals and vacationers alike.

Overseas, where offshore-wind projects have been in operation since 1991, we see other case studies of wind farms adding to the tourist economies in coastal communities. For example, the Rampion Offshore Wind Farm in the United Kingdom comprises 116 turbines. Built in 2017, it is located just eight miles from the coast along the popular tourist town of Brighton. According to data from the British Tourist Authority, overnight visits to Brighton increased from 604,000 in 2017 to 615,000 in 2018, and then up again to 647,000 in 2019.

That is just some of the information we have about offshore wind and tourism. In most cases, it is abundantly clear that wind farms do not have a negative impact on tourism.

What clearly does increase with offshore-wind development is the opportunity for coastal economies to grow beyond the confinements of a seasonal hospitality industry. These sustainability projects bring an entirely new employment sector to the shore, offering coastal residents the chance to find a career in their hometowns. This would mean year-round work at the Jersey Shore in a growing field that will repower our nation with clean energy and more well-paying jobs.

Furthermore, coastal communities face the brunt of impacts from climate change. Sea-level rise is taking its toll. This is not only seen during storms anymore, but also as sunny day flooding continues to increasingly plague Shore towns. Offshore wind is the only renewable-energy resource that is ready to be deployed at a large enough scale to provide baseload and reliable power that can replace the electricity generation sources like coal and nuclear power that continue to be lost to a lack of economic competitiveness in New Jersey.

Offshore wind is being driven at the national level in a strong and bipartisan way, a trend started over a decade ago with the George W. Bush administration. Each administration since both Republican and Democratic helped advance this industry. The Biden administration is set to take our nations offshore-wind program to the next level, a once-in-a-generation opportunity to create sustainable energy infrastructure in our state. We cannot let this moment pass. Standing with the majority who want to do right by the environment and our economy makes me prouder than ever to be from the great state of New Jersey. I hope you will stand with us too.

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Op-Ed: Offshore wind supports NJ coastal economies - NJ Spotlight

FILE PHOTO: The headquarters of the German power supplier RWE, which plans to break up subsidiary Innogy and share its assets with rival E.ON, is pictured in Essen, Germany, April 24, 2018. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) - RWE, Europes third-largest renewables group, has taken an investment decision on its 3 billion pound ($4.1 billion) Sofia offshore wind farm project, it said on Wednesday.

The 1.4 gigawatt project, to be located 195 kilometres from Britains North East coast, represents RWEs largest offshore farm and is expected to be completed by the fourth quarter of 2026.

Successfully developing a project of this size once again demonstrates our expertise and positive track-record for delivering cost effective, innovative offshore wind energy around the globe, said Sven Utermoehlen, Chief Operating Officer Wind Offshore Global, RWE Renewables.

Siemens Gamesa, the worlds largest maker of offshore wind turbines, will supply 100 of its 14 megawatt turbines for the project, RWE said.

($1 = 0.7290 pounds)

Reporting by Christoph Steitz; Editing by Madeline Chambers

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RWE to invest $4.1 billion in flagship UK offshore wind park - Reuters