Second Gulf of Mexico offshore wind sale first to permit hydrogen production

The second Gulf of Mexico offshore wind lease auction, which is expected to take place in the fall, will be the first occasion where hydrogen production is permitted, according to Bureau of Ocean Energy Management officials.

BOEM is currently in the middle of a 60-day public comment period following the release of the proposal sales notice. The public comment period ends May 20. If BOEM decides to proceed with the auction, the next step is the publication of a Final Sale Notice, which must be issued at least 30 days before the auction. The second lease auction could take place as early as late June, although it is anticipated the sale will take place in the fall, a BOEM spokesperson said April 19 in an email.

"We are fortunate that industrial and labor resources exist in the Gulf of Mexico that can assist in the development of renewable energy, because the federal waters offshore Texas and Louisiana have the highest technical offshore wind capacity for the Gulf states," the BOEM spokesperson said. "This capacity, along with BOEM's efforts to provide a predictable schedule of offshore wind lease sales, can greatly contribute to achieving the [Biden] Administration's goals of 30 GW of offshore wind capacity by 2030."

Various states have individual offshore wind capacity goals. Louisiana has a goal of 5 GW by 2035.

Proposed sale notice

The proposed sale notice, published March 21, seeks feedback on the proposed lease areas, as well as potential lease revisions to include the production of hydrogen or other energy products using wind turbine generators on the lease.

The proposed sales notice includes four lease areas offshore of Texas and Louisiana that are being considered for the second lease sale:

• Lease Area I-1: 102,500 acres located 28 miles off the coast of Texas
• Lease Area I-2: 96,786 acres located about 39 miles offshore Texas
• Lease Area J-1: 108,230 acres located 75 miles off the coast of Texas
• Lease Area K-1: 102,544 acres located 59 miles off the coast of Louisiana

The areas total 410,040 acres that have the potential to generate approximately 1,308 GW, enough to power about 1.2 million homes. Lease Area I-1 and Lease Area I-2 were offered in the first Gulf of Mexico wind auction.

BOEM is considering lease stipulations to ensure that communities, particularly those which are historically underserved, are considered and engaged early and often throughout the offshore wind energy development process, the BOEM spokesperson said.

"Proposed bidding credits include funding for fisheries compensatory mitigation, a domestic-based supply chain, and workforce development," the BOEM spokesperson said. "While the supply chain/workforce bidding credit is applicable across regions, other credits are tailored to the specific needs and dynamics of each region. In the Gulf's context, a dedicated credit is proposed for fisheries compensation, acknowledging the unique considerations of the area."

First Gulf of Mexico auction

The first Gulf of Mexico offshore wind lease sale in August 2023 brought in a high bid of $5.6 million from RWE Offshore US Gulf, the only winning bidder. RWE was awarded the Lake Charles Lease Area, which has the potential to support up to 1.24 GW of offshore wind power capacity.

The two additional lease areas up for auction in Texas called Galveston I and Galveston II did not receive any bids.

Following the first auction, BOEM finalized in October four new Wind Energy Areas in the Gulf of Mexico that could support offshore wind projects with the potential to produce enough power for more than 3 million homes.

A Wind Energy Area identifies areas that appear most suitable for commercial wind energy activities, while presenting the fewest apparent environmental and user conflicts. If deemed suitable, the area came become a proposed lease area.

BOEM began the process in June 2021 to assess interest in potential offshore wind development in the Gulf of Mexico.