Offshore Decommissioning Costs in the UK North Sea Falling
The cost estimate of decommissioning oil and gas infrastructure in the UK sector of the North Sea has been cut by 25% in the past five years, reflecting the industry’s...
By Jennifer A. Dlouhy (Bloomberg) —
The House passed legislation last Thursday that offshore wind developers say poses an existential threat to the nascent industry in the US.
The measure, folded into a defense authorization bill, would impose new nationality requirements for crew members working on offshore energy projects, from oil rigs to wind installations. Crews would have to be citizens or permanent residents of the US, or be from the same country under which their vessel is flagged.
That could delay the development of renewable projects along the US East Coast, according to executives from companies including Orsted Wind Power North America, Equinor ASA, BP Wind Energy. Right now, they say, there aren’t enough trained American mariners to do the specialized work needed to connect hundreds of offshore turbines to the grid. Significant disruptions could undercut President Joe Biden’s bid to deploy 30 gigawatts of offshore wind energy by 2030.
“This provision is a gut punch to offshore wind projects,” Heather Zichal, head of the American Clean Power Association, said in an emailed statement. “We can’t keep saying we support clean energy and clean energy jobs but then pass laws that undermine them.”
Impacts may not be limited to offshore wind.
Oil industry representatives argue the measure also would chill investment and disrupt conventional offshore energy operations, including drilling in the Gulf of Mexico.
Supporters of the measure, including the Offshore Marine Service Association and cosponsor Representative John Garamendi, a Democrat from California, say the change is needed to prevent American mariners from being edged out of the budding industry by foreign ships relying on workers from low-wage countries.
The defense legislation containing the measure is generally considered a must-pass bill on Capitol Hill, boosting the chances of the measure being signed into law. But it still needs to pass in the Senate.
Separately, last Thursday the House adopted a measure that would restore the federal government’s power to sell offshore wind leases near Florida, Georgia and the Carolinas. Former President Donald Trump had withdrawn those areas from offshore energy leasing — effectively ruling out new oil and wind projects in the region — after an outcry from coastal residents concerned about potential drilling off their shores.
© 2022 Bloomberg L.P.
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