Passage of Senate Bill Supports Offshore Wind Developers – and Oil
August 9, 2022
The adoption by the United States Senate of the more than 700 pages, economic and energy omnibus law on the reduction of inflation includes $369 billion to advance clean energy programs. This includes the development of offshore wind and the urgency of a US transition to transportation electrification and residential energy use.
The bill currently before the House of Representatives for approval could cut U.S. carbon emissions by about 40% by 2030, according to Senate Majority Leader Charles Schumer, DN.Y. , one of the main architects of the narrowly approved measure (51-50).
It includes $80 million in tax credits and other consumer incentives to encourage people to buy electric vehicles, energy-efficient induction cookers, home heat pump systems and rooftop solar panels. A much larger chunk of $260 billion in clean energy tax credits is aimed at helping the development of renewable energy, from manufacturing components in the United States to building projects like offshore wind arrays .
Proponents of offshore wind say the legislation would be a big win for them. Extending tax credits for years will help wind developers worry about escalating feedstock costs. The still-developing U.S. offshore wind industry is watching Virginia sthe concerns of utility regulators on Dominion EnergyCoastal Virginia Offshore Wind’s massive project, the largest to date, won state approval on Friday.
“The Senate’s passage of the Cut Inflation Act is a watershed moment in America’s renewable energy transition. This historic legislative package sends a message to the world that the United States is serious about building supply chain resilience, increasing American energy security, and meeting our ambitious goal of deploying 30 gigawatts offshore wind energy by 2030,” Liz Burdock, president and CEO of the nonprofit advocacy group Offshore wind business networksaid in a statement.
The bill allocates $40 billion for investments, including shipbuilding for wind energy, that “will unlock the vast potential of offshore wind and locate a supply chain on US shores, creating thousands well-paying jobs,” Burdock said.
Compromises imposed on Democratic congressional leaders by Sen. Joe Manchin, DW. Va., assured that the legislation can allow further offshore development of oil and gas production. Environmental groups lobbied the Biden administration to stop it.
But ultimately, the package had the “all of the above” approach to energy taken by the Obama administration a decade earlier, when it embraced fossil fuel development while promoting offshore wind potential. Opponents of offshore drilling were unhappy.
These “offshore drilling provisions that benefit the fossil fuel industry … place an unfair burden on communities in the Gulf of Mexico and Alaska,” said Beth Lowell, the environmental group Oceaneis the US Vice President.
“Mandatory offshore drilling goes against President Biden’s campaign pledge to end new leases for dirty and dangerous offshore drilling,” she said. “New offshore drilling leases undermine efforts to address the climate crisis and will not help lower gas prices. President Biden must reaffirm and defend his promise to end new oil and gas concessions by finalizing a five-year program without any new lease assignment.
Offshore industry operators have seen many opportunities in the old and new energy sectors.
“We thank Senator Manchin for his leadership in securing a comprehensive energy package that boosts offshore oil and gas, offshore wind and carbon capture and storage – all key priorities for the offshore industry and for long-American energy security,” said Erik Milito, president of the National Association of Ocean Industries.