Will Oil and Gas, or Renewables Power the Future? America doesn’t need to choose

Back in 2015, America planted the seeds for a future powered by clean energy when its first commercial offshore wind farm[1] was constructed off the coast of Long Island. In the year 2017, the windfarm, Block Island, began to deliver power. Following years of regulatory scrutiny and strategic planning, it is now a live example that thousands of megawatts can be generated from clean sources. It now generates power for 17,000 homes.

In 2023, another project followed with the South Fork Wind Farm, which includes 12 turbines. It’s a perfect example of an international and collaborative approach as it is a joint venture between Denmark and the United States, and promises to generate enough power for around 70,000 homes at full capacity, a drop in the ocean when it comes to meeting America’s energy needs. However, it is considered a major milestone. It was launched as a pilot project with the aim of demonstrating that offshore wind is viable in the United States (U.S.), and it has done just that.

(image courtesy Ørsted)

The nation has the technical skills, manufacturing capabilities and investment required to grow a thriving domestic clean energy sector, however a global supply chain underpinning it, and support from existing sectors, will allow the country to accelerate plans for a low carbon future. 

A wave of offshore wind projects hits America

A report[2] published this year by the National Renewable Energy Laboratory (NREL), an organisation backed by the U.S. Department of Energy’s (DOE’s) Wind Energy Technologies Office, found that a total of 4,097 MW of offshore wind energy was under construction as of May 2024. That is four times the volume recorded in NREL’s previous report. The pipeline of offshore wind projects totals a capacity of 80,523 MW, up 53 percent since 2023. 

Historically, the U.S. floating offshore wind market, which requires turbines to be moored to the seafloor in deeper waters instead of being fixed to a foundation, has experienced slower growth. That said, in April 2024 the Bureau of Ocean Energy Management (BOEM) published[3] a leasing plan through to 2028. This means that 12 offshore wind energy auctions, seven of which are in deep water and suited for floating offshore wind installations, will go ahead. 

This is an important development because floating offshore wind can be deployed in areas where it is not practical to install traditional wind turbines. Floating wind turbines tend to be able to take advantage of more favorable wind conditions, they potentially can access higher wind speeds generating more electricity, and they have less impact on the environment as they are located further from shore. This means they have less impact on marine life and their anchoring solutions create less noise pollution.

However, the same NREL report warns that as the floating offshore wind market has not yet matured in the U.S., the country’s floating wind technologies are not ready for ultradeep waters. Testing and demonstration is crucial, as is learning key lessons on viable techniques and technologies by looking at international markets that have established a successful floating offshore wind projects. 

Globally, floating offshore wind has exploded; 245MW of floating offshore wind is currently operational [4]across 15 counties. Norway leads with 94MW of capacity across three projects, shortly followed by the United Kingdom (UK) with 78MW of capacity over two projects. China, Portugal and Japan have operational capacity of 40MW, 25MW, and 5MW respectively.

The U.S. through BOEM already works closely with regulators in Denmark, Germany, and the UK to share key technical knowledge and environmental considerations, and this will need to continue if America is to realise the full potential of offshore floating wind.

The importance of cross-pollination

There are multiple states in the U.S. that have an established offshore oil and gas industry. This means a highly skilled and experienced workforce, tried and tested technologies and processes, manufacturing capabilities, and a well-connected supply chain including fleets of ships designed to aid offshore operations and well-configured ports, are all ready to be mobilized.

A great example of this is Louisiana. The foundations for the Block Island Wind Farm were designed and built[5] in the state, while a group of technical specialists from Louisiana-based companies provided engineering expertise, shipping services, and marine welding support to get it ready.

The wind farm developers recognized that Louisiana is a hotbed of technical innovation and is home to thousands of skilled workers due to its rich oil and gas heritage. The state handled over 60 percent of America’s liquefied natural gas exports of 2023, and oil and gas operations support about one in nine jobs in Louisiana. Offering local people the opportunity to diversify their skills by supporting the burgeoning renewables sector, as well as oil and gas, provides a sustainable route to paid work for the future, whilst plugging a growing skills gap.

Around 1.1 millions workers are needed to build wind and solar plants around the world, according to recent reports[6]. A further 1.7 million skilled workers are required to operate and maintain the renewables infrastructure. As a result, the NREL estimates[7] that the U.S. offshore wind industry will need to hire between 15,000 and 58,000 full-time workers each year from 2024 to 2030.

However there has already been a noticeable shift in American energy workers refocusing on renewables. According[8]to the U.S. Department of Energy, the creation of clean energy specific roles across every state grew by 3.9 percent up until 2022. Data[9] published by the NRDC (the Natural Resources Defense Council) shows that clean energy jobs grew by 200% in 2023 compared to job growth economy-wide. It also claims that renewable energy focused jobs now make up 40 percent of the 8.35million people employed in the energy industry across America, which demonstrates that the renewables sector can play a key role in lowering U.S. unemployment rates if this trend continues.

A talent gap however could significantly delay clean energy projects on American soil. The NREL has recommended[10]that efforts should be made to attract and train tradespeople who have offshore experience who currently operate in oil and gas. They represent a pool of talent with transferable skills prime for supporting offshore wind projects. 

The NREL also encourage greater collaboration between U.S. industry stakeholders and global, national, regional, and state partners on major workforce challenges through key working groups. It is simply not enough to create the jobs for local people, they will require continuous training to stay ahead of changing regulatory requirements, new advancements in technologies, and a broader understanding of international standards and equipment for offshore wind. This is important as many offshore wind structures in America will need to include parts from Europe as the nation’s manufacturing capability catches up with more mature markets. For example, the Block Island Wind Farm features monopiles made in Spain, a 450-ton generator from France, and blades from Denmark.

America’s workforce who rode the oil and gas boom now have an opportunity to secure a future career in renewable energy by upskilling their knowledge, and by learning about manufacturing techniques and design codes developed in the European countries who have a 20-year head start. 

Furthermore, the industry will look to those individuals to create new processes and drive the advancement of homegrown innovations for the benefit of the country’s clean energy sector, and their own prosperity. This cross-pollination will play a critical role in accelerating the renewables projects that have already been granted licenses, and any others to follow.

Oil and gas can accelerate clean energy goals 

The oil and gas industry has already invested billions into clean energy projects to help drive low and zero carbon technologies. We are witnessing a fundamental shift in how global oil and gas operators invest as they face mounting pressure to meet carbon-reduction targets. As they diversify their portfolios, synergies emerge between both the oil and gas and renewables sectors. 

Skilled workers, vessels and technologies traditionally focused on oil and gas can be seamlessly refocused on renewables projects when available, which means less downtime resulting in significant cost savings for both sectors. 

Furthermore, existing oil and gas assets can be repurposed to support both sectors as they have fluctuating needs over time. Decommissioning was once considered the answer to removing ageing assets but it is costly, and it comes with major environmental risks. Therefore oil and gas operators are more likely to opt for the repurposing of their assets to accelerate clean energy projects.

According to an academic report[11], it has been estimated that approximately one-third of the total life costs (operation, maintenance, and service costs) of an offshore wind project can be reduced if the oil and gas sector is involved; the key being to repurpose key assets such as rigs and support vessels. The sector is therefore playing a key role in driving progress in the renewables sector forward.

Included in the report is the example of electrifying oil and gas offshore operations by installing wind farms, which can also mean floating turbines. This would reduce the need to operate diesel or gas generators on the platform, reducing greenhouse gas emissions and air pollutants. Furthermore, the report recommends the use of oil and gas platforms as bases for wind farms. 

There are significant cost savings on offer when electrifying platforms as it lowers operating costs, and it also improves safety by reducing the risk of on-platform ignitions. It also reduces noise and vibrations to protect marine life, as well as lowering emissions.

Another key point is that a rise in offshore wind installations will make it possible to produce green hydrogen at scale, which requires electricity generated by wind turbines to split water into hydrogen and oxygen through the process of electrolysis. The U.S. has already started work on this form of clean energy. In 2021, the Department of Energy announced[12] the Hydrogen Shot, which aims to reduce the cost of clean hydrogen by 80% to $1 per 1 kilogram in a decade. Following that in 2023, the organization Hy2gen USA, launched[13] a project to identify, evaluate, and develop favorable locations to power renewable hydrogen and e-fuel production from gigawatt-scale offshore wind energy, mainly in the U.S.

The digital era requires a wider energy mix

According[14] to the International Energy Agency, we have entered a ‘new age of electricity’ as nations around the world use more air conditioning, switch to electric vehicles, and build new data centres in response to the evolution of artificial intelligence (AI) and other innovations such as digital twins.

AI and digital twins can support the maintenance and support the long-term integrity of offshore assets such as rigs or floating wind platforms, so it’s important for the industry that these innovations continue to evolve. In the first half of 2024, new data centres totaling nearly 24GW were planned[15] to be built in the U.S., which is more than triple the same period last year and already exceeding the entirety of 2023. The oil and gas industry alone won’t be able to keep up with the energy demands of this digital revolution.

Instead, a mix of fossil fuels and renewables is most likely going to power the data centres in the near term as they rapidly expand nationwide. At this time, the U.S. government is going through a period of change, and what lies on the horizon of America’s offshore wind sector remains clouded. However, it is clear that the foundations have already been laid for an offshore wind sector to flourish. America has proven it can work with international counterparts to share best practice and drive technical innovation, but it will take a renewed collaborative approach across the energy sector, and globally, to take the U.S. wind sector to the next level.

Rob Langford is Vice President of Global Offshore Renewables at the American Bureau of Shipping.

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