Will the Bureau of Ocean Energy Management still be able to hold the first California offshore wind auction in 2022, given the requirements of the recently approved Inflation Reduction Act (IRA)?
The short answer is yes – provided BOEM jumps through some regulatory hoops.
IRA ties offshore wind to offshore oil and gas
The IRA ties offshore wind auctions to offshore oil and gas auctions by requiring BOEM to offer a certain volume of offshore oil and gas acreage in the year preceding an offshore wind auction.
This could challenge BOEM’s pipeline of planned offshore wind auctions.
The matter is particularly pressing in the case of California, where BOEM has long been working towards an offshore wind auction in 2022. The next offshore oil and gas lease sale is expected in spring 2023 and therefore will not help BOEM hold an auction in 2022.
Two options for BOEM to hold California offshore wind auction in 2022
However, it is still possible to carry out the auction in 2022 – either by rushing to exploit an opportunity provided by an old oil and gas lease sale held in 2021, or by carrying out only the auction while delaying lease execution.
We recently published a comprehensive report covering conditions and opportunities in the Californian floating wind market to our subscribing clients.
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