latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/la-governor-signs-bill-creating-framework-for-state-s-1st-offshore-wind-farms-70882032 content esgSubNav
In This List

La. governor signs bill creating framework for state's 1st offshore wind farms


Infographic: The Big Picture 2024 – Energy Transition Outlook


The Big Picture: 2024 Energy Transition Industry Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023

La. governor signs bill creating framework for state's 1st offshore wind farms

Louisiana Gov. John Bel Edwards signed a bill June 15 that could pave the way for the first offshore wind farms in Louisiana waters while also calling for revenue sharing between the industry and the state.

House Bill 165, now enacted as Act 443, overwhelmingly passed the House and passed the Senate unanimously earlier this year before heading to the governor's desk. The bill would allow offshore wind development in Louisiana waters — those controlled by the state rather than the federal government — for the first time. Louisiana state waters extend about three nautical miles from the coast. Federal waters extend from where the Louisiana gulfward boundary ends to 200 nautical miles seaward into the Gulf of Mexico.

The bill also includes a provision that the State Mineral and Energy Board "has the authority to accept the bid it finds is most advantageous to the state, and may lease upon whatever terms it considers proper ... [including] a provision permitting the state, at its option, to take in kind all or any of the portion due it as royalty." The Louisiana Natural Resources Department must set state offshore wind regulations, including lease rules and royalty terms, by Jan. 1, 2023, according to the bill.

The measure is similar to provisions for the oil and gas industries, which pay for the lease areas they use but also share revenue with the state. Offshore wind, however, has so far not faced such a requirement from the federal government.

Research: State and federal support offsetting bleak financial outlook of US offshore wind

"While the royalty provision isn't ideal, my opinion is that it will just lower the price bidders are willing to pay for the lease," Southeastern Wind Coalition President Katharine Kollins said in an interview June 22. "I'm really excited about the passage of this bill because it means policymakers are thinking about how offshore wind will fit into the generation mix in Louisiana. This industry brings an incredible number of jobs and offers a clean energy opportunity for both Louisiana's workforce as well as consumers."

The bill sets the maximum size for wind leases in state waters at 25,000 acres and requires wind facility proposals to include plans for decommissioning the turbines once they are no longer in use.

Louisiana set a goal for 5 GW of offshore wind by 2035 in its first climate action plan. Edwards, in a 2020 executive order, called for the plan to be developed by a task force of government, private sector and other community representatives. The final version, released Feb. 1, includes recommendations to help the state reach net-zero greenhouse gas emissions by 2050. The plan is also intended to complement ongoing efforts to implement the state's Coastal Master Plan, released in 2007, which details how Louisiana will respond to the effects of climate change.

The offshore wind goal was among 84 recommended actions to reduce greenhouse gas emissions across the state's petroleum-rich economy. Louisiana is working with the U.S. Bureau of Ocean Energy Management to hold a lease sale in the Gulf of Mexico for offshore wind power production, according to the plan. Louisiana ranks fourth among U.S. states for offshore wind technical potential, according to the National Renewable Energy Laboratory.

SNL Image

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.