Financing Options for Coastal Vessels Qualified for Use in U.S. Offshore Wind Projects

The Biden administration’s commitment to developing offshore wind as an alternative energy source is bearing tangible results. In November, construction began on Vineyard Wind, America’s first industrial-scale commercial offshore wind project. In February, six successful bidders bid a total of $4.37 billion for wind power leases off the coasts of New Jersey and New York. Serious studies are underway of possible offshore wind installations in the Gulf of Mexico, southern Texas and the Louisiana-Texas border having been identified as prime candidates by wind capacity and economic potential. In January of this year, the US Department of the Interior’s Bureau of Ocean Energy Management (BOEM) announced that it was preparing a draft environmental assessment to consider a possible offshore wind lease in federal waters of the Gulf of Mexico. Currently, BOEM is considering approximately 30 million acres off the coasts of Texas and Louisiana for commercial development of offshore wind energy projects and has received expressions of interest from multiple parties.

Late last year, Congress amended Section 4(a) of the Outer Continental Shelf Lands Act to provide that federal laws extend to “(iii) installations and other permanent or temporary on the seabed, which may be erected there for the purpose of exploring, developing or producing resources, including non-mineral energy resources(emphasis added). In a recent decision following this amendment, U.S. Customs and Border Protection interpreted this wording to conclude that a jack-up vessel would become a coastal point when attached to the continental shelf seabed. exterior for the purpose of installing or constructing a structure to be used for the production of wind energy.

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