The US government is moving with urgency to fuel new carbon storage and offshore wind industries despite some economic hurdles, according to the nation’s newly created ocean energy regulator.
Overseeing the construction of these nascent industries falls to Liz Klein, an environmental attorney and clean energy champion just named director of the Office of Ocean Energy Management.
Klein takes over at a critical time as his agency makes decisions about where to install offshore wind farms, how to safely store carbon dioxide under the seabed and the future of oil drilling in the Gulf of Mexico
“The president has been clear that we are in a climate crisis, we have a responsibility as a federal government to do something about it, and we can turn this into an opportunity to transition to cleaner energy sources,” Klein told Bloomberg in his first interview in the new role. At the same time, the focus will be on doing it “in a way that really supports communities” while leveraging American intelligence and innovation, he added.
These opportunities converge in the Gulf of Mexico. The office is on track to sell the first offshore wind development rights in the Gulf later this year. And it is writing rules that will govern the storage of carbon dioxide under the seabed, including how the government makes the area available to companies eager to take advantage of newly extended tax credits for pumping emissions captured under land
Meanwhile, the agency is working to end an overdue five-year plan for offshore oil leasing and hold two auctions of drilling rights in the Gulf of Mexico that were mandated by the sweeping climate and tax law enacted by President Joe Biden last year. The administration’s initial offshore oil lease proposal left open the possibility that the government could hold up to 11 auctions in US coastal waters between mid-2023 and mid-2028, or none at all.
Under the Inflation Reduction Act, the government’s ability to issue renewable energy rights is tied to the sale of oil leases, which could force some of those auctions. “We have new statutory requirements” so that “if we want to continue offshore wind leasing, we also have to continue offshore oil and gas development,” Klein said.
Klein is a veteran of the Interior Department, having worked at the agency under former presidents Bill Clinton and Barack Obama. She has come under fire from fossil fuel advocates for her work in the private sector, including as deputy director of New York University’s nonpartisan State Energy and Environmental Impact Center, which helped the state attorneys general to challenge the federal government’s environmental policies, including bids from former President Donald Trump must roll back the rules.
Klein cast that work as an asset, saying it gave him a perspective on state interests that is valuable to the federal government.
Klein is consulting with counterparts in other countries to rapidly establish a new regulatory regime to oversee the storage of carbon beneath the ocean floor. With carbon capture and storage initiatives supercharged by the Inflation Reduction Act and only a few offshore storage projects globally in the North Sea, it’s an opportunity to grow a whole new industry in the US.
The opening may be greatest in the Gulf of Mexico, which for decades has been a center of US offshore oil development, providing about 15% of domestic production. Unlike other U.S. waters, there is more data about the ocean floor and what lies beneath it, as well as the opportunity to take advantage of the existing network of underwater pipelines and their proximity to instal… petrochemical sites in Louisiana and Texas.
“It presents a great opportunity,” Klein said. “It’s the perfect example, in many ways, of what the president is talking about when he says we have an opportunity to turn this climate crisis into job growth, economic development and support for communities.”
Klein said she remains “aggressively positive” about the potential development of offshore wind in the U.S., even as supply chain issues and rising inflation threaten to delay or derail some projects. Concerns about the industry’s impact on fisheries and endangered whales also cloud its outlook.
Any new energy development can expect challenges, but the United States has the innovative tools and resources to overcome them, Klein said. “Very smart engineers and scientists” are “committed to making this happen.”
