Posted on April 3, 2024
Money to address Louisiana’s land loss crisis will soon be in far shorter supply as oil spill money runs dry. But part of the solution may be arriving with the winds.
One state representative is proposing a constitutional amendment that would dedicate future revenue from offshore wind and other alternative energy to Louisiana’s coastal fund. While Gulf wind energy is only just beginning to take shape, it is expected to eventually grow substantially.
The amendment being proposed by Rep. Joseph Orgeron, R-Golden Meadow, would involve revenue from projects in federal waters off Louisiana. A second bill accompanying the amendment would dedicate revenue from alternative energy in state waters to the coastal fund, which is set aside for restoration, hurricane protection and related spending.
Louisiana state Rep. Joseph Orgeron stands in front of the lift boats that were used to install wind turbines in Rhode Island. The boats are based in Houma
Louisiana’s congressional delegation has been seeking federal legislation that would take a similar stance, but Orgeron’s amendment would serve as a backstop. The congressional legislation would set up a structure similar to one used for federal revenue distributed to Gulf states from offshore oil and gas production, known by its acronym GOMESA.
If the proposed amendment passes the state Legislature with the required two-thirds vote of both chambers, it would then go to a public referendum in November. The bill related to state waters can be approved as any common legislation would.
The amendment bill is scheduled for debate in the House on Tuesday, while the companion legislation was approved unanimously by the House and passed on to the Senate.
Orgeron has proposed the measure twice before and failed. Lawmakers representing districts outside coastal Louisiana objected to restrictions placed on the revenue since their areas would be left out, he said.
The importance of finding additional financing to address Louisiana’s disappearing coast is becoming more urgent by the day. Many recent coastal projects have been paid for with money linked to settlements from the 2010 BP oil spill, but that revenue will expire by 2032.
The state is being allocated around $8.5 billion for restoration projects — leaving a giant gap to fill when it’s gone. Louisiana’s coastal master plan calls for spending around $1 billion per year over 50 years — and even that will salvage only part of the land being lost.
“The money we’re spending on the coast now is primarily coming from the BP spill fund money,” said Orgeron, whose district spanning Jefferson and Lafourche parishes includes areas that have seen some of the state’s most dramatic land loss.
“How do we continue the work that will be remaining on the master plan? We need alternative sources of revenue to take care of the coast.”
‘All of the above’
Beyond concern over the future of Louisiana’s coast, the issue is also a sign of the transformation slowly coursing its way through the energy industry globally.
The state’s reliance on oil and gas has always been paradoxical: The industry has brought jobs and revenue, but it has been a major cause of the land loss that has seen a football field every 100 minutes vanish from the coast. The burning of fossil fuels is also causing climate change and the rising seas that come with it, which will greatly worsen the problem for Louisiana.
Around 2,000 square miles have disappeared from Louisiana’s coast over the last century, about the size of Delaware. While the levees that now hold the Mississippi River in place set that process in motion, the thousands of miles of canals dug through marsh by the oil and gas industry have been important contributors. The extraction of oil and gas has also helped caused land to sink and give way to open water.
But while the energy transition presents immense challenges, the state’s expertise in working offshore is also seen as a huge advantage in developing the nascent wind industry. Louisiana companies helped build a wind project off the coast of Rhode Island.
Former Gov. John Bel Edwards embraced the emerging opportunity and sought to nudge the state towards a future of renewable energy. His Democratic administration set a goal of generating 5 gigawatts of offshore wind energy by 2035, while the federal government wants to produce 30 gigawatts offshore by the end of the decade.
Gov. Jeff Landry, a Donald Trump-aligned Republican who has sought to make it easier for the oil and gas industry to operate, has not spoken in detail on his plans for the sector yet. A council advising him has however called for an “all of the above” energy approach.
The state signed its first two wind energy agreements for Louisiana waters in December. The federal government held its first wind energy auction for the Gulf last year, resulting in a successful bid for a project off the coast of southwest Louisiana.
While the federal auction was seen as somewhat of a disappointment — two areas off Texas received no bids — those keeping tabs on the industry say there are still many reasons to bet on the Gulf’s potential. A second Gulf auction is now being planned.
‘A billion dollars a year’
Anna Osland, director of research at the University of Louisiana at Lafayette’s Kathleen Blanco Public Policy Center, notes that the technology will have to be adapted to the comparatively lower wind speeds, risk of hurricanes and softer sea bottoms in the Gulf.
Inflation and supply chain issues also weighed on the federal auction, she said. Another factor that may not have helped: It fell on the anniversary of Hurricane Katrina and while Hurricane Idalia was intensifying, said Osland.
The first federal Gulf project being planned by Germany’s RWE will likely provide valuable lessons.
“Once they get those turbines built, other companies can say ‘OK, this is doable, and the future is bright for Louisiana,’” said Osland, one of the authors of an extensive report on offshore wind potential in the Gulf.
How much revenue such projects could eventually bring to Louisiana is difficult to predict, with structures not yet in place at the federal level to govern it.
As the law stands now, 25% of revenue from projects in state waters would go to Louisiana’s Department of Energy and Natural Resources and the rest to the general fund, notes DENR spokesman Patrick Courreges.
Steven Procopio, head of the Public Affairs Research Council of Louisiana, said the goal of dedicating the money to coastal projects could be achieved through legislation alone instead of a constitutional amendment. But that would allow future governments to more easily change it.
He says that while the revenue won’t solve Louisiana’s coastal problems, “it will be part of a solution.”
Coastal advocates say finding transparent and sustainable ways to continue to address the crisis is vital.
“What we know in coastal Louisiana is that we need about a billion dollars a year to sustain this program that we have, and so we are looking for every available dollar to do that,” said Simone Maloz, campaign director for the Restore the Mississippi River Delta coalition.
“We have to be able to anticipate future revenues and be able to put more investments in our coast for the day when the BP dollars run out.”
