Budget for U.S. Offshore Regulator Is Heavy on Oil and Gas

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--A proposed $242 million budget for the agency regulating offshore energy in the United States leaves a sizeable chunk of capital to environmental programs, but oil and gas get a greater share than renewables.

President Joe Biden unveiled a 188-page budget proposal that outlines $7.3 trillion in spending over the next fiscal year. It's unlikely to pass through both chambers of Congress to become law, though it serves as a wish-list for a president working to secure a second term in office.

The $242 million for the Bureau of Ocean Energy Management (BOEM) supports the government's commitment to offshore energy and mineral resources, which the administration said must be pursued with environmental and economic stewardship in mind.

"The 2025 budget empowers BOEM to fulfill our mission and advance the administration's ambitious climate agenda while creating high-quality job opportunities, advancing economic prosperity, and reinforcing energy security," said BOEM Director Elizabeth Klein. "It ensures our capacity to oversee offshore energy development responsibly, while prioritizing the well-being of the American people."

Incentives for private companies were spelled out in Biden's signature Inflation Reduction Act. For the federal BOEM, offshore environmental programs would get the largest share of the finances under the proposal at $86.7 million. The agency explained that those programs serve as a foundation for decision-making that would help with risk management for offshore programs.

Elsewhere, some $52 million would go toward BOEM's renewable energy program, which outlines a goal of deploying 30 gigawatts (GW) of offshore wind energy capacity by 2030 and another 15 GW of floating wind installations by 2035.

Offshore wind is in its nascent stage in the United States, with only a few offshore windfarms in commercial service. In terms of renewable programs in general, solar power is the clear standout. The government expects solar power will account for the most growth of any power source on the grid. The U.S. Energy Information Administration (EIA) expects to see a 43% increase in solar power capacity from last year, while wind capacity only grows by 6%, a slight decline from 2023.

An offshore wind market report from 2023 found that many projects in the United States are facing significant setbacks because of cost increases, particularly those with an expected start date between 2025 and 2028.

Conventional energy, meanwhile, gets more funding than renewables in the budget proposal, to the tune of $67.5 million. BOEM said it's positioned to continue its offshore oil and gas management in a way that takes the environmental impacts into consideration.

New permits for liquefied natural gas (LNG) were paused by the administration while it considers the environmental impacts. Bidding for new acreage for oil and gas drilling rights, meanwhile, has been somewhat lackluster, and the administration is only doing what's necessary in terms of leasing.

A five-year lease plan for the Gulf of Mexico outlines three sales, which is the bare minimum required by law. There is no lease sale schedule for this year.

"The Gulf of Mexico is a prime economic engine and investment area, and this was the last chance for companies to secure leases in the near term," said Erik Milito, the president of the National Ocean Industries Association, after a disappointing lease sale in December.

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