To much fanfare, two foreign multinational corporations combined to spend more than $331 on winning bids for the chance to develop more than 207 square miles of ocean off Humboldt Bay into two floating offshore wind farms.
The Bureau of Ocean Energy Management's (BOEM) two-day auction saw 43 companies vie for five leases — including three for areas of the Central Coast — with German's RWE Offshore Wind Holdings and California North Floating, LLC, a subsidiary of Denmark's Copenhagen Infrastructure Partners, named the provisional high bidders for the Humboldt leases. The first of their kind on the West Coast, the auctions represent a crucial step forward in state and federal efforts to meet renewable energy goals in the face of increasingly dire climate crisis forecasts. The auctions also represent a monumental step for offshore floating wind, a relatively new and untested technology.
"The Biden-Harris administration believes that to address the climate crisis head on, we must unleash a new era of clean, reliable energy that serves every household in America," Interior Secretary Deb Haaland said in a statement after the auctions. "Today's lease sale is further proof that industry momentum — including for floating offshore wind development — is undeniable. A sustainable, clean energy future is within our grasp and the Interior Department is doing everything we can to ensure that American communities nationwide benefit."
But the auctions also represent just a very early step in what promises to be a long process fraught with possible pitfalls and hurdles, potential risks and rewards, for Humboldt Bay and beyond. Here's a quick look at the road ahead.
Are the winners official?
No. The U.S. Department of Justice now has 30 days to conduct an antitrust review of the winning bidders, after which BOEM will provide winning bidders with copies of their lease and instructions. The companies will then have 10 business days to file financial assurances, pay any outstanding balances and sign the leases.
What happens to the $331 million?
Most of it — at least 70 percent — will be paid into the U.S. Treasury to be appropriated as Congress pleases. The other up to 30 percent — potentially almost $100 million — can be spent through so-called bid credits.
More specifically, the companies can opt to spend up to 20 percent of their winning bids on investments in local workforce development or supply chain improvements — expenditures that will theoretically have a positive local economic impact while also being in the companies' ultimate best interest. Another 5 percent can be spent in agreements with lease-area users — most notably the commercial fishing industry — and another 5 percent can be spent on community benefit agreements, or agreements with local stakeholders to help mitigate impacts of the project.
In their bids, developers were required to give BOEM a basic plan of how it plans to spend these bid-credit funds, but they have several years to finalize those plans and can simply turn the promised funds over to the treasury if they determine that's more desirable than spending it as the bid credits would require.
Maximizing the local benefits of these bid-credit funds is a huge priority for local officials. To that end, the Humboldt Area Foundation incubated a Redwood Region Climate and Community Resilience Hub (the CORE Hub), which in turn created the North Coast Community Benefits Network, a group of tribal nations, local governments, community institutions, environmental groups and leaders to advocate for local investment throughout BOEM's leasing process. In a press release after the auction, Humboldt Area Foundation CEO Bryna Lipper noted the groups had pushed BOEM to allow companies to pledge up to 50 percent of their bids in bid credits, significantly more than the 30 percent the federal agency eventually decided upon.
The groups will continue to lobby for local interests, attempting to "collectively advocate as a region."
What happens after the sales go final?
The companies will have one year to either submit a site assessment plan describing how they plan to survey the leased area and collect data to inform their project designs to BOEM and the California Coastal Commission or request an extension. The agencies will then review the survey plans to ensure they are in line with the requirements of the leases and — potentially — add environmental protections.
With an approved assessment plan, the companies can then complete surveys and develop their project designs in the form of a construction and operation plan, which will also go before BOEM and the Coastal Commission for review. Once both agencies sign off in principle on the plan, it will go through a full federal National Environmental Policy Act review, with BOEM serving as the lead agency in preparing a report attempting to quantify the projects' impacts on the environment and identifying potential mitigation measures.
With a final construction and operations plan in place after a certified environmental review, the companies can begin seeking construction permits from other agencies — including the U.S. Army Corps of Engineers and the National Marine Fisheries Service.
How long will that take?
It's unclear but likely the process will play out over the better part of a decade, at least. According to an analysis by Forbes, BOEM has auctioned off 30 offshore wind leases on the East Coast since 2012. Of those, only two are currently operational, one of them a pilot project that features only two turbines.
But it's important to remember floating offshore wind is a decidedly different beast than what's currently operational on the East Coast. The Humboldt farms, for example, will be located 21 miles off the coast in waters that are approximately 2,500 feet deep, while the world's deepest similar project is currently in Norway, at a depth of 721 feet, according to CalMatters.
The technology requires floating platforms large enough to support turbines 500 to 900 feet tall, which are then tethered to the ocean floor with cables. Habib Dagher, executive director of the University of Maine's Advanced Structures and Composites Center, told CalMatters that the deeper waters adds complexity and risk.
"California has deeper waters than any other areas with these floating turbines so far in the world," he said. "How do you protect the environment, protect local stakeholders, protect the fisheries, protect Indigenous communities, while also speeding up permitting so we make a difference with global climate change?"
It's a question Environmental Protection Information Center Executive Director Tom Wheeler touched on in a statement issued on behalf of the local nonprofit, Humboldt Baykeeper, the Northcoast Environmental Center, Coalition for Responsible Transportation Priorities and Friends of the Eel River.
"It is imperative for our climate, wildlife and local community that we work together to ensure that floating offshore wind energy development off our coast is successful, with the least impacts on the environment and the most benefits to our community," Wheeler said. "Moving forward, we will be working with project developers to ensure robust wildlife monitoring, transparent data sharing and effective avoidance, minimization and mitigation of impacts to wildlife. Success in our communities will demand investment in local infrastructure and in historically disadvantaged communities, particularly local tribal nations."
Are impacts unavoidable?
Absolutely, yes. Consider that in late October, the Humboldt Bay Harbor, Conservation and Recreation District announced it had entered an agreement with Crowley to develop the Port of Humboldt into California's first hub to service offshore wind energy installations. They're now in the midst of a more than $10-million process to conduct technical studies, design and permit a 98-acre Phase 1 of a heavy-lift marine terminal designed to service and build up to 900-foot-tall turbines — with blades longer than a football field that need to be barged out to sea upright — on the peninsula.
Already, that's brought the influx of millions in spending and the prospect that a portion of Humboldt Bay may become dotted with turbines that dwarf the 300-foot smokestack of the former pulp mill, which for decades has been the tallest thing overlooking the bay.
And then there's the prospect of $100 million being spent locally on workforce development, supply chain improvements, building out the port, community benefit agreements and more. Some believe offshore wind could bring the largest outside economic investment into Humboldt County in generations, while also transforming its bay and seascape.
One thing that was made clear in the flurry of statements from local, state and federal officials after the lease awards is that locals want a seat at the table and a voice in the conversation. In a press conference convened the morning after the winning bidders were announced, Yurok Tribe Vice Chair Frankie Myers said it was "frustrating" that neither of the two winning companies had consulted with the tribe — the largest sovereign nation in California, which had made its desire of involvement known — prior to making their bids as "several" other bidders had done, calling it "absolutely disrespect."
Myers made clear his tribe will be looking at the development of offshore wind with a critical eye, saying, at this point, it doesn't support or oppose the project. BOEM requires the winning bidders to consult with local tribes moving forward, but Myers said mere consultation is not enough.
"We don't know what it's going to be yet," he said. "But what we do know is what we've learned over the last 150 years in dealing with industry. What we do as Indigenous people, what we do as Yurok people, is look to the past to help guide our future. And I can tell you, after having seen industry come into our area with this exact same playbook, it has never ended well for our Yurok people. Any time Europeans or settlers come in that don't engage with us, who come with an idea that it is a foregone conclusion that they will take what they want, it never ends good for the tribe, and tribal people, our environment, our landscape or our cultural resources. I think we have just cause to have concern about these bidders who are coming in, and the way they are coming into our territory."
Thadeus Greenson (he/him) is the Journal's news editor. Reach him at 442-1400, extension 321, or firstname.lastname@example.org.