Louisiana’s Mineral and Energy Board approved the state’s first wind operating agreements in state offshore waters at its December meeting today, according to an announcement from Gov. John Bel Edwards and Louisiana Department of Natural Resources Secretary Tom Harris.
The board approved a 6,162-acre property agreement for Diamond Offshore Wind La off Terrebonne and Lafourche parishes and a 59,653-acre agreement for Cajun Wind off Cameron Parish.
The two agreements have different payment structures to the state with the DOW Wind agreement covering a smaller area, but paying more in upfront costs and rental fees per acre, while the larger agreement with Cajun Wind had a lower per-acre fee for upfront and rental payments but a higher energy royalty over the length of the agreement. While DOW Wind paid $308,101 upfront, Cajun Wind paid $357,923. However, DOW Wind is paying 1.5% of gross revenues in energy royalty over the life of the agreement, while Cajun Wind is paying 2.2%.
“One agreement offers more on the front end, while the other pays more over time,” Harris says in a prepared statement. “These being the first wind energy operating agreements for the state, we were breaking new trails in negotiating these agreements, and I believe we have established that we can be flexible in how we set up payment structures while still ensuring that the state and its people are appropriately compensated for using our resources.”
Harris adds that recent legislation clarifying and codifying rules on leasing state offshore areas for wind energy projects has helped Louisiana draw interest from operators.