Oil Industry Eyed as Catalyst for Floating Offshore Wind

Exxon Mobil Corp. has been researching how it can use floating wind turbines to enhance offshore oil production, making it the first U.S. oil major to express interest in offshore wind.

If companies such as Exxon are able to develop offshore wind energy to produce fossil fuels, analysts say, it could help fast-track offshore wind development—especially floating offshore wind.

Offshore wind is one of the largest mostly untapped sources of renewable energy in the U.S., and coastal states such as New York and Massachusetts are including offshore wind in their plans to cut carbon emissions to address climate change.

Floating wind turbines are very early in their technological development and are used in only one commercial offshore wind farm globally—Equinor ASA’s Hywind Scotland off the coast of Aberdeenshire, Scotland.

Floating wind turbines would be needed for offshore wind development in the deep waters off the U.S. West Coast. Within the next year, the Trump administration plans to begin leasing waters off California for the nation’s first floating offshore wind farms, which could be developed sometime late in the next decade.

“Floating wind turbine technology needs to be developed—and developed fast. The oil and gas industry should be the catalyst market for that technology,” said Johan Sandberg, director of a research project called “WIN WIN,” for the Norwegian risk-management consultant DNV GL. Exxon participated in the five-year research program, which concluded recently.

Oil companies need to consider ways to reduce their greenhouse gas emissions intensity in order to meet international decarbonization standards and address pressure from shareholders who want them to address climate change, Kyle Harrison, a Bloomberg NEF analyst, said.

Generating Electricity Where It’s Used

Offshore wind can help accomplish that while allowing a company to generate electricity in the same place it is used—on the same platform as an offshore oil rig, he said.

Exxon is considering how to proceed with the floating wind turbine research. The company referred questions to DNV GL.

The project provided “valuable insight into the potential of offshore wind generation for oil and gas applications and drives us one step closer to a technically viable and commercially deployable system,” Jayme Meier, ExxonMobil Upstream Research Co. engineering vice president, said in a statement in DNV GL’s final report on the project.

If offshore wind gets used in U.S. oil production, it would help create a trained offshore wind workforce, Stephanie McClellan, director of the Special Initiative on Offshore Wind at the University of Delaware, said.

The industry estimates that more than 36,000 jobs will be created over the next decade as offshore wind developers build offshore wind farms along the East Coast. Some of the skills they’ll need are similar to those of workers in the offshore oil and gas industry, which has been building offshore oil platforms in the U.S. for decades.

Same Industry, Different Fuel

“What it [Exxon Mobil’s involvement in offshore wind] would mean is that we will see even more integration of the offshore oil and gas industry into the offshore wind industry,” because both industries share components of their supply chain and federal regulatory framework, McClellan said. “It’s the same industry, just using a different fuel.”

Offshore wind farms have been built in Europe for more than a decade, but it’s a new industry in the U.S. Only one small offshore wind farm, Block Island in the waters of Rhode Island, operates in North America.

The federal government has leased waters off the East Coast from North Carolina to Massachusetts for offshore wind development.

European oil companies such as Norway’s Equinor ASA and Denmark’s Orsted AS and their U.S. subsidiaries are among the biggest players in offshore wind development as they aim to diversify their energy portfolios amid concern about fossil fuels’ role in causing climate change.

U.S. oil companies, however, haven’t announced any plans for offshore wind.

Wind for Water Injection

The “WIN WIN” research project with Exxon aimed to find a way for offshore wind to be used in an essential offshore oil production process so that oil companies would become familiar with renewable energy technologies and eventually embrace and support them and help fight climate change, Sandberg said.

Researchers at Texas A&M University-Kingsville have been researching how offshore wind turbines could be used to produce oil in the Gulf of Mexico, but few energy companies have expressed interest.

Getting the oil industry involved in offshore wind as part of the WIN WIN project meant finding an aspect of the offshore oil production process that could be powered by offshore wind, Sandberg said. The answer was water injection for enhanced oil recovery, which requires a lot of power to be generated in remote places such as the North Sea.

To squeeze more crude out of a sub-sea oil deposit, oil companies inject water at high pressure near the edge of the deposit to push the oil toward an oil platform, where the oil is extracted.

Wind power is an ideal electricity source for water injection because it can work well with the fluctuations in wind energy production as wind speeds rise and fall, Sandberg said.

“We wanted to make the oil industry more familiar with the opportunities of renewables,” Sandberg said.

Christopher Hart, head of U.S. offshore wind development for EDF Renewables North America and a former Exxon Mobil executive, said Exxon was still determining the potential for the WIN WIN project when he left the company in October, but it was an effective way to test out the technologies and skills the offshore wind and oil industries have in common.

Exxon Seeking Renewables

Exxon was the only major oil company to stick with the WIN WIN project from start to finish. Equinor, Exxon and six smaller companies participated in the first phase. The second phase involved Exxon, Norway’s Var Energi and the Research Council of Norway, a government agency that awards grants.

Exxon has recently begun to invest in renewable and advanced energy as a way to cut carbon emissions.

The company was sued by the state of New York in 2018 for allegedly misleading investors about how climate change would affect Exxon’s business. Exxon denied misleading investors.

Exxon struck a deal with Orsted to buy 500 megawatts of onshore wind and solar power to provide electricity for oil production in its Permian Basin play in Texas.

It also recently entered into a $100 million research partnership with the National Renewable Energy Laboratory and the Energy Department on technologies that would reduce greenhouse gas emissions. NREL Associate Lab Director Bill Farris said offshore wind research isn’t currently part of the partnership, which will focus mainly on biofuels derived from algae and cellulosic biomass.