29 minute read
Cover Story: Yearbook
from WorkBoat June 2022
by WorkBoat
YEARBOOK
The big story in the last 12 months was once again the coronavirus pandemic. At many shipyards, business has stayed steady despite the lingering eff ects from the pandemic (see below). Inland barge operations are returning to normal as cargo shipments rebound (see page 31). Tug operators continue to build innovative vessels (see page 34). The passenger vessel industry is fi nally looking forward to a strong season (see page 36). The off shore energy industry is seeing demand and commodity prices increase (see page 38).
Shipyard owners embrace change
By Ken Hocke, Senior Editor
We’ve all heard the phrase, “You have to spend money to make money.” Over the past year, shipyard owners seem to have taken those words to heart. Many boatbuilders are expanding their facilities, moving to new digs, or opening additional locations — trying to land that next big contract and the one after that.
In early 2022, Russell T. “Bubba” Steiner moved into his new Bayou La Batre, Ala., shipyard, Steiner Construction, a piece of land that used to be a part of Horizon Shipyard before it was sold to Metal Shark in 2018. The new yard gives Steiner increased capacity.
Steiner said the old yard became too crowded. “This yard will give us more room to build more boats.”
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Austal USA, Mobile, Ala., has been building aluminum fast warships for the Navy for two decades. From its humble beginnings in the late 1990s, the yard has blossomed into a world-class shipbuilder, primarily from two Navy contracts — the 421'6"×103.7' Independence-variant littoral combat ship (LCS) and the 338'×93'×12' expeditionary fast transport (EPF) vessel.
Today, those ships are built at Austal USA’s 700,000-sq.-ft. module manufacturing facility (MMF), a modern, hyper-technological facility with a production line that produces a ship that’s 85% nished when it completes its trip across the building.
Following the acquisition of additional waterfront property along the Mobile River in 2020, Austal USA established a ship repair facility, a rst for Austal, that received an immediate positive response and came with a 692'×122', 20,000-ton certi ed Panamax-class oating drydock.
“Almost immediately after word got
out that Austal USA had purchased the additional waterfront property, we were inundated with calls from commercial captains looking to return to Mobile to have their ships serviced,” Mike Bell, the shipyard’s senior vice president of operations, said earlier this year.
In addition to the drydock, Austal’s acquisition included 15 acres of waterfront property spanning almost 3,000 linear feet of waterfront pier space, a 300,000-sq.-ft. outside fabrication area, and 100,000 sq. ft. of covered fabrication facilities — all just 30 miles from the Gulf of Mexico.
Another rst took place last year when Austal USA broke ground on its $100 million steel production assembly line facility right next to its aluminum MMF. The steel building opened in April. The addition of steel capability is designed to keep Austal USA as a major contributor to the U.S. shipbuilding industrial base, the shipyard said.
In October, the Navy awarded Austal USA a $144 million, two-ship towing, salvage, and rescue ship (T-ATS) detailed design and construction contract. The contract award marks the rst new steel ship construction program for the shipyard. “We’ll be the only shipyard that can build aluminum and steel combatants,” said Bell.
OTHERS EXPAND
Fincantieri Marine Repair welcomed its rst commercial customer to its new location in downtown Jacksonville, Fla., in January, marking the start of operations in northeast Florida. The new yard is designed to provide repair and maintenance services to military, commercial, and large private vessels on the East Coast.
The rst customer is special to any business, but in this case there is more to it: the rst vessel was the LNG barge Clean Canaveral, which was built by another Fincantieri shipyard, Bay Shipbuilding, in Sturgeon Bay, Wis. The team at Fincantieri Marine Repair provided testing and trials for the Clean Canaveral.
Willard Marine Inc., Anaheim, Calif., a builder of composite and
Austal’s new $100 million steel module manufacturing facility opened in April.
aluminum boats, expanded its East Coast operations and relocated to Chesapeake, Va., from nearby Virginia Beach earlier this year.
The new Chesapeake facility has waterfront access and provides additional production capacity to meet anticipated growth, along with an increased ability to produce metal boats.
Willard’s Mid-Atlantic location provides shorter delivery distances and faster repair times for East Coast military and commercial customers.
“The move of our East Coast facility to our new location will allow us to have a total capacity of 14,400 square feet,” Willard’s director of manufacturing, Joe Nangle, said. “This will increase our service capacity and expand our metal boat production capabilities.”
Willard opened its Virginia Beach location in 2010.
Everett Ship Repair LLC’s expansion plans continued with the purchase of a second drydock and a crane barge in March. ESR purchased the drydock Zidell 220, renaming it the Emerald Lifter, in tribute to Puget Sound, also known as the Emerald Sea. The drydock, which has been relocated to ESR’s facility in Port of Everett, Wash., has a lifting capacity of 2,000 tons and working deck area of 220'×62'.
ESR also brought in a 150-ton LinkBelt LS518 lattice boom crawler crane with 150' boom and has positioned the crane on a 180'×49' barge, which will service both drydocks. Currently ESR owns and operates the Faithful Servant, a 430'×110', 8,000-ton capacity drydock.
With the acquisition of the Emerald Lifter, ESR can now provide services to both the commercial and government market segments with a focus on tugboats, fishing vessels and other workboats.
Inland waterways operators stay busy
By Pamela Glass, Washington Correspondent
After two dif cult years, operations on the inland waterways have moved toward normality over the past year. Cargo shipments have rebounded, Covid protocols have been integrated more smoothly into daily operations, and major infusions of federal funds for lock and dam improvements coupled with new opportunities in the offshore wind sector have given tug and barge operators hope for the future.
Yet the pandemic has taken its toll, as mariners reported more stress, anxiety and depression, and the industry faced labor shortages and supply chain disruptions. Shifts in the energy market
Doug Stewart
Kirby’s 3,000-hp towboat Betty Brent on the Atchafalaya River.
also forced some operators to reassess coal transport, attacks against the Jones Act revved up, and the inland barge market has most recently begun to feel the effects of the ongoing war in the Ukraine.
By far the biggest positive development for the waterways has been the $2.5 billion of full federal funding for inland waterways project construction that was included in the massive infrastructure package approved by Congress and signed by President Biden in November. Combined with full annual appropriations, over the next ve years a total of $4 billion will ow to inland waterways construction and major rehabilitation projects that should improve ef cient transport of barged cargo on the waterways.
“This is a unique and historic opportunity to see signi cant infrastructure modernization come to the inland system,” said Debra Calhoun, senior vice president for the Waterways Council Inc., an industry-backed group that advocates for waterways funding. Money in the infrastructure bill “provides about $2 billion more in funding than the last signi cant infrastructure funding package that was passed in 2009.”
Calhoun said the focus now shifts to making sure the money is spent as intended to nish the Kentucky Lock on the Tennessee River, Montgomery Lock on the Ohio River, a new 1,200' lock at Lock and Dam 25 on the Mississippi River, the Three Rivers project on the Arkansas River, and the T.J. O’Brien lock major rehabilitation on the Little Calumet River near Chicago.
In total, the bill fully funds ve of the 15 backlogged priority projects on the inland system, the same number that has been funded to completion in the last 13 years.
COVID EFFECTS
The national labor shortage hit the barge industry hard in the last year, making it challenging for operators to attract and retain workers and making many companies skittish about imposing vaccination mandates that might scare away potential recruits or push existing employees to quit.
Companies got creative with incentives to encourage vaccination and hiring. Wages for many positions were increased at a time when increases weren’t nancially justi ed for many
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companies. Meanwhile, some offered nancial incentives or prizes for workers who received Covid-19 immunizations while others adopted new hiring policies of not adding new workers or giving promotions to existing mariners who were unvaccinated. As Austin Golding of Golding Barge Line, Vicksburg, Miss., put it: “You have to have a jab to get a job.”
During the pandemic, cargo movements on the inland waterways were generally down especially in the energy sector as demand for fuels plummeted. But energy product movements in the tank barge sector have improved over the past year as domestic and international economies reopened and demand rekindled. A bright spot during the pandemic has been strong demand for barging agricultural products like corn and soybeans, and this is expected to continue as U.S. farmers plan record soybean plantings this spring.
The economic fallout from the pandemic has provided further encouragement for barge lines to diversify their businesses. Houston, Pa.-based barge operator Campbell Transportation, for example, recently acquired the marine assets of E Squared Marine Service LLC in a deal that includes its towboat and tank barge eets as well as its barge eeting operation in the Houston, Texas, area.
According to its website, E Squared
Navy yard tug (YT) 809. Part of the YT 808-class built by Dakota Creek Industries, the sixth of the series was delivered in March.
has a eet of six towboats, eight 10,000-bbl. and 16 30,000-bbl. tank barges.
Campbell, which owns and manages coal and other barges on the rivers in western Pennsylvania, said this was part of the company’s “strategic plan to grow by diversifying and expanding its current business into new and growing markets,” namely tank barge operations.
The wild card of the moment is what effect the war in Ukraine will have on the U.S. barge market.
Some impacts have already been felt. The U.S. Department of Agriculture’s Grain Transportation Report said that barge rates have skyrocketed in response to the war and a tight supply of barges, caused largely by high water on the Ohio and Lower Mississippi rivers, which has led to a 12% to 16% drop in the number of barges upriver. “The war may amplify pressures on an already tight barge supply, as global consumers turn to U.S. grain and other commodities to ll voids left by Russia and Ukraine,” the USDA said, noting that grain shippers are already competing with other commodities such as coal and energy products for available barges.
Barging might also bene t in an uptick in demand for export coal as the global market seeks substitutes for Russian coal, according to River Transport News. Imports of dry cargo commodities through the Lower Mississippi River could also experience a steep decline in volume over the coming months for products like ferrous raw materials and fertilizers that come from Russia and Ukraine.
Despite such market uncertainties, many barge lines are seeing new opportunities in the fast growing domestic offshore wind sector. Plans are proceeding at a fast clip to build out wind farms off many areas of the East Coast, and barge companies are poised to enter this emerging market providing vessels to service construction and maintenance of turbines and other related maritime services.
In April, Houston-based Kirby Corp., the nation’s leading tank barge operator, announced an agreement with Maersk Supply Service to supply coastal barging services for construction of offshore wind turbines for the Empire Offshore Wind project off New York. Kirby plans to spend between $80 million and $100 million to acquire two new feeder barges and tugboats.
“Offshore wind in the U.S. has tremendous potential for signi cant growth during this decade and beyond,” Christian O’Neil, Kirby’s president of marine transportation, said in a statement announcing the deal. “As a leading provider of Jones Act compliant barge services in the U.S. coastal trade, Kirby’s participation in the development and support of the offshore wind industry is critical to our future.”
Innovative tug designs continue to be introduced
By Bruce Buls, Editor-at-large
If you think YTB stands for YouTube, you’re reading the wrong magazine. Here in the workboat world, YTB means “yard tug boat” or “yard tug big.” It’s a designation that applies to Navy tugs whose mission
is to maneuver ships and submarines in close quarters, tow barges, transfer personnel and ght res.
In the 1960s and ‘70s, a variety of U.S. shipyards built about 75 of the 109'×29' single-screw Natick-class YTBs with 2,000-hp engines. For the past 20 years or so, the Navy has been replacing these old yard tugs with commercially chartered vessels as well as a new class of Navy vessel to perform these same functions. Between 2009 and 2011, J.M. Martinac Shipbuilding, Tacoma, Wash., built six YT 802-class tugs for the Navy designed by Robert Allan Ltd. (RAL), Vancouver, British Columbia.
Now the Navy has six more of these tugs — the YT 808-class, built by Dakota Creek Industries, Anacortes, Wash. The sixth of the series was delivered in March. The hulls are the same 90'×38' Z-Tech 4500 design as the 802-class and also have a pair of Caterpillar 3512E engines (1,810 hp each), but now with selective catalytic reduction to meet Tier 4 emissions requirements. With Twin Disc gears and Schottel Z-drives, the new tugs have a free running speed of 12 knots and a bollard pull of 40 short tons, same as the 802s. JonRie supplied hydraulic hawser winches for both series. Dakota Creek won the $84 million contract over 14 other yards. Five of the new tugs will stay in the Paci c Northwest and one was barged back to Portsmouth Naval Shipyard in Kittery, Maine.
The 77’ Athena has a pair of 3,400-hp Caterpillar 3516 Tier 4 engines.
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Robert Allan also designed the Athena, a recently delivered ship-assist tug, for Brusco Tug & Barge, Longview, Wash., which chartered the tug to Crowley Maritime. The 77' tug is a sister vessel to the Hercules and Apollo (also chartered by Crowley), but with a pair of 3,400-hp Caterpillar 3516 Tier 4 engines, it has an additional 400 hp and a bollard pull of 96 tons, making it “the most powerful tug for its size in the U.S.,” according to Crowley. The Athena, like her two sisters, Hercules and Apollo, was built by Diversi ed Marine, Portland, Ore. The tug is also out tted with remote monitoring for data interchange with the home of ce. It was assigned to Puget Sound operations.
Crowley Engineering Services is currently overseeing the construction of the eWolf, the rst fully electric ship-assist tug in the U.S. The decarbonized vessel (except for two 300-kW generators for long transit) was designed by Crowley’s naval architecture and marine engineering team, formerly Jensen Maritime Consultants. The 82'×40' harbor tug is being built by Master Boat Builders at its shipyard in Coden, Ala. With two 1,800-kW motors and 6 MWh of battery storage, the twin Z-drive tug will provide 70 short tons of bollard pull. It’s expected to go into service at the Port of San Diego in mid-2023. Crowley said the eWolf embodies the company’s dedication to sustainability, which includes a goal of net-zero emissions “across all
scopes” by 2050.
In March, Master Boat Builders completed the Spartan, the rst of two hybrid diesel-electric tugs for Seabulk, Fort Lauderdale, Fla. Designed by Robert Allan, the 98'×43' hybrid features a propulsion system provided by Thompson Tractor with two Tier 4 Caterpillar 3512E main engines (2,550 hp each), three Cat generators, two Berg azimuth thrusters, and two ABB electric motors and variable frequency drives.
Master Boat has also teamed up with Robert Allan on the design of a new hybrid model called the ElectRA 3000-H. The hybrid will incorporate up to 2,000 kWh of batteries, a boosted bollard pull of 80 MT and a continuous bollard pull of about 65 MT. RAL has also developed other variations of the ElectRA series that can operate on batteries only, such as the ElectRA 2800 harbor tugs being built in Turkey for an LNG export terminal in British Columbia. The 28-meter (92') tugs will have up to 6,102 kWh of battery capacity and produce about 70 MT of bollard pull. The new LNG terminal will also be serviced by a new class of RAstar 4000-DF escort tugs operating on dual-fuel (LNG and diesel) engines. The 40-meter (131') tugs will provide 100 MT of bollard pull. The new tugs will be operated by HaiSea Marine, a joint venture between Haisla First Nation and Seaspan ULC. LNG Canada’s $17 billion export facility, the largest private sector investment in Canadian history, is expected to open in 2025.
Last November, RAL announced a partnership with Svitzer, a Danish company that provides marine services worldwide, to develop a new generation of tugs powered by methanol fuel cells. As a subsidiary of Maersk, Svitzer’s participation will be a pilot project that will “allow for the transfer of knowledge and experience from the small scale of inshore tug operations to oceangoing containerships.”
Passenger vessels are prepared for a big season
By Dale DuPont, Correspondent
The Boat Company Ltd. has very patient passengers. When Covid-19 hit, the operator shut down for two years because its two boats carry only 20-24 on overnight eco-cruises in Southeast Alaska.
People who had their cruises canceled got refunds and rst right of refusal on future trips. Thus, this season “the majority of our bookings are clients that have been waiting” for a while, said
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The 145’x28’ Liseron was built in 1952 in Seattle, sold to France as a minesweeper, and then purchased and restored in 1989 by The Boat Company. The 900-hp vessel has a draft of 8’6”, and room for 20 passengers and 12 crew.
Hunter McIntosh, president of the Poulsbo, Wash., company. Bookings are at pre-Covid levels. “We’re putting people on wait lists. If we get a cancellation, we’re able to ll a cabin the same day.”
While the pent-up demand is welcome, passenger vessel operators are still dealing with a raft of issues the pandemic made more dif cult such as skyrocketing fuel costs – some of which are passed on in surcharges or higher ticket prices, menu changes when food isn’t available or simply costs too much, and new sanitation protocols.
Hardest hit of all workboat sectors, passenger vessel operators also have been frustrated by the Centers for Disease Control and Prevention’s (CDC) order requiring passengers to wear masks inside vessels except when eating or drinking. Hopes for an early end to the edict – in effect since February 2021 – were crushed in mid-April when the agency extended it until at least May 3, because it was monitoring the spread of a Covid subvariant. Then a few days later, a federal judge ended the mandate, saying that the CDC exceeded its authority. Further legal action was expected.
Mandates have been lifted in most public places, and the CDC’s order “is resented and resisted by most individuals who come on board,” Passenger Vessel Association (PVA) president Bob Bijur wrote to the CDC in late March. Crewmembers who remind passengers of the requirement “are met with refusal, resistance, and, not infrequently, outright hostility. Widespread non-compliance with the rule is the norm, despite best efforts of vessel operators.”
CREWMEMBERS NEEDED
But there’s one challenge that trumps the others.
Finding crew “is probably the most perplexing scenario our entire industry is facing,” McIntosh said.
In the past two years, it seems an entire generation of crew has disappeared. People have retired or changed jobs.
Seasonal operators trying to ramp up for the summer “have big hurdles to jump,” with only 30%-40% of the crew they need, said Bijur, who’s with Island Queen Cruises & Tours/ Biscayne Lady Yacht Charters, Miami.
Everyone wants more time off, more bene ts and more pay. Covid has produced a different attitude in the workplace, Bijur said. And “licensed and credentialed people are always a challenge.”
Some operators are coping by not opening certain dining rooms or running fewer trips at lower capacity to give a higher level of service to those onboard.
On the bright side, passengers in general have come back, and Bijur estimates that Covid’s nearly nonexistent corporate business is at 65%-85% of pre-Covid levels. And the return of the huge foreign- ag cruise ships to areas like Florida and Alaska could once again provide more patrons for local U.S.- ag tour boats.
Domestic tourists helped Shipwreck Tours, Munising, Mich., which is celebrating its 30th anniversary exploring Lake Superior’s sunken treasures from May to the end of September.
“We’re in an unusual situation. When Covid struck and people couldn’t go overseas, we had a large in ux of tourism,” said owner Capt. Peter Lindquist. The company operated at 50% of capacity and complied with all the pandemic’s rules. And business was still up about 50%. “Now, the question is
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what’s going to happen this year.” He’s optimistic. This past year also saw the delivery of several new commuter ferries, including New York Harbor operator Seastreak’s 720-passenger, 157'×40' Courageous, built by Midship Marine, Harvey, La., which the company says is the largest capacity high-speed ferry in the U.S.
And Eastern Shipbuilding Group Inc., Panama City, Fla., delivered two of three new ferries for New York’s Staten Island Ferry. The 4,500-passenger 320'×70'×21'6" Michael H. Ollis, WorkBoat’s 2021 Boat of the Year, arrived in New York City in August. The Sandy Ground was delivered in December. The third ferry, Dorothy Day, is due for delivery later this year.
However, with many people still working from home, ferry traf c has been down. Staten Island Ferry ridership in February, for example, was 810,018, an increase from 472,526 the same month last year, but a marked drop from the 1.7 million in February 2019.
For the second consecutive year, Washington State Ferries (WSF) carried more vehicles with a driver than walk-on passengers – 8.9 million versus 8.4 million. Ridership at the country’s largest ferry system rose to almost 17.3 million in 2021, about 72% of 2019 preCovid numbers.
Crewing challenges and the temporary loss of one of WSF’s biggest ferries due to an engine room re were two major service obstacles, a state of cial said. An improperly tightened fastener led to the Wenatchee’s engine failure April 22, 2021, causing nearly $3.8 million in damages, the National Transportation Safety Board said recently.
The 460'2"×90'×17'3" Jumbo Mark II ferry, which was undergoing sea trials with recently rebuilt engines, is one of three scheduled to be converted from diesel to hybrid-electric propulsion.
On the regulatory front, the Coast Guard issued an interim rule effective March 28 for additional re safety requirements on certain small passenger vessels with overnight accommodations. The rule, in response to the 2019 Conception dive boat re that killed 34 people, includes re detection and suppression systems, escape routes, re ghting training, watchmen monitoring devices and the handling of ammable items such as rechargeable batteries. Comments are due June 27.
High times for oil, gas and wind
By Jim Redden, Correspondent
Production is owing from the rst of three signi cant Gulf of Mexico deepwater developments slated to come on line this year as producers look to cash in on $100/bbl oil and the provincial support of the Biden administration.
In April, Murphy Oil’s celebrated King’s Quay oating production system (FPS) delivered rst oil from two wells, months ahead of schedule. King’s Quay ties in production from the Khaleesi, Mormont and Samurai elds in Green Canyon and when fully operational will produce 85,000 bpd of oil and 100 MMcfd of natural gas.
Also, in Green Canyon, BP expects to begin initial production by midyear from the second phase of the Mad Dog Field. At its peak in 2023, the FPS will produce around 120,249 bpd and 147 MMcfd of oil and gas, respectively.
Rounding out the triumvirate that is projected to help push Gulf production to a record 2.3 million bbl/day this year, Shell said its slimmed down Vito platform will be in place this month in 4,000' of water in Mississippi Canyon in preparation for rst production later this year. Vito is expected to reach peak production of an estimated 100,000 boe/d around 2024 “We have said 80% of our spend is in the core assets. And therefore, expect more to go into deepwater, where we have quite a few good opportunities that we are executing on and maybe a few more to come,” said CEO Ben Van Beurden.
All this comes as the Biden administration, in an abrupt about-face, is encouraging increased domestic production in the short term to make up for shortfalls aggravated by Russia’s invasion of Ukraine, while at the same time, aggressively pushing offshore wind and other renewable energy sources as longer-term alternatives to fossil fuels.
Like oil, the war in Ukraine has strained Europe’s natural gas inventories, putting pressure on the Gulf Coast’s dominant lique ed natural gas (LNG) export sector to pick up the slack. The Energy Information Administration (EIA) estimated on April 12 that U.S. LNG exports will average 12.2 Bcf/d this year, up 25% over 2021. Most of the increase will come from the ve LNG export terminals concentrated off Louisiana and Texas.
S&P Global’s Petrodata listed 28 drilling rigs under contract in the Gulf for the week of April 15 for a marketed utilization rate of 82.4%. A dissection
The semisubmersible fl oating production platform Argos, the centerpiece of BP’s $9 billion Mad Dog 2 project, arrived in the U.S. last year after completing its 16,000-mile journey from South Korea to the Kiewit Off shore Services fabrication yard in Ingleside, Texas.
of Bureau of Safety and Environmental Enforcement (BSEE) data shows ve new well drilling permits issued in April for waters deeper than 1,000', averaging just over one month from receipt of the application to nal approval. That brings to 12 the number of deepwater drilling permits authorized between Jan. 1 and April 18.
Despite cycle-weary operators keeping a tight rein on spending, day rates are up sharply for both deepwater drilling rigs and offshore support vessels (OSV), owing in no small part to increased costs, exacerbated by a shrinking labor pool.
“The OSV market continues to look strong and we expect it to keep rising,” Richard Sanchez, senior marine analyst for S&P Global, said in April. “Day rates are pretty good because it’s hard to get mariners. There are plenty of boats, but not enough mariners. Vessel managers I’ve spoken with say even low-level positions are hard to ll. Shipyard costs are also up, and delays are common because of supply chain issues.”
MIXED MESSAGES
While oil and gas rule the roost for now, questions remain over future investments, owing largely to the likelihood of a curtailment in new Gulf lease offerings. The Biden administration has not announced a new ve-year offshore leasing program, which by law must be in place by July 1. As things now stand, no new lease sales could be held until at least October 2023.
“At a time of geopolitical uncertainty and rapidly rising energy prices, Gulf of Mexico oil and gas production is more important than ever,” Erik Milito, president of the National Ocean Industries Association, said in March. “The longer we go without being able to explore and develop new leases offshore, the longer we weaken a key, proven national strategic energy asset in the U.S. Gulf of Mexico.”
There’s been no such delay on the offshore wind side, with the Bureau of Ocean Energy Management laying out a full plate of sales from the Gulf of Maine to California. Following the record breaking New York Bight sale in February, BSEE scheduled a sale off North Carolina and South Carolina for May 11. The New York Bight sale drew $4.37 billion in high bids for six lease areas covering 480,000 acres between New Jersey and Long Island, N.Y.
Reinforcing the administration’s goal of installing 30 GW of offshore wind capacity by 2030, the Department of Energy said that $40 billion in senior secured debt is available for renewable energy, including nancing for offshore wind turbines and Jones Act-compliant support vessels. ABS estimates that 110 specialized vessels will be needed to support offshore wind initiatives.
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