• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 56 mins Climate Change: A Summer of Storms and Smog Is Coming
  • 16 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 4 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 5 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 5 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 14 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 6 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 17 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 14 hours Itt looks like natural gas may be at its lowest price ever.
  • 1 hour Saudi A to Splash $100 Bln on India
  • 8 hours NEW FERUKA REFINERY
  • 1 hour Washington Eyes Crackdown On OPEC
Alt Text

The Ultimate Tool To Prop Up Oil Prices

Investor interest in the oil…

Alt Text

Kicking Mexico’s Addiction To U.S. Natural Gas

Mexico’s President Andres Manuel Lopez…

Alt Text

Rising Energy Demand Could Be A Boon For The Philippines

The private sector is accelerating…

Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

More Info

Trending Discussions

Oil Rig Builders Tap Into Offshore Wind Market

With the recent completion of the first wind turbine field off the coast of Block Island, many oil rig developers are shifting their attention to this popular new industry. Deepwater Wind LLC installed five turbines three miles southeast of Block Island this past August and they will hopefully be online in November. These turbines will produce 30-megawatts of energy, enough to power over 16,000 homes.

The capital required for these projects can be quite expensive; the Block Island project was a $300 million investment. Several other companies are involved in the production and transportation of the parts. Gulf Island Fabrication Inc. traditionally builds platforms for oil rigs, a service that is shrinking with oil production moving to land. The company has shifted its services over to the renewable industry, providing Deepwater with the means to tether their turbines to the ocean floor. Keystone Engineering Inc. was responsible for designing the platforms and Montco Offshore Inc. allocated the boats used for transportation and construction. Fred. Olsen Windcarrier used a 15-story boat to raise Deepwater’s turbines into place as well.

The U.S. government is setting goals for the future and they include offshore turbines. Governor Andrew Cuomo’s wants New York to have 50% of the state powered by renewables by 2030. The Department of Energy has distributed 11 leases to developers with plans in the Atlantic for renewables and their goal is to install 86,000 megawatts worth of turbines by 2050. This has the potential to add 160,000 jobs; highly notable considering low oil prices can lead to fossil fuel companies shutting down rigs and job cuts. If the U.S. were able to achieve this feat there would be more renewable energy in New England and jobs for engineers and builders. This would be highly beneficial to companies manufacturing the rigs and the economy as a whole. Traditional oil rig companies will be able to diversify away from the volatile oil market that they currently rely so heavily on.

Related: How Long Will OPEC Hot Air Continue To Fuel Oil Prices

Deepwater is planning a 90-megawatt project off the coast of Long Island and expects preparations to begin this coming year. WTI crude currently rests at $44.73 and with rig count climbing in the Permian Basin supply is growing and the price is falling. Jeff Grybowski, the CEO of Deepwater, sees the advantage in low oil prices. He understands that business is bad for rig developers during this period so finding assistance should come easy.

Similar methods will be implemented in the creation of turbine platforms as common offshore oil rigs. There will be some obvious changes in the construction process as it’s a different product. This implies once again reinventing the logistics wheel to reduce costs and earn the available revenue. It’s estimated that there’s potential for 2 terawatts of wind energy off the coasts of the U.S.

Investors should watch Deepwater’s operations closely, especially with their Block Island turbines coming online in November. By investing in the companies providing services to Deepwater, individuals can indirectly profit off the private company. Gulf Island Fabrications is one of these companies, as well as GE, who is working closely with Deepwater, maintaining an image of clean energy products. There should also be an indirect relationship between WTI crude futures and offshore wind turbine production activity.

By Michael McDonald of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News