Courts, Contracts, And The Fight To Keep U.S. Offshore Wind Afloat

Offshore wind was targeted by the Trump Administration in 2025, with multiple rationales offered to cripple the industry. 

On January 20th 2025, President Trump issued an executive memorandum to suspend issuance of any approvals required to develop and operate wind energy projects, pending wide-ranging federal assessment. 

Seventeen states and DC filed suit, and won, with a Circuit Court judge ruling the executive order was “arbitrary and capricious.” 

The Department of Interior also went after Orsted’s Revolution Wind project with a stop work order in August 2025, citing unclear national security concerns, though DOI Secretary Burgum cited underwater drones, that could be launched in a swarm attack through a wind farm without detection. A federal judge rejected that order.

In December, the DOI issued new stop work orders impacting five major East Coast offshore wind farms, again citing national security risks. 

As a result, Massachusetts – on December 30th – again delayed finalizing offtake contracts for two projects totaling 2,078 MW of capacity. 

Last week, the 700 MW Revolution Wind project off Rhode Island and the 810 MW Empire Wind 1 project off New York went to court requesting an injunction against the stop work order.

Revolution Wind argued that it had undergone extensive reviews with federal agencies and agreed to a mitigation plan addressing any national security risks.

Empire Wind also argued that the terms of its lease specify that advance notice “will normally be given before requiring a suspension or evacuation.” 

That’s what’s really at stake here. This precedent allows future presidents to take similar actions against other investments they don’t like. Some oil co execs say this type of zigzag is “detrimental to business” because one cannot make long term plans. 

Chapters

• 0:02 Setting The Week’s Energy Story
• 0:30 Offshore Wind Becomes The Focus
• 1:15 Legal Pushback And Early Court Wins
• 2:35 New Stop-Work Orders And Delays
• 3:35 Costly Injunctions And Daily Losses
• 4:30 Security Claims Versus Economics
• 5:24 Rule Of Law And Market Certainty
• 6:39 Industry Leaders Warn Of Whiplash
• 6:54 Closing And Sign-Off

Transcript

SPEAKER_00: 0:02

I've got your energy story for this, the second week of January, 2026. Happy New Year to all. Well, unless you're Nicolas Maduro, but that's a narrative for another day and we'll see how that plays out. There may be an energy story in Venezuela at some future date, but we'll need a lot of capital going into that region at a time when oil prices are pretty dismal. So somewhere along the way, we can probably expect U.S. taxpayer dollars to get involved, perhaps in the form of guarantees. Today, though, we're going to focus on the issue of offshore wind. No energy industry arguably suffered more in 2025 than offshore wind. It sat squarely in the middle of the Trump administration's crosshairs, which seemingly came up with every possible rationale to cripple that industry. Barely back in office, President Trump on January 20th of last year issued an executive memorandum with the short title, Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government's Leasing and Permitting Practices for Wind Projects. That memo directed federal agencies to suspend issuance of any permits, leases, and other authorizations required to develop and operate both onshore and offshore wind energy projects pending a wide-ranging assessment of federal wind leasing and permitting practices. Unsurprisingly, in response, 17 states and the District of Columbia filed suit, claiming the action affected their ability to lower energy costs and reduce greenhouse gas emissions through wind energy generation. They won, with a circuit court judge ruling that the executive order was, quote, arbitrary and capricious, unquote, and it included the failure of the DOI to offer a reasoned explanation for its a rapid about phase from the decades-long practice of issuing wind permits. The Department of Interior had also previously gone after Orsted's revolution wind project with a stop work order in September of 2025, citing national security concerns that it failed to specify. At that time, Secretary of the Interior Doug Bergum cited underwater drones, stating that people could, you know, with bad ulterior motors to the United States, launch a swarm drone attack throw in farm. The radar would get distorted around detecting, and you would have trouble seeing the drones coming. Right. Maybe we need some serious reasons here and articulation of what this threat really is. Well, by that time, 56 of the 62 turbines had already been installed, and so the effort of the federal government failed, for the federal judge in that case deciding in favor of developer Orstead, noting that the Department of Interior didn't provide any, quote, actual findings. Undeterred, the DOI this past December issued a new set of stopwork orders impacting five major East Coast offshore wind farms in various stages of development, with some nearly completed. And it justified this action by once again claiming the projects created unspecified national security risks. The damage from this most recent salvo has been considerable, with the latest news being that Massachusetts on December 30th once again delayed finalizing off-take contracts for two projects, Ocean Wind South Coast Wind and Ebert Rola's New England Wind 1, together totaling over 2,000 megawatts of capacity. And those two projects had emerged as winners in an earlier joint Massachusetts Rhode Island solicitation. But since that time, they've been unable to finalize off-take agreements. So the wind developers are going back to the courts, but each delay bleeds them further. Last week, the 700 MW Revolution Wind project that sits off Rhode Island, owned by Orsted and Global Infrastructure Partners, requested an injunction against the December stopwork order and noted that the delays cost them over$1.4 million each day, with over$5 billion already sunk into the project. For its part, Ecuador's 810 MW Empire Wind One project off New York also filed a similar complaint on the same day, claiming the order is, quote, unlawful and threatens the progress of the ongoing work. This is the second OA aimed at Empire Wind, which was targeted with an initial stop work order last April, costing it a total estimated$200 million. That stopwork order was also rescinded by a federal judge. In its recent action, Revolution Wind argues that DOI's Bureau of Ocean Energy Management had previously reviewed the wind farm's potential impacts to national security, with extensive reviews from Department of Defense, U.S. Coast Guard, and the Federal Aviation Administration. And it further noted that in November of 2024, it agreed to a mitigation plan with the DOD and the Air Force specifically to address national security risks and any potential adverse effects on military operations and readiness, including radar systems. It's hard not to conclude that the current administration is simply looking for any reason to kill these projects. Interior Secretary Doug Bergum claimed last month that the projects could pose risks because, quote, relevant adversary technologies were developing quickly, unquote, referring to national security risks identified by the DoD in recently classified reports. But then, in a post on X, he went after the economics of the projects, characterizing them as expensive, unreliable, and heavily subsidized. So which is it? Empire Wind also argued that terms of its lease specify that advanced notice, quote, will normally be given before requiring a suspension or evacuation, unquote. And that's what's really at stake here. Either these projects are a threat to national security, in which case countermeasures could be developed if necessary, or they're not. But in either case, they need lead times, and the rule of law will suggest an orderly process that is not so apparently politically driven, vindictive, or capricious. This type of precedent could allow future presidents to take the same actions against other investments they don't like, maybe in some future case, a pipeline or an offshore drilling lease program into which billions have been invested. That's one reason that some oil company execs have warned against this current approach. Perhaps most notably, Collat Hirstius, president of Shell USA, and ExxonMobil's CEO Darren Woods have both expressed concerns about this approach to permitting, with Woods commenting publicly that the policy zigzag between administrations is, quote, detrimental to business. It's hard for any business with long-term horizons to plan and make long-term capital allocations if the masters of the game keep changing the rules in such an apparently arbitrary fashion. If the next time you pass Go, you end up owing$200, you'd be wise to cash in your railroads and utilities, sell your hotels on boardwalk and park place, and simply quit the game. Well, that's all for this week. Thanks for watching, and we'll see you again soon.