Equinor heeds Trump stop-work order on Empire offshore wind array to New York

Norwegian state energy firm Equinor said that is complying with the Trump administration’s order to stop work on its Empire Wind I project to New York while “considering its legal remedies, including appealing the order”, it said in a release.

Research consultancy ClearView Energy Partners found that lead federal regulator Bureau of Ocean Energy Management (BOEM) took 880 days from its notice of intent to conduct on environmental review to completion, slightly less than the 937-day average.

Equinor said it is complying with the order affecting project activities for Empire Wind I.

“Upon receipt of the order, immediate steps were taken by Empire and its contractors to initiate suspension of relevant marine activities, ensuring the safety of workers and the environment,” it said.

Around 1,500 workers were on the job refurbishing South Brooklyn Marine Terminal (SBMT) into a marshaling and operations and maintenance hub.

An OREC represents the energy attributes of a single MWh of offshore wind power, according to Nyserda.

The Empire stop work order “goes against the Trump administration’s own prioritisation of independent and locally produced energy and shows a complete disregard for a once-in-a-generation economic powerhouse like offshore wind energy,” said Doreen Harris, Nyserda CEO.

“The federal government’s interference not only ignores the reality surrounding the future energy security of our state and country, it’s fueled by a shortsighted, political agenda that ignores the well-demonstrated economic benefits that this industry can provide,” she added.

“The irrefutable harm created by this action will send a chilling signal to any party investing in the US market, all of whom rely on regulatory certainty,” Harris continued.

Equinor said that it has drawn about $1.5bn off the total project financing facility, and as of 31 March, "the project had a gross book value of around $2.5bn."

“Empire is in the process of ascertaining the impact on the project and project financing,” Equinor said.

“In a full stop scenario, the $1.5bn will be repaid from the equity commitment to the project finance lenders and Empire Offshore Wind LLC will be exposed to termination fees towards its suppliers.”

National impacts

Repercussions of the project’s halt will be felt across 23 states, industry advocate Oceantic Network revealed, affecting 3,500 workers.

“Empire Wind's supply chain has brought more than $1.6bn in investments to the US,” Oceantic said, including “substantial investments in Texas, South Carolina, Louisiana, Ohio, and Kansas.”

Many of these states of considered Republican strongholds who voted Donald Trump into the presidency.

BloombergNEF said in a note that Trump’s move to target “a project under construction for the first time — will spook the owners of other under-construction US offshore wind projects”, including Orsted, Dominion, Iberdrola and Copenhagen Infrastructure Partners.

“It puts at risk billions of dollars of investments already committed,” the consultancy noted.

Dominion Energy’s Coastal Virginia Offshore Wind project and Orsted’s Revolution Wind are both well underway, with extensive at-sea installations already completed.

“Burgum seems to be pursuing a bifurcated approach to offshore wind in which the Administration will allow a few projects in advanced stages of development (i.e., significant construction completed) to move forward even as others—including fully permitted ones like Empire Wind—do not,” ClearView said in a note to clients.

Equinor is a major player in US energy with some $60bn in investment in oil & gas and renewables, it said.