Trump bans new offshore wind leasing in waters off four US Atlantic states

President Donald Trump dealt a potential blow to the emerging US offshore wind sector by banning new energy leasing for a 10-year period starting 1 July 2022 on the federal outer continental shelf along Florida, Georgia, North and South Carolina.

Maritime and renewable energy groups condemned the move as counter-productive for investment and job creation with the national economy trying to emerge from a deep coronavirus-induced recession, and irresponsible amid a global climate crisis.

Trump said his intention is to extend the moratorium to include Virginia, although it was unclear when he could issue another executive order to do this.

Off Virginia, Dominion holds the sole lease. The utility announced plans for a 2.64GW wind project east of Virginia Beach – the nation’s largest – that it expects to have fully operational by 2026.

Trump’s directive represents a policy flip-flop as he had been openly supportive of further offshore oil and gas leasing activity. To a lesser extent, his administration has also been backing offshore wind industry development there.

Press reports suggest he made the move under pressure from party officials in the four states where offshore oil and gas drilling is deeply unpopular. Trump faces a difficult bid for reelection on 3 November with polls showing him behind Democratic challenger Joe Biden in Florida, Georgia, and North Carolina.

Why offshore renewable energy, which has public support, was included in his directive was not immediately clear.

The ban on issuance of new energy leases after 30 June 2022 effectively gives BOEM a 22-month timeframe to vet six wind energy areas off the Carolinas it proposed last decade and if they pass muster with stakeholders, to hold lease sales.

They are Wilmington East and West off the extreme southern part of the North Carolina coast and four areas facing South Carolina: Cape Romain and Grand Strand, and Charleston and Winyah further from shore.

Earlier this year, BOEM indicated a timetable for future offshore wind lease area sales was under development but gave no commitment for North Carolina in 2021.

The focus of industry players, mainly European companies, has been on mid-Atlantic and northeastern states given their favourable clean energy policies and high electricity costs.

More recently, North Carolina has drawn their interest with Governor Roy Cooper, a Democrat, saying his administration is moving to position the state as an east coast industry hub. North Carolina, where the cost of doing business is lower, also has the most offshore wind resource of any state along the east coast.

Duke Energy, the dominant and politically influential electric utility in North Carolina, a potential joint venture partner and off-taker, recently announced that it now views offshore wind as an investment opportunity.

In South Carolina, officials have expressed a desire to work with its northern neighbour on offshore wind development and former Governor Nikki Haley, a potential 2024 Republican presidential candidate, is an industry supporter.

Offshore wind leaseholders had no immediate reaction to Trump’s ban but other groups were critical including the American Council on Renewable Energy (Acore).

“Barring new leasing for offshore wind in the middle of a climate crisis is, to put it mildly, irresponsible. If we’re going to have any shot at reducing greenhouse gas emissions to the level that scientists say is needed to avoid the worst impacts of climate change, ramping up our nation’s wind production is going to be critical,” said Acore chief executive Greg Wetstone.

Erik Milito, president of the National Ocean Industries Association, said, “Americans are trying to climb back from a historic economic downturn, and today’s announcement places additional offshore energy development out of reach and locks away much needed investment and jobs.”

He added, “Without a clear and stable regulatory horizon, interest and investment in developing offshore wind resources will be diminished.”

Opponents of Trump's action could challenge it in court while Biden, if elected, could issue a subsequent executive order to negate all or part. Biden is promising a push to install “thousands of turbines offshore” when in office.