Energy Musings - August 28, 2025
The next stage in the effort to revive the U.S. maritime industry, while we learn of efforts to ban another offshore wind development project off Maryland's coast.
Two News Stories From The U.S. Oceans
Two news stories broke earlier this week within areas of our research focus. Both are worthy of comment. The first deals with South Korea’s use of its shipbuilding prowess to secure a more favorable trade agreement with the Trump White House. The second story is about another offshore wind development project likely to be sunk by the Trump administration’s efforts to review the Biden-era compliance with the regulatory and environmental approval process and ban those that violate the rules.
Innovative Program to Revive U.S. Shipbuilding
At the beginning of the week, South Korean President Lee Jae Myung met with Donald Trump. The following day, Lee visited the Hanwha Philly Shipyard that Hanwha Ocean purchased for $100 million at the end of 2024. During the visit, Hanwha announced a $5 billion investment program that involves the installation of additional docks and quays to increase the shipyard’s capacity. It is also reviewing the build-out of a new block assembly facility. The investment and shipyard capacity expansion are expected to boost its production volume from less than two vessels to 20 annually. Such an announcement must be music to the ears of the Trump administration and the bipartisan Congressional legislators who have been pushing the effort to revitalize the U.S. maritime industry.
National security concerns drive the need to rebuild the nation’s shipbuilding capacity. The most critical and visible shortage is our ability to construct new naval warships on a timely basis. However, the U.S. must also build more commercial vessels if we are to avoid being at risk of international commercial blackmail. And our commercial shipbuilding capacity is woefully inadequate for this task.
In addition to the infrastructure investment, the U.S. subsidiary of Hanwha Shipping announced an order for 10 medium-range oil and chemical tankers, with the first tanker scheduled for delivery by early 2029. This order follows the company’s announcement that it will buy a Korean-built LNG carrier and complete its construction and outfitting at the Philly Shipyard under a joint construction program. This will be the first modern American-flagged LNG carrier built in 50 years. As part of the joint construction program, Philly Shipyard will send workers to South Korea for training.
State of Maine poised for its naming ceremony.
During the shipyard visit, the State of Maine, the third U.S. training ship built under the National Security Multi-Mission Vessel (NSMV) program, was christened. It is the first purpose-built training ship for the Maine Maritime Academy. The ship features eight classrooms, an auditorium, and training labs, including a specially designed training bridge. It has a helicopter pad and is outfitted to handle both containers and roll-on/roll-off cargo, providing the cadets with hands-on training experience. At 525 feet in length, the State of Maine can accommodate 600 cadets for training. In times of humanitarian need, it can handle up to 1,000 people and provide access to an advanced medical facility.
The Philly Shipyard had delivered the first two NSMV vessels to the U.S. maritime academies in New York and Massachusetts. It will complete the project with two additional vessels destined for delivery to maritime academies in Texas and California. The shipyard has also begun work on the first of three LNG-fueled containerships for Matson, and is finishing work on a rock installation vessel for Great Lakes Dredge & Dock Corporation.
President Lee informed the Trump administration that his country is prepared to invest $150 billion in U.S. shipbuilding and other key industries, with the Philly Shipyard money reflecting the initial investment. Lee said, speaking through a translator, “Through the MASGA (Make American Shipbuilding Great Again) project, we will achieve a ‘win-win’ outcome that would see the shipbuilding industries of both the United States and South Korea take a leap forward together.”
Will the South Korea/US cooperative effort be followed by others, such as with Japan, Canada, or Finland? This is the creative effort we envision is required for the U.S. to revive its maritime industry, given the challenge of attracting investors to invest in new or upgraded shipyards on the expectation that they can lure shipowners into buying expensive U.S.-built vessels.
Killing Another Offshore Wind Project
A local news TV station in Maryland reported last Friday that the Department of Justice (DOJ) had moved to stay a pending lawsuit in Delaware in which a homeowner is challenging US Wind’s offshore Maryland wind farm approval over violation of the Clean Water Act. The DOJ stated that the government intended to withdraw its approval for the wind farm, rendering the court case irrelevant and a waste of time.
On Monday, it was reported that the DOJ told the court that the Department of the Interior’s (DOI) Bureau of Ocean Energy Management (BOEM) intends to “voluntarily remand and vacate its approval of the Construction and Operations Plan” for the US Wind project. The remand is scheduled to happen by September 12. There was no reasoning given for the action. However, the project has been subject to criticism of its rushed approval, the lack of transparency during the process, and the fact that concerns raised by residents and the Ocean City, Maryland government were ignored.
US Wind is a partnership between Italy’s Renexia and America’s Apollo Global Management investment firm. It won its offshore lease in August 2014, received final federal approvals in 2024, and Maryland approval in June 2025. The project was to be built in two phases, potentially totaling 2 gigawatts (GW) of power generated by 114 wind turbines, which were expected to be operating as early as 2026.
US Wind’s location offshore Maryland.
Last month, the U.S. Environmental Protection Agency (EPA) challenged the Maryland Department of the Environment, alleging that the state had made an error in administering the final appeal process for the permits granted to US Wind. The state responded, saying it was the EPA that was wrong. The state stated that the authority resided with it, and that state-issued permits adhere to, or are more stringent than, federal requirements.
Besides the questions about the rushed nature of the offshore wind approval process, there is substantial evidence that BOEM has ignored input from co-approval agencies and other ocean users, raising serious questions about the legality of the approvals. The Department of Commerce is now launching a review of the foreign supply of materials and equipment for the wind energy industry due to national security concerns.
The legal warfare over offshore wind continues to heat up. The battleground is the courts, with both sides vying to garner public support in their favor. Ultimately, there needs to be a credible review of how rushed the approval process was to meet the Biden administration’s offshore wind energy agenda before it exited the White House. Violating laws and regulations in furtherance of a political agenda is not an acceptable practice.