Energy Musings - May 12, 2025

May's early days have marked a new phase for the offshore wind industry. Court decisions and an opinion from Interior's Solicitor General are redefining the industry's legal playing field.

U.S. Offshore Wind Playing Field Altered Again

On January 20, Donald Trump’s first day in office as the 47^th President of the United States, he issued an Executive Order for the “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.” The order set off a firestorm of protests from East Coast governors whose states have penciled in the future supply of offshore wind power as the easiest way to meet their aggressive clean energy mandates. The order, expected by many because Trump campaigned for the action, was cheered on by fishermen and groups opposed to the industrialization of our oceans.

Since January, the offshore wind industry has been traveling a road not anticipated by people, merely six months ago. Shockingly, Secretary of the Interior Doug Burgum ordered a halt to constructing Equinor’s 815-megawatt Empire Wind project in the New York Bight off the coasts of New York and New Jersey, even though the project had obtained all the necessary permits. The unexpected and unorthodox step came because of concern that the Biden administration’s approval process may have been flawed, and the new administration needs time to review the record.

Empire Wind is critical to New York’s plan for renewable energy.

While Equinor immediately ceased construction activity, which began with the dumping of tons of rock to shield the wind turbine foundations from scouring by ocean currents. Equinor has said it is considering suing the Trump administration over the stop-work order, and is being encouraged by Democrat politicians, such as New York Democrat Senator Chuck Schumer.

Multiple events in recent days will further impact the shifting offshore wind market. Here are the most important ones.

A coalition of 17 Democratic state attorneys general sued the Trump administration, challenging the legality of pausing approvals, permits, and loans for all wind energy projects onshore and offshore. They claim Trump lacks the authority to shut down the permitting process unilaterally and jeopardizes the development of the states’ economies, energy mix, public health, and climate goals.

We guess these state attorneys general substituted wind for LNG in the suit Republicans filed against the Biden administration for its pausing of LNG permitting while it studied the impact exports would have on consumer budgets. Oh, wait. There was no Republican LNG suit. Moreover, early this year, we learned Biden’s energy department had studied the issue, concluded it was not a problem for consumers, but hid the study from the public to allow disruption of the LNG industry.

The state attorneys general's petition to the court cited provisions of numerous laws the federal government must follow, which restrict it from pausing wind permitting activity. They said in their petition:

“3. Citing unspecified 'legal deficiencies' and 'inadequacies' in past federal wind-energy reviews, the Wind Directive orders the heads of relevant federal agencies to relinquish their congressionally-imposed responsibilities. It orders that Agency Defendants instead ‘shall not issue new or renewed approvals, rights of way, permits, leases, or loans for onshore or offshore-wind projects pending the completion of a comprehensive assessment and review of Federal wind leasing and permitting practices’—a review, grounded in no statute and duplicative of already required reviews, that is to be conducted by the Secretary of the Interior with six separate federal agencies. Id. at 8364.”

Legal deficiencies and inadequacies have become a critical issue in offshore wind leasing activity. The courts will be forced to become more involved, but likely not until the Trump administration completes its review.

Recent decisions of the Supreme Court, however, muted cases that might have opened court review of the issue. However, the petitioners' claims in their lawsuits provide a roadmap for investigating and resolving the legality of the Biden administration’s approval process for offshore wind.

The first case the U.S. Supreme Court declined to hear involved a challenge from Maine fishermen to the federal government’s creation of the Northeast Canyons and Seamounts Marine National Monument, a large federally protected area in the Atlantic Ocean. The fishermen challenged the creation of the park, consisting of 5,000 square miles off New England, by President Barack Obama. The park is home to fragile deep-sea corals. However, it has been a long-standing lobster and crab fishing area. Environmental concerns win over the food industry. Lower-level courts have ruled that the monument was appropriately created by Obama, who used the Antiquities Act to establish it.

In the court’s decision by Chief Justice John Roberts, he wrote that the monument’s creation was “of no small consequence,” but the fishermen had not met the criteria for bringing the case before the Supreme Court. However, he also noted that the court has never considered how such a large monument can be justified under the Antiquities Act. President Theodore Roosevelt created the law over 100 years ago to preserve artifacts like Native American ruins.

“The Northeast Canyons and Seamounts Marine National Monument at issue in this case demonstrates how far we have come from indigenous pottery,” Roberts wrote. This statement encourages parties to bring other cases that will “resurrect meaningful limits on the President’s monument-designation power.” Although this case did not involve congressional mandates, it raises the issue of extending minor legal authorities into massive national actions.

More significant for the offshore wind approval issue was the Supreme Court’s rejection of petitions for certiorari by two petitioners who sued over the Vineyard Wind project off the Massachusetts and Rhode Island coasts. The cases were RESPONSIBLE OFFSHORE DEVELOPMENT ALLIANCE, A D.C. NONPROFIT CORPORATION v. DEPARTMENT OF THE INTERIOR, et al., and SEAFREEZE SHORESIDE, INC., et al., v. DEPARTMENT OF INTERIOR. Both cases dealt with the issue of whether the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) correctly followed and interpreted the rules under the Outer Continental Shelf Lands Act (OCSLA) when it approved the project. In other words, the cases highlighted the legal deficiencies and inadequacies of the approval process, which are at the heart of the Trump administration’s claims in pausing wind permitting activity.

Four amicus briefs were filed supporting the certiorari petitions (our research was referenced in one). They provide administration officials with a roadmap to investigate the approval process. BOEM’s decisions favored the “goals” of offshore wind over the “reasonable uses” by other industries, such as the commercial fishing industry.

Surprisingly, an unrelated but critical government decision outlines the investigation road map. It was issued May 1 by the Acting Solicitor General (Gregory Zerzan) of the Department of the Interior’s office and withdrew opinion M-37067 and reinstated M-Opinion 37059. A seemingly technical ruling may have much broader implications for the future of offshore wind.

M-Opinion 37059 was issued on December 14, 2020, during President Trump’s first term, by former Solicitor Daniel Jorjani. The opinion addresses how the Interior Department should interpret and apply subsection 8(p)(4) of OCSLA. That subsection is part of subparagraph (p), which grants the Interior Secretary authority to grant a lease, easement, or right-of-way on the Outer Continental Shelf for activities not otherwise authorized in OCSLA and other applicable law. The relevant part of subsection 8(p)(4) states:

“(4) Requirements. The Secretary [of the Interior] shall ensure that any activity under this subsection is carried out in a manner that provides for— . . . (I) prevention of interference with reasonable uses (as determined by the Secretary) of the exclusive economic zone, the high seas, and the territorial seas[.]”

Zerzan writes, “Paragraph (4) of that subsection directs the Secretary to ensure that any activity undertaken pursuant to subsection (p) must be taken in accordance with the requirements established in that paragraph.”

Zerzan goes on to note that Solicitor Jorjani concluded that the proper scope of the phrase “prevention of interference with reasonable uses,” when evaluating whether a proposed activity would conflict with an existing use, the Interior Secretary is required “to act to prevent interference with reasonable uses in a way that errs on the side of less interference rather than more interference.”

Solicitor Jorjani’s ruling was withdrawn by Principal Deputy Solicitor Robert Anderson and replaced with M-Opinion 37067 on April 9, 2021, early in the Biden administration’s time in office. The prior opinion was an impediment to Biden’s plan to construct 30 gigawatts of offshore wind by 2030.

Anderson said that Jorjani needed to read subsection 8(p)(4) in its entirety and not apply “tools of statutory construction to ‘interpret’ the phrase ‘prevention of interference with reasonable uses’.” He said that by not noting the remaining text that the Interior Secretary is required to act “in a manner providing for” several goals, the prior opinion failed to put the subsection’s language “within a familiar category of statutes imposing only general obligations on federal agencies.”

This rationale aligns with the Chevron Deference courts, which, for decades, had given federal agencies the power to interpret and establish rules and procedures under the language of Congressional legislation, which was unclear or unstated. Chevron was overturned last year in a historic ruling by the Supreme Court in LOPER BRIGHT ENTERPRISES v. RAIMONDO, SECRETARY OF COMMERCE. Courts can no longer defer to agency interpretation of unclear language or legislative intent when challenged by parties harmed by the agency’s rules.

Zerzan’s ruling references the First Circuit Court of Appeals ruling in the Seafreeze case that guides the interpretation of 8(p)(4) criteria.

“That court upheld the District Court’s conclusion that ‘the OCSLA criteria are ‘mandatory,’ and ‘BOEM must ensure that ‘each criterion is met’ in a manner that is ‘not to the detriment of the other criteria.’ The Anderson Opinion’s assertion that ‘subsection 8(p)(4) commands only that the Secretary rationally balance the subsection’s various goals’ both diminishes the importance of each subparagraph (contrast ‘mandatory’ with ‘goals’), while also opening the door to the possibility that any one criteria may be favored over another. This no longer reflects the best, or even a permissible, agency interpretation. It must therefore be withdrawn.”

In other words, an agency, in this case, BOEM, cannot substitute mandatory with goals when determining its rules and actions with regard to provisions of OCSLA. It must weigh all the requirements and take actions that minimize the impact of the desired action (allowing offshore wind farms) on all the other ocean users.

The wheels of justice often turn slowly. The first day of May opened the next chapter in the battle over offshore wind. While we do not enjoy wading into legal matters, in this case, readers must appreciate how legal developments are changing the offshore wind landscape.

Resolution will take time and be frustratingly slow for both sides, with legal victories and defeats. However, the economics of offshore wind continue to be challenging, as demonstrated by Ørsted’s recent decision to abandon its Hornsea 4 wind farm project off the UK. Interest rates remain stubbornly higher than developers assumed when planning their projects, and project costs are proving higher than budgeted, threatening the very low financial returns earned by offshore wind farms.

The public is beginning to understand the relationship between the cost of new energy projects and their power bills. They are unhappy and are pushing back on many of these projects. How the offshore wind industry is impacted and what it means for its future is difficult to predict, but we will follow and report on it.