The Trump Administration executive order targeting the U.S. wind energy sector with curbs on federal site leasing and project permits could itself face legal risk with unclear and conflicting provisions that will likely trigger lawsuits, experts say. But it also is set to add uncertainty to the developing market that could impact schedules and investment. 

The Jan. 21 executive order bans future federal offshore wind site leasing on the U.S. outer continental shelf and orders federal review of already approved projects—with the latter also including onshore wind on private land—that it says is focused on the “ecological, environmental and economic necessity of terminating or amending” existing leases. 

The directive. which calls for a “temporary cessation and immediate review” of federal wind leasing and permitting—covering “new or renewed approvals, rights of way, permits, leases or loans for onshore or offshore wind projects”—could allow the administration to sue to cancel approved permits based on procurement law, says Timothy Fox, managing director of energy research firm Clearview Energy Partners.  

Clean energy proponents see a double standard. "While on one hand the administration seeks to reduce bureaucracy and unleash energy production, on the other it increases bureaucratic barriers, undermining domestic energy development and harming American businesses and workers," Jason Grumet, CEO of sector trade group American Clean Power Association, said in a statement. "The possibility that the federal government could seek to actively oppose energy production by American companies on private land is at odds with our nation's character as well as our national interests.”

Ken Alex, a former climate change advisor to former California Gov. Jerry Brown and now director of Project Climate at the University of California-Berkeley, added that “the same environmental impacts that Donald Trump said he was worried about with wind energy are not taken into account with oil and gas projects. This kind of doublespeak is right out of ‘1984.’” 

While the order says the pause is justified by “alleged legal deficiencies” in lease and permit approvals, including “potential inadequacies” under the federal NEPA environmental law, it offers nothing “on the nature of those deficiencies or support for the allegation,” says a legal review by attorneys from law firm Troutman Pepper Locke. The order “goes further than what most in the industry anticipated, and we anticipate that it will be challenged in court,” says the firm's analysis. 

*There are some clear legal vulnerabilities to the extent [the order] would require agencies to disregard their statutory obligations under NEPA … or other implicated statutes,” the attorneys say, pointing particularly to the onshore wind permit freeze as the most “unexpected and surprising aspect of the order.” They predict legal action soon, citing the order’s similarity to “executive actions under the Biden Administration targeting oil and gas production that were halted in court.” 

Energy sector research firm BloombergNEF says “It is likely that developers of under-construction projects will continue work, but the order may bring significant delays for projects yet to reach a final investment decision.” BNEF cautions that the order's description as being "temporary" could actually mean it is "indefinite." 

Global law firm Norton Rose Fulbright noted that many U.S. offshore wind project backers are "large foreign-owned utilities and oil companies that have spent tens to hundreds of millions of dollars on the projects," adding that "some could have claims under bilateral investment treaties" if the order results in cancelled projects.

But sector observers also worry that market uncertainty could prompt supply chain disruptions if contractors choose more secure wind development options in other countries.

Outcomes

The outcomes ahead are set to depend on decisions by the presumed U.S. Interior Dept. chief, Doug Burgum, former governor of North Dakota. Executive orders are not “self-executing,” said Mark Squillace, a University of Colorado Law School professor and former department official. Burgum told a Senate confirmation hearing last week that he is committed to the current “all-of-the-above” energy strategy and would allow fully permitted wind projects "to continue" if they “make sense and they're already in law." As governor, he had supported onshore wind energy development.

Adam Stern, executive director of the industry group Offshore Wind California, says that while federal approvals are still required for its planned projects, they will mostly rely on state agencies to proceed. “As an industry we’re focused on what is advancing offshore wind in California, and right now most of that is happening at the state level,” he says.

Experts see nine commercial-scale offshore wind projects totaling about 14 GW that already have federal permits as “safe,” with five now being built in the Atlantic. Seven others with permitting underway and others in earlier stages face the "temporary" halt by the order, according to data collected by Canary Media. At least one company, utility firm Dominion Energy, has already confirmed its 2.6-GW project, which is set to be the largest in the U.S, will complete as planned in 2026. 

Possibly facing more risk are two US Wind projects off Sussex County, Del., and Ocean City, Md., that gained Biden administration approvals and permits late last year—the 300-MW Marwin project and the 800-MW Momentum Wind—after more than a decade of regulatory review, according to federal records. The developer recently gained offshore renewable energy credits from both states and has signed agreements to fund transmission upgrades, site preparation and training.

“Our project will deliver a massive amount of new electricity directly into the regional electric grid in Delaware, which means a lot of benefits locally,” Jeff Grybowski, US Wind CEO, said in a statement.

But growing local opposition led Sussex County officials on Dec. 17 to reject a conditional use permit US Wind requested for a substation site near a soon-to be deactivated power plant. Market observers fear the new administration would not agree to support the developer in state or local suits seeking to revoke permits, as the Biden administration had done.

A US Wind spokesperson noted in a Jan. 21 statement that company projects "are poised to deliver on the President’s promise of achieving American energy dominance, especially now that we have received all of our federal permits.” Also noting the firm's $150-million manufacturing investment in offshore wind infrastructure at the Sparrows Point industrial area in Baltimore—once home to Bethlehem Steel—Vice President Nancy Sopko said the site "will rise again to meet the demands of a new American industry." 

Offshore wind developer Ocean Winds—a joint venture of French firms EDPR and Engie—which is developing three U.S. projects, said in a statement it "will continue to assess the scope and implications of the executive orders on our ... projects. Offshore wind farms are long-term development projects, and we will keep on finding a path forward in coordination with all relevant authorities.”

But many are watching if the growing AI-charged power market in the U.S. will require shifts in the current administration stance on wind energy. 

"The U.S. would face a power crisis if wind and other renewable energy projects are delayed," said John W. Ketchum, chairman and CEO of sector giant NextEra Energy, in a quarterly company results call with analysts on Jan. 24, noting that "right now, we need solutions that are going to deliver electrons to the grid. As part of achieving energy dominance, we're going to need all of the above solutions. We can't afford to take any option off the table."

The firm is a global leader in onshore wind, solar and storage, aiming to operate 75GW by 2027, as well as non-renewables. "We can't wait because that demand is here today," said Ketchum, noting "already planned for" capacity investment by its manufacturing and utility clients. "So, I remain very optimistic that we're going to be able to work through any issues." he said.