Equinor Considers Legal Remedies, $1.5B Cost After Trump Stops NY Wind Farm
Equinor issued a statement detailing the potential impact of the Trump administration’s order yesterday, April 16, stopping construction that was underway on its New York offshore wind farm Empire Wind. At the same time, the state’s regulators issued a strongly worded condemnation of the order following a vow yesterday for the state’s governor to fight the administration.
The company reports that it is suspending offshore work on the project, as ordered, complying with the order received yesterday from the Bureau of Ocean Energy Management (BOEM). It states the project has a gross book value of around $2.5 billion, including its investment in the South Brooklyn Marine Terminal which would be the construction and operational base.
It reports that it has drawn about $1.5 billion from the project finance term loan that was completed in late 2024. Equinor US Holdings has provided guarantees for the equity commitment in the project financing and would have to repair the $1.5 billion to the project finance lenders in a full-stop scenario. The company would also be exposed to termination fees from its supplies.
Both the state and Equinor are highlighting the long and rigorous review process the Empire Wind project went through before it received federal and state approvals in 2024. NYSERDA (New York State Research and Development Authority) highlighted that it was the first Trump administration that issued the lease for the project saying they are now showing “a complete disregard” for a project that is New York’s largest energy infrastructure project in 50 years and follows Trump’s prioritization of independence and locally produced energy.
“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 as the state and nation work to ensure an affordable, reliable and abundant energy supply for future generations,” said Doreen M. Harris, President and CEO, NYSERDA. “The irrefutable harm created by this action will send a chilling signal to any party investing in the U.S. market, all of whom rely on regulatory certainty.”
Yesterday, Interior Secretary Doug Burgum asserted that had information that “raises serious issues” with the project’s approvals. He asserted the Biden administration rushed the approvals “without sufficient analysis or consultation among relevant agencies.” Burgum directed BOEM to order Empire Wind to cease all construction activities until a further review is completed to “address these serious deficiencies.”
While saying it will safely halt the offshore construction, Empire also said it is, “engaging with relevant authorities to clarify this matter and is considering its legal remedies, including appealing the order.”
The company highlights it has more than 35 years of history in the U.S. It says it has invested more than $60 billion in the U.S. to date, including in oil, gas, and renewables.
Several companies including Shell and BP have already pulled back from the U.S. offshore wind sector while analysts were left to speculate on the broader implications of the stop work order against Empire Wind. Burgun in his memorandum said the review is ongoing of federal wind permitting practices with respect to “both existing and pending permits.”
Two projects, Vineyard Wind and Coastal Virginia Offshore Wind as well underway with offshore construction. Vineyard was delayed by a blade failure and subsequent inspection program while Dominion paused some offshore work during the winter and is due to resume this spring. Orsted also has two projects, Sunrise Wind and Revolution Wind, which have started onshore cabling and other work. In total, the Biden administration approved 11 offshore projects with one completed in 2024. Other projects remain in review at the federal and state levels.