New York feels the wind chill of White House power politics

President Donald Trump is not fond of wind power. He also reacts badly to resistance. Furthermore, he appears to revel in upending the norms of society and business. All three just came together in a bombshell order against a huge offshore wind farm being built off the coast of New York’s Long Island — which is why this is about more than just a wind farm.

Trump’s Interior Secretary Doug Burgum, who oversees development in federal waters, just ordered Equinor ASA to down tools on the 810-megawatt Empire Wind 1 project. Burgum claimed the administration of President Joe Biden had rushed its approval for Empire Wind and "further review" was needed. Without details, the veracity of that cannot be judged entirely.

What we do know is that Equinor signed its federal lease in 2017 and its initial site assessment plan was approved by Interior in 2018, all under Trump’s first administration. We also know that Empire submitted its construction and operation plan in January 2020 and announced the all-important environmental impact statement process in June 2021. Federal approval followed more than two years after that, in November 2023. Meanwhile, Trump and Burgum haven’t hidden their antipathy to offshore wind power, with the president issuing an executive order targeting leasing on his first day in office this year.

I would venture, therefore, that the "rushed review" thesis may involve, like the turbines themselves, some spin. If that isn’t necessarily a surprise, the real shock here is that Trump has swatted a project where work had already began. Construction to revive the South Brooklyn Marine Terminal, a hub to support the wind farm, began last summer and the developer had also just begun laying rocks on the seabed. Moreover, Empire Wind 1 secured $3 billion of project finance in December, which clearly didn’t come together overnight.

Up to this point, many expected that although Trump would almost certainly stymie any proposed offshore wind projects while in office, those in advanced development or under construction would be left alone. Indeed, Burgum hinted at that to my Bloomberg News colleagues only a month ago, saying existing projects would "receive different treatment." Interior has the power to suspend licenses if necessary. Doing so in the absence of details, however, smacks of capriciousness and Gov. Kathy Hochul of New York has vowed to fight it already.

So why is the president doing this? This is possibly a question you have heard raised, or raised yourself, more than once in recent weeks.

Hochul herself may be part of the answer. Trump has been pressuring New York to approve a new natural gas pipeline to supply the state and New England. Given his famously transactional approach, analysts at ClearView Energy Partners, a Washington-based research firm, saw the potential for a pipes-for-turbine-protection deal. Hochul met with Trump a month ago, however, and no such agreement appeared forthcoming. The governor remains in a standoff with the president over another issue that strangely seems to bother the most powerful man on Earth, New York City congestion fees.

This is necessarily speculative but it fits a broader agenda that has emerged in Trump’s executive orders and other actions: Cowing recalcitrant states.

Recall that in his Day One declaration of a "national energy emergency," Trump asserted powers to force pipeline construction in several areas of the country, one of them the Northeast (another being the similarly Trump-skeptical West Coast). Around the same time, amid the Los Angeles wildfires, Trump threatened to withhold federal relief dollars unless California changed its voter identification laws, which seem tangential to fire management practices at best.

Then, on April 8, he issued another order on "protecting American energy from state overreach." This one got a little lost in the shuffle since the president issued four decrees that day and the one about "reinvigorating" coal’s meager prospects garnered the most attention. The one targeting states essentially calls on the Attorney General to review a raft of state laws that seek to address climate change or environmental justice and thereby "threaten American energy dominance and our economic and national security." It specifically cited New York’s recently enacted climate superfund law as "extortion." As ClearView’s Kevin Book points out, blue states like California and New York reacted to Trump’s first term by doubling down on net zero and other environmental policies to counter federal antipathy. This executive order seems designed to suppress such instincts this time around.

Offshore wind power is a useful symbol for this. It is a nascent sector in the U.S. and, therefore, expensive; a problem compounded by the jump in interest rates since 2022 and the impact of Trump’s trade war on component costs. Hence, early projects like Empire’s are regulatory constructs to a large degree, reliant on state subsidies and mandates related to combating climate change.

That Trump accuses states of overreach while he attempts to renege on an existing license, thereby jeopardizing thousands of jobs and billions of dollars already committed, is the sort of grim irony and projection to which we have become accustomed. Also, it makes little sense to stop an ongoing energy project when you have declared an emergency about energy supply. The order represents a "complete subversion of the principles of federalism," writes Amy Turner, who directs the Cities Climate Law Initiative at Columbia Law School. She foresees a raft of litigation and possible withholding of federal funds once the AG has conducted their review.

Whether this ultimately stands is, to some degree, beside the point. Trump may well fancy his chances with a Supreme Court majority that has shown a willingness to check environmental policies as well as general deference to presidential powers. Even without that, however, the shock of the federal government simply suspending existing permits with shovels in the ground will send a chilling message to any developer of large renewables projects and their financiers — and possibly statehouses in bluer regions of the country, too. An imperial president’s attack on this particular Empire is just one front in a wider war across America’s political landscape.

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Liam Denning is a Bloomberg Opinion columnist covering energy.