Latest news with #BasilSeggos
E&E News
19-05-2025
- Business
- E&E News
How Trump pushed Empire Wind to the brink of collapse
Equinor has called the Trump administration's order to halt construction at its New York offshore wind project 'unlawful,' 'unprecedented' and 'urgent.' But it hasn't said any of those things in the place that matters most: a courtroom. The Norwegian oil giant's decision not to challenge the Interior Department's April order on Empire Wind 1 points to growing economic and political risks facing the 54-turbine project — and the future of offshore wind in the U.S. Legal observers said it is unusual for an administration to halt construction of a permitted project absent a court order or a life-threatening accident, raising questions about Equinor's legal inaction as the company estimates it's losing $50 million a week. Instead, company executives have said the project will be cancelled if work can't resume soon. Advertisement 'What would surprise me most would be if the project goes down without a fight, especially when the legal basis for a challenge is so strong,' said Basil Seggos, a partner at Foley Hoag who led the New York State Department of Environmental Conservation until 2024. 'This episode should send chills through business in America.' The administration's order has sent shock waves through the offshore wind industry as a warning of the lengths that President Donald Trump will go to target renewable energy. It came as the administration works to repeal climate rules on fossil fuel power plants, eviscerate environmental programs, and accelerate permitting for oil and gas production. Empire Wind 1 was on the edge of profitability even before Interior's order, as rising costs ate into its already slim profit estimates. The fight over its future comes as oil companies like BP and Shell have pulled back from their plans to build offshore wind projects, once a centerpiece of their climate plans. And it's raising questions about whether European wind developers, which dominate the offshore industry, will build in American waters again — regardless of who's in the White House. Many European wind companies assumed they shared similar interests with U.S. officials, 'only to find out we were operating in a banana republic with jungle law,' said Kristian Ascanius Jacobsen, CEO of Green Ducklings, a Danish offshore wind consultancy. Companies are cautiously weighing future investments in the U.S by asking 'is it worth the risk when the repercussions of such an investment are so high,' he said. The Interior Department did not respond to a request for comment. Workers walk by offshore wind components at the State Pier in New London, Connecticut. | Susan Haigh/AP Equinor, which is majority owned by the Norwegian government, has been under pressure from some investors who see the clean energy transition as a financial loser. A resolution proposed at the company's annual shareholders meeting last week called for divesting from wind. It was defeated, but there are growing calls within Norway to cancel Empire Wind, said Alexander Fløtre, head of offshore wind research at Rystad Energy, an Oslo-based energy consultancy. 'There have been voices saying that Equinor has kind of been given an out here for a bad project,' Fløtre said. 'It's not a top project from a profitability perspective. At the same time, it's so mature that I think Equinor still sees a lot of prestige in getting this done and have quite a lot of investments into it already.' Challenging economics have put Equinor in a weak position to defend its project against the Trump administration's attacks. On his first day in office, Trump ordered Interior to halt new offshore wind permits and review existing ones. That led to Interior Secretary Doug Burgum's stop-work order for Empire Wind, the only project whose construction has been halted. It wasn't supposed to be this way. 'A vital energy project' Empire Wind 1 was the poster child in the United States for Equinor's plans to move beyond the oil and gas industry and achieve net-zero emissions by 2050. The company thought its first U.S. project might not be the most profitable, but that it would serve as a gateway to other projects that would generate healthy returns, according to two people who are familiar with Equinor's planning. The early signs were promising. In 2020, BP paid $1.1 billion to acquire a 50 percent stake in Empire Wind and a separate lease area north of Long Island. The deal was an economic bonanza for Equinor, which had paid $177 million for both leases. As New York ramped up its offshore wind ambitions, Equinor became its developer of choice. Together with BP, the company signed three contracts to sell electricity to New York. But then Equinor was hit by the Covid-19 pandemic and Russia's invasion of Ukraine. Inflation climbed and the war stretched the industry's already overburdened supply chain. Project costs soared, forcing Equinor and BP to renegotiate their power contracts with New York state officials. Then BP canceled its joint venture with Equinor. In the divorce, the British oil giant acquired the lease area north of Long Island and promptly shelved plans for a project there. Equinor, for its part, paused plans for a second, larger phase of the Empire Wind development. In November, it announced it was laying off 20 percent of its global renewable division, decimating the offshore wind team working out of the company's office in Stamford, Connecticut. Empire Wind 1 was the only thing left of its grand offshore wind ambitions in the U.S. Even then, the $5 billion project represented a massive step forward for America's struggling offshore wind industry, which has been battered by rising costs, delays and project cancellations. It would generate enough power to supply 500,000 homes and plug directly into New York City's famously congested electric grid. Stringing power lines into the city has long been a challenge because it's so densely populated. The fact that Empire Wind 1 would connect to the grid at a port in Brooklyn made it a centerpiece of city and state plans to decarbonize the United States' most populous city. So it was notable when Equinor announced in December, after Trump had won the election, that it had secured $3 billion in financing and was moving forward with the project. Around 1,500 people were already at work at the Brooklyn port. In March, Equinor began preparing the ocean floor south of Long Island for installing foundations. Then Burgum's order came. Interior Secretary Doug Burgum has argued that permits for Empire Wind 1 were rushed to completion by the Biden administration. | Mark Schiefelbein/AP The Interior secretary said the department had uncovered evidence that the Biden administration rushed approval of the project when it issued a permit for Empire Wind in early 2024. He has yet to produce the evidence. Equinor began the permitting process in 2017 and received final approval in early 2024. In New York, many project advocates pressed Equinor to sue. New York Sen. Charles Schumer, the minority leader, urged the company to take its case to court. New York is leading a lawsuit of 17 states that are challenging Trump's executive order, which directed Interior to pause new offshore wind leases and review existing ones. But that lawsuit has little immediate bearing on the Empire Wind pause, analysts said. 'It's extremely unfortunate that the feds are seeking to kill such a vital energy project that was already under construction, with its thousand-plus jobs and billions in investment in the nation's supply chain,' said Seggos, the former New York conservation official. Analysts said the company has less incentive to fight for a project that's expected to generate low profit and represents a small share of Equinor's overall business. In 2024, Equinor's renewable division reported revenues of $317 million, but lost $676 million after accounting for expenses, financial filings show. Its U.S. oil and gas division, meanwhile, boasted revenues of $3.9 billion and reported an operating profit of $3.2 billion. When Equinor secured a renegotiated power contract from New York last year, company executives said they expected the project would generate a return of 12 to 16 percent. Later, they revised that number down to 10 percent. Even that may be too high. The new contract with New York includes an inflation adjustment, but it did not contemplate the tariffs on steel and European imports that were imposed by Trump, according to one person who's familiar with the deal. Green Ducklings estimated that Empire Wind 1's profit margin is less than 5 percent. 'It is very much on the borderline, and everything needs to line up,' Jacobsen said. Equinor has its broader interests in the U.S. oil and gas sector to protect, he said, adding, 'That's part of the dynamic to recognize here.' 'They will have to walk away' Building an offshore wind project is like conducting a symphony — every little piece has to work in concert. Specialized installation vessels need to be reserved years in advance and can cost more than $1 million a day. It's the same for factory slots for making turbine components, which need to be lined up years ahead of time. Postponing component deliveries and the arrival of installation vessels until next year may not be financially feasible, said Fløtre, the Norwiegan analyst. 'It's very likely that they will have to walk away from the project if they now see that suddenly there is no chance to kind of move it forward during this window,' he said. Equinor has said it is considering its legal options, but it has thus far pursued a diplomatic approach. The Norwegian finance minister, Jens Stoltenberg, and Equinor's CEO, Anders Opedal, discussed the project with White House National Economic Council director Kevin Hassett last month. Hassett reportedly informed them that administration officials were unlikely to change their minds. Kevin Hassett, director of the National Economic Council, has told European officials that it's unlikely the stop-work order on Empire Wind 1 would be reversed. | Alex Brandon/AP Equinor has 11 vessels sitting idle and was in the process of ramping up fabrication of its components, said Molly Morris, the president of Equinor's renewables division in North America. That makes a legal battle unworkable, she said. 'We are in the middle of construction and spending a significant amount of money every week,' Morris told POLITICO's E&E News. 'So to be able to stop that for months to wait for a temporary injunction to go through is just not feasible.' To community activists like Elizabeth Yeampierre, an environmental justice advocate in Brooklyn, which would benefit from the wind project, the stop-work order seems intended to stop oil companies from expanding their business into renewable energy. 'We've been working for so many years to try to get these companies to move away from fossil fuel extraction, and then the moment that we actually get a commitment to start building infrastructure so that we can show what's possible in New York City, you get this pressure from the federal government,' Yeampierre said. 'It is really to disincentivize them.' Yeampierre leads Uprose Brooklyn, which has pushed for years to bring clean energy to the waterfront in Sunset Park. The group embraced Equinor's plans after receiving assurances that it would make major investments in the community. Equinor has largely fulfilled its side of the bargain. But if the company walks away from Empire Wind, New York would be left with few alternatives to green its economy, Yeampierre said. 'I don't understand what the end goal is in defeating something like this,' she said. 'I have a hard time wrapping my head around policies that kill, you know, the U.S. supply chain or resources that are local for communities and jobs.'
Yahoo
30-04-2025
- Business
- Yahoo
Foley Hoag Launches Federal Actions Tracker at Day 100 of New Presidential Administration
BOSTON, April 30, 2025--(BUSINESS WIRE)--With the unprecedented pace and scale of change ushered in during President Donald Trump's first 100 days in office, Foley Hoag has launched a Federal Actions Tracker to document major executive actions issued from the White House. The interactive resource provides clients and the public easy-to-access information on more than 210 actions taken to date and will be continuously updated. Basil Seggos, Foley Hoag partner and senior policy director, leads the initiative along with Beth Neitzel, partner and co-chair of the firm's appellate practice group. "With the tectonic policy shifts triggered by the new administration, it has never been more important for businesses to have current, reliable information on executive actions," said Seggos. Neitzel added, "We are advising our clients daily to help them understand and respond to this new environment — evaluating risk, assessing options, and, in some cases, pursuing litigation. We created this tool to stay on top of developments, and we're sharing it publicly to help others do the same." The tracker has been designed to allow users to see where actions are being taken, how they are impacting certain sectors, and what resources are available from Foley Hoag to address them. It features: Comprehensive descriptions and links to every major executive action; Classification of executive actions into more than 24 categories, such as DEI, education, energy, government efficiency, healthcare, and trade; and Links to firm resources and attorneys who are actively handling matters connected to relevant actions. "Foley Hoag is at the forefront in helping clients respond to changes in federal policy," said managing partner Hathaway Russell. "We are counseling clients and filing lawsuits against the Administration on issues ranging from federal funding and permitting to international trade." Visit Foley Hoag's Federal Actions Tracker at: About Foley Hoag LLP Foley Hoag is an award-winning, mid-sized, international law firm that focuses on innovative industries and high-stakes litigation. The firm maintains robust offices in Boston, New York, Washington, D.C., Denver and Paris. The diverse backgrounds, perspectives and experiences of our lawyers and business services professionals contribute to the exceptional service we deliver to clients. For more information, visit View source version on Contacts Media Contact: Brian C. DygonFoley Hoag LLP617.832.7127bdygon@
