In the first serious fallout from President Donald Trump's early actions against offshore wind power, oil and gas giant Shell is walking away from a major project off the coast of New Jersey.
Shell told The Associated Press it is writing off the project, citing increased competition, delays and a changing market.
鈥淣aturally we also take regulatory context into consideration,鈥� spokesperson Natalie Gunnell said in an email.
Shell co-owns the large Atlantic Shores project, which has most of its permits and would generate enough power for 1 million homes if both of two phases were completed. That鈥檚 enough for one-third of New Jersey households.
It's unclear whether Shell's decision kills the project 鈥� partner EDF-RE Offshore Development says it remains committed to Atlantic Shores.
On his first day in office, singling out offshore wind for contempt with a temporary halt on all lease sales in federal waters and a pause on approvals, permits and loans. Perhaps most of interest to Shell, the order directs administration officials to review existing offshore wind energy leases and identify any legal reasons to terminate them.
Large offshore wind farms have been making electricity for three decades in Europe, and more recently in Asia. They are considered by experts to be an essential part of addressing climate change because they can take the place of fossil fuel plants, if paired with battery storage. New Jersey has set a goal of generating 100% of its energy from clean sources by 2035.
The Biden administration approved plans to build the Atlantic Shores project in two phases in October, but construction has not begun. Oliver Metcalfe, head of wind research at BloombergNEF, said the partners are facing significant uncertainty about their lease, and other developers are watching what happens with Atlantic Shores closely. 鈥淲e鈥檙e in uncertain territory here,鈥� he added.
Offshore wind foes, who are particularly vocal and well-organized in New Jersey, celebrated Shell鈥檚 withdrawal. Republican Rep. Jeff Van Drew, of New Jersey, helped the Trump team draft the executive order. He said Shell鈥檚 decision is a 鈥渂ig win鈥� for New Jersey鈥檚 coastline and economy but 鈥渢his fight is not over.鈥�
Robin Shaffer, president of Protect Our Coast NJ, said that without Shell's financial backing, it appears the project is 鈥渄ead in the water.鈥�
Shell is writing off a nearly $1 billion investment. It announced its decision on Thursday, as it in full-year earnings of $23.7 billion from $28.3 billion. Most of its business is oil and gas.
Danish wind developer Orsted was close to beginning work on two offshore wind farms in New Jersey in Oct. 2023 after deciding it would not be economical.
A lot of clean energy is cheap now, but offshore wind is still among the most expensive. That can make these projects less attractive to investors, absent strong policy support, said Coco Zhang, vice president for environmental, social and governance research at ING.
鈥淭he potential uncertainty that the executive order has brought to the market, it cannot be ignored,鈥� she said.
The Biden administration sought to ramp up offshore wind as a climate change solution, to deploy offshore wind energy, holding and approving nearly a dozen commercial-scale offshore wind energy projects.
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Jennifer Mcdermott, The Associated Press
