Shell withdraws from big N.J. wind farm that Trump wanted ‘dead and gone’
A pullout from the offshore project could hurt communities such as Paulsboro, where a wind-related port promised jobs and town revenue.
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Global energy giant Shell announced Thursday that it has withdrawn from the Atlantic Shores offshore wind project in New Jersey, another huge blow to the state’s ambitious renewable energy plans.
The announcement, according to Bloomberg, came during a quarterly earnings call with reporters. It comes on the heels of recent attacks on offshore wind by President Donald Trump. On his first day in office, Trump issued a temporary ban on offshore wind and within days personally attacked New Jersey’s quest to build wind farms, calling it “a disaster” on his Truth Social media platform, and saying he wanted the projects “dead and gone.”
Shell, which said it would take a nearly $1 billion write-off, was joint partner with EDF Renewables in the Atlantic Shores project that was set to begin construction this year. In 2023, Danish offshore wind company Orsted pulled out of what would have been the state’s first project, citing inflation, supply chain issues, and borrowing costs.
“We just don’t see that it fits both our capabilities nor the returns that we would like,” Shell’s chief financial officer Sinead Gorman said in a call with reporters Thursday morning. “So we took the decision to effectively write that off and pause our involvement.”
Billions of dollars are now collectively at stake for the state, offshore wind companies, the federal government, and local union workers who expected thousands of construction and other jobs to build out the renewable energy source as the state’s offshore wind plans teeter.
N.J. reacts
New Jersey Gov. Phil Murphy said Thursday in response to Shell’s announcement that the state would press on with offshore wind as a renewable energy source to address climate change, which the administration said directly impacts the coastal state.
“I remain committed to advancing my administration’s environmental and clean energy priorities, which have remained constant for the last seven years,” Murphy said in a statement to The Inquirer. “New Jersey will explore all available options to protect the health of our environment and residents while bolstering energy independence, creating good-paying American jobs, lowering energy bills, and growing New Jersey’s innovation economy.”
In response to Thursday’s news, Atlantic Shores said the company “is committed to New Jersey and delivering the Garden State’s first offshore wind project. … Our shareholders have always prepared long-term strategies that contemplate multiple scenarios that enable Atlantic Shores to reach its full potential.”
The company noted that it has “obligations to local, state, and federal partners under existing leases and relevant permits.”
Now, much of the state’s nearly 15-year push for wind energy appears up in the air, leaving industry observers unclear about the future.
“At a time of surging energy demand coupled with runaway costs, efforts to limit New Jersey’s ability to produce its own energy and force us into continued reliance on imported resources undermines the economic interests of New Jersey,” Paulina O’Connor, executive director at New Jersey Offshore Wind Alliance, said of Trump’s actions.
O’Conner said members of her trade association “stand ready to deliver American power, jobs, and manufacturing.”
$4 billion in leases
Three years ago, the Biden administration awarded $4.37 billion in leases to renewable energy companies to produce electricity off the coast of New York and New Jersey and bring it onshore to power the equivalent of millions of homes.
Construction by Atlantic Shores to build a large wind farm about 12 miles off Atlantic City was expected to begin this year, a cornerstone of Murphy’s goal of achieving 100% clean energy by 2050 to combat climate change he says threatens the coastal state. The Atlantic Shores joint venture agreed to pay $780 million for its lease.
On Jan. 20, Trump issued a temporary ban on any new or renewed wind energy leases in the Outer Continental Shelf, which are federal waters that start three miles off the coast.
But the order went further, saying existing leases would be subject to “a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal.”
That could bog already signed leases in bureaucracy for the next four years, even though some of them have already gone through years of environmental and construction permitting. The order did not set a timeline for project reviews.
Ready for construction
Atlantic Shores Offshore Wind, the partnership between Shell New Energies U.S. and EDF Renewables North America, had two key federal clearances — one for the environment and one for construction — before Shell pulled out.
The company was expected to begin build-out this year for New Jersey’s first offshore wind farm, located 10 to 20 miles off the coast between Atlantic City and Barnegat Light. The farm was designed to produce 1,510 megawatts of electricity, or enough to power 700,000 homes.
The company did not comment on how much, if any, it has paid the federal government toward its lease. Shell said Thursday that it no longer expected the wind farm to produce the returns it expected and would take a $996 million loss.
The lease states that the first year’s rent was $550,000, with payments scheduled for subsequent years.
Aside from the lease, Atlantic Shores has spent millions hiring scientists and engineers, surveying the ocean floor, complying with government permits, hosting community meetings, and signing supply chain contracts.
Local impacts
Continued attacks by Trump, local elected officials, and anti-wind groups come at an already tenuous time for the industry, which is trying to stay afloat amid rising prices, supply chain issues, less than favorable interest rates, technical issues, and a fear the administration will ax renewable energy tax credits.
A complete reversal stands to impact communities such as Paulsboro, a working-class community of about 6,200 by the Delaware River.
New Jersey invested $250 million in the South Jersey Port Corp.’s Paulsboro Marine Terminal, which opened in 2017. Later construction begun in 2021 made the port capable of handling the massive 300-foot long, 3 million-pound steel monopiles needed as foundations for wind turbines.
The monopiles were initially assembled at the terminal for the Danish company Orsted by EEW American Offshore Structures. Orsted was set to build the first wind farms off New Jersey but backed out in 2023 citing inflation and supply chain issues.
EEW began disassembling the monopiles for scrap last year, said Paulsboro Mayor John Giovannitti. It’s unclear how many workers remain on site, he said. EEW had expected to hire 500 workers.
Paulsboro receives at least $650,000 a year from a payment in lieu of taxes (PILOT) program because of the port, Giovannitti said. He noted that PILOT payments were expected to expand as offshore wind grew.
Nearly 13% of Paulsboro’s residents live in poverty, compared to the statewide average of about 10%, according to the U.S. Census Bureau. The median household income in Paulsboro is $68,750, compared to the statewide average of $101,050.
“If the PILOT increases, and as they hire more people, and if it comes to fruition where there is 200 or 300 people working there, that would make a big difference in the local economy,” Giovannitti said.
New Jersey opposition
A portion of Trump’s executive order temporarily withdrawing wind from the Outer Continental Shelf was written by U.S. Rep. Jeff Van Drew (R., N.J.), who last week called offshore wind “destructive,” adding that it would hurt “national defense operations, the environment, South Jersey’s fishing industry,” and tourism.
Van Drew is aligned with officials, groups, and residents from multiple Shore communities who oppose offshore wind because the turbines could be visible from the beach and because of beliefs they will harm whales or other marine life.
He celebrated Shell’s withdrawal Thursday, and pledged to help Trump make the temporary ban permanent.
“They are beginning to realize what we have been saying all along: these projects are not a practical or viable solution for our energy needs,” Van Drew said.
One of the state’s opposition groups, Save LBI, said Monday that it had filed a petition with the National Oceanic and Atmospheric Administration (NOAA) to create a migration corridor along the East Coast as a critical habitat for the North Atlantic right whale. NOAA has previously said there is nothing to connect offshore wind with whale deaths off the coast in recent years.
But Save LBI, led by Bob Stern, a former U.S. Department of Energy environmental official, has compiled what it says is countervailing data. It has also filed a federal suit alleging environmental violations by offshore wind companies.
Not a single offshore wind turbine has been built or installed in New Jersey, although companies have surveyed the ocean floor.
It’s unclear how much, if any, of the more than $4 billion in leases to renewable energy companies have paid into the U.S. Treasury and whether the federal government would have to give any of that back.
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