President Trump’s executive order halting permits and leases for wind projects is starting to look like a potential existential threat to the industry’s future. Just don’t expect everyone to say it out loud.
On Monday, Trump issued an order pausing new federal approvals for wind projects, pending a “comprehensive assessment” of permitting practices, while opening the door to a review of existing leases and previously-issued permits subject to litigation. In the days following the order, lawyers, industry trade representatives, and professionals who work for renewable energy developers explained to me how this could impact essentially any wind project, even ones not sited on federal lands. Wind projects are just so large and impactful that it’s hard to avoid a federal permit.
Jason Grumet, CEO of the American Clean Power Association, told me Wednesday afternoon that a pause on federal permits would impact “probably more than half” of all wind projects under development in the U.S.
“If in fact the federal government stops issuing approvals, a significant amount of the pipeline would be interrupted,” Grumet said.
Given the high costs associated with building a wind project, and the likelihood of tariffs making that situation worse, the uncertainty produced by a potential halt to permits may also be enough to cause developers to pull the plug on projects – because even if the order itself winds up tossed out in court, that could take years.
As one renewable energy professional told me anonymously, for fear of reprisal, “If we say, well we probably have the right to do this but we have to sue the government to enforce that right, it’s probably only going to get the [project] deal done 40% of the time now.” He concluded: “It’s definitely going to chill investment.”
It’s early days, and Grumet of ACP says he’s holding out hope that the new president can be walked back from the brink. He’s focusing on the possibility that people in the administration including Trump’s picks to run the Interior and Energy Departments – Doug Burgum and Chris Wright – are willing to listen and potentially help walk back a complete and total permitting shutdown.
When asked however if suing the administration may be required, Grumet said it’s a hypothetical that could come true in the worst case scenarios.
“We’re taking it seriously. But the idea that you would have a pro-business administration trying to stop private companies from taking economically appropriate action on private land is just so out of step with the role of government that we’re expecting they’re going to clarify their intent.”
Fear of a federal nexus
Trump’s executive order is so far-reaching because wind projects regularly need federal permits and other authorizations, even if they’re sited on private or state lands.
A commonly cited federal nexus is endangered species. Opponents of wind energy have long criticized turbines for being a potential threat to birds, but it is the case that many wind projects are collocated within or near areas for rare bird migration. Cultural heritage impacts can often also be a difficulty.
One major threat I’ve been hearing about from many in the industry flew out of left field: the Federal Aviation Administration often must clear wind projects for construction. Matt Eisenson, an expert in renewables permitting at the Columbia University Sabin Center for Climate Change Law, told me FAA approvals are required “very frequently” for wind projects because any land structure more than 200 feet tall must be approved to not be a hazard for commercial planes. And while the order didn’t cite the FAA specifically, it instructed all “relevant agencies” to wind permitting stop giving approvals related to projects, opening the door to aviation-related clearances idling on a procedural tarmac.
“It’s hard to avoid it if you’ve got anything sizable,” an attorney who works in the renewable energy industry told me, adding the total scope of impact is still unknown: “There’s nobody you could talk to who could have nearly all the answers [about Trump’s order]. And that includes developers and companies, because they don’t know either.” (It’s worth noting no industry attorney would be willing to go on the record with me because of ongoing impacts to clients.)
Then there’s the existing leases and permits. It’s easy to assume that a permit issued is a permit safe, and the Biden administration quickly rushed approvals for many wind projects, onshore and offshore, in the final days before Trump’s inauguration.
But the order left open a process to challenge existing approvals through litigation. In the offshore wind space, we’re already seeing public requests for Trump to review the leases for the MarWin project off the coast of Maryland and Delaware, and Atlantic Shores off the coast of New Jersey.
Paul Kamenar, a lawyer involved in a suit challenging Dominion Energy’s Coastal Virginia offshore wind project, says we can expect the same in his case. Kamenar is with the National Legal and Policy Center, which joined with the Heartland Institute and anti-wind group CFACT to sue the government for approving Coastal Virginia, claiming it did not consider the cumulative impacts of building the project on endangered whales.
Kamenar told me he believes the order shows Trump’s team is sympathetic to the arguments raised in the case, and he’s planning to file a request for the federal government to reconsider its permits and leasing for the project as soon as next week. Kamenar said the order provides avenues for similar challenges to many other projects.
“I think this affects all the onshore and offshore wind projects,” Kamenar said. “Some more than others. But if I were the energy company, I would be loath to continue going forward until I got clarification.”
Eisenson at Columbia told me the executive order “opened the door” to a massive range of new potential hurdles for wind development. He sees legal vulnerabilities in the executive order because there’s a history in recent case law surrounding Biden’s pauses on federal oil and gas leasing. But that’s cold comfort for an industry with such high capital costs that it describes low interest rates as its “fuel.”
“This could have a major chilling impact,” Eisenson said. “Even if the EO is unlawful, it could take years in court to invalidate an unlawful decision.”
