America's $4 Billion Wind Retreat Is a Bet on Permanently Cheap Gas
The strangest part of America's latest offshore-wind retreat is not that several projects have been cancelled. Some were early-stage, expensive and increasingly difficult to permit. Weak projects should be allowed to fail. The strange part is that the U.S. government is paying companies to abandon one energy technology and directing their capital toward another. Between March and August, the…
The U.S. government has agreed to a series of $3.9 billion deals with energy companies to abandon offshore wind projects and invest in natural gas, LNG, or oil infrastructure instead. These agreements, signed between March and August, involve TotalEnergies, Bluepoint Wind, Golden State Wind, Invenergy, Duke Energy, and RWE. The companies are required to surrender their offshore-wind leases and invest substantial sums in gas-related projects, with reimbursement from the federal government contingent on matching investments.
While the administration claims this policy is aimed at promoting energy dominance, it is essentially a costly bet on the long-term viability of gas as a primary energy source, rather than a market-driven decision. The policy has been criticized for socializing the costs of retreat and directing capital towards politically favored technologies.
However, proponents argue that natural gas is a useful partner for ensuring reliable power in the face of increasing demand and the intermittent nature of wind and solar energy.
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