The Biden Administration has recognized significant offshore wind projects despite concerns raised internally about the potential risks to taxpayers, as revealed in documents obtained by the Functional Government Initiative (FGI).
Recently approved is a substantial “revolutionary” project off the coasts of Rhode Island and Connecticut, which is associated with a company from Denmark. The administration granted exceptions in August 2023 that allow for the postponement of funds needed to dismantle the project after 15 years. Internal documents indicate that such exceptions may “increase risks to federal taxpayers.” The costs related to decommissioning these projects have been estimated at $325 million and $191 million, respectively, raising significant concerns among watchdog groups.
Roderick Law from FGI expressed strong criticism, stating, “These revelations make one thing clear: Wind power isn’t quite ready for its close-up, and the Biden administration seems unconcerned. It appears they’re pushing these projects through regardless of the financial implications and risks involved for taxpayers.” He contrasted this with former President Trump’s more cautious approach, suggesting that careful reviews were necessary to understand the environmental and safety impacts involved.
In May 2021, an internal memo from the Bureau of Safety and Environmental Enforcement (BSEE) cautioned the Office of Marine Energy Management (BOEM) that postponing financial guarantees would heighten risks for taxpayers. Typically, there are regulations requiring developers to pre-fund decommissioning efforts to protect against project failures. Notably, the Biden administration has allowed companies like Ørsted to delay funding, which comes amidst tightening regulations on traditional energy sources like oil and gas.
The memo expressed skepticism, indicating worries that such delays could expose taxpayers to unforeseen financial burdens. It warned that “delaying financial guarantees raises risks for federal taxpayers” and highlighted that unexpected events might necessitate accessing decommissioning funds sooner than anticipated.
Ørsted sought a 15-year delay for typical financial guarantees for its Revolutionary Wind project, which was approved in March 2024. The company claims that the project is progressing and aims to power over 350,000 households upon completion.
The Biden administration is actively supporting offshore development, which the Trump administration had largely stalled. Trump’s first-day executive order effectively prohibited new leases for offshore wind in federal waters while awaiting reviews. He often characterized offshore wind farms as expensive failures and attempted to halt several initiatives during his time in office.
FGI had previously pointed out issues with another project that caused debris to wash ashore after a turbine malfunctioned. At that time, Law described the Biden administration’s decisions as a “gamble with taxpayer money.” He emphasized that there seems to be a rush towards approving projects without adequately evaluating their safety or financial risks.
The recognition of these troubled projects by the Biden administration, according to FGI, isn’t surprising, especially given recent timelines. BOEM’s updates to renewable energy regulations may offer some flexibility to wind companies on funding decommissioning, which could further complicate the financial landscape.
Additionally, NOAA confirmed that previous evaluations of several offshore wind projects were not sufficiently thorough regarding their environmental impacts prior to approval. The projects have faced opposition from local fishermen and environmentalists who argue that wind farms pose threats to marine life.
