Robert Bryce;
Two of Europe’s biggest energy companies are abandoning the SS Offshore Wind.
In May, Shell, the UK-based oil and gas giant (2023 revenue: $317 billion), announced that it was cutting staff from its offshore wind business because, according to Bloomberg, the company has decided to focus on markets that “deliver the most value for our investors and customers.” Bloomberg also reported that the staff cuts were made after the departures of top executives in the company’s offshore wind and renewable power businesses.
Last month, Murray Auchincloss, the CEO of oil and gas giant BP, imposed a “hiring freeze and paused new offshore wind projects.” According to Reuters, the new CEO is putting more “emphasis on oil and gas amid investor discontent over its energy transition strategy” and that BP (2023 revenue: $208 billion) was cutting investments in “big budget, low-carbon projects, particularly in offshore wind, that are not expected to generate cash for years.”
The moves by BP and Shell are only the latest examples of the troubles facing the offshore wind sector, which has been foundering on the shoals of higher interest rates, citizen opposition, and ballooning costs. Over the past year, numerous projects on the Eastern Seaboard, including Skipjack Wind in Maryland, Park City Wind in Connecticut, and South Coast Wind in Massachusetts, have been canceled due to bad economics. In all, according to data compiled by Ed O’Donnell, a nuclear engineer and a principal at New Jersey-based Whitestrand Consulting, about 14,700 megawatts of offshore wind capacity has been canceled. For comparison, about 15,500 megawatts of capacity is now in development, under construction, or operational.
Of course, those figures don’t jibe with the tsunami of hype about offshore wind energy that has appeared in major media outlets. But the hard reality is that America’s offshore wind sector is a subsidy-dependent industry that is dominated by foreign companies who are in bed with some of America’s biggest climate NGOs, including the NRDC (gross receipts: $555 million) and Sierra Club (Gross receipts: $184 million).
