Key Takeaways
Governor Kathy Hochul and President Trump have discussed allowing the construction of expensive offshore wind farms in exchange for the development of natural gas pipelines in New York.
The deal, memorialized by Norway’s finance minister and Interior Secretary Doug Burgum, allowed N.Y.’s Empire 1 wind project to go forward after it was halted because of questionable permitting by the Biden administration.
The cost of power from Empire 1 is expected to be three times the cost of natural gas generation.
Empire 1 is being built by Equinor, an energy company based in Norway.
Williams Company was originally behind the construction of the Constitution Pipeline and the Northeast Supply Enhancement project, which would bring natural gas to New York and the Northeast, and is now resurrecting these projects.
New York Governor Kathy Hochul has been in discussions with President Trump to advance two natural gas pipelines alongside the resumption of construction on Empire Wind 1. While Hochul says there was no deal to do so, she indicated that she will approve the gas pipelines only if they meet federal and state requirements. Her staff claims she persuaded Trump to allow construction on Empire 1 to proceed after several conversations by presenting the facts on why the 54-turbine offshore wind project is essential. Hochul highlighted some 1,500 union jobs that would be affected.
Interior Secretary Doug Burgum halted construction of Empire Wind after reports surfaced that its approval by the Biden administration in 2024 may have been rushed and deficient. New York’s offshore wind project is being built in federal waters 20 miles off the coast of Long Island and received a permit from the Biden administration. The pause of more than a month was costing Norway-based Equinor up to $50 million per week with 11 ships out at sea and on standby. Equinor’s Chief Executive Officer, Anders Opedal, visited the White House to lobby on behalf of the project.
Empire Wind 1 has a design capacity of 810 megawatts and is expected to begin commercial operations in 2027. Offshore wind, however, is a costly technology for generating electricity, and projects have been troubled by much higher costs than alternatives. Empire Wind sought renegotiation of its contracts, settling for a fee of $150.15 per megawatt-hour, which is about three times the price of natural gas-fired generation.
President Trump believes that natural gas prices are too high for New Yorkers and New Englanders and wants to provide relief by increasing the availability of supplies through pipeline construction. He wants to revive a canceled pipeline that would carry natural gas from Pennsylvania’s shale gas fields to New York, indicating that it could cut energy prices in the Northeast by as much as 70%. The 124-mile Constitution Pipeline project was abandoned due to legal and regulatory challenges that made it economically unfeasible.
The Constitution Pipeline was proposed in 2013 at a projected cost of under $700 million, but delays and legal challenges drove up the costs by nearly 40%. After the project received Federal Energy Regulatory Commission approval in 2014, New York regulators refused to issue water quality permits, citing concerns about danger to wetlands and stream crossings. New York and other Northeast states have special water-quality certification powers granted to them under federal law to impede planned gas projects in the region. New York State lawmakers have also passed anti-gas laws and banned fracking in the state, despite enormous natural gas resources, which are an extension of the Marcellus fields in Pennsylvania. The Constitution Pipeline project was scrapped in 2020. On May 29, however, Williams Cos. announced that it is giving the Constitution pipeline and Northeast Supply Enhancement projects another try. The two projects have investments totaling about $2 billion.
Williams has asked the Federal Energy Regulatory Commission to reinstate the federal permit for the Northeast Supply Enhancement Project, a 23-mile underwater segment from New Jersey to New York City that would run parallel to its existing Transco pipeline and then connect to it. The project was canceled in 2024 after years of water quality permit rejections from officials in the two states.
While U.S. officials did not explicitly mention the deal, Reuters reported that Norwegian Finance Minister Jens Stoltenberg, who had intervened in the case, told reporters: “This is an agreement about natural gas and wind made in the United States.” And Interior Secretary Burgum had posted on X: “Energy Dominance is the foundation of America’s economic and national security. I am encouraged by Governor Hochul’s comments about her willingness to move forward on critical pipeline capacity. Americans who live in New York and New England would see significant economic benefits and lower utility costs from increased access to reliable, affordable, clean American natural gas.” S&P Global found in a recent survey that expanding pipelines could reduce natural gas prices in the Northeast by up to 30%.
Other Offshore Wind Projects Under Construction
Three other offshore wind projects are under construction in the United States, located on the East Coast. They are Revolution and Sunrise Wind in New England and Coastal Virginia Offshore Wind. Coastal Virginia Offshore Wind is 55% complete and is expected to deliver electricity in early 2026. Revolution and Sunrise are about 75% and 35% complete, respectively.
Conclusion
The Trump administration is allowing the Empire 1 project to resume construction, reportedly in exchange for Governor Hochul permitting the construction of natural gas pipelines in New York state to lower prices for consumers. However, Governor Hochul says that she will only approve new pipeline projects that meet federal and state laws. New York has been against new gas pipelines and has banned the use of natural gas in some new buildings. Trump has vowed to secure construction of gas projects in the region, casting them as essential to lowering the cost of electricity and heating in an area that struggles with supply.
While Empire 1 is allowed to continue construction, it is not necessarily an omen for more offshore wind projects. The offshore wind industry has struggled with inflation and supply chain challenges even before the Trump administration began actively reviewing previously approved projects. Its costs are incredibly high for U.S. consumers. However, with New York opposed to natural gas and having shuttered nuclear and fossil fuel plants, it is turning to offshore wind to keep the lights on in New York City, regardless of the cost.
