CERAWEEK: US energy secretary defends Trump's halt for offshore wind, tariff policy

Offshore wind outlook

Trump, a frequent critic of wind energy on the campaign trail, signed an executive order upon taking office directing a pause on federal leasing for wind energy, while the administration reviews the environmental and economic impacts of onshore and offshore wind development.

Wright has called for an "energy addition, not subtraction" approach at the DOE. Nevertheless, on March 10, Wright cited high costs when asked how the pause on wind leasing squares with an all-of-the-above energy strategy.

Setting aside the environmental and visual impacts of offshore wind, "equally big is just the incredible inflationary price rise it delivers, everywhere and always," Wright said. "That is the record of offshore wind."

More than 37 GW of US offshore wind capacity is planned to come online by 2032, according to S&P Global Market Intelligence data. That includes nearly 5.7 GW under construction, 5.1 GW in advanced development, 16.3 GW in early development, and another 10.2 GW of announced capacity.

Dominion Energy executives in February said Trump's order is not expected to affect the company's 2,587-MW Coastal Virginia Offshore Wind project. That project is about halfway complete and scheduled to come online by the end of 2026.

However, the US Northeast has recently seen multiple offshore wind projects falter due to cost pressures.

The New Jersey Public Board of Utilities in February declined to award a contract in its fourth offshore wind solicitation after developer Shell disclosed a $996 million impairment relating to its 2.8-GW Project 1 and 2.

In December 2024, Connecticut regulators declined to purchase power from Vineyard Offshore's 1.2-GW Vineyard Wind 2 Offshore Wind Project, opting to award contracts for solar and storage capacity instead. The decision prompted Vineyard Offshore, an affiliate of the Danish investment firm Copenhagen Infrastructure Partners Holding, to shelve the project.

Wright said that US wind additions peaked about three years ago, while solar capacity continues to experience rapid growth. "To the extent we can move forward on storage, it can play a growing role," Wright added.

EV stance, DOE loan authority

He also expressed support for electric vehicles despite Trump's desire to repeal a $7,500 federal tax credit for EV purchases and rescind Biden-era tailpipe emissions rules, which are projected to drive more widespread EV adoption.

"There are ... plenty of owners of electric cars in this administration," Wright said. "We're just not for reducing choice and taking American taxpayer money to subsidize wealthy people."

However, Wright said he sees a role for the DOE Loan Programs Office in supporting new energy technologies.

A 2021 bipartisan infrastructure law and the Inflation Reduction Act of 2022 expanded the LPO's loan authority to $250 billion, most of which has not yet been committed. Trump has directed a pause on new DOE loan commitments during a review to ensure consistency with the new administration's priorities.

"We inherit a loan book and follow the rule of law, so we've got to manage that loan book as well and do the best we can for American taxpayers," Wright said.

He added that the DOE will be looking to "very selectively use the LPO to nudge things that ultimately can deliver more affordable, reliable, secure energy."

Wright specifically cited fourth-generation nuclear technology and small modular nuclear reactors as examples.

Big technology companies such as Amazon and Meta Platforms are eyeing small modular reactors as a source of 24/7 carbon-free generation for their power-hungry data center operations. Still, commercial-scale development of the technology is not expected until sometime next decade.

'Too early to say' on tariffs

Wright fielded multiple questions on Trump's 25% economywide emergency tariffs on imports from Mexico and Canada, which include a 10% carve-out for Canadian energy projects.

On March 6, Trump paused the tariffs on goods compliant with the US-Mexico-Canada Agreement until April 2, when reciprocal tariffs for US trading partners were scheduled to take effect. However, 25% US tariffs on steel and aluminum imports -- crucial building materials for all types of energy projects -- are still set to take effect on March 12. The Canadian province of Ontario on March 10 went ahead with a 25% surcharge on electricity exports to Michigan, Minnesota and New York.

Trump has also ordered 20% economywide emergency tariffs on imports from China, which are currently in effect. The president has argued that emergency tariffs are necessary to stem the cross-border movement of synthetic opioids such as fentanyl.

"I think we're early on this," Wright told reporters March 10. He noted the first Trump administration featured "tense negotiations" on trade that ultimately resulted in roughly 2% inflation.

Behind closed doors, "there are people arguing on all sides," Wright said.

"Every action, there's tradeoffs," he said. "What is the ultimate outcome going to be? We don't know for sure. It's a dialogue about what's the best way to benefit the American people."