The past couple of months have been historic for New England and New York. There is “steel in the water.”
In June, Governor Kathy Hochul of New York announced a major milestone for the South Fork Wind offshore wind project as developers began the installation of the project’s foundation. This came on the heels of the Vineyard Wind 1 project, which met the same milestone in June, 13 nautical miles south of Martha’s Vineyard and Nantucket. In recent weeks, both Vineyard Wind and South Fork have made advancements in building their substations — electrical equipment that is critical for transforming electricity and transporting it to consumers. Those projects are competing to become the first commercial-scale offshore wind project in the United States.
This is a significant moment for the country. Offshore wind is going to play a critical role in the nation’s energy transition and it’s coming to the Northeast. But it’s not without its challenges.
The United States is late in the game. Europe has been producing offshore wind energy for more than three decades. We lack technical expertise, face shortages of skilled labor, and have to navigate a largely underdeveloped permitting and siting system. Early offshore wind projects like Cape Wind were unsuccessful and forced to forfeit or amend their leases. The very agency in charge of leasing offshore wind projects, the Bureau of Ocean Energy Management, was formed only in 2010.
However, one of offshore wind’s biggest challenges is a century-old, “Made in America” law known as the Jones Act.
This little-known provision in the much larger Merchant Marine Act of 1920 was intended to boost the shipbuilding industry in the wake of World War I. The Jones Act requires that all goods transported between American ports must be carried on ships that are built, owned, and crewed by US citizens.
To some, that may sound fine. Why not have American-made ships? For starters, it’s more expensive. A lot more expensive.
A domestically built tanker is four times as expensive as the global cost of a similar vessel while a container ship may cost five times its foreign counterpart. Maritime industries in Europe, Japan, and Korea are significantly more efficient and have a comparative advantage in the shipbuilding industry.
Specialized ships, like those needed for offshore wind, are especially expensive to produce domestically — a 2020 GAO report found they could cost up to $500 million each. For now, there are no US specialized ships for installing wind turbines.
The industry’s solution? Two ships for the work of one.
Offshore wind developers utilize “feeder” ships to get around this 100-year-old logistical challenge. Essentially, a Jones Act-compliant ship transports equipment from US ports and then transfers it to a foreign-flag vessel for installation.
However, this approach is costly and unsustainable. If the Biden administration wants to meet its ambitious goal to produce 30 gigawatts of offshore wind energy by 2030, then Congress should repeal the Jones Act.
Offshore wind isn’t the only industry impacted. The United States presently has no Jones Act-qualifying liquefied natural gas tankers either.
This posed a risk to millions of people throughout New England after the beginning of the Russia-Ukraine war prompted states and utility companies to call on the Biden administration to waive the Jones Act over the winter. While feared blackouts didn’t come this winter, they’ve come in the past. In 2017, similar waivers were issued for Puerto Rico in the aftermath of Hurricane Maria to help the island recover. At the time, Senator John McCain of Arizona, a vocal opponent to the law, called the Jones Act an “antiquated, protectionist law that has driven up costs and crippled Puerto Rico’s economy.”
If offshore wind is to be a viable and price competitive energy source, the Biden administration and a bipartisan group of legislators need to work together to repeal the Jones Act to secure New England’s energy independence.
William Groshek is a recent graduate of Georgetown University’s Master of Science in Environment and Sustainability Management program and works in the renewable energy sector.