U.S. Senate May Be About to Kill Biden’s Clean Energy Plans
YIt is unlikely that you’ll see any fireworks as a result of congressional hearings on regulations for offshore energy worker regulation. However, in the March House transport and infrastructure committee meeting, there was a heated exchange between Rep. Garretgraves (R.), La. Rep. Jake Auchincloss of Massachusetts (D.). They argued about an amendment to 2022 Coast Guard renewal bill which would have prohibited foreign-flagged vessels and crews from operating off the U.S. Coast. They ended their argument on a bitter note. “If my friend wants to keep hiring Russians, that’s fine,” Graves said.
“If my friend from Louisiana wants to thwart the clean energy industry in the United States,” Auchincloss responded, “then that’s fine.”
Peter DeFasio (D. Ore.), chairman of the Committee, intervened in support of the amendment. The bill was passed. While not yet enacted—the bill will likely come up before the Senate commerce committee in the next month—wind energy proponents are worried. American Clean Power, a renewables industry group, said the new provision would “cripple” the offshore wind industry and stymie President Joe Biden’s efforts to build 30 gigawatts of offshore wind energy by 2030. (Unlike Europe and Asia, the United States has almost no offshore wind power at present, and even Biden’s aspirations lag far behind the ambitions of other countries.)
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The crux of the debate comes down to certain kinds of highly specialized ships needed to perform mega-construction tasks like erecting huge turbine components and laying miles of underwater cables, which will be needed as offshore construction on the U.S.’s few approved ocean wind projects actually gets underway. The provision would mandate that only U.S. ships with American crews be allowed to work on offshore energy projects, including those big lift jobs, or, if foreign ships are used, they must be crewed either by Americans, or by sailors and workers that match the vessel’s flag of origin: for example, a ship flying the Norwegian flag should be crewed only by Norwegians.
There’s American boats to do a lot of the smaller supporting tasks around that construction, and the bill’s proponents say there’s a big problem of foreign boats with low paid workers taking American jobs. Most of the ships that are designed for specialized heavy lifting work have registered addresses in countries other than the country where they were built. This is either because it’s easier or more convenient. Supporters of the provision argue that lower foreign wages gives these ships an unfair advantage. This effectively prevents the U.S. shipbuilding sector from obtaining financing for the construction of offshore wind turbines capable ships. “If the law continues to allow foreign entities to enjoy cost advantages we don’t have, and an unlevel playing field, we simply cannot compete with them,” says Aaron Smith, president of the Offshore Marine Service Association, an industry group that advised on the provision in the Coast Guard bill.
But that situation is also why the bill could mean big problems for offshore wind projects planned up and down the East coast: the U.S. simply doesn’t have many of those types of specialized ships, and the U.S. offshore wind market is so small that even blocking foreign ships from coming still might not make a good enough financial case to get American versions built.
“Every wind turbine installation vessel that is not able to come to the United States because of this provision would eliminate 1,460 megawatts of offshore wind from being installed a year, which would be 4.9 million tons of carbon dioxide,” says Claire Richer, federal affairs director at American Clean Power. She suggests that subsidies be provided to U.S.-built offshore wind ships, and not mandates which prevent them from operating here.
In theory, foreign ships could switch their registrations and crews to comply with the law, though that could be difficult since some highly specialized personnel can’t be easily swapped out. Every single ship, including the 9 that are used to install wind turbine foundations in the ocean floor, is registered in countries such as the Bahamas, where all crew members can be located from anywhere else. And the harsh reality is that there’s so much offshore wind work to be done around the world that the owners of the ships are likely not to bother with the hassle, and just stick to construction jobs in Asia and Europe, leaving the fledgling U.S. offshore wind industry high and dry. Protectionism may eventually lead to a more domestic offshore construction industry. However, many in the offshore wind sector believe the outcome, which is free of international competition would still be superior to that achieved by ships in Europe or Asia. This could mean a slower offshore wind rollout.
This whole issue highlights an uneasy opposition to the green energy transition. We need to reduce carbon emissions as quickly as possible in order to avoid the worst impacts of climate change. However, sometimes we have to abandon politically-popular protectionism and embrace free trade. The balance between efficiency and protectionism has been long established—things get cheaper when you open the doors to the foreign market, and some domestic industry suffers—and for decades the balance of U.S. policy was weighted firmly toward globalism. Then, around the 2016 election, Donald Trump’s campaign invoked the evils of the North American Free Trade Agreement (“The worst trade deal maybe ever signed anywhere.”) so many times as to make the position politically radioactive.
There’s lots of good reasons to prioritize U.S. green industry—and there’s an argument to be made that sometimes a bit of protectionism is necessary to get the ball rolling. There are tradeoffs when it comes to blocking foreign competitors. This usually results in higher prices, such as more expensive steel or socks. In the case of offshore wind, it could mean even more delay in developing a desperately-needed source of green power as we wait for our own industry to catch up—assuming it ever really does. There’s a lot of jobs around offshore wind, and only some of them involve manning the ships that come by for a few months to drop components in the water. If the price of those additional American crews means tipping the climate balance even further in the wrong direction, our leaders should think carefully about if it’s really worth it for the rest of us.
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