The Trump administration has agreed to pay France’s TotalEnergies $1 billion US to relinquish two U.S. offshore wind leases as part of its intensified opposition to offshore wind and other renewable energy sources. TotalEnergies will be refunded for its leases for projects off the coasts of North Carolina and New York, with the company opting to redirect the funds into fossil fuel projects instead, according to an announcement by the Department of Interior on Monday. Despite previous attempts by President Donald Trump’s administration to impede offshore wind development, these efforts were consistently overturned by federal judges.
The Interior Department praised the agreement with TotalEnergies as an “innovative” move and highlighted that it would end what it deemed as “ideological subsidies” benefiting the offshore wind industry. Environmental organizations criticized the deal, labeling it as a “billion-dollar bribe” to obstruct clean energy initiatives.
Lena Moffitt, executive director of Evergreen Action, criticized the deal, stating that Trump’s administration resorted to paying off companies to withdraw from offshore wind projects after facing legal setbacks. In his second term, Trump has shifted focus towards promoting fossil fuels, arguing that this strategy would reduce costs for households, enhance reliability, and bolster the U.S.’ global leadership in artificial intelligence.
TotalEnergies had previously halted its two projects following Trump’s election. The company committed to refraining from developing any new offshore wind projects in the U.S. TotalEnergies’ CEO, Patrick Pouyanné, explained that the company renounced offshore wind development in the U.S. in exchange for the lease fees reimbursement, citing that offshore wind projects were not aligned with the country’s interests. Pouyanné specified that the refunded fees would support the construction of a liquefied natural gas plant in Texas and the advancement of its oil and gas operations, which he deemed as a more effective capital utilization in the U.S.
Upon completing these investments, TotalEnergies will receive reimbursement up to the amount paid for the offshore wind leases, as disclosed by the Interior Department. Interior Secretary Doug Burgum commended TotalEnergies for committing to developing projects that provide reliable and affordable power to reduce monthly expenses for Americans.
New York Governor Kathy Hochul condemned Trump’s approach as a “pay-not-to-play scheme,” accusing him of misusing taxpayer funds to deter the French company from pursuing offshore wind projects. Hochul reiterated her commitment to pursuing a comprehensive energy strategy incorporating renewables, nuclear power, and other energy sources. North Carolina Governor Josh Stein also criticized the deal, describing it as detrimental to the state and the nation’s interests.
The Biden administration had aimed to expand offshore wind as a solution to climate change, in contrast to Trump’s efforts to reverse energy policies in favor of oil, gas, and coal. Despite the challenges faced, the global offshore wind market continues to grow, with China leading in new installations.
The Interior Department temporarily halted construction on five significant East Coast offshore wind projects over national security concerns, and subsequent legal actions allowed all projects to resume. Coastal Virginia Offshore Wind, a project targeted by the administration, commenced supplying power to Virginia’s grid. East Coast states are investing in offshore wind to enhance the electricity supply on the grid, especially as natural gas prices surge.
TotalEnergies acquired a lease for its Carolina Long Bay project in 2022 for approximately $133 million US, aiming to generate over 1 gigawatt of power. The company also purchased a lease for a project off New York and New Jersey in 2022 for $795 million US, planning to produce up to three gigawatts of clean energy.
The developments surrounding offshore wind projects reflect the ongoing tensions and policy shifts in the U.S. energy landscape.