The Trump administration will pay $1 billion (€860mn) to the French energy giant TotalEnergies SE to walk away from two US offshore wind leases as it ramps up its campaign against offshore wind and other renewable energy.
TotalEnergies has agreed to what is essentially a refund of its leases for projects off the coasts of North Carolina and New York, and will invest the money in fossil fuel projects instead, according to their press statement.
“Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” said Patrick Pouyanné, chairman of the board of directors and chief executive officer at TotalEnergies.
Pouyanné also said that the refunded lease fees will finance the construction of a liquefied natural gas plant in Texas and the development of its oil and gas activities, calling it a “more efficient use of capital” in the US.
After it makes those investments, TotalEnergies will be reimbursed up to the amount paid in lease purchases for offshore wind, according to the Department of the Interior.
TotalEnergies purchased a lease for its Carolina Long Bay project in 2022 for about $133 mn (€115mn). It aimed to generate more than 1 gigawatt there, enough to power about 300,000 homes.
It purchased the lease off New York and New Jersey, also in 2022, for $795mn (€685mn).
This was planned as a larger project, with the potential to generate 3 gigawatts of clean energy to power nearly one million homes. TotalEnergies is involved in major offshore wind projects in Europe and Asia.
Trump administration intensifies push against wind energy projects
President Donald Trump’s administration has tried to halt offshore wind construction, but federal judges have repeatedly overturned those orders.
Last year, the Trump administration halted five major offshore wind plans, including Denmark’s Ørsted project, citing national security reasons.
Developers and states sued, and federal judges allowed all five projects to resume construction, effectively concluding that the government had not shown the risk was so imminent that construction must halt.
Concerning the current deal, the Interior Department hailed the “innovative agreement” with the French energy giant and said “the American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry”.
“We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans’ monthly bills,” Interior Secretary Doug Burgum said in a statement.
Environmental groups condemn deal as “billion-dollar bribe”
Environmental groups denounced the deal as an alternative way to block wind projects, with one group calling it a “billion-dollar bribe” to kill clean energy.
“After losing again and again in court on his illegal stop-work orders, Trump has found another way to strangle offshore wind: pay them to walk away,” said Lena Moffitt, executive director of Evergreen Action.
Ted Kelly, clean energy director at the Environmental Defense Fund, called the proposed deal “an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most”.
East Coast states are building offshore wind because it boosts affordable electricity supply on the grid, even as natural gas prices are rising, Kelly concluded.