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The Trump administration plans to pay TotalEnergies $1 billion to end two offshore wind leases in a move the Department of the Interior said will avoid taxpayer spending on what it called unreliable and costly projects, according to Interior’s announcement Monday. Under the agreement, TotalEnergies will take a refund tied to the lease fees and pledge not to develop any new offshore wind projects in the United States, the Interior Department said.
Interior said the deal effectively reimburses TotalEnergies for the leases for projects off North Carolina and New York, and that the company would invest the money in fossil-fuel projects instead. The Department of the Interior said President Donald Trump’s administration had tried to halt offshore wind construction but that federal judges repeatedly overturned those orders.
Interior characterized the agreement as an “innovative agreement” and said, “the American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry.” Interior Secretary Doug Burgum said the administration will no longer pay for offshore wind subsidies and added that the agreement would ensure dependable, affordable power that lowers Americans’ monthly bills, according to his statement.
In a company statement included in the Interior announcement, TotalEnergies CEO Patrick Pouyanné said the company renounced offshore wind development in the United States in exchange for reimbursement of the lease fees, citing what he described as an argument that offshore wind development is not in the country’s interest. Pouyanné said the refunded lease fees would finance construction of a liquefied natural gas plant in Texas and development of the company’s oil and gas activities, calling that approach “more efficient use of capital” in the U.S.
Democratic governors condemned the agreement. New York Gov. Kathy Hochul said the administration was “using a pay-not-to-play scheme” to pressure the French company not to build offshore wind and called it “an outrageous abuse of taxpayer dollars,” while Hochul said she remains committed to moving forward with an “all-of-the-above approach” including renewables, nuclear power and other energy sources. North Carolina Gov. Josh Stein called the deal “a terrible deal for the people of North Carolina and our country,” saying it is “ludicrous and wasteful” for the administration to spend $1 billion in taxpayer money to pay a company to stop investing private dollars in clean energy.
Environmental groups also criticized the move. Lena Moffitt, executive director of Evergreen Action, said, “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.” Ted Kelly, clean energy director at the Environmental Defense Fund, described the deal as “an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most,” and said East Coast states are building offshore wind because it increases available electricity on the grid even as natural gas prices rise.
The announcement arrives amid legal fights over the administration’s earlier attempts to slow offshore wind. The Interior Department halted construction on five major East Coast offshore wind projects days before Christmas, citing national security concerns, but developers and states sued and federal judges allowed the projects to resume, the Associated Press reported. On Monday, one of the targeted wind farms — Coastal Virginia Offshore Wind — began delivering power to the grid for Virginia, according to Dominion Energy.
TotalEnergies purchased the lease for its Carolina Long Bay project in 2022 for about $133 million, Interior said. It planned for the project to generate more than 1 gigawatt, enough to power about 300,000 homes, according to the Department of the Interior. TotalEnergies bought the lease off New York and New Jersey in 2022 for $795 million, with a planned larger project that could generate 3 gigawatts of clean energy to power nearly one million homes, Interior said.
In Europe and Asia, TotalEnergies is involved in major offshore wind projects, Interior said, and the company had already paused its two U.S. offshore wind projects after Trump was elected. Under the new agreement, TotalEnergies would receive reimbursements up to the amount paid in the lease purchases after it makes the investments outlined by the company and described by Interior, the Department said.