The Trump administration will pay about $1 billion to TotalEnergies to exit its offshore wind leases in the United States, as part of a broader push to scale back renewable energy projects and shift focus toward fossil fuels.
TotalEnergies has agreed to what's 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, the Department of Interior announced Monday.
The Trump administration has tried to halt offshore wind construction, but federal judges overturned those orders. Environmental groups denounced the TotalEnergies deal as an alternate way to block wind projects. President Donald Trump has gone all in on fossil fuels, which he says is the way to lower costs for families, increase reliability and help the U.S. maintain global leadership in artificial intelligence.
TotalEnergies had already paused its two projects after Trump was elected.
TotalEnergies pledged to not develop any new offshore wind projects in the United States. TotalEnergies CEO Patrick Pouyanné said in a statement that the company renounced offshore wind development in the United States in exchange for the reimbursement of the lease fees, "considering that the development of offshore wind projects is not in the country's interest."
Pouyanné said 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 U.S.
After it makes those investments, TotalEnergies will be reimbursed, up to the amount paid in lease purchases for offshore wind, according to the DOI.
"We welcome TotalEnergies' commitment to developing projects that produce dependable, affordable power to lower Americans' monthly bills while providing secure U.S. baseload power today - and in the future," Interior Secretary Doug Burgum said in a statement.
The Biden administration sought to ramp up offshore wind as a climate change solution. Trump began reversing U.S. energy policies his first day in office with executive orders aimed at boosting oil, gas and coal. Globally the offshore wind market is growing, with China leading the world in new installations.
The Trump administration halted construction on five major East Coast offshore wind projects days before Christmas, citing national security concerns. Developers and states sued, and federal judges allowed all five to resume construction, essentially concluding that the government did not show the risk was so imminent that construction must halt.
On Monday, one of the wind farms targeted by the administration, Coastal Virginia Offshore Wind, started delivering power to the grid for Virginia. The developer, Dominion Energy, announced the milestone.
Environmental groups criticized the TotalEnergies settlement. The Natural Resources Defense Council said it's reckless to halt projects designed to bring energy costs down.
Ted Kelly, clean energy director at the Environmental Defense Fund, said the proposed deals "are an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most."
TotalEnergies purchased a lease for its Carolina Long Bay project in 2022 for about $133,000. 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 $795,000. This was planned as a larger project, with the potential to generate 3 gigawatts of clean energy to power nearly one million homes.
