The Trump administration’s $1 billion payout to TotalEnergies to walk away from U.S. offshore wind development is a novel tactic against the industry that supporters see as creative — but opponents see as foolish and extreme.
The Interior Department announced March 23 that TotalEnergies 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 a liquefied natural gas export terminal in Texas and other fossil fuel projects instead. The department hailed it as an “innovative agreement” with the French energy giant so that the "American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry.”
The tactical shift comes after federal courts have thwarted President Donald Trump's efforts to stop offshore wind through executive action.
U.S. Sen. Chuck Schumer, a New York Democrat, told The Associated Press that the payment “sets a dangerous precedent and is a shortsighted misuse of taxpayer dollars.”
Robin Shaffer, president of the anti-offshore wind group Protect Our Coast New Jersey, applauded what he called “out of the box” thinking. Shaffer said after losing in the courts, the administration needed a way to take back leases that never should have been issued because of the harm offshore wind development causes to the marine environment.
“The Trump administration has been relentlessly creative in its efforts to stop offshore wind development in the U.S.," he said.
While the Republican president has been particularly hostile to offshore wind, he has also blocked dozens of clean energy projects and canceled billions of dollars in grants to promote clean energy, which he derides as the “Green New Scam.” This comes at a time when the U.S. is trying to boost power supplies in an artificial intelligence race against China and keep electricity bills from rising even higher.
The Iran war has also dealt a massive energy shock to the global economy by choking off most exports of crude oil and liquefied natural gas through the Strait of Hormuz.
A vow to stop offshore wind
On the campaign trail, Trump vowed to end the offshore wind industry as soon as he returned to the White House. Trump said wind turbines are horrible and expensive and pose a threat to birds and other wildlife.
Connecticut is getting power from Revolution Wind, an offshore wind project, and estimates it will lower wholesale energy costs for the state. The National Audubon Society, which is dedicated to the conservation of birds, has said climate change is a greater threat to birds.
Trump has long opposed offshore wind energy. In 2015, he lost his yearslong battle to stop an offshore wind farm near Aberdeen in eastern Scotland when Britain’s Supreme Court unanimously ruled against him. Trump claimed the 11 turbines would spoil the view from his golf course.
He wants to boost production of oil, natural gas and coal, which cause climate change, because he argues that doing so would give the U.S. the lowest-cost energy and electricity of any nation in the world.
His first day back in office, he acted on his campaign promise, signing an executive order temporarily halting offshore wind lease sales in federal waters and pausing permitting for all wind projects.
The deal comes after the administration is thwarted by the courts
U.S. District Judge Patti Saris vacated Trump’s executive order blocking wind energy projects on Dec. 8, declaring it unlawful as she sided with state attorneys general from 17 states and Washington, D.C., who challenged the order. The administration is appealing.
Two weeks later, the administration ordered that construction stop on five major East Coast offshore wind projects, citing national security concerns. Developers and states sued, and federal judges allowed all five to resume construction, essentially concluding that the government didn't show that the national security risk was so imminent that construction must halt.
TotalEnergies wasn't one of those; it had already paused its two projects soon after Trump was elected. And the company has now pledged not to develop any new offshore wind projects in the United States. CEO Patrick 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.
Kit Kennedy, who directs the power division at the Natural Resources Defense Council, said the proposed payment to TotalEnergies was a “boondoggle” that “transfers nearly $1 billion from American taxpayers to a foreign corporation and the oil and gas industry.”
Why is the U.S. using taxpayer dollars “to not develop power when we need energy?” she asked, calling the Trump administration deal a “scam” and harmful to the U.S. economy and environment.
Carl Tobias, a University of Richmond Law School professor who has been following the lawsuits, called it “unorthodox.”
Democrats criticize stopping offshore wind when energy prices are spiking
As crude oil and gasoline prices surge, Democrats in Virginia said the U.S. should be strengthening its energy independence and resilience. Virginia started receiving power on March 23 from an offshore wind project targeted by Trump.
“Giving an energy company $1 billion of taxpayer money to pack up its jobs and invest elsewhere — in the middle of an unpopular and unwise war that is spiking energy costs — is beyond idiotic,” U.S. Sen. Tim Kaine said in a statement to AP.
U.S. Rep. Chellie Pingree, a Maine Democrat, questioned whether the payout is legal under appropriations law and said she would question Interior Secretary Doug Burgum about it at the upcoming budget hearings.
Dozens of commercial leases issued by the Bureau of Ocean Energy Management remain active for wind energy development in the U.S.
Abigail Dillen, president of Earthjustice, said she wouldn't attempt to guess whether the Trump administration will pay to stop any others, but clearly it is willing to go to extreme measures.
“Will they do this again? Maybe,” she said.
