By JENNIFER McDERMOTT and MATTHEW DALY Associated Press
PROVIDENCE, R.I. (AP) — The Trump administration will pay $1 billion to a French company to walk away from two U.S. offshore wind leases as the administration ramps up its campaign against offshore wind and other renewable energy.
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.
President Donald Trump’s administration has tried to halt offshore wind construction, but federal judges repeatedly overturned those orders.
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.″
Environmental groups denounced the deal as an alternate 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.
In his second term, Trump has gone all in on fossil fuels, which he says will 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.
The company pledged to not develop any new offshore wind projects in the United States. CEO Patrick Pouyanné said in a statement that TotalEnegeries 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,” Interior Secretary Doug Burgum said in a statement.
New York Gov. Kathy Hochul, a Democrat, said Trump was “using a pay-not-to-play scheme” to pressure the French company not to build offshore wind, calling it “an outrageous abuse of taxpayer dollars.” Hochul said she remains committed to moving forward with an “all-of-the-above approach” that includes renewables, nuclear power and other energy sources.
North Carolina Gov. Josh Stein, a Democrat, said this is “a terrible deal for the people of North Carolina and our country.”
“Our state has the offshore wind potential to power millions of homes with renewable American-made energy. It’s ludicrous and wasteful that the Trump administration is spending $1 billion in taxpayer money to pay off a company to stop it from investing private dollars to create the clean energy we need,” Stein 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 Interior Department 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 projects 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, Richmond-based Dominion Energy, announced the milestone.
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 said.
TotalEnergies purchased a lease for its Carolina Long Bay project in 2022 for about $133 million. 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 million. 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.
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Daly reported from Washington. Associated Press writers Anthony Izaguirre in Albany, New York and Gary Robertson in Raleigh, North Carolina contributed to this report.
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