The Trump administration has agreed to pay close to $1 billion to TotalEnergies to abandon its planned offshore wind developments in the Atlantic and instead channel investment into fossil fuel projects within the United States.
The move underscores the administration’s long-standing opposition to offshore wind, an energy source Donald Trump has openly criticized for years.
After unsuccessful attempts to halt more advanced projects, officials appear to have shifted tactics, opting to financially discourage new developments before construction even begins.
Previously, the Interior Department had already stalled federal permits for renewable energy projects, effectively freezing offshore wind initiatives in their early stages.
This latest agreement goes further, aiming to prevent companies from reviving such projects under a future administration that might support renewable energy.
Under the deal, the government will reimburse TotalEnergies for leases it acquired during the Biden administration to build two offshore wind farms off the coasts of New York and North Carolina.
The US Department of Justice will fund the repayment, covering nearly $1 billion in taxpayer money spent on those leases.
The two shelved projects were expected to generate over 4 gigawatts of electricity for homes and businesses.
Instead, TotalEnergies will redirect its investment toward a new liquefied natural gas facility in Texas, aimed at boosting US gas exports to Europe.
The company also plans to expand oil drilling in the Gulf of Mexico and develop additional shale oil projects across the country.
“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,” TotalEnergies CEO Patrick Pouyanné said in a statement. “These investments will contribute to supplying Europe with much-needed LNG from the US and provide gas for US data center development.”
US Interior Secretary Doug Burgum defended the decision, reiterating claims that offshore wind is costly and unreliable because it depends on wind availability. While offshore wind projects tend to have higher upfront costs due to supply chain challenges, they do not incur fuel expenses, and pricing agreements are typically fixed—unlike oil and gas, which fluctuate.
“We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans’ monthly bills while providing secure US baseload power today and in the future,” Burgum said.
Critics argue the decision could deepen the United States’ growing electricity shortfall, driven by increasing demand from data centers, electrification, and limited power supply, particularly along the mid-Atlantic.
“This will actually cause a further energy deficit in our country and increase the cost of energy certainly along the East Coast,” said Elizabeth Klein, who previously led the Bureau of Ocean Energy Management under the Biden administration.
Klein warned that cancelling the New York project would be especially damaging for a region already struggling with energy supply constraints.
“For the current administration to be cutting that off makes no sense at all,” she added.
Industry group Oceantic Network also criticized the deal, saying it removes a key source of affordable domestic energy at a time of rising electricity costs.
“Paying to remove affordable, homegrown energy out of the equation leaves American consumers struggling to pay their electricity bills,” said Sam Salustro. “This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing.”
It remains uncertain whether similar agreements will follow, though several companies have indicated they may seek refunds if blocked from developing offshore wind projects. Leases for undeveloped projects across the Atlantic, Pacific, and Gulf coasts are valued at over $5 billion, excluding additional development costs.
German energy firm RWE, which spent more than $1.2 billion on three offshore leases, has already signaled it expects reimbursement.
“If we never get the right to build the plants, I assume we’ll get the money we’ve already paid back. And if necessary, through legal action,” RWE CEO Markus Krebber said.
However, unlike TotalEnergies, which can redirect funds into fossil fuel ventures aligned with current US policy, many offshore wind developers lack similar oil and gas portfolios.
TotalEnergies is “opting to take the billion dollars, which is a good deal for them but not a good deal for American taxpayers or the energy needs of our country,” Klein said.
