French energy company TotalEnergies has agreed to abandon two Atlantic offshore wind projects after the Trump administration offered to buy out its federal leases for close to $1 billion, with the money to be redirected into fossil fuel development.
The agreement covers two lease areas — one off the New York coast and one off North Carolina — that TotalEnergies acquired during the Biden years. The federal government will reimburse the company $928 million, the amount it originally paid to acquire those leases, according to the Guardian. Developers had estimated the combined output of the two wind farms at over 4 gigawatts.
The deal was unveiled at CERAWeek, the annual energy industry conference held in Houston, where Burgum and Pouyanné appeared together. In a statement, Pouyanné said the company had “decided to renounce offshore wind development in the United States” because it was “not in the country’s interest.” According to the Guardian, TotalEnergies plans to direct the funds toward four trains at the Rio Grande LNG plant in Texas, drilling operations in the Gulf of Mexico, and shale production elsewhere in the country.
Burgum, in a statement, called offshore wind “one of the most expensive” forms of energy. The deal followed a broader permit freeze the Interior Department imposed on renewable energy projects the previous year, which left early-stage offshore wind farms without a regulatory path forward, according to CNN.
Critics said the agreement could worsen a power shortage already straining the grid. Elizabeth Klein, who led the Interior Department’s Bureau of Ocean Energy Management during the Biden years, said the cancellation of the New York project was a blow to a region in need of additional electricity sources. “For the current administration to be cutting that off makes no sense at all,” she told CNN.
Sam Salustro, senior vice president of policy and market affairs at industry group Oceantic Network, called the deal “political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing.”
Whether more such buyouts are forthcoming remains an open question. The purchase value of outstanding leases for undeveloped offshore wind projects along U.S. coastlines — spanning the Atlantic, Pacific, and Gulf — tops $5 billion, CNN reported. RWE, the German renewable energy firm, is among those seeking repayment. RWE holds three leases — covering areas off New York, California, and the Gulf of Mexico — for which it paid over $1.2 billion. “If we never get the right to build the plants, I assume we’ll get the money we’ve already paid back,” RWE CEO Markus Krebber said at a recent press conference.
