The Department of Interior announced Monday it will buy out TotalEnergies’ nearly $1 billion investment in U.S. offshore wind leases, in exchange for the company’s pledge to direct that amount into liquid natural gas production in Texas, upstream conventional oil in the Gulf of Mexico and shale gas production.
The novel move to forestall offshore wind power comes after federal court decisions that blocked administration moves to rescind prior approvals for five other projects off the East Coast.
“Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers,” said Interior secretary Doug Burgum in announcing the agreement. “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.”
In anticipation of TotalEnergies investing $928 million in LNG and oil, the administration says it will terminate two Mid-Atlantic leases: the company’s planned Carolina Long Bay project, leased for $133.33 million in June 2022, and its Attentive Energy LLC lease in the New York Bight acquired for $795 million in May 2022.
Notably, TotalEnergies chairman and CEO Patrick Pouyanné appeared to hew to the Trump administration’s line in a joint public statement from Interior officials
“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,” said Pouyanné.
“These investments will contribute to supplying Europe with much-needed LNG from the U.S. and provide gas for U.S. data center development. We believe this is a more efficient use of capital in the United States,” he said.
Offshore wind advocates, who have been bolstered by the administration’s court defeats, reacted by casting the TotalEnergies deal as not decisive.
"Offshore wind's long-term trajectory remains secure in the U.S. as states continue to make the power source a foundational part of their energy mixture that creates good-paying local jobs,” said Sam Salustro, senior vice president of policy for the advocacy group Oceantic Network.
“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, even as other offshore wind projects continue delivering reliable and affordable power to the grid.”
