The Trump administration expanded on its new strategy to short-circuit offshore wind power developers, with two more agreements to refund offshore lease payments in exchange for cancelling those projects and promises by the companies to instead invest in U.S. oil and gas projects.
With the new agreements, backers of the Bluepoint Wind project off New York and New Jersey and the Golden State Wind array planned off Morro Bay in California will “voluntarily end their offshore wind leases, with the respective affiliate companies agreeing to make financial investments in reliable conventional energy projects,” according to an April 27 statement from the Interior Department.
Blocked by federal courts in their bids to shut down five previously permitted wind projects off the East Coast, Interior officials first struck a deal March 23 to 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.
Interior Secretary Doug Burgum cast the new buyout deals in terms of President Trump’s longstanding complaints that offshore wind power is inefficient and reliant on state and federal government subsidies.
“The companies that bid for these offshore wind leases were basically sold a product in 2022 that was only viable when propped up by massive taxpayer subsidies,” said Burgum. “Now that hardworking Americans are no longer footing the bill for expensive, unreliable, intermittent energy projects, companies are once again investing in affordable, reliable, secure energy infrastructure.”
As outlined by the Interior Department, the government would give back $885 million in all to the wind developers. In a joint statement with Burgum the energy companies sought to explain their pullback.
“We appreciate the very constructive engagement with Secretary Burgum and the Department of the Interior and are pleased to have reached a practical resolution based on our shared commitment to pragmatic outcomes,” said Salim Samaha, chair of Midstream & LNG, Global Infrastructure Partners. The company is part of BlackRock, a 50% owner of Bluepoint Wind.
Along with swearing off any future investments in U.S. offshore wind, the investors promise to reinvest in Gulf of Mexico oil and gas and LNG projects.
Global Infrastructure Partners says it will “invest up to $765 million, the original bid amount for the Bluepoint Wind offshore wind project into a U.S.-based liquefied natural gas (LNG) facility. Following this accelerated investment, Interior will cancel the lease and reimburse the company’s bid payment in the amount invested in the LNG project.”
Golden State Wind investors say they will “be eligible to recover approximately $120 million in lease fees after an investment has been made of an equal amount in the development of U.S. oil and gas assets, energy infrastructure, and/or LNG projects along the Gulf Coast.”
The offshore wind industry advocacy group Oceantic Network mocked the Trump administration’s court defeats.
“Communities should be celebrating cost savings and homegrown power, not paying more because viable American energy projects are being canceled. Until these actions are stopped through legal challenge, consumers will continue to bear the cost of an administration choosing which energy sources are allowed to succeed,” said Oceantic senior vice president Sal Salustro.
