The Trump administration has agreed to pay $1 billion to French energy giant TotalEnergies to terminate two U.S. offshore wind leases, marking a major escalation in its campaign against renewable energy projects.
The U.S. Department of the Interior announced Monday that the payment will effectively reimburse TotalEnergies for wind development leases off the coasts of North Carolina and New York. In return, the company will abandon the projects and redirect the funds toward fossil fuel investments in the United States.
TotalEnergies had already paused work on the two offshore wind projects following Donald Trump’s election. Under the agreement, the company also pledged not to pursue new offshore wind developments in the U.S.
TotalEnergies CEO Patrick Pouyanné said the decision to withdraw from U.S. offshore wind development was made in exchange for the reimbursement of lease fees.
“Considering that the development of offshore wind projects is not in the country’s interest,” Pouyanné said, the company would instead invest in projects that represent a “more efficient use of capital.”
The company plans to use the reimbursed funds to support the construction of a liquefied natural gas facility in Texas and expand its oil and gas operations.
According to the Interior Department, TotalEnergies will receive reimbursement after it completes the fossil fuel investments, up to the amount it originally paid for the offshore wind leases.
Interior Secretary Doug Burgum welcomed the agreement, saying it supports the administration’s push to prioritize traditional energy sources.
“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,” Burgum said.
The move reflects the Trump administration’s broader effort to reverse renewable energy policies and boost oil, gas and coal production. Trump has repeatedly argued that expanding fossil fuel output will reduce energy costs, improve grid reliability and strengthen the United States’ position in emerging technologies such as artificial intelligence.
The Biden administration had previously promoted offshore wind as a key strategy to combat climate change and expand clean energy production.
Despite federal efforts to slow wind development, courts have blocked several administration orders. Federal judges allowed five East Coast offshore wind projects to resume construction after ruling that the government failed to demonstrate immediate national security risks.
One of those projects, the Coastal Virginia Offshore Wind project developed by Dominion Energy, began delivering electricity to Virginia’s power grid on Monday.
Environmental groups sharply criticized the TotalEnergies agreement, arguing it undermines clean energy development while using taxpayer funds to support fossil fuel expansion.
The Natural Resources Defense Council called the move reckless, warning it could delay efforts to reduce energy costs through renewable power.
Ted Kelly, clean energy director at the Environmental Defense Fund, described the deal as “an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most.”
TotalEnergies originally purchased the lease for the Carolina Long Bay project in 2022 for about $133,000, with plans to generate more than one gigawatt of electricity, enough to power around 300,000 homes. It also acquired a second lease off the coasts of New York and New Jersey for $795,000, where it aimed to develop a larger offshore wind project capable of producing up to three gigawatts of power for nearly one million homes.
While the U.S. policy shift casts uncertainty over future offshore wind development, the global market continues to expand, with China leading the world in new installations.
