The Trump administration, facing repeated legal setbacks, is adopting a new strategy of offering cash compensation to wind power developers in exchange for their voluntary withdrawal. This move aims to terminate two offshore wind projects that have not yet begun construction by paying nearly $1 billion.

According to a report from the 17th, the Trump administration plans to pay French energy giant TotalEnergies over $928 million to relinquish its lease agreements for two offshore wind projects near New York and North Carolina. In return, TotalEnergies must commit to increasing its investment in natural gas infrastructure in Texas.

This action represents a significant shift in the Trump administration's approach to the U.S. offshore wind industry. Previously, the Interior Department ordered a halt to five ongoing projects citing national security concerns. However, after developers and several state governments filed lawsuits, federal judges rejected the government's position five times, creating a stalemate for administrative actions.

Simultaneously, milestone updates emerged this Friday for two ongoing wind projects: Revolution Wind announced it has begun supplying power to the New England grid, and Vineyard Wind completed the installation of all 62 of its turbines.

$928 Million Compensation to Cancel Leases

Based on a copy of the agreement reviewed, the Interior Department will cancel TotalEnergies' federal water leases for the two projects. Subsequently, the Justice Department will pay compensation to the company, equivalent to a refund of the winning bid prices from the lease auctions held during the Biden administration.

Specifically, TotalEnergies will receive $795 million in compensation for abandoning the Attentive Energy project off the coast of New York and over $133 million for abandoning the Carolina Long Bay project off the coast of North Carolina, totaling over $928 million.

As a reciprocal obligation, TotalEnergies must make "accelerated investments" in natural gas power plants and production facilities in Texas. The specific scale of investment and project names were not disclosed in the agreement.

In a memorandum dated February 23rd from Interior Department Chief Legal Counsel William Doffermyre to Senior Justice Department official Stanley Woodward Jr., it was stated that these investments would help "address the national energy emergency."

Project Background and Potential Impact

Both projects targeted for cancellation are in the planning stages and have not commenced construction. The Attentive Energy project is located in federal waters 54 miles south of Jones Beach, New York. Once built, it could power over one million homes and businesses and was expected to become operational in the early 2030s.

In November 2024, the CEO of TotalEnergies stated that, given Trump's election, the company would "pause the project" but expressed an intention to retain the leases for potential restart after Trump's term. The current settlement proposal, however, requires the company to completely relinquish the leases.

Carolina Long Bay is a wholly-owned subsidiary of TotalEnergies, located 22 miles south of Bald Head Island, North Carolina. Upon completion, it could meet the electricity demands of approximately 300,000 homes and businesses.

Use of Treasury Funds Raises Questions

This approach of using treasury expenditures to achieve policy goals has sparked controversy in legal circles. John Leshy, who served as Solicitor of the Interior Department during the Clinton administration, commented, "It is unusual for the government to make this cash payment simply because Trump dislikes offshore wind."

Trump has long criticized offshore wind power. As early as 2012, he unsuccessfully attempted to block a wind project near his golf course in Scotland. He has repeatedly labeled such projects "ugly and inefficient" and has baselessly claimed that they "drive whales crazy."

Whether this settlement will be finalized remains uncertain. Documents indicate that if TotalEnergies refuses the proposal, the Trump administration will still unilaterally cancel the leases, leading to costly litigation for both parties. Analysts believe that concerns over protracted legal battles motivate both sides to seek an out-of-court resolution.

Notably, the Trump administration has already suffered a series of legal defeats: multiple federal judges, after reviewing undisclosed classified reports, explicitly stated they were unconvinced by the national security justifications cited by the government. This new focus on canceling leases for projects that are permitted but not yet started marks a clear escalation in its strategy to suppress offshore wind power.