The United States and French energy major TotalEnergies said they would redirect nearly $1 billion from offshore wind leases to U.S. oil and natural gas production.
Here are three key points in the TotalEnergies announcement:
- Strategic Pivot to Fossil Fuels: TotalEnergies and the U.S. government agreed to redirect nearly $1 billion originally intended for offshore wind leases toward domestic oil, shale gas, and the Rio Grande LNG plant in Texas.
- Termination of Wind Projects: As part of the deal, TotalEnergies will abandon its lease holdings in the Carolina Long Bay and New York Bight areas and has pledged not to develop any new offshore wind projects in the U.S.
- Shift in Federal Energy Policy: The agreement reflects the Trump administration's active move to prioritize conventional energy over wind power, which the administration characterizes as costly and inefficient compared to fossil fuel production.
The deal is the latest blow to the U.S. offshore wind industry, which has faced repeated disruptions to multi-billion-dollar projects under U.S. President Donald Trump.
Trump has said he finds wind turbines ugly, costly and inefficient, and his administration has moved to increase domestic fossil fuel production.
The U.S. will reimburse Total around $1 billion the company paid in lease purchases for offshore wind, and TotalEnergies has pledged not to develop any new offshore wind projects in the country, a U.S. Department of the Interior statement said.
Total will invest $928 million in 2026 in the development of four trains at the Rio Grande LNG plant in Texas, and the development of upstream conventional oil in the U.S. Gulf and shale gas production, as reported to BIC Magazine.
Following those investments, the U.S. will terminate leases in the Carolina Long Bay area and the New York Bight area, both executed in 2022, and reimburse Total.
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Total CEO Patrick Pouyanne said offshore wind was not the most affordable way to produce electricity in the U.S.
Pouyanne and U.S. Secretary of the Interior Doug Burgum announced the agreement at the CERAWeek energy conference in Houston.
