The Trump administration is paying this company $1 billion to quit building wind farms. Experts question the arrangement’s legality |
The Trump administration is paying this company $1 billion to quit building wind farms. Experts question the arrangement’s legality
The government plans to pay TotalEnergies nearly $1 billion to pull out of offshore wind and focus on fossil fuels. But it can’t legally use taxpayer money without approval from Congress.
[Photos: Ken Cedeno/AFP/Getty Images, Byron Moore/Adobe Stock, jkgabbert/Adobe Stock]
After failing to stop multiple offshore wind projects from moving forward on the East Coast, the Trump administration is trying a new tactic: paying companies not to build wind farms.
Last week, the government announced that it would pay TotalEnergies approximately $1 billion to give up on building two planned offshore wind farms in the U.S. and to invest in oil, gas, and LNG production instead. But experts say that the federal government can’t legally spend taxpayer money this way. And Total was already planning to build new fossil fuel projects before striking the deal.
In the past, when energy companies decided to give up offshore leases, they ate the loss. Other companies, for example, have given up offshore oil and gas leases in Alaska.
“They may or may not have spent a lot of money on the lease, but they routinely will expire, and the companies are not going to ask for reimbursement because they’re not going to get it,” says David Hayes, a law professor at Stanford who worked on climate policy in the Biden administration. “That money has gone into the U.S. Treasury. The Interior Department can’t simply on its own say to the U.S. Treasury, ‘Please give that money back because the company decided it doesn’t want to proceed with the lease.’”
The French company TotalEnergies bought two leases for planned wind farms in 2022: one off the coast of North Carolina, for more than $133 million, and one off the coast of New York for $795 million. Then Trump took office, and started to attack wind farms. The president has a longstanding grudge against offshore wind; his allies in the fossil fuel industry also don’t want competition from large wind projects.
Last year, the Trump administration ordered five large offshore wind projects that were already under construction to stop work. The administration cited unspecified national security concerns, though all of the projects had already been thoroughly vetted by the military. The energy companies sued and each won in court. The government didn’t appeal the verdicts, in a sign that it knew it wouldn’t win. (Separately, the government is also now using military reviews to delay more routine approvals for wind farms on land.)
Earlier this month, one of the offshore projects, Vineyard Wind, finished construction. Revolution Wind, another project, started delivering power. Last week, Coastal Virginia Offshore Wind also started delivering power to the grid. When that project is fully complete, it will power around 660,000 homes; Dominion, the utility building it, says that it will save customers $3 billion on fuel costs over its first decade.
John Summit's rise from accountant to DJ