Offshore wind power construction on the U.S. East Coast faces obstacles: The Trump administration may pay $1 billion to halt the project

After facing repeated setbacks in legal avenues, the Trump administration is turning to a new strategy of cash compensation to encourage wind power developers to voluntarily withdraw, attempting to end two offshore wind projects that have not yet begun construction by paying nearly $1 billion. According to a report by The New York Times on the 17th, the Trump administration plans to pay French energy giant TotalEnergies over $928 million, asking it to abandon leases for two wind projects located off the coasts of New York and North Carolina. At the same time, TotalEnergies must commit to increasing investments in natural gas infrastructure in Texas. This move represents a significant shift in the Trump administration's stance towards the U.S. offshore wind industry. Previously, the Department of the Interior ordered the suspension of five ongoing projects on national security grounds, but after developers and several state governments filed lawsuits, federal judges rejected the government's position five times, leaving administrative measures in a deadlock. Meanwhile, this Friday, two ongoing wind projects received milestone news—Revolution Wind announced it has begun supplying power to the New England grid, and Vineyard Wind completed the installation of all 62 turbines. Compensation of $928 million to Cancel Leases According to a copy of the agreement reviewed by The New York Times, the Department of the Interior will cancel the federal water leases held by TotalEnergies for the two projects, and the Department of Justice will subsequently pay the company compensation equivalent to the winning bid price for the leases during the Biden administration's term. 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 more than $928 million. In terms of reciprocal obligations, TotalEnergies must make "accelerated investments" in natural gas power plants and natural gas production facilities in Texas, with specific investment amounts and project names not disclosed in the agreement. William Doffermyre, Chief Legal Counsel of the Department of the Interior, wrote in a memorandum to senior Justice Department official Stanley Woodward Jr. on February 23 of this year that the aforementioned investments would help "address the national energy emergency." Project Background and Potential Impact Both proposed projects to be halted are in the planning stage and have not yet begun construction. The Attentive Energy project is located in federal waters 54 miles south of Jones Beach, New York, and once completed, it could power over a million homes and businesses, with operations expected to begin in the early 2030s. In November 2024, the CEO of TotalEnergies stated that given Trump's election, the company would "pause the project," but also expressed the intention to retain the leases for resumption after Trump's term ends. This settlement requires the company to completely abandon the leases. Carolina Long Bay is a wholly-owned subsidiary of TotalEnergies, located 22 miles south of Bald Head Island in North Carolina, and once completed, it could meet the electricity needs of approximately 300,000 homes and businesses Using Fiscal Expenditure Raises Questions This practice of exchanging fiscal expenditure for policy goals has sparked controversy in the legal community. John Leshy, who served as the legal advisor to the Department of the Interior during the Clinton administration, stated: "It is rare for the government to make this cash expenditure just because Trump dislikes offshore wind power." Trump has long criticized offshore wind power. As early as 2012, he attempted to block a wind project near a golf course in Scotland but was unsuccessful. He has repeatedly called the related projects "ugly and inefficient," and unfoundedly claimed that wind projects "drive whales crazy." Whether this settlement agreement can be reached remains uncertain. Documents show that if TotalEnergies refuses to accept the proposal, the Trump administration will still unilaterally cancel the lease, at which point both parties will face costly litigation. Analysts believe that concerns about a lengthy legal battle have motivated both sides to seek an out-of-court resolution. It is noteworthy that the Trump administration has previously suffered legal defeats: several federal judges, after reviewing undisclosed classified reports, have explicitly stated that they are not convinced by the national security rationale cited by the government. This shift to target projects that have not yet begun construction but have already been leased marks a significant escalation in its strategy to suppress offshore wind power.