HOUSTON, March 23 (Reuters) - The United States and French energy major TotalEnergies announced on Monday they would redirect nearly $1 billion from offshore wind leases to U.S. oil and natural gas
TotalEnergies abandons US offshore wind, will invest $1 billion in fossil fuel projects
TotalEnergies Shifts Investment from Offshore Wind to Fossil Fuels
By Stephanie Kelly and Jarrett Renshaw
Background and Agreement Details
HOUSTON, March 23 (Reuters) - The United States and French energy major TotalEnergies said on Monday they would redirect nearly $1 billion from offshore wind leases to U.S. oil and natural gas production.
The agreement marks a new strategy in the Trump administration's wide-ranging effort to stymie development of U.S. offshore wind projects, which President Donald Trump has said he finds ugly, costly and inefficient.
His administration has moved to increase domestic fossil fuel production and scrap policies that support clean energy development.
Official Statements on the Agreement
"This agreement is yet another win for President Trump's commitment to affordable and reliable energy for all Americans," Interior Secretary Doug Burgum said in a statement. "Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers."
The U.S. will reimburse Total around $1 billion that 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.
Industry Reactions and Criticism
An offshore wind trade group, Oceantic Network, criticized the administration for using taxpayer funds to block projects.
Response from Oceantic Network
"This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing, even as other offshore wind projects continue delivering reliable and affordable power to the grid," Sam Salustro, senior vice president of policy and market affairs at Oceantic, said in a statement.
Details of TotalEnergies' New Investments
Investment Allocation and Project Locations
Total will invest $928 million in 2026 in the development of four trains at the Rio Grande LNG plant in Texas, and in the development of upstream conventional oil in the U.S. Gulf and shale gas production, the statement said.
Lease Terminations and Financial Details
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.
Total paid $795 million for the New York lease at a blockbuster auction during the administration of former President Joe Biden that attracted more than $4 billion in bids from the industry.
Project Outcomes and Future Prospects
The Attentive Energy One project within the lease was stalled when New York State said it would not proceed with a contract award in early 2024. A second project, Attentive Energy Two, was awarded a contract with New Jersey in January 2024.
Statements from TotalEnergies and U.S. Officials
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.
(Reporting by Stephanie Kelly, Jarrett Renshaw, Nichola Groom and Simon Webb, Editing by Franklin Paul and Nia Williams)
