On Monday, President Trump’s Department of the Interior announced that it will refund almost $1 billion to a French multinational oil company.
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The company, TotalEnergies, had spent that amount during the Biden administration to secure two leases allowing it to build offshore wind farms in the Atlantic Ocean. The Trump administration, which has taken every step possible to block offshore wind development, is so opposed to this possibility that it’s paying Total to give up those leases — which the company wasn’t even using — in exchange for a promise that Total will invest the money in oil and gas projects off the U.S. Gulf Coast — which it was already doing.
“This is a backdoor deal done with zero transparency, no public process, and no consideration of the impacts to ratepayers in states that had been planning on that offshore wind to meet their energy needs,” said Elizabeth Klein, who led the federal Interior Department’s Bureau of Ocean Energy Management under former President Joe Biden.
The administration may have been trying to buy Total off to avoid litigation, according to Hannes Pfeifenberger, principal at the economic consulting firm the Brattle Group. The French company purchased its offshore wind lease in the coastal area known as the New York-New Jersey Bight for a historically high amount, paying around four times the typical per-acre rate for such leases. Were the administration to attempt to block development, Total might have sued to avoid losing its entire investment.
“[Trump’s Interior Department] might have been responsible for damages if the offshore wind developers sued the government for selling them leases and then basically making permitting impossible,” said Pfeifenberger, adding that other developers who purchased leases in the same auction might now look to take the same path out.
But Klein and other industry experts also noted that the settlement does not deal a permanent blow to offshore wind development, beyond moves the Trump administration had already taken: Trump has already frozen all offshore wind lease auctions and vowed to oppose any new wind farm construction. At worst, the settlement will just set the timeline on new offshore wind development back by a few more years. Though Total’s ocean rights will return to the government for now, a future president could lease them out to another energy company.
“Obviously no one expects this administration to be conducting any offshore wind lease sales, but future administrations will,” said Klein.
There are other ways that the settlement may be less significant than it seems. Industry experts say most companies that hold ocean leases are looking to offload them or let them sit undeveloped until Trump is out of office. Even before this payoff, most experts believed that wind companies would not return to the Atlantic without legislative reform to protect approved permits from executive interference.
The oil side of the settlement is even more confusing. The Interior Department’s announcement says that TotalEnergies will “invest approximately $1 billion — the value of its renounced offshore wind leases — in oil and natural gas,” including offshore oil platforms in the Gulf of Mexico and a liquefied natural gas, or LNG, facility in Texas. But the company is already plowing billions of dollars into new offshore platforms, and it made a “final investment decision” on an expansion of its Texas LNG facility last year. The lease refund would only go to offset these existing investments, not to generate new infrastructure the company hadn’t already planned.
A statement from TotalEnergies CEO Patrick Pouyanné announcing the deal contained multiple grammatical errors, and it ended on a humdrum note, with the executive saying “we believe this is a more efficient use of capital.”
As for the debate in the U.S. Senate around so-called permitting reform legislation to secure energy projects from cancellation, the settlement with Total has done nothing to disrupt negotiations. That’s a stark contrast to what happened after the administration’s previous stop-work order on five under-construction wind farms in December, which caused bipartisan Congressional negotiations to collapse. Speaking to reporters last Friday, Senate Democrat Sheldon Whitehouse said that permitting reform talks are proceeding apace despite the new settlement.
“So far, so good, with respect to addressing substantive issues,” said Whitehouse, who represents Rhode Island and is known for his leadership on climate and energy issues. He noted that the Trump administration has declined to appeal any of the court injunctions against its actions targeting the five active wind farms.
“At the moment, I think they’re getting a strong signal from Republicans and Democrats in the Senate: Knock it off, cut out the nonsense,” he said.
This article originally appeared in Grist at https://grist.org/politics/trump-interior-offshore-wind-total/.
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