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

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After repeated legal setbacks, the Trump administration is now turning to a new strategy of offering cash compensation in exchange for the voluntary withdrawal of wind power developers, seeking to end two yet-to-begin offshore wind projects by paying nearly $1 billion.

According to a New York Times report on the 17th, the Trump administration plans to pay the French energy giant TotalEnergies more than $928 million, requiring it to relinquish leases for two offshore wind projects located off the coasts of New York and North Carolina. At the same time, TotalEnergies must also commit to increasing investments in natural gas infrastructure in Texas.

This move marks a significant shift in the Trump administration's stance toward the U.S. offshore wind industry. Previously, the Department of the Interior ordered a halt to five ongoing projects citing national security, but after developers and several state governments filed lawsuits, federal judges rejected the government's position five times, leading to a deadlock in administrative measures.

Meanwhile, on Friday this week, two ongoing wind projects reached milestones—Revolution Wind announced the start of power supply to the New England grid, and Vineyard Wind completed the installation of all 62 turbines.

$928 Million Compensation to Cancel Leases

According to a copy of the agreement reviewed by the New York Times, the Department of the Interior will cancel TotalEnergies’ federal waters leases for the two projects, with the Department of Justice subsequently paying the company compensation equivalent to the winning bid amounts during the Biden administration’s term.

Specifically, TotalEnergies will receive $795 million in compensation for relinquishing the Attentive Energy project off New York, and over $133 million for relinquishing the Carolina Long Bay project off North Carolina, totaling more than $928 million.

In return, TotalEnergies must make "accelerated investments" in natural gas power plants and production facilities in Texas—the investment scale and project names are 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 these investments would help "respond to the national energy emergency."

Project Background and Potential Impact

The two projects to be halted are both in the planning stage and have not started construction. Attentive Energy is located 54 miles south of Jones Beach, New York, in federal waters. When completed, it could supply power to over a million households and businesses and is expected to be operational in the early 2030s.

In November 2024, the CEO of TotalEnergies stated that, in light of Trump’s election, the company would "suspend the project" but was interested in retaining the lease to restart after Trump’s term. The settlement plan now requires the company to give up the leases entirely.

Carolina Long Bay, a wholly owned subsidiary of TotalEnergies, is located 22 miles south of Bald Head Island, North Carolina. Once completed, it could meet the electricity needs of about 300,000 households and businesses.

Use of Fiscal Expenditure Raises Questions

This approach of using fiscal spending to achieve policy objectives has sparked debate in legal circles. John Leshy, who served as Chief Legal Counsel at the Department of the Interior during the Clinton administration, commented: "It’s truly rare for the government to make such a cash outlay just because Trump dislikes offshore wind."

Trump has long criticized offshore wind. As early as 2012, he tried unsuccessfully to block a wind power project near a golf course in Scotland. He has repeatedly called such projects "ugly and inefficient" and baselessly claimed that wind projects "drive whales crazy."

There is still uncertainty as to whether this settlement will be reached. Documents show that if TotalEnergies refuses the plan, the Trump administration will still unilaterally cancel the leases, which would then lead to costly lawsuits for both parties. Analysts believe concern over a prolonged legal battle is driving both sides to seek an out-of-court solution.

It is noteworthy that the Trump administration has already repeatedly lost on legal grounds: several federal judges, after reviewing classified reports, stated they were not convinced by the government’s national security argument. This latest move targeting unbuilt but leased projects marks a clear escalation in the administration’s campaign against offshore wind.

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