The French energy company TotalEnergies is canceling two major offshore wind projects in the United States. In return, the company is receiving almost $1 billion from the US government, provided that the funds are reinvested in fossil fuel projects in the country. The world upside down?
The Donald Trump administration and TotalEnergies announced the deal on Monday at CERAWeek, the annual conference for the energy industry held in Houston, Texas.
Oil and gas operations
The two planned wind farms, with a total capacity of more than four gigawatts, were intended to be installed off the coasts of New York and North Carolina. In 2022, under the administration of former President Joe Biden, TotalEnergies paid over $928 million for those projects.
An agreement has now been reached with the US Department of the Interior to halt those investments. The US government will repay the full amount, after which TotalEnergies will commit to investing the same amount in US oil and gas operations in Texas and the Gulf of Mexico later this year.
‘New victory’
It is widely known that US President Donald Trump is not a supporter of wind energy. He has previously canceled several offshore projects. Secretary of the Interior Doug Burgum calls the deal with TotalEnergies “a new victory” for Trump’s strategy.
“Offshore wind energy is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent projects ever imposed on the American people,” he said.
TotalEnergies has concluded that “offshore wind is not the cheapest method to generate electricity” in the United States, according to CEO Patrick Pouyanné. TotalEnergies is, therefore, halting its investments in American wind energy “because such projects are currently not in the interest of the country.” At the same time, he emphasizes that the decision has no impact on the group’s ambitions in other countries.
Polarization
Donald Trump has long opposed offshore wind projects. His administration has been actively blocking or dismantling renewables projects. With this financial scheme, the US government now appears to have found an alternative strategy to slow down the development of offshore wind energy.
Inside the United States, reactions are divided. Some – mainly conservatives – are pro-fossil fuel because they consider it cheaper and more reliable, so they support the government’s decision.
Others – environmental groups, democratic politicians, and coastal states – say it’s a major setback for climate goals. They call it “misuse of taxpayer money” and highlight the loss of clean energy and jobs. Even some Republicans worry about economic damage.
Delay of energy transition
In Europe, there is concern about the rollback of climate commitments and the increased reliance on US LNG, but also pragmatic acceptance, since Europe needs gas imports.
This deal strengthens the US role as Europe’s gas supplier and reduces diversification. The EU pushes renewables and electrification, but more LNG supply, which is cheaper gas, will delay the energy transition.
The energy markets and the industry are more neutral. LNG investment is seen as strategically valuable and aligns with current demand (especially after energy crises).
