The Trump administration has signed a deal worth $928 million with TotalEnergies to give up two major offshore wind leases in the U.S. This change in strategy follows federal court rulings that blocked attempts to halt these projects due to national security concerns.
On Monday, TotalEnergies announced that it will cancel its Carolina Long Bay lease (OCS-A 0545) and New York Bight lease (OCS-A 0538)—both obtained in 2022—and exit the offshore wind sector in the United States completely.
In exchange, the company will receive the value of its lease payments, which is around $928 million, and will invest an equivalent amount into U.S. energy projects. These projects include the Rio Grande LNG export facility in Texas and oil and gas development.
This agreement comes after several federal court rulings that struck down the administration’s attempts to stop offshore wind construction on the East Coast.
Judges in various jurisdictions allowed five major projects—Sunrise Wind, Vineyard Wind, Empire Wind, Coastal Virginia Offshore Wind, and Revolution Wind—to continue, stating that the government’s national security reasons for halting construction were likely illegal or too broad.
These rulings effectively limited the administration's ability to stop projects that were already underway.
The deal with TotalEnergies indicates a new approach: canceling leases for financial compensation instead of trying to block development outright.
TotalEnergies reported that their analysis determined U.S. offshore wind projects were too expensive and not as competitive as other energy sources.
“We have decided to give up offshore wind development in the U.S. in exchange for the reimbursement of the lease fees,” stated CEO Patrick Pouyanné.
The company plans to invest the money into LNG and upstream projects, including the Rio Grande LNG facility that can handle 29 million tons per year, helping the U.S. expand its energy exports, especially to Europe.
TotalEnergies is also expanding its LNG operations with a 20-year agreement for 2 million tons per year from Alaska LNG, which strengthens its role in the U.S. energy export market.
The agreement involves two prominent leases that were granted during the Biden administration’s push for offshore wind: OCS-A 0545 (Carolina Long Bay), which was awarded for $160 million, and OCS-A 0538 (New York Bight), which received a bid of $795 million.
Together, these leases amount to about $928 million.
However, the Interior Department has stated it would reimburse only $133.3 million for the Carolina lease, which is less than the original bid. There was also an initial error in labeling the Carolina lease, as TotalEnergies confirmed that its correct designation is OCS-A 0545, not OCS-A 0535.
This deal marks one of the most significant financial setbacks for U.S. offshore wind expansion thus far, and it represents a major shift toward LNG.
It raises an important question: could this agreement set a precedent for other exits from offshore wind projects as the administration alters its energy policy?
With the courts allowing construction to resume but policy moving in a different direction, the debate over offshore wind has shifted from the courts to financial considerations.