A coalition of US states, led by New York, has moved to sue Trump administration over a contentious deal that pays French energy giant TotalEnergies nearly $1 billion to abandon major offshore wind developments.
The lawsuit, filed on Tuesday, challenges an agreement announced in March under which TotalEnergies will receive $928 million to walk away from two offshore wind leases located off the coasts of New York and North Carolina, reports Oilprice.com.
The deal stipulates that US Treasury will reimburse the company for its leases on the condition that the funds are reinvested into American oil and gas infrastructure.
Specifically, this includes ramping up oil production in the Gulf of Mexico, building gas-powered plants, and developing a liquefied natural gas export facility in Texas.
Attorneys General from Maine, Massachusetts, New Jersey, Rhode Island, and Vermont have joined New York in legal action.
The coalition argues that the cancellation of New York project – the larger of two –will result in significant harm to state economies, energy grids, and climate objectives.
According to legal complaint, the projects had potential to generate more than 4 gigawatts of electricity, sufficient to power approximately 1.3 million homes.
Specifically, New York project was projected to deliver $10 billion in savings to ratepayers, including $500 million earmarked for low-income households.
The Trump administration has defended the move, with Interior Secretary Doug Burgum stating that offshore wind projects were only viable when “propped up by massive taxpayer subsidies” during Biden period.
However, contend the policy is a deliberate attempt to halt wind development in favour of fossil fuels. Reports indicate the administration is spending nearly $2 billion in total to incentivise energy companies to exit such projects.
This “pay-to-cancel” strategy reportedly serves as a workaround after federal judges repeatedly overturned previous administrative orders aimed at halting offshore wind construction.
TotalEnergies CEO Patrick Pouyanné described the deal as a “pragmatic” response to shifting US energy policy.
He noted that without Biden-era subsidies, project margins had become significantly more difficult, making the payout a favourable alternative, though he clarified the company is not renouncing onshore wind or international renewable investments.
While the administration has effectively blocked hundreds of wind projects, including 165 onshore farms, wind remains the largest source of renewable electricity in the US, accounting for 11 per cent of total generation.
The United States currently ranks second globally with 160 GW of installed capacity, trailing behind China’s 691 GW.
In a separate legal development, renewable energy groups filed a complaint in a District Court in Oregon on Sunday.
The suit alleges that Pentagon officials have failed to complete national security reviews for new onshore wind farms on private lands, an inaction they claim has brought a total halt to onshore development.
