By Haley Zaremba – Mar 29, 2026, 10:00 AM CDT
- The U.S. will reimburse TotalEnergies nearly $1 billion to abandon offshore wind projects that could have generated over 4 GW of clean power.
- In exchange, the company will reinvest in U.S. oil, gas, and LNG infrastructure, marking a sharp policy pivot.
- The move comes as global energy markets tighten due to geopolitical conflict and rising demand from AI and data centers.
Donald Trump’s hatred for wind farms reached a new peak this week. The President announced that the United States will pay $1 billion in taxpayer dollars to a French company to not build planned wind farms in leased federal waters off the coast of New York and North Carolina. Together, those wind projects would have supplied more than 4 gigawatts of clean electricity for households and businesses in the United States.
Under the unusual deal, the French energy giant TotalEnergies would abandon its planned wind farms and annul the lease deal it made during the Biden administration. After the U.S. Treasury reimburses the company the $928 million it paid for those leases, the deal stipulates that TotalEnergies will reinvest that money in oil and gas projects in the United States. This would include a facility to export liquefied natural gas from Texas, ramping up oil production in the Gulf of Mexico, and building additional gas-powered plants.
“The deal is an extraordinary transfer of taxpayer dollars to a foreign company for the purposes of boosting the production of fossil fuels, a main driver of climate change, while throttling offshore wind power,” reads a New York Times article published earlier this week.
While the Trump administration’s decision to axe a planned domestic energy project seems fuelled by personal vendetta and long-standing hatred for wind energy rather than energy security strategy, for France’s TotalEnergies, the deal is reportedly a pragmatic one. “When the Trump administration came to power and began setting U.S. energy policy, we said that we’ll have to reconsider, clearly, these offshore wind project developments,” says Patrick Pouyanné, the CEO of TotalEnergies. He said that without the Biden-era clean energy subsidies that have been cut by the Trump administration, the margins for such a project become much tougher in the United States. A $1 billion payout is therefore a pretty good alternative.
“To be clear, we don’t renounce onshore wind,” Pouyanné went on to say. “We continue to invest in onshore solar, onshore wind, batteries [in other countries].”
This is just the latest in a long series of attacks on ongoing offshore wind projects in the United States on the part of the Trump administration. Last year, Trump tried to order an immediate halt to the construction of five wind projects along the East Coast of the U.S., but judges overturned this ruling across the board. This failure has led to the administration’s current tactic, paying off companies to cancel their wind power projects before they’ve even begun.
This most recent deal comes at a pivotal time in global energy markets. While it’s somewhat puzzling that the Trump administration would choose to derail plans that would boost the United States’ energy independence and resilience to oil market shocks, it stands to reason that the U.S. would be doing everything it can to boost liquefied natural gas output as oil and gas prices soar across the globe. Europe will also benefit from an increased flow of LNG out of the United States, which would not require navigating the chaos in the Strait of Hormuz.
The Strait of Hormuz, through which one-fifth of global oil trade passes on a normal day, has been closed to nearly all traffic for nearly a month now as the United States and Israel continue to wage war in Iran, and that closure is not likely to reverse any time soon. This energy crisis comes on top of another concurrent threat to global energy security – the rapid rise of AI and data centers, which have sent energy growth trends skyrocketing and global leaders scrambling to shore up energy security strategies.
By Haley Zaremba for Oilprice.com
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