U.S. to Refund TotalEnergies Nearly $1 Billion to Drop Offshore Wind Leases and Invest in Oil and Gas

HOUSTON — At one of the world’s premier energy conferences on Monday, the U.S. government took an unusual step: it agreed to return nearly $1 billion to French energy giant TotalEnergies in exchange for the company giving up two major offshore wind leases—and directing that capital instead into U.S. oil and gas projects.

The agreement, unveiled March 23 at the CERAWeek by S&P Global conference in Houston, cancels federal leases for planned wind farms off New York–New Jersey and North Carolina and would effectively refund most of what TotalEnergies paid for them four years ago.

Interior Secretary Doug Burgum, announcing the deal on stage alongside TotalEnergies Chairman and CEO Patrick Pouyanné, called the settlement a “landmark agreement” that redirects capital from what he described as “unreliable, unaffordable and unsecured energy” toward fossil-fuel supply.

“The era of taxpayers subsidizing unreliable, unaffordable and unsecured energy is officially over,” Burgum said.

TotalEnergies said it will instead invest the same amount in liquefied natural gas (LNG) and oil and gas projects in the Gulf of Mexico and U.S. shale basins. Once those investments are made, the federal government would reimburse the company dollar-for-dollar, up to the amount it paid for the leases.

Pouyanné described the arrangement as a “win-win agreement” aligned with U.S. energy priorities.

“We are ending the development of our two offshore wind projects in the United States,” he said.

Under the terms described at CERAWeek, TotalEnergies also pledged to renounce offshore wind development in the U.S. entirely.

Two leases, nearly $1 billion—and roughly 4 gigawatts of lost capacity

The deal covers two leases awarded in 2022, during the Biden administration’s push to make offshore wind a core pillar of U.S. climate policy.

• New York Bight (OCS-A 0538): In February 2022, a TotalEnergies-led venture, Attentive Energy LLC, bid $795 million for an 84,000-acre tract at least 36 miles off New York and New Jersey. The company had projected more than 3 gigawatts of capacity.
• Carolina Long Bay (OCS-A 0545): Three months later, TotalEnergies Renewables USA paid $160 million for a lease off North Carolina, with a planned capacity around 1 gigawatt.

In total, TotalEnergies spent $955 million securing the sites. People familiar with the settlement said the reimbursement would be “about $1 billion,” with some reports placing it near $928 million after adjustments. The Interior Department has not released the full agreement.

Combined, the canceled projects represent about 4 gigawatts of potential offshore wind—material in a sector where the Biden administration had set a goal of 30 gigawatts in operation by 2030.

From centerpiece to cash-out: how the deal took shape

The New York Bight auction was billed in 2022 as the largest U.S. offshore wind lease sale ever, raising more than $4 billion across six tracts. But the projects faced headwinds well before the settlement.

After Donald Trump returned to the White House in January 2025, his administration moved to reverse federal support for offshore wind. The Interior Department paused new lease sales and permitting reviews, and the White House issued orders to halt work on some projects already under construction or permitted, citing national security and reliability concerns.

Some directives were later narrowed or blocked in federal court, but the legal outcomes were mixed, and developers faced prolonged uncertainty.

TotalEnergies suspended development work on its leases after Trump’s election victory in November 2024. By early 2026, according to people briefed on the talks, the company and Interior Department lawyers were discussing a settlement to unwind the leases and address potential claims tied to regulatory interference and delays.

Offshore wind economics also deteriorated across the U.S. and Europe due to cost inflation, supply chain constraints, and contract prices that no longer covered expenses. Several projects were canceled or renegotiated; at least one developer paid significant penalties to exit power contracts with a state.

Pouyanné indicated TotalEnergies now sees U.S. capital as better deployed in LNG—citing, among other assets, the Rio Grande LNG export terminal in Texas, where it holds a stake and long-term purchase agreements—as well as conventional projects in the Gulf of Mexico and shale basins.

Collision with state climate plans

The settlement lands hardest in states that have built climate and economic development strategies around offshore wind.

• New York law requires 70% renewable electricity by 2030 and includes a mandate for 9 gigawatts of offshore wind by 2035. Authorities have planned port upgrades in places like Brooklyn and Staten Island to support turbine staging and component manufacturing.
• North Carolina planning documents and the NC TOWERS task force have set goals of 2.8 gigawatts by 2030 and 8 gigawatts by 2040, with expected benefits for ports and coastal labor markets.

With TotalEnergies’ exit, both states lose projects that were expected to contribute meaningfully to those targets and to help anchor local supply chains.

Climate advocates call it a ‘billion-dollar bribe’

Environmental and climate groups condemned the arrangement as an extraordinary use of public funds to dismantle clean energy development.

One advocate characterized the settlement as “a billion-dollar bribe to kill offshore wind,” arguing the administration was using taxpayer money to accomplish what courts had limited through rulings against some stop-work orders.

Critics also said that conditioning reimbursement on fossil-fuel investment functions as an implicit subsidy for oil and gas, clashing with warnings from the International Energy Agency and the U.N. Intergovernmental Panel on Climate Change about building new long-lived fossil infrastructure.

The Interior Department has not publicly detailed the legal authority for the reimbursement or the budget accounts that would cover it. Legal experts said the government may be treating the payment as a settlement of potential claims linked to delays and regulatory interference, though the administration has not disclosed any formal litigation by TotalEnergies.

A new precedent for energy policy

The agreement appears to be the first time the federal government has paid a private company to abandon renewable energy projects and explicitly tied reimbursement to new fossil-fuel investment.

In prior offshore wind cancellations, money has often flowed the other direction—for example, when a developer paid New Jersey hundreds of millions of dollars to exit a project after cost increases made it uneconomic under existing contracts.

By contrast, the TotalEnergies deal removes two large tracts from the near-term offshore wind pipeline. A future administration would have to decide whether to re-auction the New York Bight and Carolina Long Bay areas, and on what terms. Analysts and industry executives are watching for signs other leaseholders might seek similar concessions.

For now, the settlement is a public marker of the administration’s energy priorities: a staged announcement at a major industry conference underscoring that the federal government is willing to spend significant sums not only to promote oil and gas, but to pay a major company to walk away from offshore wind.