DOI reimburses TotalEnergies $928.3M to pivot from U.S. offshore wind to oil and gas

France’s TotalEnergies said today that has signed settlement agreements with the United States Department of the Interior (DOI) to relinquish its Carolina Long Bay offshore wind lease (Lease OCS-A 0545) and its New York Bight offshore wind lease (Lease OCS-A 0538), both awarded in 2022, along with its partners. As a result, TotalEnergies will no longer develop offshore wind projects in the United States.

Under the terms of the settlement, TotalEnergies will recover the lease fees paid and will invest an equal amount in the development of U.S. gas & power production and exports.

According to the Department of the Interior, TotalEnergies will be reimbursed $133,333,333 for the Carolina Long Bay lease and $795,000,000 for the New York Bight lease.

For its part, says Interior, TotalEnergies will invest $928 million, on the following projects in 2026:

·         The development of Train 1 to 4 of Rio Grande LNG plant in Texas;

·         The development of upstream conventional oil in Gulf of America and of shale gas production

TotalEnergies says that its studies on the leases have shown that “offshore wind developments in the United States, unlike those in Europe, are costly and might have a negative impact on power affordability for U.S. consumers. Since other technologies are available to meet the growing demand for electricity in the United States in a more affordable way, TotalEnergies considers there is no need to allocate capital to this technology in the U.S.”     “TotalEnergies is pleased to sign these settlement agreements with the DOI and to support the Administration’s Energy Policy,” said Patrick Pouyanné, chairman of the board and CEO of TotalEnergies. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees.”

“Furthermore,” said Pouyanné, “these agreements, under which we will reinvest the refunded lease fees to finance the construction of the 29 Mt Rio Grande LNG plant and the development of our oil and gas activities, allows us to support the development of U.S. gas production and export. These investments will contribute to supplying Europe with much-needed LNG from the U.S. and provide gas for U.S. data center development. We believe this is a more efficient use of capital in the United States.”

TotalEnergies has also recently signed a Letter of Intent (LOI) with Glenfarne, lead developer of the Alaska LNG project, for the long-term offtake of 2 million tons per year (Mtpa) of liquefied natural gas (LNG) over 20 years, subject to the project’s final investment decision.

“This agreement is yet another win for President Trump’s commitment to affordable and reliable energy for all Americans,” said Secretary of the Interior Doug Burgum. “Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers. We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans’ monthly bills while providing secure U.S. baseload power today—and in the future.