US to Pay TotalEnergies $1bn in Taxpayer Money to Drop Wind Projects, Redirect Investments to Oil and Gas

As part of the deal announced Monday, the French energy company will abandon its plans to build wind farms off the US East Coast.

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As the widening conflict in the Middle East drives up global oil and gas prices, the US has announced it will pay French energy giant TotalEnergies nearly $1 billion to drop two offshore wind projects in the country.

In an unusual move, the Interior Department announced on Monday that it will reimburse TotalEnergies $928 million, the sum the multinational paid the Biden administration for leases in federal waters to build offshore wind farms off New York and North Carolina. TotalEnergies, one of the world’s top six “supermajor” oil companies and one of the 20 largest historical emitters of planet-warming greenhouse gases, promised in turn to reinvest that money in oil and gas projects in the US, including in Texas.

“They don’t like us to develop this offshore wind concession because they have some national security concerns. Not up to me to decide yes or no,” TotalEnergies CEO Patrick Pouyanné told CNBC.

The Trump administration cited undisclosed national security concerns when it ordered five other wind farms along the East Coast to halt construction in December. Federal judges have since weighed in, dismissing the administration’s national security claims and ordering construction to resume. One judge called the suspension “arbitrary and capricious.”

Lena Moffitt, Executive Director of Evergreen Action, a climate advocacy group, called the new deal “a taxpayer-funded bribe to kill homegrown clean energy and hand the money straight to oil and gas executives.” Anne Jellema, Chief Executive of the campaign group 350.org described it as a “handout to polluters” and an “insult to every American household that the government is funneling billions in public funds into the pockets of the oil and gas industry while citizens are being crushed by record-high utility costs.”

The deal comes as US-Israeli attacks on Iran, which unleashed a wider conflict in the Middle East, triggered the largest supply disruption in the history of the global oil market, fueling the world’s worst global energy crisis.

“I suspect that the DOI will do other deals with other companies, so maybe we are the first to open the door, but it’s a matter of win-win situation,” Pouyanné said, adding that investing in gas projects is part of TotalEnergies’ strategy.

TotalEnergies in Court

TotalEnergies is embroiled in lawsuits in Europe for its contribution to global warming. In one, a coalition of French local authorities alongside five local civil society organizations are challenging the company’s continued expansion of oil and gas production despite extensive and indisputable scientific evidence of their impact on global climate. Despite positioning itself as a “major player in the energy transition,” TotalEnergies has plans to increase its hydrocarbon production by 3% per year until 2030, with at least two-thirds of its investments in fossil fuels. A verdict is expected on June 25.

Separately, a Belgian farmer sued TotalEnergies two years ago to seek compensation for the damage that numerous extreme weather events, which he says are a direct result of the company’s activities, caused to his farm. A verdict, initially expected last week, was postponed until September 9 as the court said it wanted to wait for the judgment in the French case.

Last year, a French court found that TotalEnergies misled consumers regarding its climate commitments, marking the first time a court has held an oil and gas company liable for greenwashing.

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