Earlier this week, at the CERAWeek energy conference in Houston, the Interior Department and the French oil supermajor TotalEnergies unveiled a very strange settlement. The Trump administration announced that it would give Total almost $1 billion to scrap its proposed offshore wind farms in the Atlantic Ocean, and in exchange Total would invest around $1 billion in US oil and gas projects.
Many climate activists and media outlets described this settlement as the government deploying taxpayer money to get a company not to build something, and the Trump administration itself almost seemed to invite that interpretation. The truth, as my Grist colleague Rebecca McCarthy and I point out in our story this week, is a little weirder. The Interior Department has already tried to cancel five almost-complete offshore wind farms in the Atlantic, and has lost in court on all five attempts. If the administration were to cancel other leases like Total’s, the courts would likely order it to pay out the leaseholders. The nearly $1 billion payment to Total is the exact amount Total paid to lease the ocean territory in the first place. In that sense, it represents a preemptive admission of legal defeat by the government.
The project’s cancellation doesn’t do much to change the picture for offshore wind. Major companies like Total already view the US offshore wind sector as uninvestable thanks to Trump’s animus—a future president who wants to rebuild the industry was already going to be starting from zero. If more companies take government settlements to give up their leases, that just means Interior will have to auction them off again in some future administration—likely with some legal guarantee against arbitrary future cancellations. The Northeast still needs offshore wind to meet growing power demand, and at some point the market will return.
As for the oil and gas projects Total promised to fund, that’s yet another smokescreen. The company had already made a “final investment decision” on its liquefied natural gas facility in the Gulf of Mexico and was already pouring billions into new offshore oil production well before the Interior Department got involved. Multinational oil companies are a lot of things, but one thing they are not is unscrupulous with their money. They tend to make decisions based on financial outcomes, not political browbeating. As Bob Dylan said, you don’t need a weatherman to know which way the wind blows.
Check out our reporting on the administration’s latest shell game.
—Jake Bittle
