French energy giant Total Energy is embroiled in a lawsuit with seven U.S. states and the federal government as President Donald Trump’s administration upends domestic energy policy, promoting fossil fuels while shutting down some wind energy projects.
It also raises questions about the predictability of the business and investment environment under a president who has rolled back many policies launched under his predecessor, Democratic President Joe Biden, including investments in renewable energy.
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The lawsuit concerns two offshore wind farms planned by Total Energy in the United States. The larger one, Attentive Energy, was to be built 54 miles (87 km) south of Jones Beach, New York, and would power 1 million homes and businesses in New York and New Jersey. The smaller Carolina Long Bay was scheduled to begin operations in North Carolina in the early 2030s.
Total Energy reached a deal with the Trump administration in March to abandon the $928 million plan and instead invest in oil and gas projects. This week, seven northeastern states sued the Trump administration over the deal.
The states’ attorneys general said in a filing that New York state has a “substantial need for additional power.” It said the Attentive wind project off the coast of the state “would have ensured grid reliability and also contributed to meeting statutory climate targets” for the state and other northeastern states.
On March 23, the administration reached an agreement with Total Energy to terminate the Atento and Carolina Long Bay offshore wind leases. In April, it reached similar agreements to terminate leases at Golden State Wind in Morro Bay, off the coast of central California, and Blue Point Wind, off the coast of New York. The department will withdraw from four leases and instead pay developers more than $2 billion to invest in oil and gas projects.
“To call these transactions unusual is a huge understatement,” said Dave Owens, Albert Abramson Distinguished Professor of Law at the University of California School of Law in San Francisco.
“I’m not aware of any precedent for this,” said Jordan Diamond of the Environmental Law Institute, a Washington, D.C.-based think tank. This is the first time a developer has been paid for canceling a wind farm lease.
The California Energy Commission has issued a subpoena to Golden State Wind requiring it to produce all documents and emails related to the transaction. Legal experts say this could lead to California filing a lawsuit against Golden State Wind and the federal government.
An agreement to develop the offshore wind project, reached between the Interior Department’s Bureau of Ocean Energy Management and the developer, will cost the state more than $100 million in damages for ports, moorings and other infrastructure that California has already built in preparation for the project, according to a subpoena filed by the state.
According to the lawsuit filed Tuesday, the Northeastern states allege that the Interior Department “(1) failed to provide a reasonable explanation for the termination of the leases, (2) failed to account for any change in position or dependent interest in New York, (3) to address alternative means of achieving their objectives, or (4) to provide a true justification for their actions.”
new technology
Trump has opposed offshore wind projects since taking office. “I will not allow the installation of wind turbines,” he said in August.
In December, the Department of the Interior canceled five offshore wind projects under construction in the northeastern United States. The developer sued and the court allowed construction to continue.
Projects underway in Massachusetts, New York, Rhode Island and Virginia are already producing 1 gigawatt of electricity, enough to power 500,000 homes, said Stephanie Francoeur, a spokeswoman for Oceanic Network, an offshore wind industry group.
Later, between March and April, agreements were reached to cancel the leases for four projects.
California Rep. Jared Huffman and Maryland Rep. Jamie Raskin also launched an investigation into Total Energy, asking why taxpayer money was used to enter into such an agreement they called “illegal.” They asked for all documents related to the agreement and said, “Please listen to and consider the notice.”
When asked for comment, Total Energy pointed Al Jazeera to a statement from March agreeing to withdraw from the project.
At the time, the company said it was withdrawing from the project because it was “not in the national interest,” adding: “Total Energy’s research into these leases has shown that offshore wind development in the U.S., unlike in Europe, can be costly and negatively impact electricity for U.S. customers. Total Energy does not believe there is a need to allocate capital to this technology in the U.S., as other technologies are available that can more affordably meet the growing power demand in the U.S.”
But in April, Total Energy CEO Patrick Pouyanne told Axios News that offshore wind projects “take years and years to develop…If you change government every four years and they change their mind, and every four years you stop investing, it won’t work. I can’t do that.”
He told CNBC News that this was money returned to the company, not taxpayers.
The Ministry of Home Affairs cited security concerns raised by the Department of Defense as the reason for terminating the lease. But a lawsuit filed by a northeastern state says the projects were inspected and potential safety concerns were considered before being awarded.
“We need to see this in the broader context of many actions to prioritize fossil fuels,” said Jordan Diamond, president of the Washington, D.C.-based Environmental Law Institute.
The Trump administration has previously cut subsidies for solar power projects, electric vehicles and other renewable energy, but offshore wind projects could be particularly hard hit because they are a relatively underdeveloped technology.
Wind turbines off the U.S. East Coast are installed on fixed platforms in the Atlantic Ocean, but on the other side of the country in the Pacific Ocean, the ocean floor could collapse dramatically, says clean energy analyst and author Paul Gipe.
As a result, the turbine is fixed on a floating platform with a mooring and anchoring system that connects to the seabed.
Although the technology is relatively advanced in Europe, Golden State Wind, a joint venture between Ocean Winds and Leventas, will be one of the first such projects in the United States.
Ocean Winds, a joint venture between Spanish renewable energy company EDP and French energy company Engie, owns the Golden State wind project with the Canada Pension Plan’s sustainable energy arm. Ocean Winds launched its first offshore wind project near the coast of France in early May.
Oceanic Network’s Francoeur said offshore wind power is “well-suited to power geographically constrained coastal load centers that require new energy sources to meet demand.”
James Salley, a professor at the Haas School of Business at the University of California, Berkeley, said solar and onshore wind power sources currently have the lowest levelized cost, or average cost of energy over an asset’s life, but natural gas is very expensive.
According to a recent report from Lazard, offshore wind costs range from $70 to $157 per MWh, which is comparable to gas and coal generation, but slightly more expensive than solar and onshore wind.
But if it can “capture peak energy demand in the afternoon and evening,” it could become part of a mix of power sources, said Mark Z. Jacobson, a civil engineering professor at Stanford University.
“I want the United States to innovate and develop new technologies,” says Berkeley’s Sally. “These conditions have created an uncertain investment environment for domestic and international companies. The U.S. economy could stay on track as AI investments overcome headwinds in other sectors, including renewable energy,” he said. “But behind the scenes, this makes it difficult to invest in other areas.”
further litigation
The lawsuit filed by seven states also questions payments to developers through so-called “judgment funds.” “There must be a legitimate dispute over liability or amount” for the judgment to be entered, the state attorneys general said in a court filing.
However, there was no dispute here and the project was progressing at the time the payment was agreed.
“The use of judgment funds could be seen as capricious,” said Tony Irish, senior counsel for Environmentally Responsible Public Employees, a nonprofit organization that works to protect the environment and public servants in environmental agencies.
The case also raises concerns that the Interior Department used the Outer Continental Shelf Act to reach this lease agreement, as the department did not hold a public hearing to determine whether there were legitimate safety concerns.
In the ocean, “wind power, mining, and oil and gas leases are covered by the same law,” said Diamond of the Environmental Law Institute. The precedent set here could also impact leases awarded in those areas, she says.
After TotalEnergies reached a settlement abandoning its offshore wind leases, one of its investors, the New York State Common Retirement Fund, said it was considering divesting from the company.
These studies “suggest that there is a cost to working with the Fed,” said Owens, of the University of California School of Law.
Owens expects more lawsuits as the California Energy Commission seeks documents from Golden State Wind regarding its communications with the Interior Department regarding the deal.
This could also have a signaling effect for other offshore wind developers. Industry analysts say other developers have received offers to enter into similar payment agreements to get out of their leases.
Further lease withdrawals would further undermine the state’s investments in building ports and other infrastructure and training the people who work there. The attorneys general say in their lawsuit that these projects would have created skilled jobs for people in each state.
“Companies that remain resolute may fare better in the long run,” said Kit Kennedy, managing director of power, climate and energy at the National Resources Defense Council, a Washington, D.C.-based environmental nonprofit. “This moment will pass.”
