lodeUS and TotalEnergies reach 'nearly $1B' deal to end offshore wind projects
HN title (currently reads "US govt pays TotalEnergies nearly $1B to stop US offshore wind projects") is editorialized and it's unclear to me whether it's accurate. The article says:
> We're partnering with TotalEnergies to unleash nearly $1 billion that was tied up in a lease deposit that was directed towards the prior administration's subsidies
What's the deal with this lease deposit and how does "freeing it up" equate to the US govt "paying" TotalEnergies that amount?
Is this a situation where TotalEnergies put down a 1B deposit to lease the seashore from the government and the government is now canceling that agreement and giving them their money back? How does it relate to "subsidies"?
Not sure how it relates to subsidies, but it is what you said. The government is cancelling wind shore projects leased to TotalEnergies under the Biden admin for ~$930 million.
The Trump admin is paying them back with the understanding that TotalEnergies will reinvest the money into oil and gas operations in the US
You could go to the source and see[1].
> TotalEnergies has committed to invest approximately $1 billion—the value of its renounced offshore wind leases—in oil and natural gas and LNG production in the United States. Following their new investment, the United States will reimburse the company dollar-for-dollar, up to the amount they paid in lease purchases for offshore wind. Under this innovative agreement driven by President Donald J. Trump’s Energy Dominance Agenda, the American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry.
> For its part, TotalEnergies will invest $928MM, 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.
Following TotalEnergies’ $928 million in investments in affordable, reliable and secure U.S. energy projects, the United States will terminate the following leases and reimburse the company
[1] https://www.doi.gov/pressreleases/interior-and-totalenergies...
Interior and TotalEnergies Agree to End Offshore Wind Projects, Lowering Costs for American Families | U.S. Department of the Interior
Today, the Department of the Interior announced a landmark agreement with TotalEnergies for the company to redirect capital from expensive, unreliable offshore wind leases toward affordable, reliable natural gas projects that will provide secure energy for hardworking Americans
Thanks, that's helpful. Pretty annoying the original article didn't link to its source given that it was just repeating the contents of a press release.
Anyone know what these "ideological subsidies" are that they're referring to? Were they part of the agreement that was just terminated? Or was that just a vaguely related talking point they inserted into the press release for political reasons?
"ideological subsidies" for this administration means any policy supporting non-thermal and non-battery (to a lesser extent, although their lobby has pretty successfully extracted them from previous renewable associations they relied on) generating units.
To get more specific, you could say everything rolled back from the IRA as part of the BBB.
If it's just BBB they're referring to then I would call that a political talking point since that doesn't seem directly related to this deal.
Unless the subsidies being repealed explains why TotalEnergies seems happy to get out of the lease now even though they presumably thought it was a good deal for them back when they originally agreed to it. If that's true though then I don't know why neither the article nor the press release say anything about it other than in this vague allusion.
NY Times phrases it as a reimbursement to TotalEnergies for relinquishing wind leases that they paid for. The US made the reimbursement contingent on them investing in fossil fuel projects. "The deal is an extraordinary transfer of taxpayer dollars to a foreign company for the purposes of boosting the production of fossil fuels."
Total waste of $1 Bil of taxpayer dollars. If the oil and gas industry want to shut down wind projects let them pay for it.
Why would they do that when they already paid for a corrupt new regime to do it for them?
So TotalEnergies agreed to invest 1 billion is offshore wind during thr last Administration. The current Administration doesn't want any investment in renewables so they attempted to block it. A judge said the attempted block was unlawful. So then immediately the admin said something new and that instead there were "national security concerns" with building wind plants - (Which doesn't pass the smell test to me at all) and the project would be held up while untangling those.
My assumption is the company started getting upset at being toyed around and having their 1 billion investment completely stalled for so long. So the admin said we'll kill the wind if you do our fossil fuels instead. So shift your investment away from wind (we kill it and pay you back for what you investws) if you instead do fossil fuels. And that's what's being done.
So previously the company was spending 1billion on wind and getting some subsidies. Now they spend 2 billion, and get paid 1 billion from the tax payer. For them it's at best a wash, though likely a loss since I haven't heard they get subsidies with the fossil fules. And the tax payer instead of paying for tax credits or low interest loans or other subsidies that were part of wind power portion of the Inflation Reduction Act instead pay a full 1 billion dollars to the company.
> The Trump administration will pay $1 billion to a French company to walk away from two U.S. offshore wind leases as the administration ramps up its campaign against offshore wind and other renewable energy.
1. https://apnews.com/article/trump-offshore-wind-energy-climat...
US to pay TotalEnergies to drop offshore wind leases
The Department of Interior says a French energy company has agreed to give up two U.S. offshore wind leases and invest in fossil fuel projects instead. The department said Monday that TotalEnergies committed to invest approximately $1 billion in oil and natural gas production in the United States. That is the amount the company paid to purchase leases to develop offshore wind off the coasts of North Carolina and New York. The Trump administration has tried to halt offshore wind construction, but federal judges overturned those orders. These settlements are a different way of stopping U.S. offshore wind development. President Donald Trump has gone all in on fossil fuels.
They are taking money committed to a wind project and redirecting it towards burning fossil fuels - because what other lesson can we take from a global energy shock other than to increase our exposure to the next one? The company itself (France's Total) had already committed to the wind deal, so now the Trump admin is letting them off the hook, and using Trump's irrational refusal to issue licenses for wind power as the excuse for why the deal wasn't working out as originally planned.
Total is also committed to expanding LNG - Total [0] and Oil India [1] are collaborating on a $20 Billion LNG extraction megaproject in Mozambique which was paused due to an Islamist insurgency during which Total-and-Oil India-funded forces allegedly committed massacres against civilians [2].
The US, France+India, and China have been competing over this project for decades.
These are businesses - no one cares about morals, only interests. And it is in France's interest to unlock these kinds of LNG projects.
[0] - https://www.reuters.com/business/energy/mozambique-says-tota...
[1] - https://www.reuters.com/business/energy/oil-india-sees-resta...
I drive commercially.
There are no fully electric, or even hybrid, options for the type of vehicle I drive.
And even if there were, are you (tax payers) prepared to buy it for me, because I’m not due for an upgrade for about another 400,000 kilometres.
Can’t put wind generated watt-hours in my diesel tank.
Can’t put wishful thinking in my cars petrol tank.
We don't know some important specifics about the deal but (IMHO) that's on purpose and is telling, meaning you only end up obscure deal details because you have something to hide.
So I don't know what stage the project was at but by withdrawing from the deal or cancelling it, the government is going to have to pay a penalty. Is that penalty $10 million? Is it $500 million? We don't really know.
So it could be that TotalEnergies is still getting paid $1 billion but now they have to spend $600 million on some fossil fuel project. But in doing so the government has essentially paid a $400 million break penalty. You see what I mean?
I don't believe for a second that the government didn't lose money on this political cancellation. The fossil fuel project is just a way to hide that and save face (IMHO).