White House to pay TotalEnergies $1 billion to kill off East Coast wind farm projects

The White House has agreed to pay $1 billion to shelve East Coast wind farm projects that it condemned as “costly,” with the French energy giant's investment set to be diverted into U.S. LNG production instead.

The U.S.' Department of the Interior (DOI) announced on Monday what it said was “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.”

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 U.S., the DOI said in a statement.

Following the new investment, the department said the U.S. will reimburse the company dollar-for-dollar, up to the amount they paid in lease purchases for offshore wind.

The agreement will see TotalEnergies shelve its offshore wind developments in New York and Carolina. It will invest instead in the development of four trains at the Rio Grande LNG plant in Texas, as well as upstream conventional oil in the U.S. Gulf and shale gas production.

U.S. President Donald Trump has made no secret of his loathing for offshore wind developments, frequently lambasting such projects as expensive and ugly.

The announcement comes as the Iran conflict continues to disrupt global oil and gas supplies, making the U.S. — the largest exporter of liquefied natural gas (LNG) in the world — an even more critical supplier for markets in Asia and Europe.

The DOI stated on Monday that, “in light of the national security concerns,” TotalEnergies had pledged not to develop any new offshore wind projects in the U.S. CNBC has contacted TotalEnergies for comment and is awaiting a response.