The Trump administration blocked two permitted US wind energy projects from development this week, with an agreement to pay millions of dollars in refunds to the companies behind them if those funds are reinvested in oil and gas.
US Department of the Interior officials framed the canceled agreements as a way to “promote US energy security and affordability” by funneling funds “away from intermittent, higher-cost energy sources toward proven conventional solutions”, in an announcement issued on Monday.
Donald Trump’s war in Iran has caused a fuel crisis and spiked global prices, while the increasing energy appetite of new AI datacenters has put more pressure on power supplies. As energy costs and consumption continue to rise, wind and other renewable sources have been cited as essential upgrades to secure strained power grids that also help the US secure a more sustainable future.
“Unable to defend its offshore wind actions in court, the administration is using taxpayer dollars to buy foreign companies out of legally executed offshore wind leases,” Sam Salustro, a senior vice-president of pro-offshore wind group Oceanic Network, said in a statement. “Costs to consumers’ pocketbooks are staggering.”
The agreement adds to a separate deal to pay $1bn to a French energy company to strike down a permitted wind project made last month, a signal that the administration has opted to deal directly with investors to block the renewable energy investments rather than risk opposition in the courts. A US federal judge ruled against Trump earlier this year and allowed five wind farms slated for construction along the east coast to proceed after the president tried to stop them from being completed.
Global Infrastructure Partners, an American infrastructure investment fund and subsidiary of BlackRock, committed to invest up to $765m into a US-based liquefied natural gas facility. Golden State Wind could recover lease fees up to $120m if an equal amount is invested in oil and gas assets, energy infrastructure or liquid natural gas projects on the Gulf coast. Neither company will pursue new offshore wind projects in the US, according to the announcement.
“Our priority remains disciplined capital allocation and delivering reliable energy solutions that create longterm value for ratepayers, partners, and shareholders,” Michael Brown, CEO of Ocean Winds North America, a 50% owner of Bluepoint Wind and Golden State Wind, said in a written statement issued with the announcement.
“Now that hardworking Americans are no longer footing the bill for expensive, unreliable, intermittent energy projects, companies are once again investing in affordable, reliable, secure energy infrastructure,” Doug Burgum, the interior secretary, said in a written statement included with the press release.
He added that the agreement also addressed national security concerns, but provided no additional details. The Department of the Interior did not respond to requests for comment about how the projects could have threatened national security. It’s a claim Trump has made in the past, including late last year when he ordered all wind farm construction to be paused. That order was overturned in the courts, but the interior department said at the time that the tall turbines could hamper the military by creating radar interference. The department claimed it would work with the US Department of Defense on a workaround.
Trump has also been vocal about his personal opinion about wind projects, and his belief that the turbines are ugly. In March, during a meeting with tech industry leaders, he called wind energy “worthless”, and said: “We don’t do wind in this because it’s a loser.”
In 2012, before he became president, Trump tried to stop 11 turbines from being constructed near his golf course in Scotland because he believed they would ruin the view. Despite his attempts, which included warning the Scottish parliament that they would affect tourism, those turbines now produce enough energy to supply up to 80,000 homes, according to the BBC.
The projects bought out by the administration had even more potential. Up to 2 gigawatts of offshore wind energy – an amount that could power roughly 1.1m homes – was projected from the California project. The other project, which would have been constructed off the coast of New Jersey and New York, would generate 2.4 gigawatts.
The other project, which the administration promised $1bn for last month, would have produced enough electricity to power 1.2m homes, according to a letter written to Burgum and the acting attorney general, Todd Blanche, from the Democratic US representatives Jared Huffman and Jamie Raskin earlier this month.
“We demand answers about the legal basis for this closed-door deal to pay energy companies not to provide affordable, clean, renewable energy to American families,” they wrote in the letter, calling the agreement outrageous and claiming that it is unlawful. “President Trump has been relentless in his attacks on affordable, clean energy. This backdoor deal to cancel these projects will undeniably have negative economic, environmental, and national security impacts for which this administration must answer.”