Paying to Not Build: Inside the Federal Government's $1.8 Billion Campaign to Kill Offshore Wind

On March 23, 2026, the U.S. Department of the Interior announced what it called a "landmark agreement": the federal government would pay French energy giant TotalEnergies nearly $1 billion to walk away from two offshore wind leases in the Atlantic Ocean [1]. Five weeks later, on April 27, the administration announced two more deals—paying Bluepoint Wind and Golden State Wind a combined $885 million to surrender their leases [2]. In total, the federal government has now committed approximately $1.8 billion in taxpayer funds to pay companies not to build wind farms.

The payments represent an escalation in the administration's strategy against offshore wind. After failing to permanently halt five projects already under construction—federal judges overturned those stop-work orders [3]—the Interior Department shifted to a buyout approach, targeting projects still in earlier development stages. The deals require recipient companies to reinvest the reimbursement funds in oil and gas projects on U.S. soil [4].

The Deals: Who Got Paid, and How Much

The cancellation payments break down across four leases held by two corporate groups.

TotalEnergies received reimbursement for two leases acquired during competitive auctions in 2022 under the Biden administration. The Attentive Energy lease in the New York Bight cost $795 million; the Carolina Long Bay lease off North Carolina cost $133.3 million [1]. Under the terms, TotalEnergies committed to invest approximately $928 million in U.S. oil, natural gas, and LNG production, after which the government would reimburse the company dollar-for-dollar [4]. TotalEnergies CEO Patrick Pouyanné told reporters the company initiated the discussions: "It came from us—we took the initiative" [5].

Bluepoint Wind and Golden State Wind, both managed by Ocean Winds—a joint venture between France's ENGIE and Portugal's EDP Renewables—agreed to similar terms. Bluepoint's lease, covering waters off New Jersey and New York, cost $765 million. Golden State Wind's lease, for a floating offshore wind project off California's central coast, was valued at approximately $120 million [2]. Bluepoint is co-owned by Ocean Winds and BlackRock's Global Infrastructure Partners; Golden State Wind is a partnership between Ocean Winds and Reventus Power [6].

Source: U.S. Department of the Interior

Data as of Apr 27, 2026CSV

Both projects were in early development and had not begun construction. Each was projected to power more than one million homes upon completion [2].

Gigawatts at Stake

The four cancelled leases represent a significant loss of planned capacity, but they are only part of the story. In December 2025, the Interior Department issued stop-work orders halting construction on all five large-scale offshore wind projects under way in the United States, citing unspecified national security risks [7]. Those five projects—Coastal Virginia Offshore Wind (2,600 MW), Sunrise Wind (924 MW), Empire Wind 1 (810 MW), Revolution Wind (704 MW), and Vineyard Wind 1 (800 MW)—represent 5,838 MW of combined capacity [8].

Federal judges subsequently enjoined all five stop-work orders, concluding the government had not demonstrated an imminent national security threat [3]. Construction has resumed, but the legal uncertainty has slowed progress and increased costs.

Adding the cancelled early-stage projects—Bluepoint Wind (approximately 2,400 MW planned) and Golden State Wind (approximately 2,000 MW planned)—the federal government's actions have affected more than 10 GW of offshore wind capacity [8].

Source: EIA / Industry Reports

Data as of Apr 27, 2026CSV

The Legal Questions

The deals have drawn sharp scrutiny from legal scholars and legislators. Senator Sheldon Whitehouse, ranking member of the Senate Environment and Public Works Committee, opened a formal investigation in April 2026, warning of potential violations of the Anti-Deficiency Act—a federal law that prohibits agencies from spending or obligating funds in excess of their appropriations [9].

Whitehouse's core concern: no bureau or office within the Department of the Interior has nearly $1 billion available to pay TotalEnergies, let alone $1.8 billion for all three deals combined [9]. The administration has suggested the payments would come from the Judgment Fund, a permanent, indefinite appropriation used to pay court judgments and settlements against the government [10].

But multiple former Interior officials have questioned whether the Judgment Fund applies here. Elizabeth Klein, former director of the Bureau of Ocean Energy Management (BOEM), said "there are significant questions about under what authority Interior is doing this" [10]. Tony Irish, a former attorney in the Interior Solicitor's office, called the arrangement "a backdoor transaction" and noted that the parties reference "settlement agreements" despite no active litigation between them [10].

The requirement that companies reinvest cancellation payments into fossil fuel projects raises additional legal issues. Irish questioned whether Interior has any legal basis for dictating how companies spend settlement funds [10]. Senator Ed Markey led colleagues in requesting that FY2027 appropriations legislation prohibit the use of taxpayer funds to cancel offshore wind leases [11].

The Interior Department's press release cited no specific statutory authority for the agreements, describing TotalEnergies' lease surrender as voluntary [4]. The administration has framed the deals under the Outer Continental Shelf Lands Act, which grants the Secretary of the Interior authority to cancel leases under certain conditions, including national security [12]. Whether a voluntary buyout agreement qualifies under that framework remains untested.

The Cost to Ratepayers and Taxpayers

The $1.8 billion in direct cancellation payments is the most visible cost, but analysts say it represents a fraction of the total economic impact.

For the five projects whose construction was halted in December 2025, the costs are already substantial. The Coastal Virginia Offshore Wind project alone had $8.9 billion invested toward a total projected cost of $11.2 billion [13]. The Empire Wind project employed more than 4,000 workers before the stoppage [14]. Connecticut officials estimated that cancellation of Revolution Wind would cost New England ratepayers roughly $500 million per year in higher energy costs, because replacement power—primarily from gas-fired generation—is more expensive [15].

Research from Johns Hopkins University corroborated that estimate, finding that Revolution Wind's cancellation could cost ratepayers nearly half a billion dollars annually over several years [15]. The Institute for Energy Economics and Financial Analysis (IEEFA) warned that "costs from project investments will not disappear if projects are cancelled," forcing customers to "pay for power they are not getting" [13].

The Environmental Defense Fund noted a concrete counter-example: the already-operational portion of Vineyard Wind saved New England consumers $2 million per day in energy costs during a recent cold snap [16].

Replacement power costs compound over time. One analysis estimated that gas-fired replacement power for cancelled offshore wind would cost ratepayers an additional $3 billion over the first decade [13].

The Administration's Case

Interior Secretary Doug Burgum has argued the deals save taxpayers money in the long run. "Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers," Burgum said in announcing the TotalEnergies deal [4]. He argued that companies "were sold a product that was only viable when propped up by massive taxpayer subsidies" during Biden-era lease auctions [4].

Attorney General Pam Bondi said the reinvestment requirement would "enhance our national security and grid reliability" by redirecting capital toward "baseload power" [4].

The administration's argument rests on two premises: that offshore wind projects would have required ongoing subsidies that exceed cancellation costs, and that natural gas provides more reliable electricity than wind. The Interior Department's press release for the TotalEnergies deal cited no independent cost-benefit modeling, grid reliability studies, or comparative energy price analysis to support these claims [4].

Some energy market analysts have noted that offshore wind costs did rise significantly between 2021 and 2024. The levelized cost of energy for U.S. offshore wind surged nearly 50% to $114.20 per megawatt-hour during that period, driven by inflation and supply chain constraints [17]. Ørsted, the world's largest offshore wind developer, recorded approximately $4 billion in impairment losses related to U.S. project cancellations in 2023-2024 [17].

However, these cost increases affected projects globally and have since stabilized. Proponents of the cancellations have not presented independent modeling showing that the lifecycle costs of completing the cancelled projects would have exceeded the combined cost of cancellation payments, stranded infrastructure, replacement power, and foregone clean energy generation.

Jobs and Political Geography

The offshore wind industry has warned of severe employment impacts. Industry groups estimated the construction halt put more than 17,000 offshore jobs at risk, with thousands more onshore positions in manufacturing and port infrastructure tied to the projects [14].

The job losses are concentrated along the East Coast, in congressional districts spanning Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Virginia, and North Carolina [14]. The South Brooklyn Marine Terminal, upgraded as part of the Empire Wind project, employed thousands of construction workers [14]. Port facilities in New Bedford, Massachusetts and Norfolk, Virginia were purpose-built or expanded for the offshore wind supply chain.

Grid Strategies President Rob Gramlich noted that "offshore wind is great at meeting winter peak loads in the Mid-Atlantic and Northeast, so federal blockage of utility resource plans harms reliability" [16]—directly contradicting the administration's reliability argument.

Fossil Fuel Prices and the Replacement Energy Question

The administration's pivot toward natural gas as a replacement for offshore wind comes at a volatile moment for fossil fuel markets. WTI crude oil prices have surged 43.4% year-over-year, reaching $91.06 per barrel in April 2026 after dipping to $55.44 in December 2025 [18].

Source: FRED / EIA

Data as of Apr 20, 2026CSV

While natural gas and oil prices do not move in lockstep, they are correlated, and the broader trend raises questions about the cost stability of fossil fuel-dependent electricity. Wind energy, once built, has zero fuel costs—a hedge against precisely this kind of price volatility.

Nationally, renewable energy capacity additions continue to outpace fossil fuels. In 2026, solar, wind, and battery storage added over 55 GW of new capacity, while net fossil fuel and nuclear additions totaled less than 1 GW [19]. Net fossil fuel capacity is projected to fall by 4,261 MW this year [19]. The cancelled offshore wind projects would have contributed meaningfully to the clean energy pipeline in states where electricity demand is growing.

No specific fossil fuel or nuclear projects have been publicly announced to fill the capacity gap left by the cancelled wind leases. The administration's reinvestment requirements direct companies toward upstream oil and gas production and LNG export infrastructure—not toward new electricity generation capacity in the affected regions.

The European Comparison

The United States is not the only country where offshore wind development has hit turbulence. In 2024, Denmark failed to attract any bids in an offshore wind auction structured around negative bidding—where developers pay the government for the right to build [20]. Germany experienced a similar outcome, with zero bids in a major auction [20]. The UK saw Vattenfall halt its 1.4 GW Norfolk Boreas project due to rising costs [20].

But the European response has been the opposite of the U.S. approach. Rather than paying companies to abandon wind, European governments restructured their auction mechanisms. Denmark and Germany shifted to Contracts for Difference (CfDs)—government-backed agreements that guarantee developers a stable revenue stream, reducing investment risk [20]. The UK expanded its CfD program. WindEurope, the European wind industry association, declared negative bidding "finally dead" as governments moved to make projects viable rather than cancel them [20].

The contrast is stark: where European governments absorbed restructuring costs to keep wind capacity in the pipeline, the U.S. government is paying companies to remove capacity from the pipeline.

Political Donations and Lobbying

Public campaign finance and lobbying records do not reveal direct lobbying by TotalEnergies, EDP Renewables, or ENGIE specifically targeting the cancellation payment mechanism before its announcement. TotalEnergies CEO Pouyanné said the company approached the administration, not the reverse [5].

However, the structure of the deals—which require cancelled-wind-lease proceeds to be reinvested in fossil fuels—aligns with broader fossil fuel industry advocacy. The deals effectively use public funds to subsidize new oil and gas investment, a long-standing policy goal of the fossil fuel lobby. Senator Markey and Representative Alexandria Ocasio-Cortez characterized the payments as a "payoff" that uses taxpayer money to "kill offshore wind projects" [11].

What Comes Next

The administration has signaled that more deals are forthcoming. Interior Department officials confirmed they are in active negotiations with additional leaseholders [6]. ENGIE executives acknowledged discussions with U.S. officials about "possibly canceling" additional offshore wind leases [6].

Meanwhile, the legal landscape remains unsettled. All five construction stop-work orders have been overturned by federal courts [3]. The Senate investigation into the TotalEnergies deal is ongoing [9]. And the fundamental question of whether Interior can use the Judgment Fund—or any existing appropriation—to finance nearly $2 billion in lease buyouts without congressional authorization remains unresolved.

The offshore wind industry, for its part, is not yet dead. Revolution Wind began delivering power to New England in March 2026 [21]. Vineyard Wind continues operating off Massachusetts. The court orders allowing construction to proceed on all five halted projects remain in effect. But the cancellation-payment strategy represents a new front: rather than fighting projects in court, the government is paying to make them disappear—and asking the companies to put the money into fossil fuels instead.