The Trump administration has agreed to pay German energy giant RWE $1.22bn to relinquish its offshore wind leases off the coasts of New York, California, and Louisiana, redirecting those funds toward fossil fuel investments. This marks the fifth deal of its kind, bringing total taxpayer spending on killing offshore wind projects to nearly $4bn.
RWE's decision and settlement details
Announcing the deal with the US interior department on Thursday, RWE said it had agreed to give up its offshore wind leases. “After careful consideration, it was determined there is no path forward to permit these projects in the US for the foreseeable future,” the company said, referring to leases it initially secured with a “long-term commitment to develop offshore wind capacity.”
RWE paid $1.1bn for its New York lease in a 2022 auction held by the Biden administration, while its Louisiana and California leases cost a combined $163m, according to Reuters. The settlement resolves RWE US Offshore’s legal claims and provides $1.22 billion in settlement funds, allowing the company to “direct resources toward energy projects that can be advanced with certainty.”
Redirecting funds to fossil fuels
As part of the agreement, RWE will spend $900m to acquire a 16% stake in an unnamed Louisiana liquefied natural gas (LNG) project, using the settlement proceeds to fund construction of the terminal. Additionally, RWE has signed a $300m turbine reservation agreement to develop a pipeline of 15 natural gas peaker plants across the country.
Interior secretary Doug Burgum hailed the deal, saying: “We welcome RWE’s agreement and voluntary investment in projects that strengthen our nation’s energy security, provide dependable baseload power, and help keep electricity affordable for hardworking Americans today while supporting our country’s long-term energy future.”
Largest deal yet in a series of payouts
The RWE agreement appears to be the largest deal the Trump administration has struck with an energy company to kill clean energy projects. Earlier agreements with other companies, including TotalEnergies and Duke Energy, amounted to $2.7bn in taxpayer money.
Following the administration’s $928m deal with French energy company TotalEnergies to cancel its offshore wind lease off the coast of New York, seven states, including New York, sued the administration over what New York attorney general Letitia James described as a “sham deal” and “illegal agreement.”
Broader context and criticism
The administration has also spent up to $1.1bn to boost coal, a move critics argue is “fattening the wallets of his cronies” while raising working Americans’ energy bills, particularly as the US’s war on Iran drives up fuel prices. At the same time, the federal government is seeking to slash public input periods for fossil fuel drilling on federal lands while shifting more of the financial risks of cleanup to taxpayers.
Meanwhile, a report released last fall by the Environmental Integrity Project found that every fully operational LNG facility in the US had violated federal pollution limits in recent years. According to the non-profit research organization, violations included the discharge of illegal amounts of bacteria, zinc, oil, and other pollutants into waterways, as well as failures of terminal managers to submit monitoring reports for waterway discharge.
