U.S. Interior, TotalEnergies Reach Deal to Exit Offshore Wind, Redirect $1 Billion to Oil and Gas

The U.S Interior Department on March 23 announced an agreement with TotalEnergies to terminate two offshore wind leases and redirect roughly $1 billion toward domestic oil, natural gas, and liquefied natural gas development, marking a shift in federal energy priorities toward conventional resources.

Under the agreement, TotalEnergies will invest about $928 million in 2026 across key projects, including development of the Rio Grande LNG facility in Texas and upstream oil and shale gas production in the Gulf of America. In exchange, the federal government will reimburse the company up to the value of its offshore wind lease payments, effectively offsetting its earlier investments in the sector.

The leases slated for termination include a Carolina Long Bay site acquired in June 2022 for $133 million and a New York Bight site secured in May 2022 for $795 million by Attentive Energy, a venture involving TotalEnergies. The decision unwinds prior offshore wind commitments along the Atlantic coast.

As part of the agreement, TotalEnergies also committed to refrain from pursuing new offshore wind developments in the U.S, citing broader national security considerations and evolving policy direction. Federal officials framed the deal as a step toward strengthening grid reliability and ensuring stable energy supply amid rising demand, including from data centers and artificial intelligence infrastructure.

The agreement follows a series of federal actions that have slowed offshore wind development, including a December 2025 decision by the department to suspend construction and leases for multiple large-scale offshore wind projects along the East Coast over national security concerns. The administration has also revisited prior leasing and permitting decisions, contributing to delays and uncertainty across the offshore wind pipeline.

The shift marks a departure from prior federal support for offshore wind and signals a reallocation of capital toward fossil fuel infrastructure, with broader implications for investment trends in the energy sector.