While seven states are taking the Trump administration to federal court to challenge the legality of its deal with energy developer TotalEnergies to convert two US East Coast offshore wind site leases valued at $928 million to oil and gas projects in other states, new deals have been made.
The U.S. Department of the Interior said June 17 that it reached an agreement to pay developer Invenergy about $765 million to “voluntarily terminate” four ocean leases in New Jersey, Maine and central California that were acquired at auctions during the Biden administration. Invenergy will redirect the money “toward other domestic energy sources,” the agency said, including natural gas-fired power plants in Indiana, Wisconsin, Iowa, Kansas and Missouri and geothermal energy projects in western states.
Invenergy and its partner energyRE intended to build the 2.4GW Leading Light Wind project in its offshore lease area adjacent to New York and New Jersey, with a capacity originally intended to support both statistics. But it was canceled in November 2025 due to cost and supply chain challenges “that have made the development of new offshore wind projects very difficult,” according to a state document from the developers. Invenergy’s other lease areas, two in the Gulf of Maine and one in Morro Bay, California, had a potential 4.8 GW of electrical capacity.
By agreeing to Trump’s purchase, which did not include interest paid on wind lease payments or incremental development costs, Invenergy implied the move would avoid a battle with a more pro-fossil fuel emergency administration.
The company will “deploy additional capital on projects that can be delivered in a commercially reasonable timeframe and meet customer demand while continuing to evaluate opportunities as market conditions evolve,” said Daniel Runyan, Invenergy’s senior vice president of development.
“Instead of supporting large-scale homegrown energy solutions that already provide savings for Northeast residents, these actions undermine local economies and threaten American jobs and energy affordability,” said the offshore wind advocacy group Oceantic Network. The cancellation of a 1 GW offshore wind project is estimated to permanently eliminate up to $9.5 billion in US economic output.
The Invenergy deal follows others
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Invenergy is still working to build the Grain Belt Express, an estimated $11 billion high-voltage transmission line that will cross 800 miles across four Midwestern states to deliver solar and wind power to the eastern United States, despite the administration’s cancellation last year of a $4.9 billion federal loan guarantee. Now, as a privately funded project, pre-construction and engineering is underway on the first phase of the project in Kansas and Missouri. The line will also be built in Indiana and Illinois. Quanta Services and Kiewit Energy Group are the main contractors for the first phase, with less than $1.7 billion in combined contracts awarded last year.
Invenergy’s deal follows a deal a few weeks earlier with developers Bluepoint Wind and Golden State Wind to give up their offshore wind leases in New York-New Jersey and California, respectively, and redirect investment of about $885 million to “LNG projects, oil and gas assets and other energy infrastructure” in the Gulf Coast areas, Interior said. The funds include about $765 million for the Bluepoint Wind lease and $120 million for Golden State, established for Morro Bay. California, wind energy zone. Both developers then “decided not to pursue any new offshore wind development in the US,” Interior said.
In its TotalEnergies deal, Interior said funding from canceled New York-Jersey and North Carolina offshore leases would be diverted to build new trains at the Rio Grande LNG terminal project in Texas, develop “upstream conventional oil” in the Gulf of Mexico and toward shale gas production. Interior Secretary Douglas Burgum said the deal was voluntary.
According to Interior, the settlement agreements. now estimated at $2.5 billion, would be paid from the Treasury Department’s taxpayer-funded Judgment Fund. But according to the June 2 lawsuit by the attorneys general of New York, New Jersey, Connecticut, Maine, Massachusetts, Rhode Island and Vermont, “no statute authorizes the federal defendants to use a sham settlement agreement to unlawfully terminate an offshore wind lease and redirect lease money to an independent, unauthorized use favored by the president.”
Sierra Club senior counsel Nancy Pyne called the deals “dark deals.”
Globalizing
Meanwhile, TotalEnergies may have more difficulty trying to recoup recent offshore wind investments in Germany, with the country’s economy minister, Katherina Reiche, refusing to compensate the developer, according to press reports, out of concern about the impact on the country’s 30 GW target by 2030.
The company won places totaling about 7.5 GW in auctions from 2023 to 2025 in the North Sea and Baltic Sea, but is concerned about developing market conditions, Bloomberg and Recharge publications say. Reiche is quoted as telling reporters in Berlin on June 17: “Anyone who has ever submitted a bid for a project has made a commitment. This is a contract.”
TotalEnergies said it was in talks with the German government to return payment for a 1.5GW site won in an auction in 2024, according to the reports, which also noted that Jera Nex BP, a joint venture between a Japanese power company and oil giant BP, is in similar negotiations related to sites in Germany from 2023-25.
