Two offshore wind developers will give up federal leases and instead commit funds to fossil fuel projects under agreements with the Trump administration, the Interior Department said Monday.
The deals mark the latest step in the administration’s push to stymie the nascent US offshore wind industry opposed by President Donald Trump and boost investment in fossil projects.
Bluepoint Wind, which is partially owned by investment firm BlackRock, Inc., and Golden State Wind will relinquish their leases and be reimbursed for costs, according to the department. The moves come in exchange for plans by the companies to direct hundreds of millions of dollars into US fossil fuel development.
“We welcome the opportunity to engage constructively with the administration on this agreement and acknowledge the clarity they have provided with this decision and deal,” said Michael Brown, chief executive officer of Ocean Winds North America, a 50% owner of Bluepoint Wind and Golden State Wind.
The agreements are similar to a deal announced last month by the administration in which it released TotalEnergies SE and its partners from $1 billion in offshore wind leases to redirect investment toward oil and natural gas projects in the US.
Bluepoint, which is 50% owned by Global Infrastructure Partners, has committed to invest as much as $765 million — equivalent to the value of its lease — into an unspecified US liquefied natural gas facility, per the Interior Department.
Some oppose the divestment in wind projects, arguing that the move undermines the mounting energy needs of the US.
“This is a double whammy for Americans, wasting their tax dollars and halting affordable energy projects,” said Kit Kennedy, managing director for power at Natural Resources Defense Council.
Golden State Wind, which was in the early stages of developing a floating offshore wind project, agreed to terminate its lease off Morro Bay, California. The company will be eligible to recover about $120 million in fees after investing an equal amount in US oil and gas assets, energy infrastructure or liquefied natural gas projects along the Gulf Coast, the Interior Department said.
The buyback approach has been used before to extricate the US government from leases, particularly after litigation. After former President George W. Bush’s Interior Department sold shale oil leases in Utah in 2008, the auction was subsequently challenged in court. Months later, the agency under former President Barack Obama ordered the withdrawal of those leases, with leaseholders refunded the bids they’d paid for the territory.
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