Trump administration pays billions to not build wind energy projects

Aug. 17 (UPI) — The Trump administration has agreed to pay out about $4 billion to companies to encourage them not to build out offshore wind energy projects.

The Department of the Interior announced its latest round of buyouts, totaling more than $1.22 billion, on Aug. 7, continuing a long-running pattern of President Donald Trump’s aiming to kill wind energy projects in the United States.

The U.S. Department of Interior has reached agreements with at least six offshore renewable energy leaseholders to pay them not to develop offshore wind projects. The payouts total about $3.97 billion.

There are 44 offshore wind projects in development under leases with the United States, ranging from four under construction to 10 under contract, the Offshore Wind Power Hub says.

Through what the administration has referred to as “agreements” it is directing the federal government to pay leaseholders not to develop offshore wind projects. The payouts are made with the government’s Judgment Fund.

The Judgment Fund is used by the government to pay for court judgments and settlements when it is the subject of a lawsuit, for example. The U.S. Bureau of the Fiscal Service, a division under the Treasury Department, says that government agencies may only request payment from the Judgment Fund if funds are not legally available to pay from the agency’s own appropriations approved by Congress.

The Judgment Fund is a mandatory fund, meaning it is a permanent fund paid with tax dollars that the government is required to keep. It is not subject to additional congressional appropriations.

Elizabeth Klein is the former director of the Bureau of Ocean Energy Management in the Department of the Interior under the Biden administration. She worked in each of the past three Democratic administrations. She told UPI that the Trump administration’s agreements with companies to not develop offshore wind facilities break from the norms on multiple fronts, including from a fiscal sense and legal perspective.

Unlike the settlement agreements that the Justice Department may use the fund to pay, there have been no legal complaints made by leaseholders against the U.S. government. Therefore, there is no legal reason to pay settlements.

“At the Interior Department, in my past experience, we have used it to settle claims made by tribes in tribal trust litigation,” Klein said. “All past examples of the use of the Judgment Fund pale in comparison to the billions of dollars that are being paid here.”

Payments made through the Judgment Fund are published in bi-weekly reports on the U.S. Treasury website and in annual reports to Congress.

Last month, the Department of Energy used the fund to pay Dominion Energy and two of its subsidiaries more than $12 million for breach of express contract. This was after the company filed a lawsuit against the Trump administration late over Trump’s executive order stopping the leasing and permitting of offshore wind projects.

Dominion’s project was just one of many offshore wind projects already under construction that were affected by the executive order. The Revolution Wind farm off the coast of Rhode Island and Empire Wind project off the coast of Long Island, N.Y., were suspended in December due to stop-work orders from the Interior Department.

All three projects were allowed to resume in January.

New York and California are the lead plaintiffs in two separate lawsuits against the Trump administration over canceling offshore wind projects.

The lawsuit by New York Attorney General Letitia James and Gov. Kathy Hochul relates to French energy company TotalEnergies canceling its plan to develop offshore wind projects off the state’s coast. The Trump administration paid the company $1 billion to cancel its plans and terminate its leases.

As part of the agreement, TotalEnergies is instead investing in gas and oil production in Texas.

“This pay-not-to-play scheme pressuring a foreign company to forego planned offshore wind projects in America in favor of gas and oil drilling is an outrageous abuse of taxpayer dollars that hurts our ability to meet our energy needs, create good jobs, and help secure American energy independence while reducing emissions,” Hochul said in a statement.

The lawsuit alleges that the Trump administration is in violation of several laws.

It is in violation of the Administrative Procedures Act because the decision to cancel wind projects is arbitrary and capricious. It violates the National Environmental Policy Act because the administration did not weigh the environmental impact of its decision as required by law. It violates the Outer Continental Shelf Lands Act by skirting the requirement that it hold a hearing before cancelling a lease and the government did not coordinate with governors of the affected states.

The lawsuit out of California also accuses the administration of violating the OSCLA law, adding that the government is required to suspend the lease for five years before cancelling it as is required.

In making these agreements, the Trump administration is exercising an authority it does not have, Klein said.

“There’s no provision in the law for [the Bureau of Office Management] or the Interior Department of the federal government to issue a refund,” Klein said. “If you are a company that has participated in a lease sale, whether it’s for offshore wind or some other purpose — there is no provision in the law that says if you change your mind and you want your money back, that’s not an option.”

Companies enter lease agreements with the government with the intent to develop. A company can end a lease but it is not granted a return of its investment. The system is set up this way in part to prevent anticompetitive tactics, such as purchasing a lease solely to deny a competitor opportunities.

“There are actually very high profile and very expensive examples in the past of offshore oil and gas companies, for instance, relinquishing leases after they have decided for whatever reason not to move forward on them and they do not get their money back,” Klein said.

Trump’s opposition to wind energy has been part of his campaign speeches and press briefings throughout his 10-year political career.

Trump has claimed that wind energy is expensive but it is one of the cheapest ways to generate electricity.

Onshore wind farms are among the most inexpensive sources of energy in the world, more inexpensive than natural gas, based on data collected by the International Renewable Energy Agency, U.S. Energy Information Administration.

Offshore wind farms are more expensive to build and maintain than onshore farms but also yield greater electricity production due in part to consistent winds.

As the technology has developed, energy sources like wind, solar and hydropower have become less expensive. Meanwhile, the levelized cost of electricity or energy, a measure of the present cost of energy production over a source’s lifetime, has made offshore wind competitive with natural gas and coal, though still more expensive.

Trump has alleged that offshore wind farms are responsible for the deaths of whales. He has also said that the noise from the windmills drive whales “crazy.”

“They’re driving the whales, I think, a little batty,” Trump said in a January 2025 rally in South Carolina. “They’re washing up on shore on levels never seen before.”

The National Oceanic and Atmospheric Association, which investigates the cause of whale deaths, said in 2023 that there has been no evidence that offshore windfarms have caused the death of any whales.

One of the most frequent claims Trump has made about wind farms is that they result in an inordinate amount of bird deaths.

The National Audubon Society’s 2025 Birds and Offshore Wind Report says that wind turbines, like all infrastructure, “can pose a risk to birds” but the risks can be minimized with strategic planning. Climate change, on the other hand, poses a persistent risk as 389 species, about two-thirds of bird species, face extinction due to the rise of global temperatures and loss of habitat.

“There’s no way to rationalize this from the federal government’s perspective and from the taxpayers perspective,” Klein said. “The only entities that benefit here are the companies that are getting paid off.”