The Government Paid a French Oil Company $1 Billion to Abandon a Wind Farm. Seven States Are Suing to Stop It

Forty-seven miles off the coast of New York, there was supposed to be a wind farm. It would have powered more than 700,000 homes, sent clean energy directly into New York City, saved residents an estimated $10 billion on their electricity bills, and created over 1,700 jobs. It was already permitted, already funded, and already in the planning pipeline. Then, three months ago, the federal government struck a deal to make sure it never gets built — and agreed to hand the company behind it nearly $1 billion in taxpayer money on the way out.

Seven states are now suing to stop it.

How the Deal Works — and Why Critics Call It a Giveaway

In 2022, a French energy company called TotalEnergies paid $795 million for the rights to develop an offshore wind lease in the New York Bight, as part of a competitive federal auction the government described as the highest-grossing offshore energy lease sale in U.S. history. A separate lease off the coast of North Carolina cost another $133 million. By March 2026, construction plans were already under federal review.

That's when the Interior Department announced a new deal with TotalEnergies. The company would walk away from both wind leases and pledge never to develop offshore wind in the United States again. In exchange, the federal government would give TotalEnergies back the full $928 million drawn from a Treasury fund called the Judgment Fund.

The catch? TotalEnergies doesn't actually lose anything. The company reinvests the $928 million into U.S. oil and gas projects — a liquefied natural gas plant in Texas and oil production in the Gulf of Mexico — and the federal government then reimburses them that same amount. TotalEnergies pivots from wind to fossil fuels at effectively zero net cost, the American taxpayer ends up funding the switch.

The Interior Department framed this as a win for American consumers, with Secretary Doug Burgum calling offshore wind "one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers." The administration's position is that natural gas is more affordable and reliable, and that the deal serves the public interest.

Why the Lawsuit Says This Is Illegal

New York Attorney General Letitia James, leading a coalition that includes Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont, filed suit in federal court in early June arguing the deal breaks the law in two distinct ways.

The first concerns how offshore leases can be canceled. Under the Outer Continental Shelf Lands Act — the federal law that governs offshore energy development — the government can only cancel a lease after holding a formal hearing, finding that the lease poses a serious threat to life, property, national security, or the environment, and determining that canceling it does more good than harm. The lawsuit argues the administration skipped all of that, instead invoking vague national security concerns that had never been raised during the years the lease was previously reviewed and approved.

The second concerns where the money came from. The Judgment Fund is a pool of federal money that Congress set aside specifically to pay out court-ordered legal settlements — not, the states argue, to fund voluntary deals that serve a policy goal. Using it this way, the lawsuit contends, was simply not a legal use of that money.

"This administration cooked up a sham deal to pay a foreign energy company hundreds of millions of taxpayer dollars to abandon offshore wind and invest in oil and gas instead,"

said Attorney General James. "We are fighting back to stop this illegal agreement that threatens to erase over a thousand union jobs and cheat millions of New Yorkers out of clean, affordable energy."

New York Governor Kathy Hochul called it "a pay-not-to-play scheme pressuring a foreign company to forego planned offshore wind projects in America in favor of gas and oil drilling," and

"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."

What Americans Lose From the Wind Farm

Whatever the courts decide, the numbers involved are worth understanding.

The canceled New York project alone was projected to generate $25.6 billion in economic benefits to the state over 25 years, including $10 billion in direct savings on energy bills for New York households. Over 1,700 jobs — many of them union positions — were on the table. For the Northeast more broadly, offshore wind is one of the most practical ways to add large-scale electricity generation, especially for densely populated cities like New York that have limited options for local power.

Beyond New York, this is part of a broader pattern. Federal courts have repeatedly blocked the administration's other efforts to freeze or cancel offshore wind projects along the East Coast. In April 2026, a U.S. District Court judge in Massachusetts ruled the administration's wind freeze was "arbitrary and capricious." The TotalEnergies agreement looks, to critics, like an attempt to accomplish through a private settlement what the courts have blocked through direct regulation — and the seven suing states argue that is precisely what the law does not allow.

For anyone paying an electric bill, working in energy construction, or living in a coastal community that depends on clean, stable power, this case will have consequences well beyond one wind farm off the New York coast.