Trump faces another state lawsuit over support for fossil fuels

US states are once again challenging President Trump. Several states are suing over a federal agreement under which TotalEnergies' offshore wind projects were canceled.

A legal dispute has begun in the United States over a controversial agreement that led a major offshore wind developer, French company TotalEnergies, to exit the market. The website RenewablesNow reported on the case. Under the agreement, which instead aims to support projects in traditional energy sectors, investments were redirected from renewable energy projects to fossil fuels. A coalition of states now argues that the agreement undermines the development of clean energy and exceeds the federal government's statutory authority.

Seven US states have decided to sue. The challenged agreement, signed in March this year, would allow the company to cancel offshore wind projects originally planned off the coasts of New York and North Carolina. In exchange, it would receive compensation of approximately USD 795 million if the French energy giant agreed to invest the returned funds in oil and natural gas projects.

Costly and unreliable projects

The lawsuit was filed in federal court in Washington, DC. It specifically challenges the US Department of the Interior's decision to terminate the leases for areas where the wind farms were to be built. The states involved argue that the agreement is unlawful and are seeking to have it overturned. Federal authorities, by contrast, defend the agreement as a way to shift capital away from projects they consider costly and unreliable. The renewable energy projects were to be built in the New York Bight and Carolina Long Bay. Instead, TotalEnergies would now invest in fossil fuel projects, including liquefied natural gas production, as well as conventional oil projects.

The states of New York, Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont have joined the lawsuit. They argue that the Department of the Interior exceeded its authority under the Outer Continental Shelf Lands Act, which restricts the cancellation of offshore energy leases. They also argue that the compensation mechanism improperly uses a federal fund for litigation settlements intended to resolve ongoing or imminent lawsuits.

Critics of the agreement warn that canceling approved projects could undermine investor confidence and slow progress toward emissions-reduction targets. New York Governor Kathy Hochul, for example, condemned the agreement, calling it a misuse of taxpayer money.