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The government spent a year trying to stop offshore wind farms and kept losing in court. So it tried something simpler. It started paying developers to walk away instead, and the tab has already passed three point nine billion dollars.
Five settlements. More than 3.9 billion dollars. All of it paid so that leases which had not yet broken ground would stay that way. How the government's approach shifted from stop-work orders to checkbooks, and why that shift is now being fought in court, is the rest of this story.
Companies bid for the right to build wind farms in federal waters, paying the government hundreds of millions of dollars up front at auction. That payment does not buy a finished project. It buys years of permitting, environmental review and construction risk before a single turbine ever turns.
Shell absorbed a $2.1 billion loss walking away from its Alaska leases in 2022. Nobody reimbursed the company for that decision. That is the precedent that makes today's buybacks so unusual. For two decades, walking away from a federal lease meant eating the loss yourself, not collecting a check for it.
For projects already under construction, judges repeatedly ruled against the stop-work orders the administration issued. For leases that had not yet broken ground, Interior found a different lever. Instead of fighting those developers in court too, it started buying the leases back.
The sequence of deals reads like a shift in tactics happening in real time: roughly $928 million paid to TotalEnergies to give up the Attentive Energy and Carolina Long Bay leases, a separate settlement covering four Invenergy leases, and two more deals with Ocean Winds covering Bluepoint Wind and Golden State Wind.
In August, the German utility RWE agreed to give up leases off New York, California and Louisiana in exchange for $1.22 billion, the fifth such settlement this year. RWE had invested just over $1 billion in those leases in the first place.
RWE is redirecting the proceeds into a $900 million stake in a Louisiana LNG export terminal and a $300 million gas turbine agreement, part of 15 new gas peaking projects the company is pursuing. RWE says the moves fit a plan to grow its US generation capacity from 13 gigawatts to 22 gigawatts by 2031.
Former Interior officials and legal experts are asking a basic question: is the department even allowed to spend money this way?
Several of the settlements drew on the federal Judgment Fund, an account meant to pay out lawsuits the government loses, not to finance voluntary buybacks the government proposes on its own. California's lawsuit argues that BOEM never had clear legal authority to hand leasing revenue back to the companies that paid it in the first place.
California has filed or announced two lawsuits over these buyouts: one over a $120 million Golden State Wind deal, another over a $111 million Invenergy deal, both off the Central Coast.
Both sides have said their piece publicly, and both are quoted below exactly as said.
“a backroom buyout designed to line the pockets of Big Oil donors”
“throwing good money at bad ideas”
Electricity demand is climbing fast, driven largely by AI data centers, at the exact moment the government is paying billions of dollars to guarantee that new power capacity never gets built.
None of California's lawsuits have been resolved yet, and more settlements are expected before this is over. Either way it lands, the trade underneath all of it stays the same: billions of dollars spent specifically to make a looming shortage worse, not better.