The Trump administration is terminating the existing site leases for monster offshore wind development projects by refunding the lease payments already made. The wind-loving Democrats are nonsensically calling this a “buyout” supposedly done at taxpayer expense.
Of course, this costs the taxpayers nothing because the money comes from the developers who are simply getting it back. The taxpayers may even benefit from these near billion-dollar deals depending on how the Feds use the money while they have it, which can be many years in some cases.
Here are the two big deals so far:
TotalEnergies (March): The Interior Department agreed to a near-$1 billion reimbursement to cancel leases off New York and North Carolina. The French company is redirecting these funds to a Texas LNG export facility.
Ocean Winds (April): The administration reached an $885 million deal with a joint venture between France’s ENGIE and Portugal’s EDP to terminate the Bluepoint Wind (New York/New Jersey) and Golden State Wind (California) projects. The funds are to be redirected into oil and gas development including LNG.
Of course, there was an immediate outcry from the wind-loving left. Several top-ranking House and Senate Democrats opened investigations and sent letters of inquiry but, so far, nothing has come of that. Various legal objections have been posited.
In Congressional jargon, the top minority party member of a committee is called the ranking member, all Democrats in today’s Congress. The ranking members of the House Judiciary and House Natural Resources Committees sent a joint inquiry to TotalEnergies. (One word with a capital in the middle is their goofy idea, not a typo.)
The evergreen Sen. Whitehouse, ranking member of the Senate Committee on Environment and Public Works, also opened an investigation. Ranking members have little authority, so these actions may mean little for now.
In addition, and to no one’s surprise, Representative Alexandria Ocasio-Cortez and Senator Ed Markey sent a letter to the U.S. Department of the Interior questioning the TotalEnergies deal.
California also got into the act. The California Energy Commission is investigating the deal with Golden State Wind. The commission issued a subpoena to Ocean Winds seeking documents in what it claimed were “backroom deals” involving taxpayer dollars.
Given the arcane intricacy of U.S. administrative law, it is always possible that these deals will get stopped. But for now, it is likely that more deals will be done.
The Interior Department’s Bureau of Ocean Energy Management has awarded nearly three dozen offshore wind leases since July 2013. The deals to date are for some of the biggest leases, so a very good start, but there is still a long way to go.
The wind-lovers have universally referred to these deals as “buyouts” and “payoffs,” but you cannot buy someone out or pay them off with their own money. A refund is not a buyout. If I buy concert tickets and the concert is cancelled, refunding my money is certainly not buying me out or paying me off.
Word has it that the Feds told the developers to take the deal or they would simply cancel the leases, letting the developers sue to try to get their money back, someday. The Feds have a strong lever here which explains their getting promises from the developers that they would reinvest the refund in oil and gas development.
Whoever came up with this leverage deserves a lot of credit. The President is a big-time, long-time deal maker so maybe he did it.
If Congress changes hands in the coming elections, a lot of this resistance could become much more serious with Democrats chairing committees. Or something could happen sooner than that, and there are a lot of offshore wind leases still to go.
Stay tuned to CFACT as this deal making drama plays out. It is not a done deal.