$4 Billion Wind Retreat: A Bet on Permanently Cheap Gas
The U.S. government has reached agreements worth approximately $3.9 billion with various companies to abandon offshore-wind projects and invest in natural gas, LNG, or oil instead.
The Department of the Interior made these arrangements between March and August, which include reimbursing companies for relinquishing their leases in exchange for investing comparable sums in politically preferred technologies.
RWE is receiving $1.22 billion to resolve claims and surrender leases off New York, California, and Louisiana, with $900 million going towards Louisiana LNG infrastructure and $300 million reserved for gas turbines in a pipeline of 15 peaking plants.
The administration argues that the original lease prices were based on unrealistic assumptions about subsidies, costs, and permitting. However, critics argue that these settlements are not a market-driven choice between gas and wind but rather government agreements that socialize the cost of retreat and favor politically preferred technologies.