California is moving to sue the Trump administration over a controversial agreement that ends an offshore wind project off the central coast, escalating a clash over renewable energy policy. State officials sent a formal notice of intent to the Interior Department on Tuesday, targeting the buyback of the lease for Golden State Wind, a floating wind farm proposed in federal waters.
Governor Gavin Newsom's administration argues the deal illegally diverts taxpayer money to prop up fossil fuel investments at the expense of California's clean energy goals. The state has committed to developing 25 gigawatts of offshore wind capacity by 2045, enough to power roughly 25 million homes and provide about 13% of its electricity. State Energy Commission Chair David Hochschild called the administration's move “a strategic mistake of colossal proportions,” particularly as fossil fuel prices spike amid the ongoing conflict with Iran.
“Countries that thrive around the world are those that lean into innovation, into the energy sources of the future,” Hochschild said in an interview Tuesday. “To turn away from this, and turn back the clock, really engage in what I consider to be a war on innovation, is really ill-considered. It’s a decision that’s not just bad for California, it’s bad for the nation.”
Trump's Fossil Fuel Push
President Donald Trump has made boosting fossil fuels a central priority, frequently expressing hostility toward wind power. After federal courts blocked his executive orders targeting offshore wind, the Interior Department began negotiating lease buybacks. Under these deals, companies receive reimbursements for lease fees in exchange for investing in oil, gas, or geothermal projects. Interior Secretary Doug Burgum said last week that “under President Trump, companies are shifting investment back toward dependable, secure energy infrastructure that can power our economy and lower utility costs.”
Five federal leases off California's coast have been awarded to developers. Two are now being canceled: Golden State Wind and another floating project by Chicago-based Invenergy. The state also served an administrative investigative subpoena on Invenergy, which accepted a $765 million deal last week to terminate its lease. California Attorney General Rob Bonta said in a statement that the state “won’t stand idly by as the Trump administration illegally strikes deals to kill offshore wind projects and replace them with more windfalls for his fossil fuel friends.”
National Pattern of Lease Cancellations
The Golden State Wind agreement is part of a broader pattern. Eight offshore wind projects have been halted nationwide, with total buyout costs approaching $2.6 billion. In March, French company TotalEnergies received nearly $1 billion to surrender two leases off North Carolina and New York, with a requirement to invest that money in fossil fuels. New York is leading a lawsuit challenging that deal, and Democrats in Congress are investigating it. In April, Golden State Wind and Bluepoint Wind—the latter off New Jersey and New York—also agreed to terminate their leases.
Golden State Wind, a joint venture of Ocean Winds and the Canada Pension Plan Investment Board, can recover about $120 million in lease fees after investing an equal amount in Gulf Coast oil and gas assets or infrastructure, according to Interior. Ocean Winds North America CEO Michael Brown said in April that the deal provided “clarity” for the company and its investors.
California contends the Interior Department illegally used federal funds to pay Golden State Wind to abandon its lease and shift capital to out-of-state fossil fuel projects, undermining the state's energy economy. The state has invested over $100 million in the past decade to prepare ports, transmission systems, and supply chains for offshore wind, and those investments are now at risk. California plans to file suit in 60 days if the situation is not resolved.
The legal battle comes amid broader tensions between the Trump administration and California over energy policy, including a separate DOJ threat to sue the state over gun laws. Meanwhile, the administration's push for fossil fuels has drawn criticism from fiscal conservatives as it seeks $1.5 trillion in defense and Iran war funding.
