Why is Trump paying to stop wind farms?

0:01NPR.

0:06This is The Indicator from Planet Money. I'm Waylon Wong, here with friend of the show and host of the public radio podcast Outside In, Nate Hedgie. Hey, Nate.

0:15Cardiff Garcia:Hey, Waylon. It's great to be back. What do you got today? First, I've got a question for you. If the government doesn't want more of something, what does it normally do? Pass a law against it, like a ban or a moratorium? Yeah, exactly. Remember Biden putting a moratorium on offshore oil and gas drilling or when former New York mayor Michael Bloomberg banned big sodas? Remember that? Oh, yeah. I wasn't living there at the time, but it was national news. Did it end up sticking? No, it did not. I looked it up recently. Did not stick. Did not stick. Well, anyways, Trump has been doing something unusual.

0:47Cardiff Garcia:Instead of bans and moratoriums, he is opening the checkbook. His administration will be paying energy firms billions of dollars to completely walk away from wind farms. The latest casualty is a proposed offshore wind farm in North Carolina. U.S. company Duke Energy agreed to a$129 million buyout from the White House to abandon its plans to build it. Today on the show, why is the federal government paying companies to not build things? And what does it mean for our energy bills? Stay tuned.

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2:29President Trump's beef with wind farms is personal. It goes back nearly two decades to when he began building what he called the world's greatest golf course in Scotland.

2:38Cardiff Garcia:But there were also plans to build an offshore wind farm nearby, and Trump was not happy, mainly because he thought they would ruin the view. And he still hates the way they look today. Last summer, when he was visiting Europe, he said this to reporters. Stop the windmills. You're ruining your countries. I really mean it. It's so sad. You fly over and you see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds. And if they're stuck in the ocean, ruining your oceans. He has, from the very beginning of his political life, railed against wind power in general, saying many things that aren't true and many things that have a grain of truth.

3:20That's Severin Borenstein. He's the faculty director of the Energy Institute at UC Berkeley's Haas School of Business. He points out that wind farms do have some environmental impacts.

3:31Cardiff Garcia:They bother some people. They have killed birds. When you put that in the context of what most other energy sources do, it's pretty minimal. I should also say that they are a problem for bats, too. Bats? I thought bats just were in their caves all the time. No, no, they're flying around getting hit by windmills. Like the wind, is it like they can't detect where the windmills are? That's such a great question. I'm so concerned about bats. OK, I got to put a pin in this. Otherwise, we'll never finish this episode. Since President Trump got back into office last year, his administration has tried a few aggressive tactics to stop new wind farms.

4:07First, there was an executive order halting permits for new wind farms on federal lands and waters. That was shot down by the courts in December.

4:15Cardiff Garcia:The administration also tried halting new projects citing national security concerns. They've made an argument that the farms interfere with military radar. But there really isn't much evidence supporting those claims, and judges, when faced with those claims, have generally rejected them. So they haven't been very successful in making a real case that there's a problem. In fact, wind farms have been operating across Europe and Asia for decades with no significant problems. So none of this was really working until the Trump administration found a workaround, opening the checkbook. It has agreed to spend more than$2.7 billion to buy out and cancel nine large offshore wind leases.

4:58The leases were originally awarded by the Biden administration back in 2022.

5:03Cardiff Garcia:None of these wind farms were actively being built when Trump offered the money. Instead, his administration was buying back the rights to build those farms on sections of federal waters. While many of the companies are getting a full reimbursement for what they paid for the leases, a couple aren't. So they're losing money on the resale back to the federal government. And that obviously reflects the fact that they think that the future for these projects, at least under this administration, is pretty bleak. At least one company has said as much. In a press release, French company Total Energies argued that wind projects aren't in the U.S.'s interest anymore.

5:39And as part of its agreement with the Trump administration, it's reinvesting that money into a major natural gas plant in Brunsville, Texas. Severin says this is misguided.

5:48Cardiff Garcia:We know that they put out significant greenhouse gases and other pollution. And so I think that that's really investing in a technology that is not likely to be the future. This idea of essentially subsidizing scarcity by paying firms not to develop energy projects is pretty novel in American history. I mean, bans and moratoriums, sure. But actually spending federal money to take away these rights or to buy out these rights is extremely unusual. We reached out to the White House. Spokeswoman Taylor Rogers said the administration is, quote, simply returning the money that companies bid on offshore wind projects that are unable to be built due to national security concerns.

6:33Cardiff Garcia:End quote. Those security concerns that did not convince any judges? Yeah, exactly. Those security concerns. I see. Well, Severin says that this is actually going to have a pretty big impact on the development of offshore wind, which here in the U.S. is still a nascent energy source. And that's a shame, he says, because offshore wind is actually more reliable than onshore wind. Wind speeds over the sea are generally faster and steadier, but it needs a lot of investment in the beginning to help bring prices down. And without that, offshore wind in the U.S. will continue to be very expensive and not as widely adopted.

7:08Cardiff Garcia:I'm quite concerned about this. I think the people who say, oh, no, renewables has such momentum now, there's nothing you can do to slow it down, are really not looking at the facts. Senate Democrats have railed against Trump's plan. An investigation they held found that these projects would have powered millions of homes and created tens of thousands of jobs. The renewables energy industry is also worried, but the pain of these attacks on wind could be temporary. That's according to Jason Grumet, the CEO of the trade group, the American Clean Power Association. 90 % of all of the new electricity added to our nation's electricity grid over the last few years has come from clean sources.

7:48Cardiff Garcia:And if the administration obstructs the kind of economic reality of American energy, you're going to see prices skyrocket, at which point they'll have to back down. It's just a question of how much unnecessary harm happens to consumers in the economy while they figure this out. Jason actually sees similarities to when Biden cracked on an oil and gas during his term as president. Then the full-scale invasion of Ukraine happened. Gasoline prices shot up and then they went to Houston and said, please drill more. I think we're expecting some version of the same thing will happen if the Trump administration actually intentionally drives up American energy bills.

8:26Cardiff Garcia:At this moment, when gasoline prices are spiking because of the war in Iran, the idea that we would be blockading domestic American energy at the same time is pretty hard to fathom. And either way, Severin Borenstein, the energy expert, doesn't think the economic pain of these buyouts will be that immediate. Mainly because, unlike oil and gas, these offshore wind farms aren't woven into the economy right now. And it would take years to get them built and connected to the grid. This, he says, will be a future problem. What the demand growth situation will be like five or 10 years from now when we would start to see some of this offshore winds connect is murkier.

9:08Cardiff Garcia:I know there are these forecasts of astronomical growth between now and 2035 due to data centers. But I think that there's huge uncertainty and the really aggressive forecasts are coming from people and companies that have a pretty strong incentive to put that narrative out there because they want to make sure that the power is available when they actually build their data centers. But he says, bottom line. It's unfortunate not to have this as one more quiver in our arsenal to fight climate change and to grow our electricity supply. Multiple states and NGOs have sued to try and stop the buyouts.

9:56So we'll see if Trump's latest attempts to collapse America's wind power industry by subsidizing scarcity will actually work.

10:07This episode was produced by Vito Emanuel and engineered by Robert Rodriguez. It was fact-checked by Tyler Jones. Kaking Cannon edits the show, and The Indicator is a production of NPR.

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