The Department of Energy announced late Wednesday its decision to revoke over $7.5 billion in funding for hundreds of clean energy initiatives, a move that primarily affects states with Democratic leadership.
This decision highlights the Trump administration’s apparent strategy of leveraging the federal government shutdown to penalize its political adversaries. Earlier in the week, President Trump explicitly warned that if congressional Democrats failed to approve a funding bill, he would enact “irreversible” actions that would be detrimental to them during the shutdown.
Although the Energy Department’s official statement on Wednesday omitted specific details regarding the terminated projects, an internal agency document obtained by The New York Times reveals a wide array of impacted initiatives. These include critical upgrades to power grids in California, Minnesota, and Oregon; programs aimed at curbing methane emissions from oil and gas operations in Colorado; and significant developments for clean hydrogen fuel production in California and the Pacific Northwest.
The document further indicates that most of the 321 canceled grants were destined for projects within these states, along with Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Mexico, New York, and Washington – all states with Democratic governors and senators.
In its accompanying press release, the Energy Department justified the cancellations by stating that the projects “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”
Recipients have a 30-day window to appeal these terminations. Should these appeals fail, affected parties may pursue legal action against the Department, a precedent set by similar grant cancellations by the Environmental Protection Agency that also led to lawsuits.
It’s important to note that no existing law permits a federal agency to revoke previously allocated grants during a government shutdown. Typically, entities receiving federal funds, such as companies or universities, enter into legally binding agreements and often front their own capital, anticipating future reimbursement.
These cancellations, however, appear to be part of a longer-term strategy. For several months, political appointees within the Energy Department have been scrutinizing billions in climate and infrastructure spending approved by the previous administration. They have contended that these funds were hastily disbursed, though they have offered minimal concrete evidence of specific issues.
California Governor Gavin Newsom immediately condemned the agency’s announcement. California stands to lose projects projected to create over 220,000 jobs. In a sharp rebuke, Newsom stated, “In Trump’s America, energy policy is set by the highest bidder, economics and common sense be damned. We’ll continue to pursue an all-of-the-above clean-energy strategy that powers our future and cleans the air, no matter what D.C. tries to dictate.”
Prior to the official Energy Department announcement, White House budget director Russell T. Vought had signaled the impending cancellations on social media, proclaiming, “Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being canceled.”
Vought’s initial posts lacked specifics, and the Energy Department’s formal news release followed several hours later, leaving state officials, congressional members, and energy executives in a frantic rush to identify the impacted projects.
Among the most significant cancellations were awards totaling $1.2 billion for clean hydrogen projects in California and $1 billion for similar initiatives in the Pacific Northwest. These projects aimed to advance the production, transportation, and storage of hydrogen fuel, which offers a pathway to decarbonize industries like steel and fertilizer production, as well as heavy-duty transport, by eliminating planet-warming greenhouse gas emissions.
Congress had initially approved approximately $8 billion for these “hydrogen hubs” under the bipartisan infrastructure law of 2021. The Biden administration had subsequently distributed these funds to seven hubs spread across 16 states, though a majority of the allocated money remained unspent.
Notably, none of the hydrogen hubs situated in Republican-controlled states, including West Virginia, Texas, and Louisiana, were impacted by this latest round of funding cuts.
Dr. Greg Keoleian, a University of Michigan professor specializing in hydrogen research, emphasized that these canceled funds were crucial for the United States to maintain global competitiveness against countries like China and Europe, which boast more developed hydrogen industries. He asserted, “We need to be investing in clean energy technologies like hydrogen for global competitiveness.”
Chris Green, president of the Pacific Northwest hydrogen hub, expressed disappointment but affirmed their “unwavering commitment to advancing hydrogen in the Pacific Northwest.”
The agency’s list also highlighted the termination of financial awards for two dozen projects aimed at modernizing the national electrical grid. This notably included a $630 million allocation for upgrading 100 miles of California’s transmission lines with advanced, higher-capacity conductors, and a $250 million grant designated for reinforcing power lines on the Warm Springs Reservation in central Oregon.
Another significant cancellation was a $464 million grant for Minnesota, intended to bolster interconnections between two major regional electrical grids spanning the Midwest and Great Plains. This initiative sought to facilitate greater integration of renewable energy sources and mitigate blackout risks. Supporters argued that it would have lowered electricity costs across a broad area, including several Republican-led states.
The terminated funding further encompasses $326 million previously allocated to Colorado State University for efforts to reduce methane leaks from oil and gas wells – a critical measure against a powerful planet-warming gas. Additionally, over $350 million in awards to the Gas Technology Institute in Illinois, focused on cutting emissions from methane, hydrogen, and other advanced technologies, are now also impacted.
Finally, the Energy Department also withdrew funding for projects dedicated to reducing emissions from cement production and for developing carbon capture technology, which aims to trap and store carbon dioxide from industrial sources before it contributes to atmospheric warming. It appears some of these specific cancellations had already been announced in May.