Late Wednesday, the Energy Department announced a sweeping cancellation of over $7.5 billion in clean energy project awards, a significant portion of which were initiated during the Biden administration. These cuts overwhelmingly impact projects situated in states predominantly governed by Democrats.
This decision highlights a contentious pattern: the Trump administration seemingly leveraged the ongoing government shutdown as an opportunity to retaliate against political adversaries. President Trump himself had warned earlier in the week that if congressional Democrats failed to support a government funding bill, he would take “irreversible actions that are detrimental to them” during the shutdown.
The official announcement from the Energy Department on Wednesday provided no specific details regarding the projects slated for termination. However, a confidential agency document obtained by The New York Times reveals a list of affected initiatives. These include critical upgrades to electrical grids across California, Minnesota, and Oregon; programs aimed at mitigating methane leaks from oil and gas operations in Colorado; and significant developments of clean hydrogen fuel hubs in both California and the broader Pacific Northwest region.
The document further indicated that the overwhelming majority of the 321 canceled awards were designated for these states, alongside Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Mexico, New York, and Washington. Notably, all these states are currently led by Democratic governors and are represented by Democratic senators.
In an accompanying news release, the Energy Department justified its decision by stating that the projects “did not adequately meet the nation’s energy requirements, lacked economic viability, and would not yield a positive return on taxpayer investment.”
The agency has granted recipients a 30-day window to appeal these terminations. Should these appeals fail, affected parties may consider legal action against the Energy Department, mirroring previous lawsuits filed in response to grant cancellations by the Environmental Protection Agency.
It’s crucial to note that no existing law permits a federal agency to unilaterally revoke previously awarded grants during a government shutdown. Typically, organizations like companies and universities enter into legally binding agreements for federal funding, often investing their own capital with the expectation of subsequent reimbursement.
Evidence suggests these cancellations were not sudden but rather the culmination of months of internal review. Political appointees within the Energy Department have been scrutinizing billions in climate and infrastructure funding allocated by the Biden administration. They allege that these funds were hastily disbursed, though they have offered minimal specific evidence of mismanagement.
California Governor Gavin Newsom swiftly condemned the department’s announcement, especially since a project in his state, now facing cuts, was anticipated to generate over 220,000 jobs. In a sharp statement, Newsom declared, “In Trump’s America, energy policy prioritizes the highest bidder, disregarding economics and common sense. Regardless of Washington D.C.’s dictates, we remain committed to a comprehensive clean energy strategy that fuels our future and purifies our air.”
Prior to the official Energy Department announcement, White House budget director Russell T. Vought foreshadowed the cancellations in social media posts. He proclaimed on X (formerly Twitter): “Nearly $8 billion earmarked for the Left’s climate agenda, a ‘Green New Scam’ as he termed it, is being eliminated.”
Vought offered no specifics, and the Energy Department’s news release followed several hours later. This delay left numerous state officials, members of Congress, and energy sector executives in a frantic search on Wednesday to identify which projects faced termination.
Among the most substantial canceled awards were $1.2 billion for California projects and $1 billion for Pacific Northwest initiatives, both dedicated to the advancement of clean hydrogen production, transportation, and storage. Hydrogen fuels offer a promising path to decarbonize industries like steel and fertilizer manufacturing, and power heavy vehicles, by avoiding planet-warming greenhouse gas emissions.
The bipartisan infrastructure law of 2021 originally authorized approximately $8 billion for these “hydrogen hubs.” The Biden administration had subsequently allocated these funds to seven such hubs spanning 16 states, though the majority of this money remained unspent.
Significantly, none of the hydrogen hubs located in Republican-controlled states, including West Virginia, Texas, and Louisiana, were impacted by this recent wave of cancellations.
Dr. Greg Keoleian, a University of Michigan professor specializing in hydrogen research, emphasized that these canceled funds were critical for the United States to maintain a competitive edge against nations like China and Europe, which boast more advanced hydrogen industries. “Investing in clean energy technologies like hydrogen is essential for our global competitiveness,” stated Dr. Keoleian.
Chris Green, president of the Pacific Northwest hydrogen hub, expressed disappointment but affirmed, “Our dedication to advancing hydrogen in the Pacific Northwest remains steadfast, despite this decision.”
The agency’s list also included financial awards for two dozen national electrical grid upgrade projects slated for termination. These encompassed a $630 million allocation to modernize 100 miles of California’s transmission lines with advanced, high-capacity conductors, and a $250 million grant aimed at fortifying power lines on the Warm Springs Reservation in central Oregon.
Minnesota’s $464 million grant, intended to enhance connections between two major regional electrical grids in the Midwest and Great Plains, was also on the chopping block. This project was designed to facilitate the integration of more renewable energy and decrease blackout risks, with advocates arguing it would lower electricity costs across a broad area, including Republican-governed states.
Further impacting environmental efforts, the cancellations include $326 million previously awarded to Colorado State University for projects aimed at curbing methane leaks from oil and gas wells – methane being a highly potent greenhouse gas. Additionally, over $350 million in awards to the Gas Technology Institute in Illinois, which focuses on various emission reduction technologies including methane and hydrogen, are also set to be revoked.
Finally, the Energy Department also withdrew funding for initiatives dedicated to lowering emissions from cement production and developing carbon capture technology, which prevents industrial carbon dioxide from entering the atmosphere and contributing to global warming. It appears some of these specific cancellations were initially announced back in May.