department of energy cancels $7.5b of clean energy projects in mostly blue states

Department of Energy Cancels Billions in Clean Energy Awards

The Department of Energy announced Wednesday evening the rescission of 321 awards, totaling $7.56 billion, with a primary focus on clean energy initiatives.

As of the time of this report, the agency has not made public a comprehensive list of the projects impacted, nor has it provided one to TechCrunch upon request. However, reports from E&E News and Heatmap indicate that a significant portion of the cuts affect states that supported Kamala Harris in the most recent presidential election, although some reductions also occurred in states that voted for President Trump.

Impacted Projects

Projects centered around direct air capture technology and the development of hydrogen hubs appear to have been largely eliminated. California Governor Gavin Newsom stated that a $1.2 billion project for the state’s hydrogen hub, known as the Alliance for Renewable Clean Hydrogen Energy Systems, was among those canceled. Reports from E&E News also suggest that hubs in Texas and Louisiana are facing similar cuts.

At least 10 direct air capture (DAC) projects, representing $47.3 million in funding, were terminated, though projects located in Alaska, Kentucky, Louisiana, and North Dakota were preserved. The oil and gas sector has demonstrated support for DAC projects due to the potential for utilizing captured CO₂ to enhance oil production in depleted wells.

States Affected by the Cuts

Numerous states are experiencing the effects of these substantial contract cancellations. These include Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Vermont, and Washington.

Confirmation regarding the cancellation of projects in states that voted for Kamala Harris came via a tweet from Russell Vought, Director of the Office of Management and Budget. He had previously alluded to the cancellations earlier in the day, seemingly aiming to exacerbate partisan divisions during the government shutdown, asserting that “the Left’s climate agenda is being cancelled.”

All 16 states identified by Vought had indeed voted for Kamala Harris in the last presidential election, and a majority have Democratic leadership at the state level. Notably, Vought did not mention states that voted for President Trump which were also on the list of impacted projects.

Funding Sources and Appeal Process

The original awards were distributed by several offices, including the Advanced Research Projects Agency-Energy, Clean Energy Demonstrations, Energy Efficiency and Renewable Energy, Fossil Energy, Grid Deployment, and Manufacturing and Energy Supply Chains.

The Department of Energy revealed that 26% of the awards were granted between Election Day and Inauguration Day in January. It is important to note that the president’s authority extends until Inauguration Day, not simply after Election Day.

Recipients of the canceled awards have a 30-day window to formally appeal the decision.

Broader Policy Context

The Trump administration has consistently signaled its intention to hinder the shift away from fossil fuels. Last week, the Department of Energy implemented a ban on staffers using specific terms, including “climate change” and “emissions.”

Previously, in May, the agency rescinded $3.7 billion in clean energy and manufacturing awards. These cancellations encompassed a wide range of industries, including metal manufacturing, cement production, power plants, and chemical facilities operated by major fossil fuel companies.

These aggressive cancellations have led numerous awardees to initiate legal action against the government in an attempt to retain their funding. The Environmental Protection Agency, which swiftly canceled contracts worth $20 billion, has been a primary target of these lawsuits, with plaintiffs experiencing varying degrees of success.

While a federal district court deemed the EPA’s actions as “arbitrary and capricious,” an appellate court sided with the agency, affirming the validity of the contract cancellations and asserting the government’s right to “proper oversight and management.”

The Department of Energy has confirmed that several recipients of the recent cancellations have already filed appeals.

Update: This article and its headline have been revised to incorporate additional details regarding the affected states and programs.