Dept. of Energy axes clean energy grants worth nearly $4 Billion

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The Department of Energy canceled $3.7 billion in grants Friday that the Biden administration had authorized for cutting greenhouse gas emissions in fossil fuel plants and industrial projects, a blow to U.S. carbon-cutting efforts and a sign that more award cancellations are possible.

Among the 24 axed awards was a hydrogen energy initiative led by Exxon Mobil in Baytown, Texas, and several decarbonization projects for the cement sector and for the food and beverage industry, including the Kraft Heinz Co.

Of the canceled grants, only $99 million had gone out the door, DOE said. The majority of the contracts were signed by the Biden DOE after Donald Trump won the presidency last November, the department said.

DOE’s list shows award cancellations for projects that are mostly in Republican-leaning states — Texas, Louisiana, Wyoming, Ohio and Alabama — and for industries that have voiced support for Trump.

“The Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources and advance projects that generate the highest possible return on investment,” Energy Secretary Chris Wright said in a statement.

He added, “the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars.”

The department says it used a review process announced earlier this month to cancel the awards, deciding the grants “did not meet the economic, national security or energy security standards necessary to sustain DOE’s investment.”

Democratic lawmakers, environmentalists, energy efficiency groups and some manufacturing advocates panned the grant cancellations.

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The largest canceled awards are for carbon capture projects at cement plants. Heidelberg Materials received $500 million for a project, and the National Cement Co. of California won an award for the same amount.

An $189 million award for cement company Brimstone Energy was also canceled. Brimstone spokesperson Liza Darwin said the company believes the decision to cancel was based on a “misunderstanding,” given the “project’s strong alignment with President Trump’s priority to increase U.S. production of critical minerals.”

“Brimstone’s Rock Refinery represents the only economically viable way to produce the critical mineral alumina in the U.S. from U.S.-mined rocks,” Darwin said in a statement.

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Meanwhile, natural gas plants appear to be big targets for the cancellations.

Among DOE’s award cancellations is one for a gas-fired power plant in Kentucky, which DOE selected last February for a federal cost share of $72 million. The Cane Run Generating Station intended to install CCS and trap roughly 200 tons of carbon dioxide per day.

Power generator Calpine and its carbon capture projects also took a hit. On the list of cancellations was a $270 million award to Calpine Texas CCUS Holdings for the company’s project in Baytown, Texas.

A $332 million canceled award for Exxon Mobil was for a project that planned to swap out natural gas for hydrogen at a textile and plastic production site in Baytown. At the time of the Biden award announcement, DOE said the project would avoid 2.7 million metric tons of carbon dioxide emissions annually, along with roughly 200 tons per year of nitrogen oxide.

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The list didn’t include some of the largest projects — such as hydrogen hubs — potentially slated for cancellation at DOE’s Office of Clean Energy Demonstrations, according to documents that have been circulating among DOE officials and lobbyists for weeks.

It’s possible that those other projects may be terminated later, as Wright has said DOE is conducting a broad review of projects to be completed this summer. According to the documents, four of seven hydrogen hubs funded with $7 billion from the bipartisan infrastructure law may be on the chopping block.

The 24 projects nixed Friday were on the circulating lists.

OCED also is facing a staffing plunge. More than 70 percent of employees have opted to leave the office voluntarily as part of a deferred resignation program. The department has not provided a final tally of how many resignation offers have been approved.

According to modeling from the environmental think tank Center for Climate and Energy Solutions, the closure of OCED could result in the loss of more than 290,000 jobs.

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