Energy Department cancels climate project

The cancellation of more than 300 funding awards in the Energy sector for a 16-state project won by Democratic candidate Kamala Harris in the 2024 presidential election has denounced the brakes on efforts to reduce carbon emissions, air and water pollution and strengthen the electrical grid.

Eliminating nearly $8 billion in funding for more than 200 projects could result in the loss of tens of thousands of jobs created by the project, potentially robbing the Trump administration itself of stated goals to make American manufacturing more competitive, critics said.

The cuts were announced on Wednesday, the first day of federal closures. Earlier on Wednesday, the Trump administration frozen a whopping $18 billion in funding for two large-scale infrastructure projects in New York City, home to two of Congress’ top Democrats.

President Donald Trump and Congressional Republicans blamed Democrats for the shutdown.

Senate minority leader Chuck Schumer, DN.Y., on Thursday, mentioned the cancellation of funding for the energy sector, saying, “Instead of closing and politics, President Trump should work on bipartisan solutions to lower US costs and create jobs.”

“This is beyond the target of the Blue State. It has wrecking balls in the lives of workers’ families. It expels construction workers from work and raises their families’ electricity bills for political gain,” Schumer said.

Some of the division cancellations originally announced by Management and Budget Director Russell Vauton were new, with others being announced by the division in May.

Similarly, before the Department of Transport officially announced the move, it trumpeted a fundraising freeze for a project that would connect New Jersey to New York and build a new rail tunnel connecting New Jersey to New York to extend Manhattan’s Second Avenue Metro.

The list distributed by Capitol Hill’s Energy Division on Thursday included all of the cuts that were advertised, but not all of the cuts from May. Cuts from May, which affected the projects in the states that Trump won in the 2024 election, were not on the list, and there were no new cuts in such states.

The revoked awards were issued by the offices of the Clean Energy Demonstration, Energy Efficiency and Renewable Energy, Grid Deployment, Manufacturing and Energy Supply Chain, Advanced Research Projects Agency Energy, and Energy Division of Fossil Energy.

“There would have been a significant emission reduction from these forecasts,” said Ian Wells, a senior advocate at the National Council for Resource Defense, advocacy group. “It’s not just about greenhouse emissions, it’s about green air and water,” Wells said.

Wells, another large-scale funding grant cancelled in May, has been allocated $500 million to the Rebec Zero Zero Project in Rebec, California, aims to produce carbon-neutral cement.

A similar small project in Holyoke, Massachusetts had awarded $87 million to the sublime system to build low-carbon cement production that created 70-90 jobs, Wells said.

He said the projects were “in line with the administration’s priorities” of gaining environmental support, reinvigorating American manufacturing and competing with overseas competitors.

“It’s potentially a ‘win-win-win’ and it’s potentially abandoned,” Wells said.

The Energy Division did not release details of the 223 projects affected by the termination of funds.

But Democrats on the House Budget Committee compiled a list of affected projects and released it Thursday afternoon.

“The end of these critical energy projects will raise energy prices, eliminate employment and reduce the reliability of the energy grid,” the group said.

The end of the funds included $1.2 billion for California’s hydrogen hub under the so-called Arches program. This is an alliance of renewable clean hydrogen energy systems.

“Today’s decision to withdraw federal funding for the Arch ignores the important benefits the project offers, including 220,000 American jobs and the security and resilience of stronger national energy,” Arches CEO Angelina Galiteva said in a statement.

“Arches Ecosystem and Marketplace continues to work with state leaders and private sector innovators, based on a strong foundation for creating a national hydrogen network focused on a reliable future beyond California.”

An additional $1.1 billion in grants for Washington-wide energy projects, including hydrogen hubs in the Pacific Northwest, have been cancelled, according to Washington state officials.

“That hub will create a clean hydrogen economy throughout our region,” Washington Gov. Bob Ferguson said in a statement to CNBC.

“It’s outrageous that this administration is using government closures to punish blue states like Washington,” Ferguson said. “We are working with the Attorney General’s office to combat this illegal activity.”

Pacific Hydrogen Association president Chris Green called the cancellation of the Hub’s federal fund “a gut punch.”

“Of course, we’re very disappointed with that,” Green told CNBC, saying the project could lead to tens of thousands or hundreds of thousands of jobs.

He said the companies involved in the hub were “expending a lot of money,” with about 80% of the committed funds being provided by private companies, and the federal fund will provide the remaining 20% ​​or so.

“I lost 20% of my planned revenue, so can I still do this project?” asked Green. “It remains to be seen whether some of these projects will be patient.”

The Colorado Energy Office said more than 30 grants totaling more than $500 million “we’ve been illegally fired in Colorado alone.”

Two of these grants each will provide $2.5 million to help reduce energy and create cost savings by building performance standards through energy code construction and decarbonisation.

“Other fired grants in Colorado are from investments in grid resilience in supporting oil and gas methane reduction projects and utility programs in low-income communities,” the office said.

“This clearly politically motivated targeting by the government will inflate energy costs, threaten grid reliability, increase pollution and create instability in the business community,” the office said.

In New Mexico, more than $135 million in energy sector funding has been cancelled on 10 projects.

Four of them were under the auspices of the New Mexico Institute of Mining and Technology. One said the $42.7 million energy sector “will be able to develop storage hubs on a commercial scale within the San Juan Basin to ensure that these sites can safely store 50 million tonnes of CO2,” DN..m.

Heinrich, a ranking Democrat for the Senate Energy and Natural Resources Committee, said on Thursday, “I just left lunch with my (energy) secretary (Chris) Wright, minutes before news of the cancelled project broke, and he didn’t mention this coming, and he didn’t forget that I didn’t include 10 projects in my state.

“It tells you everything you need to know about how this administration works. In the darkness, without respecting that people will hurt their decisions,” Heinrich said in a statement.

“The American people are not the ones who play politics in their lives that are appropriate for the government that works for them,” he said. The administration has chosen to punish ordinary families just to resolve the score. It’s as dangerous as Americans. ”

The Energy sector said in a statement that the cancellation, following a “full and personalised financial review,” follows a “decided that these projects will not advance the country’s energy needs properly, are not economically viable and will not provide a positive return on investment on taxpayer dollar investments.”

Wright Energy Secretary said many of the awards were “urgently in the last few months of the Biden administration with inadequate documents with reasonable business standards.”

“President Trump has committed to protecting taxpayer dollars and expanding America’s supply of affordable, reliable, safe energy,” he added that cancellation “will bring that commitment.”

The category said of the 321 financial awards, “26% were awarded between Election and Inauguration Days,” and said the awards alone were worth more than $3.1 billion.

But Wells, an advocate for the NRDC, said despite the energy sector’s claims, “transparency is confusing with this process of cancelling this fund.”

Wells contrasted it with what he reviewed before the Biden administration’s project was approved. He noted that the department itself has not published a list of cancelled projects.

The Energy Division did not respond to CNBC’s request for that list.

Wells noted that in early September, several members of Congressional Democrats, including New Mexico’s Heinrich, raised concerns about the impact of political appointees in the energy sector in May to cancel funding for the project.

“This is extremely rare and goes against the precedents of the long-standing DOE,” wrote Heinrich and two other Democrats, California president Zoe Lofgren, and New Jersey Rep. Frank Palone Jr. in a letter to Wright. “It also contrasts with the strict, merit-based process that the department followed when selecting each award.”

“These programs are not options,” the lawmaker wrote. “These programs are surrounded by law by a bipartisan majority and represent the will of Congress. You have no legal authority to interfere with them.”

Ken Lovett, senior energy and environment communications advisor to New York Gov. Kathy Hochul, said the funding would be cut “not surprising given the Trump administration’s full attack on clean energy.”

“Whether it’s offshore-style blocks, reducing federal incentives for electric vehicles and solar energy, or rewinding clean air and clean water standards, the Trump administration’s attempts to roll the progress they have put New Yorkers at risk,” Label said in a statement.

“We won’t go back.”

– CNBC’s Emily Wilkins, Ashley Trujillo and Mac Weron contributed to this story.