The Energy Department said on Wednesday night that it would cancel more than $7.5 billion in Biden-era awards for hundreds of energy projects, with the vast majority located in states led by Democrats.
The move underscored how the Trump administration appeared to be using the government shutdown as a pretext to punish its political opponents. President Trump said this week that if Democrats in Congress did not vote for a funding bill to keep the government open, he would “do things during the shutdown that are irreversible, that are bad for them.”
In its Wednesday announcement, the Energy Department did not specify which projects would see their funding terminated. But according to an agency document reviewed by The New York Times, the list of affected projects include major upgrades to electrical grids in California, Minnesota and Oregon; efforts to reduce methane leaks from oil and gas operations in Colorado; and large hubs to produce clean-burning hydrogen fuels in California and the Pacific Northwest.
The vast majority of the 321 canceled awards would have gone toward projects in those states as well as Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Mexico, New York and Washington, the document showed. Those states all have Democratic governors and senators.
In a news release, the Energy Department said it had determined 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.”
The agency said that recipients would have 30 days to appeal any terminations. If those appeals are unsuccessful, the recipients could potentially sue the Energy Department, much as award cancellations by the Environmental Protection Agency have faced legal challenges.
There is no law that allows a federal agency to cancel previously awarded grants during a government shutdown. Companies or universities that receive federal funding typically sign a legally binding agreement and then spend their own money, on the expectation that they will be reimbursed later.
The cancellations appear to have been months in the making. Political appointees at the Energy Department have been reviewing billions of dollars worth of climate and infrastructure spending that was awarded by the Biden administration, claiming that the money was rushed out the door but providing few details about specific problems.
The agency’s announcement met swift condemnation from Gov. Gavin Newsom of California, where one of the projects facing funding cuts was projected to create more than 220,000 jobs. “In Trump’s America, energy policy is set by the highest bidder, economics and common sense be damned,” Mr. Newsom said in a statement. “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.”
Before the Energy Department announced the cancellations, Russell T. Vought, the White House budget director, said in social media posts that they were imminent. “Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being cancelled,” he wrote on X.
Mr. Vought did not provide details, and the Energy Department did not issue the news release until several hours later. In the meantime, many state officials, members of Congress and energy executives were scrambling on Wednesday to figure out which projects would be affected.
Two of the largest canceled awards would have provided $1.2 billion to projects in California and $1 billion to projects in the Pacific Northwest focused on the production, transportation and storage of clean hydrogen. Hydrogen fuels have the potential to produce steel and fertilizer, or to power trucks, without producing planet-warming greenhouse gas emissions.
Congress had authorized roughly $8 billion for so-called hydrogen hubs as part of the bipartisan infrastructure law of 2021. The Biden administration awarded that money to seven hubs across 16 states, although most of the funds had not been spent yet.
None of the hubs in Republican-controlled states such as West Virginia, Texas and Louisiana were affected by the latest round of cancellations.
Greg Keoleian, a professor at the University of Michigan whose research focuses on hydrogen, said the canceled funds would have helped the United States compete with China and Europe, which have more mature hydrogen industries. “We need to be investing in clean energy technologies like hydrogen for global competitiveness,” Dr. Keoleian said.
Chris Green, the president of the Pacific Northwest hydrogen hub, said that “while we are disappointed” in the decision, “our commitment to advancing hydrogen in the Pacific Northwest is unwavering.”
Republican-held states and districts were not entirely spared. The Pacific Northwest hydrogen hub was expected to create jobs in Montana, for instance. Some of the cuts would affect projects in states like Florida, South Carolina and Texas, where a battery factory was being built with help from a $20 million federal grant that is now being canceled.
Financial awards for two dozen projects to upgrade the nation’s electrical grids were also targeted for termination, according to the agency list. That includes $630 million to help upgrade 100 miles of transmission lines in California with advanced conductors that can carry more electrical current, as well as a $250 million grant to strengthen power lines on the Warm Springs Reservation in central Oregon.
Also targeted for cancellation was a $464 million grant awarded to Minnesota to help improve the connections between two large regional electrical grids in the Midwest and Great Plains. That project was aimed at making it easier to add more renewable energy to the grid and reducing the risk of blackouts. Proponents said it would have helped reduce electricity costs across a wide region, including in Republican-led states.
The list of canceled funding also includes $326 million that had been awarded to Colorado State University to reduce leaks of methane, a potent planet-warming gas, from oil and gas wells. The cancellations would also affect more than $350 million in awards to the Gas Technology Institute in Illinois, which works on reducing emissions from methane, hydrogen and other technologies.
The Energy Department also canceled funding for projects to reduce emissions from cement production and to develop technology that traps and buries carbon dioxide from industrial smokestacks before the gas escapes into the atmosphere and heats the planet. Some of those terminations appear to have been previously announced in May.
