From the Daily Caller News Foundation

By AUDREY STREB

“A lot of the push to keep these subsidies alive isn’t about good energy policy — it’s about keeping industries afloat that can’t meet reliability and affordability standards on their own.”

Energy Secretary Chris Wright said on Friday that his agency plans to cut billions in grant funds for Biden-era loans as the Trump administration conducts a review of the department’s $400 billion clean energy investments, a decision that energy policy experts who spoke with the Daily Caller News Foundation cheered on.

Before leaving office, former President Joe Biden squeezed $25 billion into the Department of Energy’s (DOE) Loan Programs Office (LPO) for various projects, with the bulk of the funds going toward renewable energy development. Wright’s newly announced plans to review and cancel a majority of the loans has the backing of several energy policy experts who told the DCNF that the LPO has stripped cash from taxpayers and contributed to U.S. grid instability.

“We’ve got a lot of reasons to be worried and suspicious about that,” Wright told Bloomberg in response to a question about the LPO. “Some of these loans will go forward, some of it, it’s too late to change course. A lot of them won’t go forward, but that’s a very careful review process that we’ve just put in place and just got a team to execute on.”

The LPO has previously dished out loans for nuclear energy, an industry championed by the Trump administration. However, among the loans finalized after the election were $6.57 billion to an electric vehicle manufacturing facility in Georgia and $289.7 million to solar energy development and battery storage in Massachusetts.

“[The LPO] may have been well-intended, but it’s morphed into a clean energy slush fund that dooms energy projects by making them tied to federal funding,” Gabriella Hoffman, the director of the Center for Energy and Conservation at Independent Women’s Forum wrote to the DCNF. “LPO investing currently undermines competition and market innovation of energy technologies. In the event it stays, however, it must be radically reformed to not prop up reliable energy sources like solar and wind.”

Notably, the rush to get these loans greenlit under Biden prompted a November inspector general report, which highlighted several potential risks to taxpayers related to the LPO, including concerns that the office may be moving too quickly to distribute funds, possibly at the expense of properly vetting loan applicants.

Other noteworthy projects approved under Biden’s watch included a $2.5 billion in loan for EV technology, 1.45 billion for a solar manufacturing facility in Georgia and $584.5 million for a solar photovoltaic (PV) system with an integrated battery energy storage system in Puerto Rico.

Founded in 2005, the loan office was created to help advance clean energy infrastructure, and it was increasingly active under the Obama administration, which approved a $535 million loan to Solyndra, a green energy company that collapsed just two years later. Activity slowed during President Donald Trump’s first administration, but under Biden, the office received a massive funding boost from Congress — totaling $400 billion — to support green tech firms.

“These past four years have been the most productive in LPO’s history,” LPO wrote in a fact sheet three days before Trump returned to the White House. “Under the Biden-Harris Administration, the Office has announced 53 deals totaling approximately $107.57 billion in committed project investment – approximately $46.95 billion for 28 active conditional commitments and approximately $60.62 billion for 25 closed loans and loan guarantees.”

“If the government’s going to use my money as a taxpayer through LPO investments, that money should be going to investments that actually provide reliable power,” André Béliveau, senior manager of energy policy at the Commonwealth Foundation told the DCNF. “A lot of the push to keep these subsidies alive isn’t about good energy policy — it’s about keeping industries afloat that can’t meet reliability and affordability standards on their own.”

While the majority of the LPO’s support in Congress and the White House has come from the left, some right-of-center organizations recently urgedWright on April 14 to “preserve” the LPO for the sake of “American dominance.” The organizations argue that the LPO plays a “critical role” in enabling “new nuclear power development.”

“LPO continues to play a critical role in financing infrastructure that enables new nuclear power development, revitalizes domestic mineral production, and modernizes both grid and gas systems — all central to the administration’s goals of lowering energy costs, reshoring manufacturing, and achieving energy dominance,” the letter reads.

Subsidizing energy projects that are not able to survive on their own in the free market is questionable, Amy Cooke, the co-founder and president of Always on Energy Research and the director of the Energy and Environmental Policy Center, told the DCNF. “The calls to eliminate it are well-founded, and at the very least, it should be dramatically reformed,” she said. “If the market isn’t interested in it, is it the responsibility of the Department of Energy to fund [these projects]?” she asked.

“We should be funding improvements for firming the grid and not arbitrarily add more intermittency,” Béliveau said in reference to wind and solar projects that provide less inertia — the grid’s ability to continue running smoothly after a disturbance occurs between energy supply and demand for the electrical grid.

“If it’s going to exist, then reforms need to make sure that we’re being good stewards of taxpayer dollars,” he added, pointing to natural gas and nuclear as options that could help “firm the grid.”

“The Trump administration’s version of energy dominance has created a source-neutral way of picking winners and losers,” he continued, noting that reliability, affordability and security are the priorities of the administration, as opposed to a climate-change centric approach to energy policy.

Trump declared a national energy emergency on his first day back in office and signed an executive order to boost domestic energy generation. He signed a series of other EOs within his first 100 days in office to speed up the permitting process and clear red tape for several industries including coal and critical mineral mining.

From EnergyNow.Ca

We can strengthen economic sovereignty and resilience: Unlock private-sector investment, responsibly develop our world-class natural resources, support climate action

The Rt. Hon. Mark Carney, PC, MP
Prime Minister of Canada

Dear Prime Minister Carney,

On behalf of Canada’s leading energy companies, please accept our congratulations on your election victory and appointment as Canada’s new Prime Minister.

This moment marks not only the first chapter for your government, but also a vital opportunity for our nation to come together around shared goals and build the trust necessary to get big things done. Together we can Build Canada Now and strengthen economic sovereignty and resilience, by unlocking private sector investment, through responsibly developing Canada’s world class natural resources and supporting climate action to reduce emissions. As business leaders in Canada, we look forward to working constructively with you and your cabinet to achieve our energy sector’s potential and our shared goal to position our country as a global energy superpower.

For context, global prosperity will continue to rely on oil and natural gas for decades to come. Regardless of whether absolute global demand will grow or weaken over time, the natural decline of oil and natural gas production requires ongoing investment to replace that decline. Without continued investment, global supply could fall by more than half within 10 years—the question is, in what producing countries will investment occur, and the economic benefits realized? With abundant resources, a strong commitment to environmental stewardship and responsible energy production, it should be Canada, and it should be now. Canada can be a global energy leader and secure long-term economic prosperity.

We have reviewed your platform for governing Canada, particularly your ambition of building the fastest growing economy in the G7. As a major contributor to the Canadian economy, with significant untapped potential, the energy sector must play a pivotal role in your pursuit of this ambition. Growth in the Canadian oil and natural gas sector supports GDP growth, job creation, and tax revenue. Your focus on fostering energy independence and enhancing Canada’s energy infrastructure and clean technology, requires major sector investment and globally competitive energy and carbon policies. Over the last decade, the layering and complexity of energy policies has resulted in a lack of investor confidence and consequently, a barrier to investment – especially when compared to the United States, which is taking steps to simplify its permitting process.

In March, a subset of us wrote to you and the other federal leaders, outlining an urgent action plan needed to support ongoing and future investment from the energy sector in Canada. We note that many of these issues were talked about in your campaign and are of growing interest for Canadians as is evidenced by recent polling. The bullets below reflect our earlier action plan. Beneath each statement we have described opportunities to work together to deliver on our shared objectives.

• “Simplify regulation. The federal government’s Impact Assessment Act and West Coast tanker ban are impeding development and need to be overhauled and simplified. Regulatory processes need to be streamlined, and decisions need to withstand judicial challenges.”
  • Current regulatory processes are complex, unpredictable, subjective, and excessively long. These processes inhibit the ability of industry to make timely investments, add unnecessary costs and create uncertainty within capital markets. Aligned with your proposal to streamline the approval process, industry is committed to working with your government to ensure Canada can grow exports of oil and natural gas to other regions.
• “Commit to firm deadlines for project approvals. The federal government needs to reduce regulatory timelines so that major projects are approved within 6 months of application.”
  • Your proposal to have all federal regulatory authorities complete reviews of nationally significant projects within a two-year timeframe is a positive step, but insufficient. In our opinion, two years is still too long of a period for review and we must target a 6-month approval process to bring capital back to Canada. Additional clarity with regards to provincial jurisdiction is required. We believe that we can work together to accelerate this even further to accomplish urgent economic growth, while maintaining environmental standards and addressing Indigenous rights.
• “Grow production. The federal government’s unlegislated cap on emissions must be eliminated to allow the sector to reach its full potential.”
  • We continue to believe the federal government’s cap on emissions creates uncertainty, is redundant, will limit growth and unnecessarily result in production cuts, and stifle infrastructure investments. Together, we can drive investment into emissions reductions by simplifying the regulatory regime, establishing an attractive fiscal environment, and ensuring carbon policies protect our export industries.
• “Attract investment. The federal carbon levy on large emitters is not globally cost competitive and should be repealed to allow provincial governments to set more suitable carbon regulations.”
  • Recognizing the global nature of oil and natural gas, industry needs clear, competitive, and durable fiscal frameworks, including carbon policy and associated costs, sufficient to secure the required capital and incentivize investment in the sector. The current federal price and stringency trajectory results in uncompetitive costs compared to those we compete with to deliver our products to market.  Additionally, the potential benefits of a federal approach, like consistency across jurisdictions and connected carbon markets, has failed to materialize.  A solution is to revert back to the functioning system where provinces administer the policies and pricing to enable emissions-reduction investments, improve emissions performance, and maintain competitiveness.
• “Incent Indigenous co-investment opportunities. The federal government needs to provide Indigenous loan guarantees at scale so industry may create infrastructure ownership opportunities to increase prosperity for communities and to ensure that Indigenous communities benefit from development.”
  • Your intention of doubling Indigenous Loan Guarantee Program to $10 billion to support infrastructure ownership opportunities and increase prosperity for communities is aligned with our earlier recommendation. That being said, Indigenous loan guarantee programs are only effective if Canada fosters a competitive investment environment. We look forward to working with you on this initiative to grow the prosperity of Indigenous communities and earn their support for our shared ambitions.

The time is now to take action, signaling to the global investment markets that Canada is ready to move forward with achieving our shared vision of Canada as a leading global energy superpower.

We know the decisions in the coming months will have a lasting impact on Canada’s economic sovereignty, economy and global position, and that each of us—governments, industry, and Canadians—has a role to play. We can’t do it without each other.

The energy industry looks forward to working together, with you and your government, on an urgent basis, for the benefit of this country and Canadians nationwide.

Regards,