Illustration: Aïda Amer/Axios
The Department of Energy's top watchdog offered a remarkably candid assessment Thursday of the problems that could plague the Biden administration's climate agenda.
Why it matters: The IRA and infrastructure law are sending billions out the door at extraordinary speed. There's a real chance some of that money gets wasted or ends up in the hands of companies tied to foreign adversaries — namely China.
Driving the news: DOE IG Teri Donaldson told the Senate Energy and Natural Resources Committee that the agency is facing "unprecedented" risks in implementing dozens of new programs from the two laws.
- "On the issue of not funding our adversaries, I am greatly concerned about how things are going in that regard," she said.
- The office DOE set up to vet projects is vastly understaffed and has "no written procedures," Donaldson said.
- Energy Secretary Jennifer Granholm does not support transferring more money to the IG's office to combat fraud, she added.
- "As we sit here today, I am the poorest-funded inspector general in the federal government proportionately," she said.
Zoom in: Donaldson alluded to what she called the "monopoly money syndrome" — that it's much easier to spend (and waste) the government's money than your own.
- It's a problem that IGs are intended to prevent, but she said her office can only audit a small fraction of the grants and loans that DOE is currently pushing out.
What we're watching: ENR Chair Joe Manchin spoke with Donaldson one-on-one after Wednesday's hearing and told her he would try to get her more money via the appropriations process.
- "We'll help her any way possible," Manchin said. "I just want to make sure that we're held accountable to that, and I don't want money going out the door that doesn't have a return."
Between the lines: It's not the first time Donaldson has asked for more money, but her testimony shows the issues DOE's top brass will have to deal with if they want to avoid the next Solyndra- or Microvast-style political fight.
- Still, Manchin sounded pretty chipper after the hearing about how things are going. He said the IRA and infrastructure law have been "overwhelmingly productive."
- "I just don't want to throw caution to the wind," he said.
Yes, but: DOE's Loan Programs Office, which got a huge influx from the IRA, has historically earned good returns on the risky energy tech investments that it makes.
- LPO chief Jigar Shah told the panel his office "conducts rigorous due diligence that is comparable to, if not more stringent than, what might be done in the private lending market."
- That's because DOE has access to thousands of scientists who work on research and development for emerging technologies that are "scary" for the private sector, he said.
Of note: Republicans on the committee also went after Shah for reportedly appearing at exclusive events hosted by Cleantech Leaders Roundtable — an organization he founded and whose members seek funding from LPO.
- "He has refused in front of this committee to commit to refrain from associating with his previous organization," said ranking RepublicanJohn Barrasso.
- Shah countered that he has no role in actually choosing who gets a loan and that he appears at events of all kinds to "gain private-sector trust."
- We expect this to become a focal point for GOP oversight.
