Photo illustration: Annelise Capossela/Axios. Photo: Torsten Blackwood/AFP via Getty Images
A Republican Congress and incoming Trump administration could throw into jeopardy more than half of the announced deals from a favorite target: DOE's Loan Programs Office.
Why it matters: The Energy Department has yet to finalize $25 billion for 16 conditional loan commitments to back battery manufacturing, low-carbon fuel production, lithium mining, EV charging, and other projects.
- The office — a longtime GOP punching bag — has another 210 active applications totaling nearly $304 billion as of October that the incoming administration could scrap.
During the Biden administration, Republicans have accused its director, Jigar Shah, of possible ethics violations and of running a green "slush fund."
- Asked about LPO's fate, Sen. John Barrasso told Nick he believes it has "been run as a kickback operation for the supporters of Joe Biden."
- The agency's independent IG has told Congress that she's conducting a wide-ranging probe into how money has been awarded.
Follow the money: LPO watchers expect the incoming administration — at the very least — will freeze and review any unspent funds.
- Such a funding review could put finalization of loan commitments on hold until summer until the staff is in place, according to a former senior DOE official who spoke on condition of anonymity.
- House Republicans have already proposed in this year's energy-water spending bill to reprogram $9 billion from LPO to fund three advanced nuclear demonstration projects.
- Rep. Chuck Fleischmann, who plans to remain the top energy-water appropriator, told us he would "continue to advocate for that."
The other side: Energy and Commerce Democrats have shot back at GOP accusations, demanding answers about the IG's contract with a Texas lawyer who they said bypassed the usual competitive-bid process.
One possibility under Trump is that the office becomes a way to fund GOP-friendly tech like sustainable aviation fuel, nuclear or even fossil fuel projects.
- "We need to make sure we're using all sources of energy," Barrasso said as he hopped on a Senate elevator.
Flashback: The office went virtually dormant during Trump's first term.
- The bipartisan infrastructure law and IRA led to a dramatic expansion of LPO's loan authority, including a $250 billion IRA program to repurpose existing energy infrastructure.
Yes, but: Elon Musk's involvement in a Trump administration may moderate the push to scale back the office.
- Tesla received a $465 million loan that seeded the company's growth, as Shah likes to remind critics.
- After briefly meeting Musk last week, Fleischmann said Republicans should be "very careful how we proceed" with any funding cuts and noted "there are accounts that are very near and dear" to a range of energy interests.
What they're saying: "It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities spurred by LPO's investments," a DOE spokesperson said in a statement.
What's next: The LPO will be racing to finalize conditional commitments in the next two months.
- "If you're very close to approval, maybe you're feeling good now, because they're going to really try to get as much out the door as they can," said Shailesh Sahay, a partner at Baker Botts. "But then as soon as that window closes, things are going to slow down significantly."
