In its closing hours, the Biden administration’s Department of Energy hastily approved nearly $42 billion in deals for green energy projects. This was an unprecedented action, dwarfing the total sum that the Loan Programs Office (LPO) has distributed over the past ten years. The conspicuous rush of approvals on January 16 and 17, 2025, led to this immense payout, which amounted to more than $93 billion in existing and future funds. It appears that the Biden administration, in its desperate urgency, readily assumed that the succeeding governance would divert remaining funds away from their green energy pursuits.
Despite delays and dissension, agreements were hastily sanctioned, ignoring the recommendations of the department’s Inspector General. The Inspector General had urged the loan office to cease operations due to potential post-election loan-associated conflicts of interest, yet his caution was consigned to the wind. This reckless conduct has already caused problems, raising suspicions around several shaky deals that the Biden administration pushed through to fund what now emerged as floundering projects.
One such dubious deal included the approval for Sunnova, a rooftop solar company. Despite having $382 million of its $3.3 billion loan guaranteed, the organization shockingly declared bankruptcy in the same month. Likewise, Li-Cycle, receiving a $445 million loan in November, shortly declared bankruptcy and put itself on the market for sale. Such hasty agreements cast a shadow of poor judgment over the Biden administration’s final attempts to push through their green agenda.
Further, Zum Energy, a Californian electric school bus firm, was approved a $705 million loan on January 17 for its ‘Project Marigold’. The company has till date only received $21.7 million from the U.S. government. In the flurry of approvals, a $15 billion loan to Pacific Gas & Electric, which mainly catered to renewable sources, was approved just a day after a $9.63 billion loan was sanctioned to Blue Oval SK. Disconcertingly, these massive loans stem from the 2022 Inflation Reduction Act, which released a staggering $400 billion to the LPO.
The distribution of such large amounts via the Inflation Reduction Act was unprecedented, leaving the LPO with a sum ten times larger than it had ever received in a single fiscal year. Despite the Biden administration’s apparent goal to ratify as many deals as possible before leaving office, a budget of around $300 billion remains unspent. This act of over-authorization seems peculiar, especially since some small-scale agreements have already been abandoned.
These extravagant financial transactions carried out in the twilight of Biden’s reign are reminiscent of the Environmental Protection Agency’s last-ditch effort to allocate $20 billion before their departure. Though primarily related to for-profit companies, these deals raise serious concerns. Critics argue they reflect the Biden administration’s attempt to prop up companies which would struggle to survive on their own in the free market, painting a worrisome picture for taxpayers.
If any of these companies recover and flourish in the future, the beneficiaries would not be the taxpayers. Instead, only stakeholders stand to gain, while the average Joe is left with the burden of mere loan interest repayments. The wastage and lack of oversight have invited sharp criticism, with many pointing out that these substantial handouts to faltering green business ventures are a betrayal of the taxpayers’ trust.
Amid rising unease and suspicion over the lavish post-election outpour of government funds, the Biden administration stands accused of subtly amending the LPO’s guidelines back in 2023. By eliminating some traditional requisites and conditions of loans, they effectively cleared the path for these questionable loans to be passed with minimal obstruction. Furthermore, they shrewdly positioned funds in ‘obligated’ silos to make future cancellations more difficult, essentially tying the incoming administration’s hands.
Even the Trump administration could encounter similar dilemmas if it attempted to refurbish the LPO in alignment with its own energy policies, particularly with respect to nuclear energy. The history of this sector is riddled with unprofitable facilities, significant cost escalations, and construction setbacks, making federal loans in this sector a risky venture. Nevertheless, the Biden administration continued to endorse massive financial commitments, seemingly ignoring the potential risks and consequences for taxpayers.
An example of this reckless financial endorsement occurred on January 15, when Biden’s administration granted a $1.2 billion ‘conditional commitment’ to a subsidiary of EnergySource Minerals LLC (ESM). The company plans to extract lithium from geothermal brine, a controversial decision given the administration’s environmental claims.
Further, during the final days of the Biden administration, another dubious deal was hastily approved with ioneer Ltd. This agreement, known as the Rhyolite Ridge project, concerns a mining and manufacturing center in Nevada. The aim is to harvest lithium and boron, substances critical for defense and national security, suggesting a disconcerting pivot towards energy commodities at the expense of climate policy.
In conclusion, the massive spending spree at the end of the Biden administration is a stark example of rush decision making and untamed expenditure. This leaves in its wake a tide of faltering projects, bankrupt businesses, and potential scandal. Despite their claims of green innovation and fight against climate change, the reality painted by the Biden administration seems to be one of hasty decisions, misuse of funds, and unfulfilled promises.
Ultimately, these actions could be construed as not just a last-minute scramble to push through a green agenda but also a clear disconnect from the needs and challenges of the wider public. Despite the lofty rhetoric about climate solutions and renewable energy, the Biden administration’s final deeds have piled on more burdens for taxpayers – a flamboyant fling with green energy initiatives that left fiscal responsibility by the wayside.
The outgoing administration’s handling of green energy funding is a sobering reminder of the pitfalls of unregulated distribution of resources. The Biden administration’s sloppy approach, with its hastily approved $42 billion in green energy projects, speaks volumes about their disregard for fiscal responsibility and responsible governance. The public deserved better.