Uche Cecil Izuora
Oil major, ExxonMobil has lost the bid for a $331 million contract after the U.S Government announced cancellation of $3.7 billion clean energy projects.
The Energy Department is canceling some $3.7 billion in Government support for clean energy projects it said did not warrant continued backing from the Trump administration.
The Agency said the move came after it found the projects “failed to advance the energy needs of the American people, were not economically viable and would not generate a positive return on investment of taxpayer dollars.”
Sixteen of the 24 projects were awarded during the Biden administration between Election Day and President Donald Trump’s January 20 inauguration, the department said in a statement.
Among the canceled awards was $331 million to Exxon Mobil Corp. for a project to use hydrogen instead of natural gas at the company’s Baytown, Texas, Olefins Plant.
The announcement comes roughly two weeks after the Energy Department moved to audit more than $15 billion in grants and other support awarded by the Biden administration for upgrading power grids and manufacturing energy technology.
Under an audit policy announced May 15, the department told beneficiaries of Agency grants and support that they must quickly comply with requests for information or risk cancellation.
It also follows an internal agency proposal to shut down the $27 billion clean energy office, which under former President Joe Biden provided billions for a network of hydrogen hubs, carbon capture projects and other clean energy technology.
Under an internal plan to eliminate the Agency, billions of dollars for hydrogen hubs would have been eliminated as well as carbon capture and battery storage projects. Also slated for termination was a direct air capture project by a subsidiary of Occidental Petroleum Corp. that had been selected for an award of as much as $1.2 billion by the Biden administration.
Other canceled awards included $375 million to Eastman Chemical Co. for a molecular recycling project in Longview, Texas; and $270 million to a subsidiary of Calpine Corp. for work on a carbon capture project at Exxon’s Baytown facility. Also eliminated was $270 million to Calpine subsidiary Sutter CCUS for another carbon capture project near Yuba City, California.
“While the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars, the Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources and advance projects that generate the highest possible return on investment,” Energy Secretary Chris Wright said in the statement.