The former Biden Energy Department hastily approved $42 billion in green energy loans in its final days, ignoring inspector general warnings and potentially wasting billions in taxpayer money as recipients face bankruptcy and operational challenges.
Key Takeaways
- The former Biden administration’s Energy Department approved nearly $42 billion in green energy loans during its final two working days, exceeding the total amount disbursed over the previous decade.
- This massive spending spree occurred despite explicit warnings from the department’s inspector general about potential conflicts of interest in post-election loan approvals.
- Several funded projects are already facing financial difficulties, with some companies filing for bankruptcy shortly after receiving government backing.
- The Trump administration is now reviewing these financial commitments, expressing concerns over apparent lack of due diligence and has approximately $300 billion in remaining funds to redirect.
- Energy Secretary Chris Wright has called the rushed loan process “extremely concerning” and is implementing stronger oversight measures.
Last-Minute Green Energy Spending Spree
In an unprecedented move that has raised serious concerns about fiscal responsibility, the previous Biden administration’s Energy Department approved nearly $42 billion in green energy loans during its final two working days in office. This massive funding allocation not only occurred after Vice President Kamala Harris’s electoral defeat but also surpassed the total amount disbursed by the department’s Loan Programs Office over the previous decade. The timing appears deliberately calculated to commit enormous sums of taxpayer money before the Trump administration could redirect these funds toward different energy priorities.
“It is extremely concerning how many dozens of billions of dollars were rushed out the door without proper due diligence in the final days of the Biden administration,” said Energy Secretary Chris Wright.
What makes this spending spree particularly troubling is that it directly contradicted warnings from the department’s own inspector general, who had specifically cautioned against approving post-election loans due to potential conflicts of interest. Instead of heeding this advice, the outgoing administration pushed through massive funding commitments for solar power solutions, advanced battery recycling, and electric vehicle infrastructure projects with minimal oversight. The funds originated from the 2022 Inflation Reduction Act, which had allocated $400 billion to the Loan Programs Office.
Troubled Recipients and Bankruptcy Concerns
The hasty loan approval process has already shown signs of becoming a financial disaster. Several approved projects are facing significant financial difficulties, creating an alarming parallel to the Solyndra scandal during the Obama administration, when that solar company filed for bankruptcy after receiving $535 million in federal loan guarantees. Among the current problematic investments are Sunnova, a residential solar company that received $3 billion despite investigations into predatory lending practices targeting elderly homeowners, and Li-Cycle, a battery recycling company that secured $375 million shortly before laying off 18% of its workforce.
“The loan office should not be in the virtual venture business, but in a few cases, it could make sense to serve as a catalyst or backstop for viable and important projects from a national security or policy perspective,” said Mark Mills, executive director of the National Center on Energy Analytics.
Other questionable recipients include Zum Energy, which received a $130 million loan guarantee despite having never deployed a commercial system, and Blue Oval SK, which was granted a $9.2 billion loan for battery manufacturing while its parent company, SK Innovation, faces serious financial difficulties. These examples highlight a disturbing pattern of prioritizing ideological green energy goals over practical financial considerations and taxpayer protection, with projects appearing to be selected based on political alignment rather than financial viability.
Trump Administration’s Response and Path Forward
The Trump administration has inherited not only these hastily approved loans but also the challenge of preventing further wasteful spending. While approximately $42 billion has been committed, about $300 billion in Loan Programs Office funding remains uncommitted. Energy Secretary Wright and his team are now conducting a comprehensive review of the existing loan commitments, with the potential to cancel some deals that haven’t been finalized and to implement stronger oversight measures for those that cannot be reversed.
“Ioneer believes government policy should encourage projects if we want critical minerals developed domestically. Time is the key risk for development as China continues to provide financial support to its critical minerals industry and dump critical minerals into the market thereby depressing the price,” said ioneer Vice President Chad Yeftich.
Rather than disbanding the Loan Programs Office entirely, the Trump administration appears committed to reforming its operations and redirecting its focus toward projects that align with national security interests and reliable energy production. This includes potential support for nuclear energy development, which offers a stable, carbon-free alternative to intermittent renewable sources. New guidelines are being developed that will require more comprehensive evaluations of projects, focusing on financial viability rather than political considerations, and ensuring that taxpayers are protected from unnecessary risks in future energy investments.
