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A hydrogen-powered facility that would produce 700,000 tons of nitrogen-based fertilizer a year is among the victims of the Energy Department’s decision to cut about $7.6 billion in energy grants.
The Atlas Agro Pacific Green Fertilizer plant in Richland, Washington, would help satisfy the need for domestically produced fertilizer, said Brian Young, deputy director and adviser to the president for the Pacific Northwest Hydrogen Association, or PNWH2. DOE canceled its grant of $1.1 billion to the PNWH2 hub, which includes six projects.
“We were disappointed, because we really thought that our projects stood up, from a financial standpoint, on their own, really contributed to the American energy dominance that we're looking for, and and also is a pretty good deal for the government,” he said. “I mean, we're talking less than 20% [of the projects' value] to get almost $6 billion of energy infrastructure in the Pacific Northwest alone.”
The Atlas Agro plant is well along the path to construction, with front-end engineering design completed, Young said Tuesday. It is estimated it will cost about $1.5 billion; federal funding was supposed to provide $157 million of that.
The company also has received $80 million from USDA as part of the Biden administration’s Fertilizer Production Expansion Program.
Young said the PNWH2 is not giving up on the funding yet, and has sent an “informal appeal” to DOE. He also said there are questions about whether the funding cut was done “outside of the traditional legal framework of how you would do this.”
Young said the project would satisfy a need for domestically produced fertilizer. “I grew up in the Midwest, on the Mississippi in Missouri, and there is so much fertilizer coming in from other places,” he said. “I don't think most people realize just where the all our fertilizer comes from.”
The U.S. Geological Survey estimates that between 6-13% of nitrogen used in the U.S. since 2020 has been imported.
Young notes that the Atlas Agro plant would be “the first big project” to be built on the Hanford Site, the location of a now-decommissioned nuclear production complex.
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“This land was just turned over by the [U.S. Department of Energy] a year or two ago,” he said, noting there has been “30 years of cleanup.”
“It's just such a cool story, and it's sad that it's getting lost in this broad-stroke politics,” he said.
Renewables hit hard by cuts
In addition, Young says, “If this doesn't move forward, that's a big hit to foreign direct investment, especially for our state, which is important, and for our country, which is important.” Atlas Agro is headquartered in Switzerland.
In general, critics of the administration’s decision say renewable energy development necessary to meet U.S. power demands will suffer. Wind, solar and electric battery research also has been hit.
About a third of the 320 projects that DOE targeted had already had their funding pulled before the Oct. 2 announcement, but criticism came swiftly, as Democrats noted the projects are all located in states that did not vote for Donald Trump in 2024. The projects are located in 136 congressional Districts, 108 of which are represented by Democrats and 28 by Republicans.
“The only criterion for cancelling the impacted projects appears to have been whether they were within Democratically led states,” a group of Democratic lawmakers said in an Oct. 9 letter to Energy Secretary Chris Wright and Office of Management and Budget Director Russell Vought.
In addition to the loss of thousands of jobs, the project cancellations “will mean higher energy bills for households and businesses across the country, all of whom are already stretched thin thanks to the affordability crisis instigated by this administration’s tariffs and economic policy,” they said.
The administration said the projects did not align with its priorities. In announcing the canceled projects, Vought called them “nearly $8 billion in Green New Scam funding to fuel the Left's climate agenda.”
But energy demand fueled in part by AI data centers is not slowing down, raising the question of whether the current administration’s shift away from renewables will hinder the nation’s ability to provide reliable power.
Russell Vought (Wikipedia photo)“Demand for energy in the U. S. is growing rapidly by historical measures, prices are rising and the bulk of new additions over the next five years will be renewables and energy storage,” Andrés Gluski, president, CEO & director of The AES Corporation, said on an investors call in August.
“Current government policies aim to increase the amount of future power coming from fossil fuels, nuclear and enhanced geothermal,” Gluski said. “While measures can be taken to increase generation from existing thermal plants, new additions will take years to materially come online, some more than others.”
Energy Information Administration data bear him out. In February, the DOE agency said that this year, “solar and battery storage account for 81% of the expected total capacity additions, with solar making up over 50% of the increase” to the U.S. power grid.
Imperial Irrigation District hit by cut
DOE axed $18.3 million in funding for a project at the Imperial Irrigation District in southern California, the largest irrigation district in the country and the sixth-largest utility in the state.
IID said in a news release that it would continue with the project despite the loss of the federal match.
“The district will continue to work to deploy an Advanced Distribution Management System (ADMS) on schedule – a major project for IID that, through modernization and automation, will enhance operations and reliability, providing direct service benefits to customers,” the news release said.
The district also said it’s “reevaluating the project, which is projected to launch in June 2026, and creating a revised full implementation plan.”
“We’ll be trimming the original plan a bit, but we will be fully implementing its core components,” IID Power Manager Matt Smelser said in the release.
DOE also cut $2.25 million in funding to Deere & Company “to develop a mobile, rapid charging delivery mechanism for remotely located, off-road electric vehicles used in farming and construction operations,” according to a news release from the University of Texas at Austin’s Cockrell School of Engineering. Deere did not respond to a request for comment on whether the project would continue.
In some cases, grant recipients may not even have received formal notice cancellations. A spokesperson for the California Energy Commission said it had not gotten a notice yet, even though the announcement was made Oct. 2.
CEC was due to receive a total of $630 million “to upgrade 100 miles of electric transmission lines with grid-enhancing technologies to improve reliability and deliver clean, affordable electricity faster,” according to the commission.
The cutbacks come amid a slew of other canceled grants in the energy arena. EPA recently rescinded about $7 billion in funding for its Solar for All program, which has prompted a lawsuit by nearly two dozen states and the District of Columbia. In May, DOE announced it was canceling 24 grants, many of which went to support carbon capture projects.
Inside Climate News also has reported that DOE is considering slashing funding for more than 300 additional projects.
