When the first iteration of the Department of Energy’s so-called “hit list” of clean energy projects began circulating late last month, the two multi-billion dollar direct air capture hubs were both marked for cuts.
On Friday, Latitude Media viewed an updated version of that list. The South Texas DAC Hub, a one million ton project operated by Occidental subsidiary 1PointFive, was still assigned the designation of “terminate.”
But Project Cypress, a Louisiana project involving Climeworks and Heirloom, and slated to receive up to $500 million, had a new designation: “[Office of Clean Energy Demonstrations] requests more time to evaluate this project.”
The project’s status change, though by no means an assurance that it will maintain its award, came after two weeks of an intense, behind-the-scenes effort to save its funding; an effort that stretched from Shreveport, Louisiana to Washington.
In the last week of March, a group of business associations including the Louisiana Oil and Gas Association, the Louisiana Chemical Association, and the Louisiana Association of Business and Industry, sent a letter to the state’s delegation in Washington, D.C., urging them to support “federal policies that strengthen carbon management initiatives.”
Such policies, the letter added “will create jobs, attract investment, and sustain our energy infrastructure, allowing the state to maintain its competitive edge in the production of low-carbon commodities for domestic and international markets.”
Their letter was followed a day later by a letter from Louisiana Secretary for Economic Development Susan Bourgeois, advocating specifically for Project Cypress.
Beyond the direct economic benefits — thousands of jobs and billions of dollars added to the state’s GDP — the project will have immense downstream impacts, she wrote. “Investing in DAC will generate demand for American-made steel, concrete, and advanced equipment, revitalizing U.S. manufacturing and ensuring that innovation and jobs remain here at home.”
Bourgeois asked the state’s senators and representatives to contact Energy Secretary Chris Wright directly, “and ask him to take every necessary step to advance this critically needed federal grant.”
The ask was passed around every corner of the domestic carbon removal ecosystem in the last two weeks, from the companies themselves to industry groups and investors: Go straight to the top, and ask Wright to remove the DAC hubs from the “hit list.” And if you know someone in the White House or at the Department of Government Efficiency, ask them too.
A political balancing act
Giana Amador, executive director of the Carbon Removal Alliance, said her organization has facilitated at least a dozen meetings with congressional offices in the last two weeks, focused on defending the hub funding.
“When folks heard the DAC hubs were potentially affected by either the DOGE cuts or some of those efforts within the Office of Clean Energy Demonstrations, we saw a mobilization at the local, state and federal levels to protect these programs,” Amador told Latitude Media. “We’ve received pretty positive reception from folks on both sides of the aisle around the benefits of this program and wanting to see it protected.”
The fact that so many of those conversations could happen so quickly, she said, was due in part to the groundwork Project Cypress stakeholders have been doing in Louisiana.
“Stakeholder engagement is critical to the success of any project,” she added. “They built that support, and that support was able to be mobilized under the threat of cuts.”
The legislation behind the DAC hubs, Amador explained, was passed with bipartisan support. Louisiana Senator Bill Cassidy, who has long championed carbon management projects, has said he authored the original DAC Hub program, and has been a vocal advocate for Project Cypress in the past.
Cassidy, who didn’t respond to Latitude Media’s request for comment, has been touting DAC as a means to advance domestic industries since long before the second Trump administration took office.
“If we want Louisiana to be in the best position for American energy independence, make sure we don’t rely on China for supply chains, and do so in a way that reduces pollution, we must support Louisiana’s plans for CCS storage wells,” Cassidy wrote in 2023.
In the early weeks of the new administration however, Cassidy has attempted something of a balancing act, both critiquing mass firings of essential federal workers, while simultaneously introducing bills to “make federal government more efficient [and] slash wasteful spending,” including a proposal to relocate at least 100,000 federal employees out of D.C., and to bar federal employees who telework at least one day a week from receiving raises.
Cassidy hasn’t commented publicly on plans to cut the DAC hubs in particular, but in February, when asked about carbon removal incentives, he told E&E News that eliminating such incentives isn’t aligned with the Republican party’s “pro-business” stance. “Anytime an entity has made a significant investment, you don’t pull the rug out from underneath their feet,” he said.
Inside OCED
Even if the DAC hubs are ultimately allowed to retain their grants, there’s a good chance that the federal workers who oversee them won’t be around to manage them.
The Office of Clean Energy Demonstrations, which manages the largest DAC hubs, has found itself at the intersection of the Trump administration’s efforts to repeal climate funding and Elon Musk’s efforts to dramatically downsize the federal government.
Project 2025, the conservative policy blueprint from the Heritage Foundation, claims that OCED is “distorting energy markets” and forcing taxpayers to cover “the risk of new technology deployment.” It calls for the office to be shut down, with the exception of programs focused on nuclear power.
According to a document reviewed by Latitude Media, the administration appears to be heeding those calls. Proposed cuts would reduce the office’s more than 250 person staff down to a temporary staff of 35, through September 30th.
Those 35 staff would be tasked with winding down the office’s programmatic operations, the document explains, and would include 12 people from the contracts and awards team, seven from the business operations team, and 16 from the project management team. The nuclear technologies program would be transferred to the Office of Nuclear Energy. The goal of the changes, the document says is to “terminate as many awards as possible using [a] range of options consistent with legal authorities.”
With those cuts looming — and many of the office’s longest-serving employees having taken the Trump Administration’s deferred resignation offer — it’s not clear, even inside the office, what evaluation OCED will conduct on Project Cypress, one current employee told Latitude Media.
“We can’t tell if the document [of project cuts] has any logic to it, whether the Secretary is involved or not, or if he cares about these projects,” the employee said. However, the rumor that the DAC hubs would be cut dates back to the administration handover in January, they added. “That’s the first group we heard, way early on, that they just didn’t like these projects.”
If the weekly invoice review meetings, overseen by OCED’s new director Cathy Tripodi, are anything to go by, any projects that do retain their funding are facing an uphill battle.
The general sense inside the office is that Tripodi, who worked at DOE during the first administration, was brought in “as a hatchet person” whose job was to “cut, cut, cut.” In one memorable meeting, Tripodi pushed back strongly against a $600 invoice for a sign language interpreter at a community engagement event (which is an allowable cost under OCED regulations, the employee said.)
“She’s questioning these crazy things…and not really focusing on the substance of the project,” they said.
Whether the DAC hubs — both of which are designed to be the largest of their kind — can survive without the federal grants is a tough question to answer. On the one hand, all of OCED’s awards are designed as partnerships, and in every single case, the companies are bringing more money to the projects than the government is, the employee said.
But in a nascent field like carbon removal, $500 million is absolutely massive — several hundred million more than the total amount contracted to date by the Frontier Coalition, a group of corporate buyers that includes Alphabet and Shopify.
And the hubs themselves are still in the earliest (and cheapest) stage of the development process — the planning phase. That means that the vast majority of the DOE award hasn’t been disbursed yet, with the most expensive stage (construction) still to come, the OCED employee explained.
“Our fear is they will just shut things down because…there are no bodies to manage this,” they added. “These projects, even if we try to save them, they’re going to falter, because so much of the office…is gone.”
