When the Biden administration unveiled the Regional Clean Hydrogen Hubs in October of 2023, the seven projects spanned 16 states, and were slated to receive a combined $7 billion in infrastructure law funding.
Those projects, all of which would be powered at least in part by renewable energy, were offered awards ranging from $750 million to $1.2 billion, in the form of a 50% federal cost share. According to the Biden administration, the projects had the potential to produce at least 3 million metric tons of hydrogen annually — or around a third of the country’s 2030 production goals.
Now, however, all that is up in the air. The Department of Energy under the second Trump Administration has proposed canceling the awards for at least four of the hubs, and OCED is a shell of its former self following aggressive cuts made when Elon Musk’s Department of Government Efficiency swept through DOE in February. The agency has canceled community input meetings scheduled for several projects, and OCED is reportedly encouraging awardees to voluntarily step back from their promised funding.
But OCED’s hydrogen work is fielding criticism that extends beyond the administration’s anti-clean energy agenda, and into the management of the program itself.
In an audit of the hydrogen hubs program released in June, DOE’s internal watchdog concluded that the office had failed to “fully assess risk” to the program and the chosen projects, and wasn’t prepared, from a staffing perspective, to manage the hubs. That audit began in May 2024, long before the second Trump administration took office.
As in the case of a similar report that assessed OCED’s deployment of the Advanced Industrial Facilities Deployment Program, the office declined to request or provide feedback on the hydrogen hubs audit. Instead, OCED leadership submitted a single-sentence comment concurring wholesale with the audit’s findings; they agreed to “establish a cross-functional process to identify, document, and monitor key risks,” and to develop a “workforce plan” for the hubs by the end of the year.
One senior manager in the program, however, wrote their own responses, which were shared informally with former OCED staff, but not submitted for the record. Those responses, seen by Latitude Media, acknowledged the steep challenges facing the projects. However, they wrote, the OCED team was “keenly aware” of the risks — and laser-focused on mitigating them. They were most focused on avoiding one particular risk that the inspector general’s audit appeared to ignore, the manager said: half-built projects that cost money but never come online.
That type of failure, the senior manager wrote, “would cost exponentially more taxpayer dollars (to the tune of hundreds of millions of dollars) versus the factors [the inspector general’s office] were assessing.” Now, though, they added, that risk is being posed by the Trump administration itself.
Responding to risk
The audit of the program, which commenced six months before most of the awards were finalized in November 2024, stopped short of accusing OCED of rushing the awards. But the watchdog’s report concluded that the program prioritized speed over risk mitigation, particularly in the face of a tax credit landscape that was also being built from scratch.
OCED was required to assess and mitigate risks for the hydrogen hubs program as a whole, but only did so at the project level, the inspector general said. A programmatic assessment, the report added, could have both identified broader challenges, like the persistent uncertainty regarding the 45V hydrogen tax credit, and ensured the program had a mitigation plan in place.
OCED also failed to conduct reassessments of risk as the landscape for hydrogen changed, the report found, including as the government-to-recipient cost share shifted, and portfolio costs increased. “Such a significant change in project scope and cost should have triggered a reassessment of program risks,” it concluded.
But the senior manager for the program rejected the assertion that the program was failing to manage programmatic risks. In fact, program staff were very focused on several key risks in particular, including the fate of 45V, high electricity prices, disrupted global supply chains, a project’s dependency on a single recipient or supplier, and “the turning of public opinion on hydrogen.”
Those concerns were covered in weekly meetings with OCED leadership and were also included in a “programmatic risk register,” which was only established once all of the hubs were under award — meaning January 2025. “We didn’t know if the hubs would even get into award, so the programmatic risks couldn’t be fully assessed until we had a full picture,” they wrote.
At a program level, risk was mitigated throughout the early phases of the projects, because very little money was to be given out during that time, the manager said: “For example, if the 45V ruling and high electricity prices caused green hydrogen projects to drop, then we would have reallocated the dollars to other uses, such as adding more blue or pink hydrogen production projects…In fact, we successfully utilized this flexibility to handle projects that dropped out of the program prior to award.”
But the most significant risks to the government from the hydrogen hubs weren’t at the program level, but within individual projects, the manager added.
“Specifically, if a large project was abandoned during or shortly after construction, that would result in a significant amount of money invested by both the U.S government…and the recipient with nothing to show for it,” they wrote. “That’s why we had a phased investment process and key decision gates before a project was allowed to purchase equipment and start construction, which is when the majority of dollars are spent.”
A lack of resources
Part of the reason a program-level risk assessment wasn’t conducted, the inspector general found, was that OCED simply didn’t have enough staff, and hadn’t developed “a formalized workforce plan” for the hubs program.
The report’s workforce critique dates back to June 2022, in OCED’s early days when it had “only 12 full-time equivalents on staff.” At that time the office went ahead with developing a mission and vision statement, organizational policies and procedures, and funding opportunity announcements.
Two years later, with a staff of nearly 400, “a programmatic risk assessment had still not been conducted.” Until that’s completed, the report added, OCED “is not well positioned to respond to emergent changes in funding, scope, political or social dynamics, or other unforeseen issues related to the H2Hubs Program.”
But according to the senior program manager, OCED’s staffing approach to the hydrogen hubs was standard. “We had always predicated having at least one federal project manager and one project officer for each hub, with an additional project manager or officer for the larger hubs,” they explained. Additional support was provided by NEPA, grant and award officers, and DOE general counsel teams.
“To protect the taxpayer dollars, we only ramped-up in staffing when it was clear that the majority of the hubs were on a successful trajectory to get to award,” they wrote. That turned out to be a smart strategy, they added, “given the subsequent DOGE cuts.”
Regarding the audit itself, the manager pointed out that the inspector general’s office didn’t have anyone with experience managing large capital projects, “let alone anybody who has experience managing large energy project portfolios.”
In other words: “they don’t know what they don’t know.” While the auditors could look for procedural elements of program management, they were limited by their lack of contextual understanding. “In some respects,” they added, “it’s the proverbial ‘to a hammer, everything looks like a nail.’”
