Since its inception over a month ago, the Department of Government Efficiency (DOGE) has identified cost savings of $105 billion—which may be an overestimation. Regardless of the exact figure, DOGE has brought to light some (of the many) layers of wasteful spending within the federal government, which includes the Department of Energy’s Loan Programs Office (LPO).
The LPO was created in 2005 to finance high-risk, first-of-a-kind cleantech projects. Since its founding, the office has funded $43.9 billion worth of projects. While some of these have included eventual winners like Tesla, the program has mostly been marred by failed projects and wasteful spending—which permeates throughout the LPO today.
In December 2024, the Energy Department’s Inspector General (I.G.) identified several violations of conflicts of interest, which could give applicants an unfair advantage when applying for federal money. The I.G. concluded that the LPO “is administering more than $385 billion in new loan authority” without properly vetting, managing, or tracking conflicts of interest.
In light of the report, the Energy Department has “paused all new loan actions,” Jonathan Black, the agency’s chief adviser for oversight, told the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations in February.
This is not the first time the I.G. warned about potential waste, fraud, and abuse at the LPO. A November 2024 report called the program—whose lending authority climbed from $17 billion in 2021 to more than $400 billion in 2024—a “high risk” to the Energy Department. With $290 billion of this money set to expire in 2026, the I.G. warned, “There is no precedent in the Department for this level and pace of financing.” Despite this, the Biden administration dolled out over $46 billion in loans during President Joe Biden’s last days in office. Over the entire Biden administration, the LPO awarded more than $107 billion to energy projects.
Several of these projects benefited large corporations that had the means to finance advancements in cleantech. BlueOval SK received $9.63 billion to build manufacturing facilities to produce batteries for Ford Motor Co. A Stellantis subsidiary was awarded $7.54 billion to expand lithium-ion production in Indiana, while Mitsubishi Power got over half a million dollars for a clean hydrogen and energy storage facility. The LPO’s frivolous spending is not only a Biden-era problem; the first Trump administration also used the program to fund politically favored projects, including up to $12 billion in loan guarantees for two nuclear power plants in Georgia.
Absent an LPO, the private sector would continue to fund cleantech projects more efficiently than the federal government—which it’s been doing for years. In 2023, JPMorgan Chase financed $66 billion worth of sustainable projects. The firm has set a goal to distribute $1 trillion toward green projects by 2030 and has underwritten $242 billion for this goal since 2021. Bank of America, meanwhile, has deployed more than $560 billion in “sustainable finance” since 2021, and last year, 14 of the world’s largest banks and financial institutions pledged to increase their support for nuclear power.
The Department of Energy was never supposed to be a bank. DOGE might not be able to claw back committed LPO funding, but by working with Congress, it could zero out the budget of a redundant program and prevent wasteful federal spending in the future.
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