The Government Accountability Office (GAO) recently released a report shedding light on the Department of Energy’s (DOE) mismanagement of carbon capture and storage (CCS), and direct air capture (DAC) projects. This report highlights areas where the DOE needs to improve to ensure that taxpayer funds are used efficiently and effectively.

Between fiscal years 2018 and 2023, the DOE invested nearly $1.4 billion in 654 research and development projects to advance CCS and DAC technologies. The Office of Fossil Energy and Carbon Management (FECM) administered 70% of these funds—$950 million across 410 projects. These investments are part of a broader federal effort to tackle the urgent issue of carbon dioxide (CO2) emissions, which reached a record high in 2023. However, FECM did not follow DOE’s own guidance on risk reduction on the selection and management of these projects.

The GAO report identifies significant areas where FECM’s management of these projects could be improved:

1. Risk Treatment Documentation: One major concern is the lack of clear documentation regarding risk treatment strategies. The GAO found that FECM did not consistently document how risks were addressed, which could jeopardize project continuity and success while also risking a significant amount of taxpayer dollars.
2. Project Selection Criteria: Another red flag was the selection of a $14.6 million project that did not meet FECM’s own technical acceptability criteria. This project subsequently experienced cost overruns and delays, requiring an additional $5.1 million and 18 more months to complete.

The GAO report underscores the importance of robust management practices to ensure that projects not only advance technological goals but also provide a fair return on taxpayer investment. The GAO made two key recommendations to the DOE:

1. Improve Documentation: FECM should more clearly document risk treatment strategies to ensure that risks are comprehensively addressed and managed throughout the project lifecycle.
2. Adhere to Selection Criteria: FECM should follow its own guidance and only select projects that are technically acceptable to minimize the risk of funding unsuccessful projects.

The DOE has acknowledged the findings of the GAO report and agreed with the recommendations.  This report is not the first time that the GAO found evidence of DOE mismanagement of CCS projects. In 2021, the GAO found that only 3 of the 11 CCS demonstration projects funded by DOE were completed, due to external economic factors and DOE mismanagement. The GAO found DOE failed to award coal CCS projects selectively and negotiated funding agreements on an expedited schedule, resulting in significant waste of taxpayer funds. The expedited negotiation resulted in conditional cooperative agreements limiting DOE’s ability to enforce certain actions, such as procurement contracts. GAO found DOE had violated the agency’s own risk mitigation measure and when projects were unable to meet established milestones, instead of terminating funding agreement, DOE reduced the awardee cost share portion established in the original agreements and shifted funds earmarked for later phases of development and sped up disbursement of funds. As a result, DOE wasted an additional $300 million on projects which were never built. The GAO recommended the DOE implement a down-selection process, allow sufficient time for negotiations, and oversee future demonstration programs according to established scopes, schedules, and budgets. To date, these recommendations have not been fully implemented.

Despite this poor track record, Congress directed about $12 billion to DOE for new CCS and DAC projects through the 2021 Infrastructure Investment and Jobs Act. With such substantial investments, it’s imperative the DOE addresses past mismanagement and tighten risk reduction measures.

There must be more scrutiny and accountability in the management of CCS programs and subsidies, as this latest report confirms, to ensure that taxpayer dollars are being used effectively and efficiently.