Federal grant cuts strip $102 million from Whatcom County clean hydrogen project
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- DOE cancels $102M for Ferndale hydrogen project, cutting PNWH2 funding by $1B.
- State leaders open legal challenge and warn of 10,000 regional job losses.
- AltaGas pledges continued local investment while PNWH2 seeks alternative support.
A Whatcom County-based clean hydrogen facility project will lose more than $102 million in federal funding as the U.S. Department of Energy (DOE) cancels roughly $7.5 billion in energy grants.
ALA Renewable Energy, which operates under AltaGas, was one of the Pacific Northwest Hydrogen Association (PNWH2) partners hit by the budget cut. PNWH2 serves Washington, Idaho, Montana and Oregon, and was designated by the DOE as one of seven Regional Clean Hydrogen Hubs nationwide.
ALA Renewable Energy was working with PNWH2 to construct and operate a facility in Ferndale to produce renewable hydrogen. It was in the planning and design phase at the time of the funding cut.
PNWH2 will lose a total of $1 billion in funding due to the new budget cuts, and U.S. Sen. Maria Cantwell (D-WA) said the loss will eliminate more than 10,000 jobs across the region.
“The Trump Administration’s politically motivated decision to strip funds from the pioneering Pacific Northwest Hydrogen Hub is unprecedented and corrupt,” Cantwell said in a statement.
Washington Gov. Bob Ferguson also condemned the termination of the energy grant funding, which affects clean energy projects beyond those involved in PNWH2.
“It is outrageous that this administration is using a government shutdown to punish blue states like Washington,” Ferguson said.
He said that he is working with the Attorney General’s Office to fight the “illegal action.” Award recipients have 30 days to appeal a termination decision, according to a statement from the DOE.
The DOE said the projects that it defunded “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”
PNWH2 issued a statement on the funding cuts, saying that while they are “disappointed” in the decision, they will “continue to support our project and industry partners that have laid the foundation for a thriving hydrogen ecosystem throughout the Pacific Northwest.”
“The future of hydrogen is still being written by states, communities, and industries across the country,” PNWH2 said. “With or without federal support, this industry will continue to drive the innovation and infrastructure needed to fortify America’s energy economy.”
AltaGas told The Herald in an email that its investment in the Ferndale area “remains a priority.”
“We will continue to explore development opportunities that align with our values and deliver lasting benefits to the region,” a spokesperson said. “Job creation and positive community impact remain central to any future plans, and we are focused on ensuring that the benefits of our work stay rooted in the local community.”
This story was originally published October 3, 2025 at 12:25 PM.