Trump cancels $75 million grant to cut fuel use at Gallo Glass plant in Modesto
The Trump administration on Friday canceled a $75 million grant that would help reduce fuel use at Gallo Glass Co. in Modesto.
Its massive furnaces make bottles for the adjacent E.&J. Gallo Winery, the world's largest. The company declined to comment on the grant withdrawal, including a possible legal challenge.
The grant was among 33 announced in March 2024 by then-Energy Secretary Jennifer Granholm, totaling $6 billion across several industries. The funding came from two climate spending packages signed by President Joe Biden.
Gallo's grant would help it test a gas/electric hybrid technology on a furnace. It projected a 70% drop in gas consumption. The project also would add about 30% to the plant's already substantial use of recycled glass.
It employs several hundred people and sits between the main winery and the airport neighborhood. About 7,000 people in all work in Gallo operations in Modesto and elsewhere.
The cancellation of this and 24 other grants, totaling $3.7 billion, was announced by current Energy Secretary Chris Wright. A news release said he spared only projects that 'bolster affordable, reliable energy sources' and 'generate a positive return on investment of taxpayer dollars.'
The move is in line with President Donald Trump's many statements downplaying climate change and other effects of fossil fuels. He also claims authority to rescind Biden-area grants in areas beyond energy. That has drawn numerous lawsuits.
The 2024 energy grants went to sectors including concrete, chemical, metal and food processing. Supporters hailed them for supporting jobs in manufacturing while reducing annual emissions equivalent to 3 million gasoline-powered cars.
'Decarbonizing our industrial processes is key to achieving our ambitious climate goals,' Sen. Alex Padilla, D-Calif., said in a 2024 news release. 'Today's announcement marks an innovative step forward toward net-zero industrial production while improving air quality and generating hundreds of good-paying jobs for Californians.'
Ernest and Julio Gallo founded their namesake winery in 1933 and added the glass plant in 1958. The latter's website said it is the largest maker of container glass in the United States, at about 500,000 tons per year. Some of the bottles hold the hard liquors that have become a sizable part of Gallo's business.
The glass plant has four furnaces and has had previous improvements to cut emissions. It already was a major user of electricity from the Modesto Irrigation District even before the hybrid furnace grant was sought.
Gallo has a newer venture in the Beard Industrial District, Halo Glass Recycling, which handles material from curbside pickup and other sources. Volume is expected to grow due to California adding wine and liquor containers to its deposit program last year.
The current energy secretary said many of the grants announced in early 2024 were not finalized until the weeks after the November election. Trump defeated Vice President Kamala Harris and took office Jan. 20.
'Today, we are acting in the best interest of the American people by canceling these 24 awards,' Wright said.
Some of the grant money came from the bipartisan infrastructure package approved by Congress in 2021. The rest was from the Inflation Reduction Act of 2022, which narrowly passed the Democrat-controlled House and Senate.
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