DAC Hubs: The IIJA Authorization Driving the Industry

Even if we hit the brakes on emissions today, there is still too much carbon dioxide (CO2) in the atmosphere to meet net zero by 2050. Engineer and Professor Klaus Lackner realized this back in 1999, at the 24th Annual Technical Conference on Coal Utilization and Fuel Systems in Clearwater, FL, where he proposed the concept of directly scrubbing CO2 from the air. Fast forward to 2021, and a momentous milestone was achieved as the world's first direct air capture (DAC) plant turned on in Iceland.

In 2021, Congress also provided the U.S. Department of Energy (DOE) a staggering $3.5 billion through the bipartisan Infrastructure Investment and Jobs Act (IIJA) to develop four Regional Direct Air Capture (DAC) Hubs, each with the capacity to capture 1 million metric tons of CO2 annually. While much of the federal investments in the IIJA were directed towards traditional projects such as roads and bridges, one significant section managed to revolutionize an industry: the Regional Direct Air Capture Hubs.

U.S. DAC innovators are eager to hit the ground running with their technology. In August 2023, DOE announced up to $1.2 billion for two DAC Hubs slated for award negotiations: the South Texas DAC Hub and Project Cypress in southwest Louisiana, both designed to capture a million metric tons of CO2. In March, Project Cypress, the first to emerge from negotiations, received the first portion of their award funding — $50 million issued by the DOE’s Office of Clean Energy Demonstrations (OCED). Battelle, the project lead, has indicated that an additional $51 million in private investment will be mobilized to kick-start the initial phase of the Project Cypress DAC Hub. DOE is anticipated to finalize the remaining $1.2 billion in DAC grants soon and is set to release an additional $2.4 billion in follow-on funding.

When included in a portfolio of innovative, clean technologies, DAC has the potential to provide a game-changing solution to the global challenge of removing excess carbon dioxide (CO2) already in our atmosphere. Research shows DAC can remove CO2 at the volumes needed to meet net-zero targets AND it can do so quickly.

Though the two million-ton DAC Hub winners are garnering the spotlight, there are 19 additional projects that will support earlier stages of DAC project development, including feasibility assessments and front-end engineering and design (FEED) studies. Of the 19, 14 projects will enable efforts to explore the feasibility of a potential DAC Hub location, ownership structure and business model. The remaining five projects will perform FEED studies establishing and defining technical requirements focused on project scope, schedule and costs to reduce risk during later phases.

While stakeholders eagerly await the finalization of these awards, DOE is already looking ahead to its next task of accelerating DAC deployment potential by supporting mid-scale commercial demonstration facilities. Last month, DOE issued a Request for Information on how to approach the development of DAC facilities with lower capture capacities of approximately 5,000–25,000 tons per year. 

DOE’s Regional DAC Hubs represent a fusion of innovation and economic opportunity. Furthermore, these hubs offer a tangible solution to the pressing issue of climate change without resorting to heavy-handed regulations or mandates. By incentivizing private-sector investment in DAC technologies, the government empowers businesses to lead in reducing emissions while preserving economic competitiveness.

DAC Hubs showcase the potential for collaborative efforts between government and industry. The success of DAC technology hinges not only on its scalability but also on its capacity to integrate seamlessly into existing infrastructures and industries.

DAC is one of the many types of carbon dioxide removal (CDR) technologies that are taking on the challenge of removing CO2 from our atmosphere. Because of this, the program will lay the technical foundation for the future widespread commercialization of this critical suite of technologies. The yearly removal capacity for all U.S.-based CDR technologies is roughly one billion metric tons and 10 billion metric tons globally to reach net zero by 2050. With the DAC Hubs only clearing a percentage of the task, there is still a long road ahead. Other DOE initiatives like the CDR Pilot Prize are embracing a technology-inclusive approach to accelerate multiple CDR solutions, like enhanced weathering and bioenergy with carbon capture and storage, towards the billion metric ton goal. Bipartisan proposals, such as the Carbon Removal and Emissions Storage Technologies (CREST) Act of 2023 introduced by Senators Susan Collins (R-ME) and Maria Cantwell (D-WA), possess the ability to infuse the necessary resources toward this technology-inclusive DOE program. 

The United States is leading the way for supportive policies for DAC innovation. As the DAC narrative unfolds, it underscores the importance of bold, forward-thinking American policies like the IIJA, which have the potential to catalyze transformative change within the industry.

Unlocking Carbon Storage Wells in 2024

Carbon storage is carrying momentum into 2024 following big year-end developments, with Louisiana obtaining regulatory primacy for carbon storage and Wyoming permitting its first set of Class VI wells. After years of delays and bottlenecks at the federal level, states are taking the lead to move these projects forward.

Both of these developments help address the main challenge developers are currently facing: unclear project development timelines due to permitting delays. To date, the Environmental Protection Agency (EPA) has permitted just two active wells in Illinois and six pending wells in Indiana and California.

The EPA is charged with implementing the Underground Injection Control (UIC) program as required by the Safe Drinking Water Act (SDWA) to prevent contamination of underground sources of drinking water. In 2011, the EPA created a new well classification, known as Class VI wells, specifically for the geological sequestration of carbon dioxide. This well class was specifically created to store CO2 in “non-usable” aquifers under a layer called caprock, which is a natural seal that prevents CO2 from escaping back out into the atmosphere. Research has shown that CO2 can be securely sequestered underground, particularly within deep and porous rock formations, lasting for thousands of years, and there are natural pockets of CO2 that have existed for millions.

States have recognized the need to accelerate these types of investments and have elected to pursue primacy – the ability to process applications through the state’s environmental regulator rather than the federal Environmental Protection Agency (EPA) — for carbon storage wells.

States have long been critical partners in the UIC program. In each case, the state regulator must demonstrate standards that are no less stringent than the federal requirements. While the EPA has delegated primacy for at least one well class to a majority of states, so far, just three states hold Class VI primacy: North Dakota, Wyoming and Louisiana. The number of states with Class VI primacy is expected to steadily increase as applications from Arizona, West Virginia and Texas are all currently under review. Additionally, the EPA recently made award selections across 25 states and tribes to support state primacy applications as directed by the infrastructure bill.

North Dakota and Wyoming have demonstrated a strong track record of approving permits for carbon sequestration in a timely manner. Whereas the federal EPA process can take years, North Dakota and Wyoming have been able to issue permits in a matter of months, with Wyoming issuing its first three Class VI permits in December 2023 after 10 months of review.

As of January 2024,179 wells across 63 projects are currently under review at the EPA. Creating efficient timelines through state primacy will be critical to approving the deluge of new well permit applications currently sitting under review at the EPA. The long and uncertain timelines at the federal level represent a significant barrier to developing the scale of storage capacity required for future carbon management infrastructure.

Additional recommendations to accelerate carbon storage projects include:

Combined with a growing interest in Class VI primacy applications from states, these policy recommendations will position carbon capture and storage for more breakthroughs in the year ahead. It will be critical for the EPA to demonstrate success by expeditiously reviewing state primacy applications to unlock projects and get more steel (and CO2 emissions) into the ground.

Rich Powell’s TED Talk: How to Modernize Energy Permitting

Rich Powell, ClearPath CEO, recently delivered a TED Talk on modernizing the energy permitting process. Rich shines his quintessential optimism on the otherwise gloomy permitting outlook, and outlines a plan for Congress to expedite project development and improve the burdensome judicial review process. There is no doubt the permitting system is slowing down America’s path to building more clean energy, and there’s no single national straightforward solution for our current permitting emergency, but it starts with all of us.

Watch Rich Powell’s TED Talk below:

Advancing American Clean Energy Leadership at COP28

November 30 marked the start of the 28th annual meeting of the Conference of the Parties (COP28), where a historic 97,000 participants registered and over 80,000 convened in Dubai, UAE to collaborate on solutions to reducing global emissions.

The outcome of the first global stocktake has received mixed feedback; regardless there were several developments from COP28 that should be celebrated.

First, the U.S., UK and Canada, along with more than 20 other countries, launched an ambitious call to triple nuclear energy capacity by 2050.

To triple nuclear capacity from now until 2050, the world will have to build around 30 large reactors each year, even more, if replacing retiring capacity is necessary or if smaller reactors take off.

ClearPath partnered with the World Nuclear Association on a number of events, including one where ClearPath CSO Jeremy Harrell spoke of the increasing bipartisan support for advanced nuclear and America’s position to lead global deployment.

Second, at COP28, conservatives took a leadership stake by driving discussions centered around an all-of-the-above approach to clean energy solutions.

In fact, there were a record number of Congressional Republicans at COP28, solidifying their ambitions to be part of the dialogue and present positive solutions. ClearPath collaborated with the bipartisan delegation by hosting several panels and joining them at others. Our CEO Rich Powell and Senator Lisa Murkowski (R-AK) hosted a fireside chat highlighting American policies that have catalyzed a range of technologies. Senator Murkowski emphasized the impact the Energy Act of 2020 had on authorizing advanced nuclear, but called for restructured permitting to ensure projects face reasonable timelines for attracting private investment.

ClearPath discussed permitting with Congressional leadership including Representative John Curtis (R-UT), Representative Garret Graves (R-LA), Representative Tim Walberg (R-MI) and Representative Scott Peters (D-CA). Powell led the conversation around the time-sensitive need for bipartisan legislation to address the broken permitting system.

L to R: ClearPath CEO Rich Powell, Representative Garret Graves (R-LA), Representative Scott Peters (D-CA), Representative John Curtis (R-UT), and Representative Tim Walberg (R-MI).

Alongside participation with conservative leadership, ClearPath highlighted pragmatic solutions to fill the white space of clean energy deployment. Compared to previous years, carbon management and nuclear energy were previously shunned; however, at this year’s conference, the final agreement calls for the acceleration of carbon capture and nuclear technologies. ClearPath’s participation in events helped underscore the importance of these vital technologies.

Speaking of technologies, that brings up a third key theme of COP28 — carbon management. In an event with Axios, ClearPath CEO Rich Powell referenced the Intergovernmental Panel on Climate Change (IPCC) report which specified the need for carbon removal technologies to stabilize global temperatures, while also noting the technology’s unique ability to retrofit existing infrastructure and preserve jobs.

L to R: Rich Powell (CEO, ClearPath); Nicholas Johnston (Publisher, Axios)

Photo Credit: Arthur Abraham/ Haiku D Photography on behalf of Axios

By collaborating with a diverse range of stakeholders with big ideas on solving the climate challenge, ClearPath left COP28 with a great deal of optimism. It was a pivotal opportunity to elevate nuclear energy, carbon management and conservative leadership. Ensuring American leadership remains prominent on the international stage is crucial for securing a future with both a prospering environment and economy.

America’s Global Energy and Climate Leadership Needs Carbon Capture (RealClearEnergy)

This op-ed was originally published by RealClearEnergy on December 3, 2023. Click here to read the entire piece.

The world is in the throes of a complex energy landscape as we recognize the unprecedented demand for affordable and reliable energy combined with our shared goal to decrease global carbon dioxide emissions. These twin realities create parallel challenges: producing more, while simultaneously deploying clean energy technologies that will reduce emissions.

The U.S. must lead in meeting both challenges. Domestic natural resources — oil, natural gas, coal and critical minerals – are prolific. Recent global instability has demonstrated just how crucial it is to decrease our dependence on hostile regimes like Russia, China and Iran. As the world’s largest producer of oil and natural gas, America’s seat at the table is clear.

Advancing U.S. leadership can’t stop with natural resources, we must also lead in low-carbon technologies. Financial incentives and policy support are accelerating the development of solutions like carbon capture and storage (CCS), which the International Energy Agency has said will be “necessary to meet national, regional and even corporate net-zero goals.”

The U.S. already has a competitive advantage with CCS. A recent report from the Global CCS Institute shows that the U.S. “dominates” the global CCS landscape with the U.S. facility count increasing by 73 in the past year alone. This is no surprise: the technology enjoys vast bipartisan support from Republicans and Democrats, environmentalists and industry alike, and is widely thought to be a crucial piece of the puzzle in decreasing emissions.

Click here to read the full article

Earth, Wind, Fire: Geothermal Plants are Perfect for Direct Air Capture

Earlier this year, Houston-based geothermal energy developer Fervo announced an important new project to use its next-generation geothermal systems to power a direct air capture (DAC) facility. The announcement marks another milestone in the path towards a decarbonized economy and the expanded use of both geothermal and DAC technologies.

Geothermal + DAC = CO2 Reduction


The Need for Direct Air Capture of CO2

Deploying DAC technologies offer an exciting opportunity to add another tool to the toolbox for lowering global carbon dioxide (CO2) emissions by removing CO2 from the atmosphere.

Most decarbonization efforts focus on two areas. The first is keeping CO2 from going up into the atmosphere by generating electricity from technologies that don’t emit CO2 at all — think nuclear or renewables like hydropower and geothermal. The second effort is to use technology to capture the CO2 that would have been emitted from power plants and put it back underground – often referred to as carbon capture and storage (CCS).

The problem, unfortunately, is that there is already a heck of a lot of extra CO2 up in the atmosphere. DAC technologies offer a third option for decarbonizing by removing this CO2 from the air around us. If you have not heard of DAC, think of it as a massive vacuum cleaner that literally sucks carbon dioxide molecules out of the open air.

With recent Congressional action to pass bills with clean energy incentives, DAC technology is poised to see major growth moving forward. Last year, the U.S. Department of Energy (DOE) granted a series of awards to universities, utilities, and private businesses to study a variety of potential implementation models for DAC technologies ranging from use on nuclear and geothermal power plants to retrofitting steel and fertilizer plant operations.

Additionally, the Bipartisan Infrastructure Law (BIL), called for $3.5 billion in DOE funding to be used to establish four regional DAC hubs to, “demonstrate processing, transport, secure geologic storage, and/or conversion of CO2 captured from the atmosphere with DAC technology and accelerate commercialization of those technologies.” Project selections are expected later this summer and will provide another set of R&D opportunities for this technology.

Finally, under the tax package passed last year, the 45Q tax credit for CCS technologies included a special rule for DAC projects to expand tax incentives with the hope of enabling the industry to scale and export innovations on a global scale.


Why Geothermal?

Geothermal energy is heat that radiates from the core of the Earth to the subsurface, produced by the decay of radioactive materials and residual heat from the planet’s formation. Geysers, hot springs, volcanoes, and fumaroles are all locations where geothermal energy reaches all the way to the Earth’s surface. It is easier to access geothermal resources in these locations, but geothermal resources are actually available anywhere if one drills deep enough. Geothermal energy, like wind and solar energy, is an inexhaustible natural resource.

Enhanced or engineered geothermal systems (EGS) create opportunities to use hot, dry rock by enhancing the permeability of a specific geology or by adding water. EGS developers drill wells and inject water at high pressures to crack rock. After permeability has been improved to increase fluid circulation, hot water can be drawn to the surface through a production well and used for electricity generation.

U.S. Potential for Enhanced Geothermal Systems

Dots Indicate Existing Hydrothermal Sites

Shaded Regions Are Potentially Suitable for EGS

Similar to recent policies adopted to support DAC, Congress has taken steps to support the geothermal industry in an effort to spur growth and innovation and to expand the map in facilitating its use in projects outside just the Western U.S. In addition to support in the tax package, the BIL set aside funding for the DOE to fund EGS demonstration projects. In February of this year, the DOE’s Geothermal Technology Office announced they would fund up to seven EGS projects with applications due this summer.


Perfect Union

As of late 2022, there were 18 DAC plants in operation around the globe. Most of these are still smaller demonstration projects, but newly planned facilities like Occidental Petroleum’s in West Texas will be much larger, with the potential to remove up to 1 megaton (MT) of CO2 annually. To meet its net-zero goals, the U.S. could require 60 MT of CO2 removal each year by 2030, which would necessitate the buildout of an additional 60 plants similar in size to Occidental’s. Of note, Occidental has said that they could build up to 70 DAC projects globally by 2035 under current market conditions.

To result in a net carbon removal, DAC plants need electricity supplied by a 24/7 zero-emissions power source. Many DAC technologies also require access to a constant heat source, like that resulting from a geothermal plant, meaning EGS fits the bill perfectly.

Add to that the fact that the captured CO2 will need to be stored somewhere, usually in large underground geologic formations, and geothermal plant developers are uniquely qualified to pair with DAC plants. Companies like Fervo use next-generation technologies to survey the earth for their operations, and this same technology can be leveraged to help identify high-quality CO2 storage locations for DAC operations.

Today, the combo of geothermal and DAC is being used in Iceland, where Climeworks’ Orca plant has been removing CO2 from the atmosphere since 2021. Its system of fans, filters, and heaters are all powered by geothermal energy, and plans are underway to expand across the globe everywhere from Scotland to Texas.

As the U.S. market continues to take shape, recognizing the complementary nature of these technologies and their massive potential is producing a true ‘win-win’ for decarbonization. Not only will innovations in geothermal power allow for reliable, affordable, firm electricity generation, but when paired with energy intensive DAC projects, the impact will not just be ‘carbon neutral’ but could, in fact, be ‘carbon negative,’ offsetting past historical emissions.


Conclusion

This latest announcement is illustrative of the types of technological innovations that will be needed for the U.S. and the world to effectively decarbonize the economy in the future. Addressing climate change will necessitate an ‘all of the above’ approach to not only limit future emissions from reaching the atmosphere by expanding the use of technologies like hydropower, nuclear, geothermal, and renewables, but will also require cleaning up the current atmosphere. Continuing to prioritize support for innovative technologies like EGS and DAC and pairing these industries is not only promising for reducing emissions, but could also usher in a whole new innovative industry segment with global potential. 

Why 45Q Matters - and Why It’s Not Enough

This blog has been updated. Previously posted on March 22, 2018 by Rich Powell and Justin Ong

One of the most critical clean energy incentives available today is the 45Q tax credit. Recent modifications raised the incentive for heavy industry and power carbon capture operators from $50 per ton to $85 per ton of CO2 and up to $180 per ton for direct air capture (DAC) – think machines that selectively vacuum CO2 out of the air – sequestration projects. Additionally, the legislation lowered capture thresholds and extended the construction windows for projects looking to take advantage of the tax credit.

The 45Q tax credit now represents the most aggressive policy driver for the deployment of carbon capture, utilization, and storage (CCUS) across the globe. This incentive will further U.S. leadership by accelerating a network of new CCUS projects from existing and new coal and natural gas plants, as well as industrial facilities that produce a range of U.S. products.

CCUS Projects Are in Development Across the Country

Map: CCUS projects are in development across the country for biofuels, cement, direct air capture, heat and power, hydrogen, heavy industry, storage, and other applications.

For background, Congress first established the 45Q incentive as part of the Energy Improvement and Extension Act of 2008. Over the next decade, it became clear that the incentive was not driving the level of investment and innovation that policymakers envisioned, leading to a bipartisan effort to make the credit more attractive for private investment. In 2018, recognizing that something needed to be done, Congress updated 45Q, increasing the credit value, lowering capture eligibility thresholds, and allowing DAC to be eligible for the incentive. The industry experienced additional gains when the Energy Act of 2020 established the research and demonstration programs for carbon capture that would ultimately be funded by the Infrastructure Investment and Jobs Acts (IIJA). IIJA infused nearly $12 billion to develop the full carbon capture supply chain, from capture to transportation and storage. This was a huge win for American technology leadership. Among other changes, the recent update allowed project developers to elect to have direct pay for the first five years of a project's life, eliminating the need to seek funds from the tax equity market – which can be very costly.

These modifications mean more projects to capture carbon could be developed.

Proposed business models also look at economic opportunities, including utilizing CO2 for enhanced oil recovery (EOR) and, in the longer term, manufacturing commodities such as sneakers, toothpaste, and building materials like cement. Some major energy producers, including ExxonMobil and Occidental Petroleum, estimate that carbon capture, utilization, and storage markets could be worth trillions of dollars by midcentury – an opportunity that can be seized by the U.S. not just domestically but also in helping deploy these technologies abroad.

That includes India, a serious player in global energy and climate change talks but also a country that imports three-quarters of its oil. Captured carbon will help them build a domestic oil supply through EOR. The Middle East – which amazingly still pumps natural gas into the ground for EOR – is also increasingly eager to mimic the U.S. by storing CO2 in underground geologic formations instead. Further down the line, carbon capture could help African nations build out clean energy and supply reliable electricity to the continent.

While the prospects abroad are exciting, we need to perfect the technology here in the U.S. An ambitious implementation agenda is still needed to scale up carbon capture technologies nationwide, drive down costs, and instill sufficient investor confidence.

The promise of carbon capture technology can’t rest on the recent 45Q enhancements alone. In the interim, we need to ensure that regulators are using the $12 billion from the bipartisan IIJA to successfully implement the authorized carbon capture demonstration, large-scale pilot projects, and carbon dioxide transportation infrastructure finance and innovation programs, all while working to assist the EPA to get Class VI permits out the door.

It’s quite a list. The good news is the 45Q enhancements were a major hurdle that was overcome and will be the anchor that drives a lot of new, incredible innovation.

Growing The Domestic Energy Sector Supply Chain And Manufacturing Base

House Energy and Commerce Committee Subcommittee on Oversight & Investigations

Below is my testimony before the House Energy and Commerce Committee Subcommittee on Oversight & Investigations, entitled "Growing The Domestic Energy Sector Supply Chain And Manufacturing Base: Are Federal Efforts Working" on May 23, 2023.

Watch Jeremy’s Opening Remarks
Read Jeremy’s Full Testimony as Seen Below

Good morning Chairman Griffith, Ranking Member Castor, and members of the committee. My name is Jeremy Harrell, and I am the Chief Strategy Officer of ClearPath, a 501(c)(3) organization that develops and advances policies that accelerate innovations to reduce and remove global energy emissions.

Thank you for the opportunity to testify today and for holding this important hearing. The United States faces intense global competition. Adversaries like China and Russia are deploying hundreds of billions of dollars around the world to advance their geostrategic interests in order to dominate the energy sector and connected supply chains.

China and Russia have spent decades investing in the dominant position they now hold in the mining – and perhaps more importantly – in the processing of critical materials. China is responsible for the processing of 90 percent of rare earth elements and 60 to 70 percent of lithium and cobalt, often with poor labor practices and disregard for the environmental impact.1 Similarly for uranium, some projections suggest that by 2030 China and Russia will control roughly 63 percent of global enrichment capacity. Meanwhile, in the U.S. it can take up to a decade just to permit a mine. America is on its heels. From project finance to government permitting, the project development cycle must move faster to have any chance of regaining the supply chains underpinning our energy industrial base and become resource independent.

Large-scale energy innovation often needs to bring together private and public investment in order to scale up deployment and bring down costs. This model worked for solar, wind, natural gas and other clean energy technologies. For example, Texas entrepreneur George Mitchell figured out how to break up shale rocks to release the natural gas stuck inside. This process, called hydraulic fracturing, initially got off the ground with support from the Department of Energy (DOE), which cost-shared R&D and demonstrations in the 1970s and 1990s, as well as tax credits from the 1980s to early 2000s.

Fortunately, the past few years has yielded targeted federal energy innovation policy that, if implemented right, could help bring resource production back to America and help build the next success story similar to American shale gas.

The Energy Act of 2020 (EACT), signed into law by President Trump at the end of the 116th Congress, modernized and refocused the DOE’s research and development programs on some of the most pressing technology challenges identified by the International Energy Agency (IEA) as essential to global energy and climate objectives — scaling up clean energy technologies like advanced nuclear, long-duration energy storage, carbon capture, and enhanced geothermal. Subsequently, the bipartisan Infrastructure Investment and Jobs Act (IIJA) invested $62 billion into next-generation technologies, power grid improvement, energy efficiency, and more at the DOE. Importantly, nearly half of that total was slated for the very energy-related research, development, and demonstration (RD&D) programs authorized in the EACT and the relevant infrastructure needed for their broader adoption.

The bipartisan IIJA targeted federal energy research investment, focusing RD&D programs around some of the biggest opportunities to advance U.S. energy security, technological leadership, and global emissions reductions. The DOE is now launching the most aggressive commercial-scale technology demonstration programs in history, with clear permanence and cost goals, to scale up clean energy technologies like the Long-Duration Storage Shot, the Hydrogen Shot, and the Enhanced Geothermal Shot. For example, the storage initiative launched in July of 2021 is oriented around reducing the cost of grid-scale energy storage by 90 percent for systems that deliver 10+ hours of duration within the decade. That specific goal may sound familiar – it mimics the bipartisan authorization from the Better Energy Storage Technologies Act (BEST) enacted in the 116th Congress.

These initiatives present opportunities but also many significant challenges that this Committee is rightly using its oversight authority to explore.

The bipartisan Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 was also constructed specifically to go on offense versus China on technological innovation. The package directed $280 billion in investment over the next 10 years, with the majority for scientific R&D and commercialization. Approximately $53 billion is for semiconductor manufacturing, R&D, and workforce development, with another $24 billion worth of tax credits for chip production. The law also added significant new DOE technology transfer authorities, comprehensively reauthorized the DOE Office of Science and established a first-of-a-kind, low-emissions steel manufacturing research program that aims to make American steel production the cleanest and cheapest in the world.

The U.S. has a national security imperative to take on China and Russia in technological innovation and energy exports. A cohesive strategy that syncs our country’s robust research, development and demonstration (RD&D), the American entrepreneurial spirit, targeted free market incentives, and proactive trade policies can leverage the United States’ advantage as one of the most carbon efficient economies in the world. Three examples where the U.S. is leading are natural gas, steel and minerals mining. A life cycle analysis conducted by the DOE’s National Energy Technology Laboratory on U.S. liquefied natural gas (LNG) exports shows that American LNG can be up to 30 percent cleaner than Russian natural gas. While Chinese steel is the third most emitting in the world, American steel is among the cleanest in the world, with the second lowest CO2-intensity of any country. Emissions from mining support services in China, including many minerals required for deploying clean energy at scale, are over 5 times higher than if those activities were conducted in the United States.

Our nation should double down on the public and private sector momentum to produce more and innovate faster, securing a clean, affordable, resilient energy future reasserting global technology and resources leadership, and furthering global emission reductions.

But simply throwing federal taxpayer resources at the problem is not going to achieve that ambitious goal. For the United States to lead globally while creating jobs in new industries here at home, the United States must maximize public and private sector efforts by taking the following actions:

  1. Strengthen direct investment and foster private investment in U.S. supply chain: The bipartisan Energy Act of 2020, the IIJA, the CHIPS and Science Act, and federal tax incentives must more effectively bolster the U.S. clean energy supply chain and commercialize key technologies. The successful implementation of these programs is critical to ensuring that U.S. companies can demonstrate and deploy their technologies and be able to compete on the world stage. That difficult task means identifying projects that can be delivered on time and on budget, while ensuring the maximum benefit of investment goes to American companies and the industries where the U.S. has a leading edge. To assist with accountability and oversight, ClearPath has developed an interactive dashboard to follow progress across the major demonstration programs led by the DOE from the initial program development stages all the way through to final award selections.
  2. Modernize Permitting: The single largest impediment to private sector investment is regulatory unpredictability. Unnecessary regulatory hurdles that slow down the deployment of innovative technology and necessary infrastructure, including the critical mineral supply chain, threaten the United States’ ability to significantly reduce our emissions and provide low-cost options to the rest of the world on an ambitious timescale. Right now, developers can only build new energy infrastructure as fast as federal, state, and local governments can permit them – and it simply is not fast enough. Reform must flip the permitting paradigm from one that favors stopping a project to one that expedites the approval process for projects that bring net benefits and comply with the legal requirements meant to ensure clean water and clean air. U.S. leadership requires a system that promotes good outcomes – both economic and environmental – so that the country can build at the pace and scale required to meet America’s energy demand and compete with our adversaries.
  3. Foster Global Market Opportunities for American Technologies: The economic opportunity for the U.S. is remarkable. A recent report from Boston Consulting Group estimated the Serviceable Addressable Market (SAM) for six key clean energy technologies (clean steel, hydrogen, long-duration energy storage, geothermal, direct air capture, and new nuclear) to be roughly $16.5 trillion through 2050. Getting our domestic policies right, including in many cases getting the government out of the way, will allow us to scale up our clean technologies and drive down costs to meet the energy demands of the developing world with more price-competitive exports of American solutions. At the same time, the U.S. needs to create better trade and financing frameworks to support our exporters. Our country must prioritize market access abroad through removal of tariff and non-tariff barriers, and better leverage agencies like the U.S. Export-Import Bank and International Development Finance Corporation to compete more effectively against our non-market rivals (e.g. Chinese state-owned enterprises).

Further, the following three American industries serve as examples where U.S. government policies, investor interest, and the regulatory environment are incongruent with what is needed for the U.S. to lead globally.


Carbon Capture

China continues to dominate global coal power development, both at home and abroad. Chinese coal power plant construction and new project announcements accelerated dramatically in 2022, with new permits reaching the highest level since 2015. Many of those projects received expedited permitting and broke ground in a few months. This resulted in six times as many coal plants starting construction in China than the rest of the world combined for a total of 106 GW; the equivalent of two large coal power plants per week. While China recently committed to stop financing new overseas coal financing, over the last 10 years, its Belt and Road Initiative financed over 100 gigawatts of coal in at least 27 countries.

Policymakers have a choice – bet that the Chinese and their partners shut down their coal-fired power plants at the expense of economic growth; or develop, demonstrate, and deploy affordable U.S.-based emissions control technologies abroad as we have previously done for acid rain and aerosols. That’s where carbon capture, utilization, and storage (CCUS) technologies come in.

CCUS is on the rise, with 35 projects in operation and over 250 million metric tons of CO2/yr of capture capacity currently in development worldwide by 2030. 40 percent of the capacity in development over that timeline is in the U.S., which is currently the global leader on CCUS technology. While the over 100 million metric tons of capacity announced in the U.S. is significant, it is only scratching the surface of this country’s potential. A recent report from the DOE estimates that getting CCUS technologies on track for climate targets in the U.S. would require capacity to capture 400 to 1,800 million tons of CO2 per year by 2050. This level of development would represent $100 billion of investment by 2030 and $600 billion by 2050. On a global level, reaching net-zero by 2050 likely requires at least 4-7 gigatons of CO2 captured per year, meaning that we currently only have one-half of one percent of the CCUS capacity needed today.

Current and Proposed U.S. Carbon Capture Infrastructure

Sources include ClearPath analysis, CATF US Carbon Capture Map, Rextag CO2 Pipelines, and EPA’s Class VI Well Tables as of March 2023

CCUS technologies allow us to mitigate emissions and also support American jobs. Right now, the U.S. truly has the lead on other countries through a combination of engineering expertise, technical leadership, and recently enacted public policy like the 45Q carbon capture utilization and storage tax credit and the Department of Energy’s Carbon Capture Demonstration Projects Program. Going forward, the U.S. needs to find ways to parlay this leadership edge into the potential to export our expertise to support the development of carbon capture technologies in other countries. The services associated with carbon capture can be significantly higher than the physical investment of the technology itself, meaning we will create jobs at home that lead to lower emissions abroad.

Despite our head start, a lot needs to be done to ensure that the massive CCUS scale up in the U.S. occurs. The U.S. is woefully behind on the carbon dioxide transportation and storage infrastructure necessary to give confidence to private sector investors that they will be able to receive a meaningful return on their investment within a reasonable time. A dramatic increase in the number of required Class VI carbon dioxide storage wells, as well as the ability to build out carbon dioxide transportation pipeline systems, is essential. The U.S. currently only has 3 permitted Class VI wells for carbon storage, when we likely need over 600 or more wells to meet long term climate targets.

Beyond that, the U.S. only has 5000 miles of carbon dioxide pipeline. While this is more than anywhere else in the world, it is concentrated in a few geographic regions and is insufficient to meet the needs of a larger scale carbon capture build out. The proposed Heartland Greenway pipeline and Midwest Carbon Express projects, centered around connecting Midwest producers to permitted CO2 storage sites in Illinois and western North Dakota respectively, are two prime examples.

Without addressing these infrastructure challenges, it's not possible to see the level of buildout that is needed in the long run. To make this happen, the American supply chain needs significant permitting reform, as well as improvements in the ability of both the EPA and states to authorize pipelines and storage wells. Combining these types of reforms with targeted public-private investments like the DOE Carbon Capture Demonstration Program and the 45Q tax credit is the recipe to ensure U.S. competitiveness, not unrealistic mandates as proposed in new EPA regulations on May 11, 2023. Seizing the moment will deliver energy security, a resilient and reliable U.S. grid, and continue to position the U.S. as the leading supplier of technology for global emissions reductions.


Nuclear Energy

The demand for carbon-free technologies that further energy security has never been higher, and the effects of the war in Ukraine on international energy markets are lasting. This makes the expansion of reliable, secure and affordable nuclear power more important than ever.

The International Energy Agency said that the world needs to double the amount of today’s nuclear energy capacity in order to reach net-zero in 2050. That equates to roughly 25 new 1,000-megawatt reactors per year, every year from 2030 to 2050. While this seems daunting, at least eight U.S.-based companies have publicly announced international partnerships to explore deployment in more than 10 countries, and even more are in the works. In addition, more than 52 countries are projected to have markets for advanced nuclear power in the coming decades, representing a potential ~$380 billion per year market opportunity for the American supply chain.

This increase in global nuclear energy demand has coincided with unprecedented momentum in U.S. industry. The U.S. Nuclear Regulatory Commission (NRC) has publicly stated it anticipates at least 13 applications for advanced reactors by 2027. Additionally, American electrical utilities are projecting a need for nearly 90,000 MW of new nuclear power by 2050, essentially doubling the U.S. nuclear energy capacity in the next 30 years.

The nuclear provisions in the EACT and IIJA, as well as the other financial programs like the Loan Programs Office (LPO), can further attract private investment to the sector and accelerate technological innovation that position the American industry to capitalize on a competitive advantage: our abundance of innovative new technologies the global market demands. Today, almost 15 percent of active loan applications at LPO are for nuclear projects. All of these programs prepare the U.S. to be a competitive player in the international market. Concurrently, as we look to develop these new nuclear energy technologies, strong support for the existing fleet is important to energy security today and for the workforce and supply chain of the future.

A robust fuel supply chain and competitive financing will require coordination with our allies. Nevertheless, the market is not uncontested. In fact, over the past two decades, the U.S. and like-minded countries have lost market leadership in this space. Between 2017 and 2022, Russian and Chinese reactor designs captured 87 percent of all new reactor construction globally through their non-market, state-owned enterprises.

Reliance on the Russian nuclear fuel supply chain is particularly troubling. This year, Russia will supply almost 25 percent of our nation’s enriched uranium. While the U.S. and our allies have sanctioned and significantly reduced consumption of Russian oil and gas post-Ukraine evasion, the Russian nuclear industry has largely dodged sanctions due to the Russian bottleneck in the uranium supply chain. Uranium is a global commodity and when looking at the global uranium supply chain, 38 percent of conversion capacity and 46 percent of enrichment capacity are controlled by Russia. Securing the nuclear fuel supply chain will require domestic and allied capabilities to both source and process uranium.

With the growing global market for nuclear energy, the U.S. must seize this moment and prove itself as a competitive alternative to Russian and Chinese energy exports. Key strategic allies like Poland, Ukraine, and the United Kingdom are hoping to partner with American vendors rather than those competitors. Romania is a great example. Against a backdrop of growing mistrust of Chinese investments in Europe in 2020, the Romanian government broke a financing agreement with the China General Nuclear Power Corporation (CGN). Since then, Romania has penned a roughly $9 billion deal to build two new reactors in Cernavoda with a $3 billion loan being provided by the U.S. Export Import Bank.

New and Forthcoming Nuclear Reactors Worldwide

The challenge ahead is project delivery. Recently enacted federal policies, like the clean electricity tax credit, NRC modernization legislation, and new public-private partnerships with the DOE, boost the confidence of investors and end-users needed to commercially scale up reactors domestically and internationally.

To go from building a handful of American reactors to building hundreds of reactors, a few critical barriers to lift off must be addressed.

First, the nuclear fuel supply chain must be secured for both the existing fleet and our next generation of reactors. Industry, the DOE, and Congress must work together to enable a private-industry-led, domestic High-Assay Low Enriched Uranium (HALEU) supply chain. HALEU is essential to the success of many advanced reactor projects, including the two recipients of the Advanced Reactor Demonstration Program (ARDP). Today, Russia is the only source of large volumes of HALEU. Concurrently, the U.S. and its allies must also ensure its demand for Low Enriched Uranium (LEU) for our current fleet and future light water reactors can be met without any reliance on Russia. Ensuring fuel security is paramount to American nuclear expansion.

Second, regulatory modernization is critically important as it is the necessary step between the development of these new designs and commercialization. If America is not proactive with licensing the next generation of designs, the U.S. could fail to meet its clean energy needs and continue to lose ground to China and Russia on innovation. While the NRC is working to modernize, attract new talent, and further its technical understanding of new technologies – efforts that I commend them for – the Commission admits it will still struggle to review these new applications in a timely manner. Understandably so – 13 new applications in the next five years is unprecedented. To lead, the NRC must be structured and incentivized to license the next generation of new reactors differently than they have licensed traditional reactors. The review process can be more efficient, effective and not unduly burdensome without any reduction in safety.

And lastly, the U.S. government and industry must work together to aggressively promote orders for our cutting-edge technologies abroad. Recent actions by countries in Europe, Africa, the Middle East and South Asia have shown that advanced nuclear deployment is highly desired. Nations want clean, reliable, and secure energy. The U.S. and its allies should be the ones to establish these new, 100-year international partnerships in place of our adversaries. The U.S. government must develop a robust and effective interagency strategy to proactively build and enhance relationships with partner nations, as well as create competitive financing and technology packages to offset the growing influence of Russia and China.

There are many new American nuclear projects in the pipeline today, and the robust U.S. supply chain that supports it and existing nuclear operations employs nearly half a million Americans. On average, a person working in the nuclear energy industry makes a higher median wage than any other energy industry and twice the national median wage. Concurrently, there is a 30 billion dollar crossover benefit to our national security between the civilian nuclear industry and the U.S. military, focused on shared research infrastructure, workforce, and supply chain diversity. Fostering the growth of the domestic supply chain and going on offense in the global marketplace could yield tens of thousands of more high-paying, stable jobs as the industry grows.


Critical Minerals

It is difficult to overstate China’s dominance and America’s dependence on foreign supply chains when it comes to critical minerals. According to the 2023 U.S. Geological Survey’s Mineral Commodities Summary, the United States was 100 percent net import reliant for 12 of the 50 individually listed critical minerals and more than 50 percent net import reliant for an additional 31 critical mineral commodities; meanwhile, China was the leading producer for 30 of the 50 critical minerals. Rising demand for minerals will place major stress on global supply chains and undermine the United States’ ability to deploy more clean energy.

In a recent report, the International Energy Agency (IEA) predicts that by 2040, demand for energy-related minerals like lithium, cobalt, graphite, and nickel could grow by 20-40 times.

Regardless of where the minerals are mined, China exerts dominant control over the refining process for each of these critical minerals. According to the IEA, the production of critical minerals used for clean energy technologies is highly concentrated geographically, raising concerns about security of supplies. The Democratic Republic of Congo supplies 70 percent of cobalt today; China supplies 60 percent of rare earth elements; and Indonesia supplies 40 percent of nickel.

Perhaps even more concerning is the fact that the processing of these minerals is even more concentrated. China is responsible for a large majority of the refining of rare earth elements and has demonstrated a willingness to leverage its influence to pursue political objectives. The concentration of mineral supply chains creates risks of disruption from political or environmental events, poor transparency and traceability, and sacrifices the expertise necessary for value-adding innovation and jobs.

While the current Administration has convened a Minerals Security Partnership, along with other regional and multilateral clean energy dialogues with friendly nations such as Australia, Canada, Japan, South Korea and others to address these challenges, both the public and private sector need to do more, faster to ensure reliable and responsible clean technology supply chains.

Absent a clear, predictable, and streamlined process, the U.S. will continue to rely on critical minerals sourced from overseas. These include countries that pose national security risks or those that lack basic environmental and human rights protections. The choice should be clear: producing American resources here at home creates jobs, promotes innovation, increases energy security, and leads to better global environmental outcomes.

Yet, the U.S. struggles to permit projects to unlock these critical minerals. Recent data from Goldman Sachs shows that regulatory approvals for mines have fallen to the lowest level in a decade. This should be the exact opposite because of the substantial demand growth for electric vehicles and other renewable applications. While the Administration has announced awardee selections with a combined total of nearly $5 billion for critical minerals demonstration projects funded by the IIJA or through the Loan Programs Office, there remains one glaring omission in the critical minerals supply chain: only one of these selected projects address our inability to extract new materials domestically.

The House has rightly put permitting reform front and center this year, passing with bipartisan support its signature energy package, the Lower Energy Costs Act, as H.R.1. Provisions in the bill recognize the current system undercuts America’s ability to deploy domestically abundant resources and compete on the world stage. There is real opportunity for this Congress to work on a bipartisan basis to modernize the permitting process and solve this problem.


Conclusion

Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing innovative policy solutions to ensure a robust domestic energy supply chain in order to ensure a clean, reliable, and affordable domestic energy sector.

We applaud the Committee for taking on this important task to help ensure U.S. leadership of these efforts, including target investments and permit reform here at home that advance innovative technologies to provide clean, reliable, and necessary energy to our nation and the world.

Administration's Action Has Impact on American Energy Independence

House Committee on Natural Resources Subcommittee on Oversight and Investigations

Below is my testimony before the House Committee on Natural Resources Subcommittee on Oversight and Investigations, entitled "The Biden Administration’s Executive Overreach and its Impact on American Energy Independence" on May 11, 2023.

Watch Jeremy’s Opening Remarks
Read Jeremy’s Full Testimony as Seen Below

Good afternoon Chairman Gosar, Ranking Member Stansbury and members of the Committee. My name is Jeremy Harrell, and I am the Chief Strategy Officer of ClearPath, a 501(c)(3) organization that develops and advances policies that accelerate innovations to reduce and remove global energy emissions.

Thank you for the opportunity to testify today and for holding this important hearing. America’s energy demands are rapidly increasing. Some estimates say the U.S. will need to double the capacity of the grid by 2050 to meet expected clean energy demand. To support that grid modernization and U.S. manufacturing competitiveness, America will simultaneously need to construct tens of thousands of miles of new pipelines carrying natural gas, hydrogen, and captured carbon dioxide from power plants and industrial facilities.

Financing and building enough energy infrastructure projects to meet our nation’s need for reliable, affordable cleaner energy is an immense challenge. Recent projections show that 1,300 gigawatts of new clean energy would need to be added by 2035. This would more than double the grid’s current capacity within the next 12 years. But under the current regulatory environment, this pace of deployment is procedurally impossible.

Never has the phrase “time is money” been more appropriate. Regulatory delays that can last nearly a decade are making projects more expensive, and impeding the U.S.’ ability to deploy billions of dollars of capital that would create American jobs, enhance U.S. energy security, keep consumer costs affordable, and reduce emissions.

The Council on Environmental Quality’s (CEQ) own data shows that on average it takes agencies 4.5 years to issue a Record of Decision for an Environmental Impact Statement (EIS). But the average belies the real challenge. In reality, 10 percent of projects took 10 years or more to reach a Record of Decision. The projects most likely to be held up in permitting purgatory are those that have the potential to offer the greatest benefits to the United States, including reduced energy costs, enhanced energy independence, increased economic opportunity, and lower global emissions.

The current system is broken. The structures in place are overwhelmingly titled toward those who seek to delay or block projects as opposed to those who seek to build. While that dynamic may have made sense four decades ago when policymakers enacted these laws as a response to environmental disasters, today, those laws are being used to block projects that will reduce emissions and improve environmental quality. We need a system that promotes good outcomes – both economic and environmental. The pace and scale necessary to build clean energy infrastructure projects to reliably meet America’s energy demand and reduce emissions is not something the authors of the 1970s environmental laws could have imagined.

The energy infrastructure we need today is simply not getting built fast enough, and throwing federal money at the projects or the agencies reviewing them is not going to substantially change that problem. The combination of permitting delays and “ping-ponged” decisions from Administrations past and present have disrupted the U.S. ability to build to fulfill needs. As a result, it can now take six years to permit carbon dioxide storage locations needed to store billions of tons captured from industrial sites, 16 years to permit an offshore wind farm in Massachusetts, and up to 15 years for a new transmission line from Wyoming to Utah.,, Another important example is the need for timely approval of a new LNG terminal as well as any necessary interstate natural gas pipelines to supply these new terminals. These are just a few of the hundreds of projects held up by the status quo of the current system.

Fortunately, fixing this outdated, broken system is at the top of the agenda this Congress. This Committee has rightly put permitting reform front and center this year, passing with bipartisan support its signature energy package, the Lower Energy Costs Act, as H.R.1.

This bill addresses bottlenecks that make the current system a quagmire: unnecessary duplication, a morass of reviews across multiple agencies, and superfluous legal action. Solving these challenges will reduce emissions, increase production and boost U.S. energy security, all while providing safety and environmental protection for local communities.

Project developers are ready to build today. There is real opportunity for this Congress to work on a bipartisan basis to modernize the permitting process. The important thing is policymakers keep an eye on the prize. Senate action cannot simply water down H.R.1 into something milquetoast that fails to fundamentally change the current regulatory regime.

This is underscored by recent proposals released this month, as leaders in the key Senate committees on both sides of the aisle have put forward their own proposals, including many concepts that match themes included in H.R.1.

As the permitting reform effort continues in both the U.S. House and Senate, I will highlight three key solutions that have been identified by project developers, former federal officials, academics and environmental non-governmental organizations.

  1. Restore predictability to the system;
  2. Provide more streamlined litigation; and
  3. Improve coordination between and among federal, state and local governments.

American entrepreneurs have the wind at their backs to deploy more energy projects now. Congress has come together in a bipartisan manner, with bills like the CHIPS and Science Act and the Infrastructure Investment and Jobs Act (IIJA), to bring new technologies to the market and invest in American supply chains. 2022 saw record industry investment in energy, with the largest boost in recent years coming from the power sector.

But again, simply spending more money on new projects will not necessarily make them a reality. Without meaningful permitting reform, there is a real risk that these major investments in technologies that the globe needs, such as carbon capture, advanced nuclear, and geothermal will go unrealized. And the U.S. will miss out on an opportunity to lead a global energy transformation.

While these challenges are numerous, Republican and Democratic policymakers have never been more closely aligned on the need for significant permitting reform. Whether the motivation is climate, economic growth, more energy production, or energy supply chain security, it is well-past time to fix what is broken, as America’s energy, environmental, and economic future depends on sweeping reform.


Restore Predictability to the System

Reform must flip the permitting paradigm from one that favors stopping a project to one that expedites the approval process for projects that bring net benefits and comply with the legal requirements meant to ensure clean water and clean air. This approach would rely on a three-pronged approach that automatically advances projects with significant net benefits, focuses environmental and permit review on uniquely local conditions of a project on an accelerated timeline review, and keeps the relevant agencies within the boundaries of the laws Congress has enacted. Many of these concepts were included in H.R.1, and it is important a final bill doubles down on the concept and maximizes their impact.

First, projects that do not have an environmental impact should be granted immediate approval. For example, replacing a retiring power plant with a zero-emissions advanced nuclear generator at an existing site or building a solar project on a brownfield site should not require a yearslong permitting process. Advancing these types of projects without delay is a win-win. The economic and environmental benefits of these projects should not be delayed by unnecessary bureaucracy.

There should be criteria to prequalify technologies that are proven to have minimal environmental impacts and immense positive outcomes – similar to “permit-by-rule” concepts some states have implemented. In other words, there should be a presumption of project approval so long as the specifics of a project satisfy certain predefined criteria. In many cases, this would alleviate the requirement to do unnecessary boilerplate re-analysis.

One starting point could be to automatically advance projects that have nationally significant outcomes, like enhancing resilience of the grid or a significant reduction of global emissions, where the environmental impacts of development are well known. For example, a carbon capture retrofit of an existing facility, the modernization of a grid substation, or powering of a non-powered dam. H.R.1 took a similar tack for energy storage projects at existing facilities and maintenance or upgrades to existing transmission and distribution infrastructure.

Similarly, designating a list of prequalified geographic areas to encourage project sponsors to seek out specific locations, would go a long way towards accelerating projects with the lowest impact. Such areas could include previously disturbed locations or well categorized sites, such as brownfield sites that present opportunities to use existing electrical or mechanical infrastructure or former military bases. The environmental impacts to these locations related to energy deployment are minimal, and in many cases these locations are in or near communities that need the redevelopment most urgently. Congress could also consider regulatory incentives to direct investment toward areas where impacts are already well understood.

Another opportunity could be to pair existing financial incentives, such as the “Opportunity Zones” or “Energy Communities” classifications established by Congress, with a streamlined permitting process to further boost investment. Both Opportunity Zones and Energy Communities were established by Congress to drive investment in distressed areas and communities that would benefit the most from new energy investments. Matching financial incentives with regulatory certainty will create a clear signal to project developers during the site selection process. Coordinated incentives like these can help drive investment to previously underserved areas and ensure the benefits of clean energy reach these communities without unnecessary delays.

Some of the most egregious problems of our broken system would be solved by this type of reform. For example, nonsensical approaches to geothermal exploration inhibit our ability of scaling baseload clean energy at scale. The Department of Energy estimates that geothermal generation could double by 2035 if our immense potential was unleashed. But concurrently, the Department found that “because additional steps and NEPA analyses are required, confirming the resource is more costly and risky,” translating to permitting timelines of 5–7-years, rather than a 1–3 year period that would otherwise be available with a categorical exclusion.

Geothermal energy uses similar technology as oil and gas exploration and drilling activities. When oil and gas uses this technology, these resource confirmation (e.g. exploration) activities benefit from statutory authority enacted by the Energy Policy Act of 2005 that expedites five types of development activities. However, when the same mechanisms are used to confirm a geothermal energy resource, the expedited pathway does not apply. As a result, two very similar methods to test for resource feasibility must undergo substantially different permitting reviews despite both having negligible environmental impact. The Bureau of Land Management has the authority to administratively grant this same expedited pathway for geothermal energy resources, yet has wrung its hands for years rather than simply updating its regulatory guidance. This system is clearly broken.

Further, departments should proactively consult with other agencies to identify existing NEPA categorical exclusions available to accelerate development of energy infrastructure projects. DOE’s recent Request for Information (RFI) to adopt new Categorical Exclusions is a model that should be replicated across other federal agencies.

Second, reform must streamline the approval process for projects where there are unique environmental impacts. In these cases, the review process could focus specifically on issues of the highest impact, resulting in more efficient timelines that still ensure compliance with existing environmental laws.

There are several provisions that have earned broad bipartisan support, including applying the “One Federal Decision” framework to energy projects. Similar support exists to reuse existing environmental review documents when a project will have substantially similar impacts as one previously studied. These provisions are both included in H.R.1 and other proposals that have been recently made public. Those principles should be expanded upon.

One immense opportunity that could be fostered by reforms like this is in new nuclear technologies. The U.S. Nuclear Regulatory Commission (NRC) has publicly stated it anticipates at least 13 applications for advanced reactors by 2027, technologies that could bring safe, flexible, and reliable clean energy to our energy system. Decades of operation have shown that nuclear energy has a minimal environmental impact. Future designs hold the same promise.

Since the dawn of the nuclear age in the 1950s, nuclear reactors have been supplying Americans with clean, reliable, and affordable energy. On a bipartisan basis in the 115th, 116th, and 117th Congresses, legislation has been passed that strengthens the U.S. nuclear industry. However, except for the Vogtle Unit 3 reactor that recently came online in Georgia, the vast majority of nuclear plants in the United States were constructed over 40 years ago.

That is changing today. The advanced reactor market is at an inflection point. Investors and potential end-users are closely watching first-of-a-kind utility-scale projects eyeing the late 2020s and early 2030s for commercial operation. American electric utilities are projecting a need for 90 GW of new nuclear power by 2050, nearly doubling our nuclear energy capacity in the next 30 years. Simplifying the permitting for projects like TerraPower’s flagship project in Kemmerer, Wyoming, which is leveraging the infrastructure at a retiring coal plant, is a no brainer. A nuclear facility is different from a coal-fired power plant, but many of the environmental factors that must be considered are similar. Additionally, many advanced reactors are looking to develop alongside industrial facilities or existing nuclear sites, where previous environmental analysis and community engagement has been extensive. A rational permitting system would leverage that work to accelerate exciting projects, not force needless duplication.

Third, federal action can no longer vacillate according to political whims, particularly when the Congress has acted. Given long development timelines needed to bring a project from financing to construction, project developers need to be able to rely on regulatory certainty from one Administration to the next. This need is perhaps most acute for projects that seek to unlock critical minerals.

While the Administration has announced award selections worth a combined total of nearly $5 billion for critical minerals demonstration projects funded by the bipartisan infrastructure bill and other new programs, there remains one glaring omission in the critical minerals supply chain: none of these selected projects addresses our inability to extract new materials domestically. The International Energy Agency (IEA) predicts that demand for energy-related minerals like lithium, cobalt, graphite, and nickel could grow by 20-40 times by 2040. The U.S. will not be able to recycle its way out of this demand for critical minerals.

It is difficult to overstate the U.S. dependence on foreign supply chains, including reliance on China. According to the 2023 U.S. Geological Survey’s Mineral Commodities Summary, the U.S. was 100 percent net import reliant for 12 of the 50 individually listed critical minerals and was more than 50 percent net import reliant for an additional 31 critical mineral commodities. Meanwhile, China was the leading producing nation for 30 of the 50 critical minerals. Regardless of where the minerals are mined, China exerts dominant control over the refining process for many of these critical minerals. Rising demand for minerals will place major stress on global supply chains and undermine the ability of the U.S. to deploy more clean energy.

One of the most prominent examples of America’s inability to permit mines is Resolution Copper, which Congress explicitly authorized when the Southeast Arizona Land Exchange and Conservation Act was enacted into law with the Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 (P.L. 113-291). Once approved, the proposed mine is expected to become the largest copper mine in North America, capable of producing up to 25 percent of U.S. copper demand each year. The proposal received a final EIS in January 2021, only to have it unpublished by the Biden Administration two months later. The Administration is explicitly subverting Congressional intent with this project. These unnecessary delays precede a decade of construction before operations can begin, bringing the project timeline to at least two full decades from its inception.

This back and forth regulatory review is far too common. The Resolution Copper Mine is just one of many examples. And the regulatory overreach deters investors, increases capital costs, and delays the energy security benefits of developing a robust domestic supply chain for clean energy and related infrastructure.

Absent a clear, predictable, and streamlined process, America will continue to rely on critical minerals sourced from overseas, including from countries that pose national security risks or those that lack basic environmental and human rights protections. The choice should be clear: producing American resources here at home creates jobs, promotes innovation, increases energy security, and leads to better global environmental outcomes.


Provide more streamlined litigation

Once a project is approved, any further adjudications should be addressed as expeditiously as possible to ensure that protracted litigation does not undermine project viability. Judicial review is the biggest wildcard in the current permitting system, and H.R.1 appropriately recognized it as an area that could have the most meaningful impact towards efficient project deliverability. Establishing requirements where any legal disputes must be resolved in less than one year would meaningfully address this uncertainty.

In the spirit of the current system rewarding those who seek to delay rather than those who seek to build, litigation under NEPA has become the favored tool of those who seek to indefinitely delay projects through procedural lawsuits. Such prominent examples include the saga of the proposed Cape Wind project off the coast of Massachusetts, where protracted litigation, including more than 20 administrative and judicial challenges to both federal and state reviews, ultimately led utilities to cancel power purchase agreements, effectively killing the project. While no single suit ever specifically terminated the project, the purposeful delay tactics requiring evermore environmental analysis ultimately led investors to pull the plug. This same playbook is now being used to protest the approval for the Vineyard Wind project, despite new state laws that mandate utilities to procure offshore wind energy.

The Atlantic Coast Pipeline (ACP) is another prime example in which legal uncertainty contributed to an untenable business environment leading project developers to cancel the project and take a loss. ACP was intended to bring natural gas access to residential, commercial, defense, and industrial customers in Virginia and North Carolina, but legal challenges to federal and state permits contributed to more than three years of delays and increased project costs from $8 billion from an original estimate of $5 billion.

Additionally ,the Mountain Valley Pipeline (MVP) from northwestern West Virginia to southern Virginia has also attracted extensive Congressional attention because of similar uncertainty. No doubt, the expected build out of gas, hydrogen, and CO2 pipelines needed to meet our future system demands requires a more predictable process for the private sector to deliver on these projects.

As more clean energy projects enter the permitting process, clean energy projects will increasingly find themselves subject to these delay tactics. Such actions too often delay significant economic and environmental benefits, like new clean energy generation from that wind farm or the net reduction in global emissions from the use of lower emissions U.S. gas relative to dirtier Russian supplies in Europe. These increases in emissions or environmental harm are the very outcomes that NEPA was enacted to avoid and prevent.

Any changes to judicial review must balance a plaintiff's right to have his or her day in court with the goal of reaching finality on a more predictable timeline. One such proposal would be to immediately elevate any legal challenge under NEPA to the federal appellate court where the project is to be constructed or alternatively the DC Circuit. This would be similar to the process already used to challenge agency decisions, including those made by FERC.


Improve Coordination with State and Local Governments

Finally, it is important to recognize and address, to the maximum extent practicable, challenging permitting projects at the state and local level – without trampling on federalism.

An example of an unpredictable regulatory environment is the prolonged delay to review and approve permits for Class VI underground injection control wells needed to permanently sequester carbon dioxide. Class VI wells are a necessary part of the carbon capture equation of preventing more emissions and are the only authorized method permitted by the Environmental Protection Agency (EPA) to sequester carbon dioxide in permanent geologic storage.

While many states have long held primary enforcement authority for other well classes, only North Dakota and Wyoming have received primacy for this newest well class established in 2010. Congress rightly included provisions in the 2021 Consolidated Appropriations Act and the IIJA directing the EPA to support states applying for Class VI primacy and to actively improve the Class VI permitting review process.

The advantages of state primacy for Class VI wells are readily apparent in North Dakota. Whereas the EPA has taken an average of three years to permit Class VI wells, it took North Dakota only five months. The EPA currently has more than 70 pending applications across eight states awaiting regulatory approval.

This backlog is a prime example of where this Administration is working against its own priorities. The Department of Energy is investing billions of dollars to deploy new carbon capture technologies now, while the EPA muddles through reviews of storage sites at a palatial pace and the Department of the Interior stands in the way of related infrastructure projects across regions prime for commercial scale up.

The most egregious example may be in Louisiana. After years of delay, the Administration finally issued the draft rule necessary to approve Louisiana’s request for Class VI primacy earlier this month. This initiates a 60-day comment period and a subsequent EPA response period that historically can take upwards of a year for a state to be granted final authority. Once final, the decision is likely to have an immediate impact as 10 of the current outstanding Class VI permits are located in the state, which could unlock up to 6 million tons of carbon dioxide per year in Louisiana alone. If Republican and Democratic policy makers did not lean into the federal agencies in recent oversight hearings, this rule would likely still be stuck in the bureaucracy.

It is clear that the time to transfer Class VI authority should be improved for the other states looking to obtain primacy such as Pennsylvania, Arizona, Texas, and West Virginia, which are preparing applications for Class VI primacy. To date, primacy is the number one tool to get these projects permitted quickly, while preserving the safety of local communities. Additionally, this would allow federal agencies to focus their energies on permits in states not-yet equipped to take on permitting primacy or accelerate review of storage opportunities on federal lands or the Outer Continental Shelf, which have immense potential to contribute to our long-term energy future.

Similar barriers exist for proposed transmission lines that can better connect both new and existing generation assets to load as timelines to get new transmission projects developed now routinely stretch to over a decade.

One example is the SunZia line, designed to move power from New Mexico to California. The 550 mile line required cooperation from 10 federal agencies, 5 state agencies, and 9 local authorities while incorporating input from a host of additional state, local, and federal stakeholders. Projected to come online in 2025, the 3.5 GW project, which would provide power for millions of customers, will have taken over 17 years from proposal to completion. These timelines, complicated by the intersection of different requirements from federal, state, tribal, and local regulators, impede the ability of new projects to interconnect to the grid.

According to the Lawrence Berkeley National Lab, there are 2000 GW of electricity and storage waiting in the interconnection queue to be connected to the grid. While not all of these projects will be built, this figure is nearly double the current system capacity as it exists today. This backlog is especially relevant as hundreds of gigawatts of clean energy projects spend years stuck in the interconnection process, awaiting evaluation by transmission providers to determine their impact on the broader system. An average completion rate of 21% and queue wait time of 4 years makes meeting any target for a reliable and affordable clean energy system infeasible. It is also important to note that analysis recently conducted by the regional transmission organization (RTO) PJM estimates that 40 GW of baseload generation, more than 21 percent of current installed capacity, is at risk of retirement by 2030 without reliable generation lined up to replace it and keep up with demand growth.

While there is no silver bullet to rapidly and reliably modernize the grid, a combination of process improvements, permitting reforms, and technological innovation will help avoid clean energy deployment from hitting a wall.


Conclusion

The current permitting system stymies clean energy resources and broadly delays the highest impact projects from delivering benefits. It is imperative that Congress address both aspects of the permitting process to maximize public and private sector investments and put steel in the ground. These pillars of pre-qualification to expedite review, more streamlined litigation, and improved coordination with state and local governments are priorities that merit consideration as the process to reach a permitting deal moves forward.

These reforms are ambitious by design as half measures have failed to move the needle for more than two decades. Anything less will only prolong the inability of the U.S. to build big things.

We look forward to working with this Committee to both further legislative action on regulatory reform and to reign in Executive Branch overreach. I look forward to today’s discussion.

ClearPath Leads Congressional Delegation to Houston, TX

As the world increasingly turns towards clean energy solutions, the demand for carbon capture technology will only continue to grow. Fortunately, America has been abundantly blessed with vast natural resources — and the technology to make energy reliable, affordable, and clean.

With a long history of innovation and expertise in the energy sector, Houston is the perfect place to showcase recent advances in clean energy development. Home to one of the largest petrochemical manufacturing complexes in the United States and positioned to leverage the state’s robust energy workforce, the city has been and will continue to be a major energy hub. But it's Houston's commitment to cutting-edge carbon capture technology that sets it apart.

With that in mind, ClearPath brought a delegation of Members of Congress and Congressional staff to visit the energy capital of the world, Houston, Texas, to engage with key industry stakeholders and visit steel-in-the-ground projects.

The delegation included Members of Congress and Congressional staff from key Congressional committees that have jurisdiction over energy issues.

The delegation included:

During their time in the Houston region, the delegation met with dozens of clean industry leaders and innovators, including keynote speakers Jane Stricker, SVP, Energy Transitions and Executive Director, Houston Energy Transition Initiative; and Michael Avery, President and General Manager for Direct Air Capture (DAC), North America, 1PointFive – an Oxy subsidiary.

The theme of the trip was clear – we need to modernize permitting in America. Far too often, companies are ready to invest but are being held back by lengthy and overly onerous regulatory processes. Improving the efficiency of the permitting process will make U.S. energy more reliable and get more projects built.

Notably, ClearPath returned to NET Power, the world’s first supercritical carbon dioxide power plant. This technology has the ability to capture almost 100% of the emissions generated from reliable energy sources. The captured CO2 is then directed back underground, where it can be safely stored.

Pictured above: The Congressional Delegation visited NET Power in LaPorte, TX.

The delegation also had the opportunity to visit Linde’s Clear Lake HyCO Plant in Pasadena, Texas, to learn how one of the pioneers of clean hydrogen production plans to scale up its operations through strategic partnerships in the region.

Pictured above (L to R): Jeremy Harrell, Chief Strategy Officer, ClearPath; Congressman John Curtis (R-UT); Congressman Chuck Edwards (R-NC);
Congressman Brian Babin (R-TX); Dan Yankowski, President of Linde Gases, North America; Jay Faison, Founder, ClearPath;
and Congressman David Rouzer (R-NC) at Linde’s Clear Lake HyCO Plant.

“Houston is one of the fine examples of how American innovation moves us toward clean energy solutions,” said Rep. John Curtis (R-UT). “This visit is a great reminder of how our friends in the fossil fuel industry can lower emissions while providing affordable, reliable, clean, and safe energy to power our homes and industry.”

“To reduce carbon emissions while maintaining energy security, American technology must lead the way,” said Rep. Chuck Edwards (R-NC).

Texas is on the brink of an exciting chapter in its energy story, one that promises to revolutionize the industry and make U.S. energy cleaner, reliable, and more secure. As the energy capital of the world, Houston is leading the charge in developing and commercializing carbon capture technologies and is positioning the state to play a major role in the future of clean energy. We look forward to continuing to partner with the delegation to continue to build upon this exciting momentum, while also making America resource independent and keeping energy affordable.