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.

Promoting Sustainable Environmental Practices Through Trade Policy

House Committee on Ways and Means Subcommittee on Trade

Below is my testimony before the House Committee on Ways and Means Subcommittee on Trade, entitled “Promoting Sustainable Environmental Practices Through Trade Policy” on December 14, 2022.

Watch Rich’s Opening Remarks
Read Rich’s Oral Testimony
Read Rich’s Full Testimony as Seen Below

Good morning Chairman Blumenauer, Ranking Member Smith and members of the Committee. My name is Rich Powell, and I am the CEO of ClearPath, a 501(c)(3) organization devoted to accelerating breakthrough innovations to reduce emissions in the energy and industrial sectors. To further that mission, ClearPath provides education and analysis to policymakers and collaborates with relevant partners to inform our independent research and policy development.

Given this Committee’s vital role in America’s energy trade policy, and how that relates to the global climate challenge, I will discuss three key topics today:

We must not ignore that the climate is changing, and global industrial activity is contributing to it. We hear that statement from the oil and gas industry, power companies, the agriculture sector and the folks running our supply chains. Everyone is clear: it’s time to talk about solutions.

We can’t damage the economy in our efforts. And the good news is, we can point to solutions that are good for the economy and the environment. There are exciting opportunities to develop new clean energy technologies. Rapidly scaling and diversifying American clean energy technologies can reduce global emissions, foster economic growth, and provide safe and reliable energy on a global scale. If done right, solutions can meet the needs of everyday Americans and reduce household costs, while also lowering global emissions. It can also help with U.S. soft power by providing developing countries energy to improve their own economies and provide them with an alternative to projects with China and Russia.

But far too often, energy and climate change policy is oversimplified to false choices. Renewables versus fossil fuels, economy versus environment, emissions reductions around the world versus inaction here at home — these false choices ultimately cloud potential solutions. We can invest in innovative emissions reduction technologies alongside improved trade policies. Ultimately, we will need both.

Most studies suggest that climate change has intensified, but you don’t need a study to see the impacts across the U.S., and in American communities, and you don’t have to study science to realize the global market for new clean energy technologies is getting competitive. Other countries are rapidly investing in clean energy, with total investment in 2022 estimated at $1.5 trillion. Remaining a global energy leader by building and exporting clean energy technologies and products is one of the greatest economic opportunities for the U.S. available today.

Think global, and lead with America first

Ongoing aggression and coercive tactics by Russia and China underscore the need for the United States to both be energy secure and provide our allies access to technologies and resources they need to reduce their reliance on adversarial nations while reducing emissions.

The world is looking to U.S. leadership and we need to work with our allies and trading partners to tackle the global climate challenge, ensure reliable and responsible supply chains for clean technology, and grow our respective markets for these technologies. Concerted action with our friends around the world through American leadership is an essential counterweight to other nations that do not have our best interests, nor the world’s climate, at heart.

Trade policy is a critical aspect of achieving this. For instance, recent painstakingly negotiated trade agreements like the U.S.-Mexico-Canada Agreement promote American industrial standards abroad. These help create the international economic conditions to support clean technology innovation and deployment, while establishing a bulwark against nations that do not adhere to such standards. Our network of trading partners is a powerful dimension of American leadership and should be continually expanded, in part, to help combat environmental arbitrage.

Critical minerals represent another area where we need to lead and expand our global trading relationships with like-minded countries to strengthen our clean energy supply chains. Mineral supply is an economic, environmental, and security imperative. The International Energy Agency (IEA) estimates that global demand for minerals for energy systems will quadruple by 2050, creating market demand in the hundreds of billions of dollars. A new energy revolution is going to require an enormous amount of resources like lithium, copper, cobalt, graphite, and nickel. Currently, China dominates the supply chain and dependence on China increases global emissions and handicaps American businesses. At present, China has a dominant position in extraction, and especially processing, of minerals necessary for energy. Its midstream market share ranges from 35 percent to 60 percent of critical mineral supply and 80 percent of rare earths. 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.

Relatedly, nearly 50 countries have markets for advanced nuclear power, a potential $500 – $740 billion market opportunity over the next 10 years, but Russia and China currently account for about two-thirds of reactors under contract worldwide. Furthermore, Russia controls 46% of uranium enrichment capacity, meaning that the near-term uranium supply for the United States is threatened. It is essential that the array of innovative new American nuclear technologies nearing commercialization accelerate through our own federal licensing and permitting process and then towards the global market, while we onshore and nearshore the nuclear fuel supply chain.

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. Similar to how the U.S. has scaled up trade networks for crude oil and natural gas or how we are working with allies to commercialize energy storage, we can apply our talents for creating market-driven goals to develop alternative trading relationships for additional key energy technologies and their materials sourcing requirements.

Unleash American resource development

Energy intensive industries operate on very low margins and often face unfair international competition. We can’t afford to disadvantage American industry by saddling it with overly complex permitting processes and compliance requirements, nor should we neglect some of our most practical clean energy resources such as natural gas or nuclear energy. The fact is, American manufacturing is among the cleanest in the world. Global industry – China in particular – is much dirtier than U.S. industry. Numerous U.S. laws, programs, technology innovation, and voluntary actions by our industry have resulted in a much cleaner economy, and we need to level the playing field so America can remain a global leader.

We should focus on returning manufacturing to the U.S. using clean American energy technology, where production is more efficient and environmental performance is far superior to places like China or Russia. For example, American steel has the second lowest CO2-intensity of any country, and investors are clear they want clean and affordable steel. Two-thirds of U.S. steel is already produced using recycled steel and an all-electric process – and new processes are being demonstrated that make high-grade steel without any emissions. Yet, America is the largest importer of steel in the world. America must find a way to increase domestic production, reduce its reliance on foreign sources, and increase exports around the world that adhere to our strong environmental standards.

Getting the domestic policies right, will allow us to scale up our clean technologies by driving down costs, and we already have a perfect model for how to do this.

We often hear about public-private partnerships in the clean energy space, and for good reason. Hydraulic fracturing is one of the biggest success stories on this front — thanks to research, development, and deployment efforts supported by the Department of Energy (DOE), a breakthrough made by a Texas entrepreneur in the 1970s has become the most affordable source of 24/7 power in America.

George Mitchell figured out how to break up shale rocks to release the natural gas stuck inside. This process, known as hydraulic fracturing, initially got off the ground with support from DOE, which cost-shared research, development and demonstrations in the 1970s and 1990s, as well as tax credits from the 1980s to early 2000s.

Combined-cycle natural gas turbines now produce 24/7 reliable, affordable power. That early stage investment and production tax credit, together more than $10 billion, both expired as the technology matured. Now we have a $100 billion annual shale gas market in America, and saw emissions lower by 20% in the U.S. between 2005-2020. This is driving our rapid expansion of American gas into global markets that can be used to displace unmitigated Chinese coal or Russian gas, over time.

We should also accelerate American nuclear fuel production and expedite the deployment of emerging technologies such as advanced nuclear small modular reactors (SMRs). SMRs have the ability to deliver zero-carbon power generation, be built more rapidly, and at lower costs than traditional reactors. We lead the world in SMR-related patents, but countries, namely Russia, dominate uranium mining and enrichment capacity, thus limiting market potential. Russia and China are already operating next-generation gas and liquid metal cooled reactors, which the U.S. originally pioneered in the 1960s. Here, we should focus on building up our own fuel production capacity and again work with friendly and trusted trading partners such as Australia and Canada as alternative potential sources for uranium. We must modernize the licensing process for new nuclear reactors.

Unfortunately, we have neglected one of our most clean and abundant resources – geothermal energy. The geothermal resources under our feet could literally power 10% of the entire country, if properly tapped, and lead to the export of this scalable, clean energy technology abroad. We should fix the permitting processes on public lands that hold back geothermal developers to develop the technology here first.

The U.S. is well positioned to be a global leader in the production of low-carbon hydrogen, particularly hydrogen made from natural gas with carbon capture. Our abundant renewable and natural gas resources, CCUS technology, and related infrastructure are all key enablers for our potential capabilities with low-carbon hydrogen.

We made significant progress over the past year. In particular, the energy portions of bipartisan Infrastructure Investment and Jobs Act (IIJA) enacted last year includes significant funding for energy programs originally authorized by the Energy Act of 2020, signed into law by President Trump, as well as a number of new energy and climate programs.

Just last week, ClearPath launched a tracker to follow the status of the Department of Energy’s implementation of the energy programs funded by the bipartisan Infrastructure IIJA, because with great investment of taxpayer dollars comes great accountability. We’ve been able to visualize the progress the Administration has made on awarding projects with the infrastructure funds to help ensure we are making the best use of this investment in ourselves and bringing these projects to fruition.

We appreciate the focus of the House Republican Energy, Climate and Conservation Task Force on rolling out policies to unlock American resources, accelerate American innovation, cut through red tape, and invest in ourselves so that we can advance U.S. clean technologies globally to lower emissions and beat our adversaries who wield energy as a weapon.

To unleash clean American energy technologies, the U.S. and our trading partners will need to rapidly develop economies of scale and advance R&D to reduce costs and remain competitive with the rest of the world. This will also require greater international alignment on what constitutes zero- and low-carbon energy sources, such as blue hydrogen, to help facilitate trade. Technological innovation, the American entrepreneurial spirit, and targeted free market incentives have made the United States one of the most carbon efficient economies in the world. We should prioritize policies that encourage the private and public sectors to accelerate down that path.

American clean energy exports

If we are successful at rapidly increasing the total amount of clean energy technologies deployed domestically, driving down their cost, and holding the lead in product quality through R&D, then we will have a significant opportunity to boost our exports of these 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, EVs, direct air capture, and advanced nuclear SMRs). These alone have a domestic SAM of $9 to $10 trillion through 2050. Potential U.S. exports across these technologies in 2050 could reach roughly $330 billion annually. Additionally, the adoption of these technologies alone could reasonably enable 20 Gt/yr in global emissions abatement if adopted at scale by 2050.

Additionally, we should fast-track decisions on things like American natural gas and hydrogen export facility permits to get our clean, and cleaner, fuels to global markets faster, rather than watch as global allies get their energy from hostile nations, or even get cut off.

While energy prices here at home remain elevated, Europe has seen even more dramatic price spikes given its tenuous energy supply chain. As part of Europe’s drastic rethinking of its energy mix, U.S. liquefied natural gas (LNG) has become a critical lifeline to the European Union as it continues to wean itself from Russian gas.

In fact, the U.S. is now the leading producer of oil and natural gas in the world, exporting our LNG to 39 countries. But just as importantly, a life cycle analysis conducted by the Department of Energy’s (DOE’s) National Energy Technology Laboratory shows that American LNG exports can be up to 30% cleaner than Russian natural gas. So, the United States is in a prime position to lead global action on LNG, while boosting our exports, creating jobs, reasserting America’s global technology and resources leadership over Russia and China, and driving down global emissions all at the same time.

Focusing for a moment on hydrogen, because of our abundant domestic energy resources, the U.S. can be a dominant exporter in this domain as well, but there is a global race to capture that market. Many countries, like Japan, South Korea, and the EU, are beginning to include hydrogen in their decarbonization efforts but are unable to produce the necessary amounts domestically. It’s estimated that cumulative global demand is roughly 1 – 2 billion metric tons. American clean hydrogen could competitively meet that demand with low-carbon hydrogen and ammonia hydrogen produced from natural gas with a high rate of carbon capture as well as from renewables. Several U.S. regions are poised to benefit from hydrogen exports. These future hydrogen hubs are able to support hydrogen production capacity and delivery infrastructure and can include major industrial centers and geologic storage capacity for carbon dioxide sequestration.

In the wake of the Russian invasion of Ukraine, it has become clear that civil nuclear exports are vital to our core national interests and other countries are looking at the U.S. to lead. They recognize that partnering with Rosatom is a bad deal that locks them into a 60-100 year relationship with Russia. In particular, Eastern European countries have been inking MOUs and contracts with the U.S. – Poland signed up for several U.S.-designed AP1000 reactors, and Romania plans to build a NuScale small modular reactor. We already know that not all countries play fair, and the U.S. must leverage the numerous financing tools at our disposal to support nuclear energy exports. These tools include utilizing the Export-Import Bank and the U.S. Development Finance Corporation, which lifted their ban on nuclear energy two years ago.

We should also look at new authorities that may be required to support nuclear energy exports. A significant piece of legislation, the International Nuclear Energy Act (INEA), passed out of the Senate Foreign Relations Committee just last week by voice vote. The companion bill in the House was introduced by your colleagues Reps. James Clyburn (D-SC) and Byron Donalds (R-FL) in October. INEA creates a national strategic plan for nuclear energy exports and will be essential to competing against China and Russia. Future enactment of this bill will result in sustained industry, high-paying jobs, abundant clean energy for developing nations, and strong international partnerships.

There is more to be done for international nuclear energy. As I mentioned previously, Russia and China dominate nuclear energy development today and offer significantly stronger incentives to partnering countries. The U.S. needs stronger coordination between agencies and a fast-track nuclear energy export process for allied countries. Additionally, we must fully end our reliance on Russia for nuclear fuel and establish a domestic fuel industry that can support both the U.S. and its allies. None of these tasks are easy, but they are worth doing.

Necessary Next Steps

Trade policy is critical to creating a global economic landscape that supports innovation and deployment of clean energy technology. For years, the United States led negotiations on a high-standards Environmental Goods Agreement, and although the negotiations were not completed, significant progress was made.

We appreciate the efforts that Reps. Kevin Brady (R-TX), Adrian Smith (R-NE), Suzan DelBene (D-WA), and other members of this subcommittee have devoted themselves to raising the importance of an Environmental Goods Agreement with the Administration.

We need to get back to the lead position at the negotiating table.

For many of the clean energy products under consideration for an Environmental Goods Agreement in the past, U.S. tariffs are already very low compared to tariffs imposed on American-made products by countries with whom we would want to negotiate. Accordingly, an Environmental Goods Agreement would help open international markets to U.S. clean energy technologies – like the ones I’ve discussed – with little disruption to our domestic market.

An ambitious Environmental Goods Agreement would go a long way to reduce the price of U.S. clean energy technologies abroad, making them more viable across the developed and developing world, thus helping to reduce carbon emissions and supporting American jobs.

We need to be thoughtful and forward-leaning in our opposition to China’s belt-and-road initiative for clean energy infrastructure projects. For many countries looking to continue their economic development, China is often their primary financing partner. The U.S. must use its authorities at Commerce, State, Development Finance Corporation (DFC), U.S. Trade and Development Agency (USTDA), and the Export-Import Bank of the United States (EXIM) to provide an alternative partner, while also supporting clean energy manufacturing here in the United States. These agencies offer robust financing options for technologies important to the developing world. Due to the size of these energy projects, almost every major project requires financing backstops from the exporting country. Cementing the mission of clean energy exports and development in these agencies by law will go a long way to building new clean energy markets globally for American products. This will further ensure that future energy projects in developing countries emit less and eliminate forced labor, particularly as it relates to current human rights violations throughout the existing supply chain in China.

To address a massive global challenge like climate change, every tool must be available. No country will use a single clean power technology – every country will need to find the right mix given its national circumstances, resource endowments, and pre-existing industry.

Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing innovative policy solutions to ensure US leadership in international clean energy trade. We applaud the Committee for taking on this important task to help ensure the appropriate action, including trade policies that will help advance innovative technologies to provide clean, reliable, and necessary energy to our nation and the world.

Energy Security Depends on Modernizing a Broken Federal Permit Process (Review-Journal)

This op-ed was originally published by the Las Vegas Review-Journal on March 5, 2022. Click here to read the entire piece.

As war in Europe underscores the importance of secure energy supply chains, some good news from Nevada shows how the United States can boost domestic supplies of critical minerals and reduce dependence on foreign adversaries, such as Russia and China. Success hinges on the federal government’s capacity to unleash private-sector innovation, not restrict it.

Last month, Nevada approved the final permits needed for Lithium Americas’ proposed Thacker Pass project, which would be the second active lithium mine in the United States. Domestic demand for lithium is rising as the country builds more energy storage for grid reliability and electric mobility.

The Trump administration approved Thacker Pass on Jan. 15, 2021, but the project is still months away from construction while the company resolves remaining permitting and litigation.

The fact remains that it shouldn’t take this long. A decade in the making, Thacker Pass highlights the need for modernizing the permitting process to produce a domestic supply of critical minerals necessary for clean energy development.

America’s dependence on foreign sources of critical minerals is well known. The United States is import-reliant for 31 of 35 critical minerals and has no domestic production for 14 of those minerals. By 2040, demand for energy-related minerals such as lithium, cobalt, graphite and nickel could grow by 20 to 40 times, according to the International Energy Agency.

Regardless of where the minerals are mined, China controls the refining process, including for lithium. Russia is also one of the top nickel producers, a key mineral for energy storage. If the United States does not diversify its sources, growing demand for minerals will undermine our energy security and clean energy goals.

Click here to read the full article

Time to Build a Domestic Critical Minerals Supply Chain

Energy storage is going global. In 2021, worldwide energy storage deployments are expected to triple compared to last year, according to a new report from Wood Mackenzie. While energy storage is important for strengthening grid reliability and reducing emissions, its explosive growth will dramatically increase demand for critical minerals, whose supply chains are largely controlled by the Chinese government. For the U.S. to build a domestic critical mineral supply chain, we need to get serious about what it takes to finance, permit, and build new projects.

All Roads Lead to China

It is difficult to overstate China’s dominance and America’s dependence on foreign supply chains. The U.S. is import-reliant for 31 of 35 critical minerals and has no domestic production for 14 of those minerals. Rising demand for minerals will place major stress on global supply chains and undermine America’s 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.

Critical Minerals Production and Refining by Country

Source: Bloomberg

The Trump Administration foresaw America’s clean energy supply chain challenge and actively worked to address it. In December 2017, President Trump issued Executive Order 13817 to Ensure Secure and Reliable Supplies of Critical Minerals. That culminated in a Federal Strategy, issued in 2019, which called for investing in innovative technologies and streamlining permitting processes.

Fortunately, that work continues. In February 2021, the White House announced a 100-day review of key supply chains, including batteries and minerals. The White House issued its report in June, which outlined a series of policy recommendations.

Federal Innovation Initiatives

Federal policy should focus on expanding innovation across the critical mineral supply chain, from mining to refining to recycling. Yet technological innovation is wasted if new projects can’t get permits, so policymakers should also reform the federal permitting process so viable projects do not die on the vine.

In recent years, the U.S. Department of Energy has established new initiatives to accelerate supply chain innovation. In 2020, DOE’s Advanced Manufacturing Office, which I oversaw at the time, issued a competitive solicitation to demonstrate advanced separations and processing technologies. It was the first time AMO had issued funding for demonstration-scale critical mineral projects.

In January 2021, DOE awarded $50 million as part of that funding opportunity, including four projects to demonstrate improved upstream extraction and midstream separation and processing technologies at scales that facilitate the next step to commercialization. That $50 million in taxpayer funding catalyzed an additional $45 million in private sector cost share. One of those projects, led by BHER Minerals, a subsidiary of Berkshire Hathaway Energy Renewables, will demonstrate lithium extraction from geothermal brine in the Salton Sea under a 50/50 cost share arrangement.

More innovation is needed to build on this success. The Energy Act of 2020 authorized new investments to bolster America’s critical mineral capabilities. Many of those provisions are included in the bipartisan infrastructure package, including $6 billion for DOE to boost RD&D for battery manufacturing, processing, and recycling, a dramatic expansion of DOE efforts initiated under the Trump Administration. The bill also includes $167 million for the U.S. Geological Survey to build a critical minerals research facility and $140 million for DOE to construct a rare earth demonstration facility.

Private Sector Innovation

Existing and proposed federal initiatives would complement recent private sector investments. Consider lithium, which is a key mineral for grid storage and electric vehicle batteries. Currently, the U.S. does not produce anywhere near enough lithium to meet our growing domestic needs, with Albemarle operating the only active U.S. lithium mine in Silver Peak, Nevada. However, several additional projects are under development, including:

Permitting Challenges

While the pipeline of new projects is promising, more investment means nothing if projects cannot get approved on a reasonable timeline. One such case is Ioneer’s Rhyolite Ridge Lithium-Boron Project in Nevada. The company says it’s the largest known lithium and boron deposit in North America. While Ioneer has received permits from the state of Nevada, it must also obtain approval from the U.S. Bureau of Land Management (BLM), which is required to conduct an extensive review under the National Environmental Policy Act (NEPA) – adding significant time and cost.

In July, Ioneer noted “ongoing delay” at BLM to publish the company’s notice of intent, which would then trigger a series of public meetings and notice-and-comment periods under NEPA. Ioneer says the federal permit is the only thing standing in the way of starting construction on the project.

Another promising project that would benefit from more sensible permitting is Twin Metals Minnesota. It’s a proposed mine in Northeast Minnesota’s Duluth Complex, which is the world’s largest known undeveloped copper-nickel deposit, according to the company. The mine would produce copper, nickel, cobalt, and platinum group metals, which are essential to multiple clean energy technologies. The project includes mining and processing capabilities, and the company has developed an advanced tailings management technology to mitigate environmental impacts. Despite clear benefits for U.S. clean energy supply chains, the project has been stuck in regulatory limbo for years.

If the U.S. stands any chance of mitigating our supply chain dependence, projects like Ioneer’s and Twin Metals’ should move through the permitting process in a timely fashion. Regulators should ensure projects meet robust environmental standards, but must come to those decisions on reasonable and predictable timelines. Otherwise, the lack of regulatory certainty will have a chilling effect on the future investment necessary to build a domestic clean energy supply chain.

Attempting to address regulatory delays while balancing environmental concerns, in July, a bipartisan group of Senators re-introduced the Federal Permitting Reform and Jobs Act, which would streamline the federal permitting process and set a two-year goal for permitting covered projects under NEPA. That bill is included in the bipartisan infrastructure deal that passed the Senate in August. It’s a sensible step toward enhancing regulatory certainty for clean energy projects.

Conclusion

U.S. entrepreneurs possess the skills and resources to develop a domestic supply chain for clean energy technologies like battery storage, as a growing pipeline of viable projects shows. Yet domestic developers face stiff international competition and a global supply chain controlled by the Chinese government. The last thing we should do is hamstring promising U.S.-based projects that would create jobs, reduce emissions, and strengthen our economic security. By doubling down on technology innovation and permitting reform, the U.S. can take major strides toward more secure and reliable clean energy supply chains.