Energy

The Defense Department will buy $400 million of MP Materials’ preferred stock, becoming its largest shareholder, the company announced today (CNBC). MP Materials owns the only rare earth mine operating in the U.S. today at Mountain Pass, California.

The background: “Rare earths are used in magnets that are key components in a range of military weapons systems including the F-35 warplane, drones and submarines, according to the Defense Department.”

• The U.S. imports almost all its rare earths, with China supplying about 70% of imports in 2023, according to the U.S. Geological Survey.
• Rare earth imports from China have become a point of dispute in U.S.–China trade relations.

Looking ahead: “MP Materials will build a second magnet manufacturing facility in the U.S. to serve defense and commercial customers with support from the Pentagon. The facility, whose location wasn’t disclosed, is expected to start commissioning in 2028 and will bring MP Materials rare earth magnet manufacturing capacity to 10,000 annual metric tons.”

• The Pentagon will buy all magnets produced by the new facility for a period of 10 years after it is built.

What they’re saying: “We understand that this partnership is ultimately on behalf of the taxpayers and our national security, and with that comes a great responsibility to get this done right,” MP Materials CEO James Litinsky told investors in a call this morning.

• “Securing America’s supply of rare earth materials and magnets is essential to our economic and national security.”

The NAM says: “The NAM has long led the charge for diversifying sources of critical minerals both to strengthen manufacturing supply chains and to safeguard its national security,” NAM Director of Energy and Resources Policy Michael Davin said.

• “Investments like this one are an innovative way for the U.S. government to make good on its promise to manufacturers and the American people.”

The U.S. will lose the race for leadership in artificial intelligence unless it ramps up baseload power generation, the Energy Department said in a report issued Monday (E&E News).

What’s going on: If older, traditional-source power plants continue to close at the current pace and the construction of new facilities is not sped up, “DOE said that parts of the mid-Atlantic and Great Plains regions could face 400 hours of power outages in 2030 in a worst-case scenario where tech companies build giant energy-hungry AI data centers unabated.”

• In the scenario laid out in the report, Eastern states served by regional transmission organization PJM Interconnection—including Maryland, Pennsylvania and Virginia—would see “power shortages … that could total more than a month over the course of the year” by 2030, owing in large part to unchecked data center growth.

Yes, but … The report also notes that grid operators would not greenlight data center construction that would harm “the reliability of the system.”

The big picture: Some 104 gigawatts of traditional power plant capacity is slated for retirement by 2030, according to the DOE—and it isn’t being replaced fast enough to meet projected demand. (For reference, one gigawatt is capable of powering about 850,000 homes.)

• Last month, the NAM commended the administration for its plans to repeal the previous administration’s power plant regulations, which would have mandated unfeasibly stringent emissions rules on traditional-source power plants.
• “A consensus of grid operators in U.S. competitive power markets like PJM and the Southwest Power Pool is that grid reliability faces extraordinary stresses if the heavy rate of [traditional power] plant retirements continues,” according to E&E News.
• President Trump has pledged to beat China in grabbing the golden AI ring, an endeavor that will require far more generation—and one which the DOE report classifies as a national emergency.

Our take: “This report from the DOE underscores the need for the U.S. to maintain baseload power generation,” said NAM Director of Energy and Resources Policy Michael Davin. “We need to shore up, not shut down, power generation.”

• The NAM has long urged policymakers to accelerate the permitting process for energy projects. In May, it responded to a request for information from the House’s AI and Energy Working Group seeking input about how to boost energy production, secure the grid and outcompete China in AI.
• “Streamlining permitting processes, cutting red tape, requiring federal agencies make timely decisions and reducing the potential for baseless litigation will help prevent years-long delays that undermine manufacturers’ ability to compete globally,” the NAM told the committee.

The State of New York plans to construct the first major U.S. power plant in more than 15 years (The Wall Street Journal, subscription).

What’s going on: “Gov. Kathy Hochul said in an interview that she has directed the state’s public electric utility to add at least 1 gigawatt of new nuclear-power generation to its aging fleet of reactors. A gigawatt is roughly enough to power about a million homes.”

• The New York Power Authority—created in 1931 by then-governor Franklin D. Roosevelt to manage hydropower for New York—will locate a site upstate and then determine a reactor design.
• Potential sites “include the grounds of New York’s three operating plants, all owned or majority-owned by Constellation Energy” and could consist of a single large reactor or several smaller reactors, according to Hochul.
• NYPA “may pursue the project alone or in partnership with private entities,” according to Hochul.

Why it’s important: The endeavor could spur a new age of reactor construction in the U.S. The industry has been stymied in recent decades in part by “permitting processes that move at a glacial pace.”

• Since 1991, just five new commercial reactors have come online in the U.S.—not nearly enough to offset the retirement of old plants.
• Nuclear generation capacity has declined more than 4% from its peak in 2012, as other electricity generation methods, such as solar, have experienced booms.

Closed—with no Plan B: In 2021, New York shuttered its Indian Point nuclear plant, about 40 miles outside Manhattan. The plant had supplied about a quarter of New York City’s electricity needs.

• “There was no Plan B,” Hochul told the Journal.

Nuclear resurgence: Since then, nuclear energy’s popularity has surged, due in part to the large amount of energy required to build artificial intelligence data centers.

• Late last year, Microsoft announced plans to restart the shuttered reactor at Pennsylvania’s Three Mile Island, and in March, the Energy Department approved $57 million in loans to get Michigan’s Palisades Nuclear Plant up and running again.

The NAM’s view: “New York’s plan to expand the role of nuclear in the state’s energy footprint is an important one,” said NAM Director of Energy and Resources Policy Michael Davin.

• “Nuclear energy is safe, emissions-free and available 24 hours a day. As such, it’s a critical component of America’s energy dominance strategy. It’s also vital for meeting additional energy needs that have arisen with the growth in data centers and the use of AI. President Trump recognizes this, and manufacturers commend him for the four executive orders he signed last month designed to boost the nuclear energy industry in the U.S.”

Thanks in large part to rising power demand for data centers, policymakers have become increasingly supportive of nuclear energy—resulting in more than 200 nuclear-related bills filed in state capitols so far in 2025 (E&E News).

What’s going on: One of the few methods of electricity generation to have bipartisan backing, nuclear “has quietly gained traction in statehouses from Phoenix to Austin to Indianapolis” with dozens of state bills already either signed into law or now awaiting signature by governors.

Why it’s happening: “Unlike in the past, when nuclear power was pitched as a carbon-free back[stop] for aging coal plants, the selling point today is focused squarely on rising power demand, especially for power-thirsty data centers.”

• Nuclear power emits no greenhouse gases and can be generated year-round and in all weather.
• But efforts to make it more widely used in the U.S. have stalled in recent years, owing mainly to project delays and higher-than-anticipated costs.

What’s new now: “Desperate to bring economic investment and jobs to their states and districts, state legislators of both parties are courting ‘hyperscale’ data centers operated by technology titans” such as Amazon. “And lawmakers are keenly aware that power availability is at the top of the list of requirements.”

Case study: In Indiana, legislators have prioritized measures to hasten nuclear development.

• Lawmakers have passed bills to attract small modular reactors, the next generation in nuclear power generation “considered by many leaders in the state as a fitting replacement for an aging coal fleet. And Republican Gov. Mike Braun and other state officials see potential for making Indiana a manufacturing hub for the next-generation reactors.”
• Large projects in the state—including an $11 billion Amazon endeavor in New Carlisle—require large amounts of power.
• One state utility, AEP’s Indiana Michigan Power, is seeking $50 million in federal grants with the Tennessee Valley Authority for an early site permit to build a 300-megawatt SMR at the site of a coal-fired power plant that’s set to retire in 2028.

Other states go nuclear: “Arizona, Arkansas, North Dakota, Utah and Virginia have all enacted measures into law to encourage nuclear power.”

• The hardest-hitting bills authorize funding or financial incentives, such as Texas’ measure for a $350 million nuclear fund.

Our take: “Nuclear power is a critical component of the all-of-the-above energy strategy that we need to meet the demands of the manufacturing industry in the 21st century and to make America truly energy dominant,” said NAM Director of Energy and Resources Policy Michael Davin.

Many major business groups, including the NAM, are calling on Congress to preserve funding and resources for ENERGY STAR, a federal program that promotes energy efficiency in consumer products (E&E News, subscription).

The request: “Clear legislative authorization backs ENERGY STAR as a voluntary public–private partnership run by the federal government,” more than 30 business groups told legislators.

• “We respectfully request that ENERGY STAR not be supplanted by nongovernmental efforts that could significantly alter and overly complicate the program.”

The background: Environmental Protection Agency Administrator Lee Zeldin has announced plans to restructure the agency, including by eliminating the Office of Atmospheric Protection, which manages the ENERGY STAR program.

• The ENERGY STAR program sets efficiency standards for a range of products and materials, including air conditioners and heat pumps, allowing them to display the program’s logo if they meet the criteria.

Why it matters: “Electricity saved by ENERGY STAR helps free up space on the grid needed so the U.S. can lead the world to power and grow artificial intelligence, support the burgeoning crypto asset industry and bring more manufacturing plants back to our shores,” the associations said.

The NAM’s take: “The ENERGY STAR program is a prime example of how federal agencies should be partnering with the industry to promote energy-efficient products that save money for consumers,” said NAM Director of Energy and Resources Policy Mike Davin.

• “Instead of imposing top-down regulations, ENERGY STAR brings together the public and private sectors on a voluntary basis to create a win–win–win outcome for consumers, the environment and the economy.”

The U.S. produced a record amount of energy in 2024, according to the U.S. Energy Information Administration.

What’s going on: “U.S. total energy production was more than 103 quadrillion British thermal units in 2024, a 1% increase from the previous record set in 2023. Several energy sources—natural gas, crude oil, natural gas plant liquids, biofuels, solar and wind—each set domestic production records last year.”

The details: Natural gas has been the primary source of American domestic energy production—accounting for approximately 28% of total energy production last year—every year since 2011.

• Crude “was a record 13.2 million barrels per day in 2024, 2% more than the previous record set in 2023.”
• Natural gas plant liquids, which are fuels extracted from the processing of natural gas such as ethane and propane, totaled a record 4 trillion cubic feet in 2024, up 7% from 2023 and accounting for approximately 9% of total U.S. energy production that year.

Other sources: Solar, wind and biofuels also set records in 2024.

• Solar and wind production increased by 25% and 8%, respectively, as new generating capacity was added.
• Biofuels—which comprise biodiesel, renewable diesel and ethanol, as well as other biofuels like sustainable aviation fuel—accounted for “a record 1.4 million barrels per day, up 6% from previous records set in 2023.”
• Output from geothermal declined slightly from 2023.

The NAM says: “This data is clear evidence of the strength and success of an all-of-the-above energy strategy,” said NAM Director of Energy and Resources Policy Michael Davin.

• “Given the growth of artificial intelligence and data centers, we will continue to need record levels of energy generation. By continuing down this path, we could reach our goal of U.S. energy dominance on the world stage.”

The artificial intelligence–driven rise in energy demand from the tech sector is adding more strain to the U.S. power grid, boosting the risk of outages to “new highs,” regional power market executives said at a regulatory conference this week (POLITICO Pro’s ENERGYWIRE, subscription).

What’s going on: “Grid rules developed during periods of relatively slow growth aren’t equipped for the demands of Silicon Valley’s investment in artificial intelligence, extreme weather shocks and deep national and state political divisions over energy and climate policy, grid operators told members of the Federal Energy Regulatory Commission.”

• PJM Interconnection, which has 67 million customers in the eastern U.S., forecasts a 32-gigawatt power demand increase through 2030, “of which 30 is from data centers,” CEO Manu Asthana told FERC.
• Southwest Power Pool, with approximately 19 million customers in the Great Plains states, said it projects peak demand “to be as much as 75% higher 10 years from now,” largely due to data centers and electrification.

Why the outage threat is worsening: Extreme weather events and greater use of weather-dependent energy sources such as wind and solar make “outages … 125 times more likely to happen [now] than eight years ago.”

What’s needed: C-suite leadership told regulators there are steps that can—and must—be taken to mitigate the worsening risk. These include:

• Stabilized market rules and “find[ing] that intersection between reliability and affordability that works both for consumers and suppliers, and that intersection is getting harder and harder to find”;
• “[M]uch deeper insight” into future electricity supply and demand and probabilities of extreme weather;
• More and better real-time information about the effect of dangerous storms on gas pipeline deliveries to electric turbines;
• “[S]tronger modeling of fuel and capacity performance to assess reliability risk”; and
• The establishment of an agreed-upon profile of the risks operators likely face.

Adding to the problem: Making matters worse are the vastly different climate policies between states, which put regional power markets “in an impossible position,” FERC Chair Mark Christie said at the conference.

• One possible solution: give states more responsibility for fixing grid reliability problems on their own.

The NAM says: As the NAM recently told the House’s AI and Energy Working Group, led by Rep. Julie Fedorchak (R-ND), “A reliable, resilient modern grid is required to enable the historic growth in data centers, which in turn can contribute to manufacturing growth.”

President Trump signed several executive orders on Friday that call for the reform of the Nuclear Regulatory Commission and will speed up the permitting of new reactors in the U.S. (CNBC).

What’s involved: “Trump said Friday the orders focus on small, advanced reactors that are viewed by many in the industry as the future. But the president also said his administration supports building large plants.”

• “We’re also talking about the big plants—the very, very big, the biggest,” Trump said. “We’re going to be doing them also.”

Going faster: Building new power plants has been a tedious effort thanks to the long licensing and regulatory approval processes.

• Yet the appetite for more nuclear power is there, thanks to the electricity demand from the data centers powering the AI revolution.
• “Three Mile Island is expected to return to service with financial support from Microsoft . . . and Alphabet and Amazon are investing in small, advanced reactors,” CNBC noted.

More uranium: The EOs also aim to boost uranium mining in the U.S. and to increase domestic enrichment and processing capacity, according to an administration official.

• In addition, the orders also “aim to speed up reactor testing at the Department of Energy’s national laboratories.”

The NAM says: “These actions mark an important and timely step toward unleashing American energy dominance safely and responsibly. Nuclear-generated power is an important part of an all-of-the-above energy strategy, which is necessary to meet the power needs of a growing manufacturing sector, and the nuclear fuel supply chain is a critical manufacturing industry that we need to bring home,” said NAM President and CEO Jay Timmons.

• “Rebalancing regulations and expediting permitting reform to unleash American energy are key pillars of a comprehensive manufacturing strategy that Congress must act on so manufacturers can grow, hire and compete—and these orders reflect that vision by reforming the licensing and permitting systems that place burdens on manufacturers.”
• “The NAM looks forward to working closely with the National Energy Dominance Council, under the leadership of Secretary of the Interior Doug Burgum and Energy Secretary Chris Wright, as well as Congress to ensure these policies translate into durable results for manufacturers.”

Washington, D.C. – The National Association of Manufacturers today welcomed President Trump’s latest executive orders to expand the development of nuclear energy, streamline federal permitting and strengthen domestic fuel production. NAM President and CEO Jay Timmons issued the following statement:

“These actions mark an important and timely step toward unleashing American energy dominance safely and responsibly. Nuclear-generated power is an important part of an all-of-the-above energy strategy, which is necessary to meet the power needs of a growing manufacturing sector, and the nuclear fuel supply chain is a critical manufacturing industry that we need to bring home.

“The executive orders include measures to accelerate the licensing of next-generation nuclear reactors, open federal lands for energy infrastructure and increase domestic uranium production. Together, these actions address critical supply chain challenges and energy demands—particularly as the AI-driven economy continues to grow.

“Rebalancing regulations and expediting permitting reform to unleash American energy are key pillars of a comprehensive manufacturing strategy that Congress must act on so manufacturers can grow, hire and compete—and these orders reflect that vision by reforming the licensing and permitting systems that place burdens on manufacturers.

“The NAM looks forward to working closely with the National Energy Dominance Council, under the leadership of Secretary of the Interior Doug Burgum and Energy Secretary Chris Wright, as well as Congress to ensure these policies translate into durable results for manufacturers.”

Background:

Most recently, support for nuclear energy in the U.S. has climbed to 61% according to Gallup, reaching just one point below the all-time high in 2010. Support for accelerating the development and commercialization of both traditional nuclear energy plants as well as advanced modular reactors is vital to America’s energy future and the success of manufacturers in the U.S.

The NAM has long championed policies that drive investment in advanced nuclear power to meet rising U.S. energy demand fueled by electrification, advanced manufacturing and the surge in AI and data centers.

These include:

• Reforming the permitting and approval process to make it easier for reactor projects to locate on underused or abandoned sites;
• “Early licensing work” provisions to help deploy reactors more quickly at national security infrastructure sites; and
• A series of awards to encourage companies to develop advanced-reactor technology.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The Federal Energy Regulatory Commission has issued a new final supplemental environmental review for Venture Global’s CP2 liquefied natural gas project in Louisiana, bringing it a step closer to reality (E&E News, subscription).

What’s going on: FERC found that “the terminal and an associated compressor station wouldn’t cause ‘significant cumulative air quality impacts.’”

The project: “The CP2 facility has a nameplate liquefaction capacity of 20 million metric tons per year, but it could produce even more under peak conditions.”

• If approved expeditiously, the project could produce its first LNG by 2026, the company said last year.
• “With today’s [final environmental impact statement,] FERC has found twice-over that CP2 will have no significant air impacts,” Venture Global spokesperson Jess Szymanski said in an emailed statement to E&E News. “The project is ready to break ground and begin supplying U.S. allies with much-needed LNG as soon as the FERC Commission votes on the Final Order and issues a notice to proceed with construction.”

What’s next: The Final Order is slated for July, according to FERC’s website.

The NAM says: “LNG projects like Venture Global’s will help bolster the American economy by creating jobs here at home and enabling the U.S. to achieve energy dominance on the world stage,” said NAM Director of Energy and Resources Policy Michael Davin.