Energy

In recent years, an American household company name has been helping keep Ukraine’s nuclear reactors running (The Wall Street Journal, subscription).

What’s going on: After Russia’s invasion in 2022, Ukraine stopped buying nuclear fuel from Moscow, formerly its top supplier. That’s when Westinghouse Electric stepped in.

• The Pennsylvania-headquartered company “now makes fuel bundles that are compatible with all of the country’s [Soviet-designed VVER] reactors and is working on a plan that could allow Ukraine to start making some of that fuel itself. Ukraine also plans to build nine Westinghouse-designed reactors.”

Why it’s important: The change is a victory for the West, “which has long sought to erode Russia’s dominance in the industry and the political influence that comes with it.”

• Russia has about 44% of the world’s uranium-enrichment capacity, which is critical because nuclear reactors use uranium for power production.

A decade in the making: After Russia seized Crimea in 2014, Ukrainian state nuclear company “Energoatom ramped up purchases of Westinghouse’s fuel assemblies and, by the beginning of 2022, six of Ukraine’s 15 reactors had been loaded with fuel from the company.”

• The firm also began supplying Ukraine with fuel assemblies for the VVER-440 reactor, of which the country has two.

A critical moment: As part of its full-scale invasion of Ukraine two years ago, Russia occupied the country’s largest nuclear power station, Zaporizhzhia, and attacked other energy infrastructure.

• Energoatom had to move fast to maintain deliveries of Westinghouse’s VVER-440 fuel, without which one of Ukraine’s nuclear reactors might need to be shuttered, worsening an electricity shortage.
• “What followed was a high-stakes race to make the fuel and load it in a reactor near the western Ukrainian city of Rivne, which faced occasional aerial bombardment despite being far from the war’s front line.”
• Westinghouse raced to source new machinery and rework its factory floor in Sweden, “upending traditional ways of working in a tightly regulated sector that is better known for its glacial pace.”

How it succeeded: The company set up a 60-person task force to meet and identify potential bottlenecks in production and launched talks with other European utilities.

• It got the Czech Republic and other countries with VVER-440 reactors “to accept the same basic fuel assembly design as the one Westinghouse was planning to use for Ukraine—a step officials said helped speed up production because it eliminated some of the time the company would usually spend on customization.”
• Utilities in five countries, including Ukraine, have since signed deals with Westinghouse for fuel deliveries.
• Experts from Energoatom went back and forth between Ukraine and Sweden to help with the fuel development, and in September, the new fuel assemblies were ready.

A nuclear future: To produce the fuel, Westinghouse purchased new manufacturing equipment, repurposed older equipment and 3-D printed some detailed components.

• “Westinghouse delivered a first batch of VVER fuel to a nuclear power plant in Bulgaria this spring and has said a delivery to the Czech Republic should take place this year.”

The most difficult part of creating nuclear power is enriching the uranium—and that’s precisely where Centrus Energy Corporation has set out to make America the global leader.

A unique position: The Bethesda, Maryland–headquartered Centrus, which is the only U.S.-owned enricher of uranium, can trace its roots as a company back to the Manhattan Project, the secret government initiative during World War II that brought the U.S. into the atomic age.

• The company is uniquely poised to make good on its aim to bring clean, plentiful, affordable and reliable energy to the world.
• “Nuclear power is reliable—so much so that we’ve seen a lot of the growth in nuclear generation around the world,” Centrus President and CEO Amir Vexler told the NAM.
• In 2023, global nuclear power generation grew 8%, after declining the prior year.

Geopolitical-fueled growth: The driver behind the expansion? Russia’s 2022 invasion of Ukraine, according to Vexler.

• “Since 2022, a lot of nations realized they have to have some level of sovereignty around power generation,” he said. “With nuclear, you’re not dependent on fossil fuels from other countries, which is particularly important if you’re a nation that’s not rich in resources.”
• In the more than two years since the start of the war in Ukraine, Russia has lost its position as the world’s top oil and gas exporter, as the U.S. and allies have sought to wean themselves off Russian energy imports.

A catch-22: But there’s no nuclear power without uranium—and ironically, Russia holds approximately 44% of the world’s uranium-enrichment capacity, according to the Department of Energy, and supplies nearly a quarter of the enriched uranium used in U.S. reactors.

• However, that monopoly may soon start to crumble, as in May President Biden signed bipartisan legislation to ban the import of Russian low-enriched uranium, also known as LEU.

Building up domestic supplies: At the same time, the U.S. is moving to ramp up domestic uranium production—and Centrus is key to making it happen.

• In November 2022, the DOE announced a $150 million cost-shared award with a Centrus subsidiary to demonstrate the capability to produce high-assay low-enriched uranium, or HALEU, an advanced fuel form needed to power the next generation of nuclear reactors.

Sole producer: HALEU is uranium enriched to between 5% and 20% uranium-235, and Centrus’ Piketon, Ohio, enrichment plant is the only American facility licensed to produce it.

• The Piketon facility began HALEU enrichment in late 2023, becoming the first U.S.-owned enrichment plant to start production in nearly 70 years. With sufficient public and private investment, Centrus could add thousands of centrifuges for the large-scale production of LEU for existing reactors and HALEU for future reactors. The plant could also provide enriched uranium for national security missions.

Filling a crucial vacuum: The removal of Russia from the uranium-enrichment landscape “creates a huge vacuum,” and it’s America’s to fill. In fact, doing so is a national security imperative, Vexler continued.

• “The enrichment process—creating the technology and building the machines—is so demanding, we as a country cannot cede it to others. Once that knowledge leaves our shores, we will never get it back. We have ceded [nuclear knowledge] to the Russians and Europeans before and it’s hard to catch up. … This is a complex supply chain that is extremely specialized, with an enormous amount of value add.”
• If the U.S. establishes robust uranium enrichment processes and facilities, he said, the country “could become a net exporter [of nuclear fuel] to Europe, Latin America [and] Asia. If we don’t compete in those markets, the Russians will.”

Safe, sound and lucrative: The cartoonish portrayal of the nuclear industry in popular culture has done it a disservice. It’s a fundamentally safe sector—and it can ensure well-paying jobs for years to come.

• “There is such great misinformation” about nuclear energy, Vexler said. “One of our biggest enemies is probably animated shows with catastrophic images [of nuclear plants]. … Consider that a U.S. company is enriching uranium here and will create a generation of people that will know about how to do it—technicians, electricians and more who understand these complex machines.”
• The nuclear sector is assiduously regulated and held to high standards, and it’s always learning, evolving and coming up with new reactor designs. “It’s probably one of the safest industries in the world.”

The last word: Vexler is optimistic about the future—both for Centrus as a company and for the U.S. as a major nuclear-power exporter.

• “I commend the U.S. government; there are many in it who are strong champions of nuclear power,” Vexler told us. “Getting the amount of funding that’s been allocated is a great accomplishment. With the continued support of the government and a public–private partnership, we will bring enrichment and all the associated benefits back to the U.S.”

Federal tax credits that have long been available for solar and wind energy projects may soon also be available for other renewables initiatives, such as nuclear fission and fusion (Reuters, subscription).

What’s going on: On Wednesday, “[t]he Treasury Department announced its guidance for Clean Electricity Production Credits and Clean Electricity Investment Credits, created under the 2022 Inflation Reduction Act, that will be available in 2025 as the previously available wind and solar production and investment tax credits sunset.”

• The Biden administration’s proposal identifies several technologies that will be eligible for the credits, including nuclear fission and fusion, marine and hydrokinetic energy, hydropower and geothermal.
• Public comments on the proposal will be accepted through Aug. 2, and a public hearing is scheduled for Aug. 12 and 13 (Law360, subscription).

The NAM says: “Expanded eligibility for these tax credits is a key to getting more industries involved,” said NAM Director of Energy and Resources Policy Michael Davin.

Russia’s missile attack on Ukraine last Saturday hit vital energy infrastructure, underscoring the need for the Biden administration to lift its more than three-month-old ban on U.S. liquefied natural gas export permits.

What’s going on: “The [missile] attack targeted ‘the power grid and the gas transit system, particularly the gas infrastructure that ensures the security of deliveries to the EU,’” Ukrainian President Volodymyr Zelenskyy said (POLITICO Pro, subscription).

• “Russia has intensified its assaults against Ukrainian power stations in recent weeks, and its missiles are now also hitting gas storage facilities that were used by some EU companies last winter to prevent energy shortages.”
• The strikes also hit four thermal plants in Ukraine and injured a worker.

Why it’s important: “With Russia targeting energy supplies in Europe, it is critical that we lift the ban on LNG exports so the United States can fill any unexpected gaps,” said NAM Director of Energy and Resources Policy Michael Davin. “Lifting the moratorium is a national and energy security issue.”

What Americans want: People in the U.S. overwhelmingly support natural gas exports, a recent NAM poll found, with 87% of respondents saying the U.S. should continue to export the energy source.

Washington, D.C. – Following the release of the Environmental Protection Agency’s new regulations on greenhouse gas emissions standards for certain power plants, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Manufacturers appreciate the EPA removing existing gas plants from its new regulation, following manufacturers’ warnings about the initial proposal. However, the rest of the rule causes serious concern because Congress and the president have not enacted permitting reform—making it impossible to achieve the EPA’s highly aspirational mandates. We call on Congress to get serious by enacting significant and meaningful permitting reform this year. That is essential to ramping up the use of renewables, carbon capture, hydrogen and nuclear, for example, to meet future demand.

“The final rule threatens grid reliability because of the unrealistic timeline for power plants to adopt technologies within the next 10 years that have yet to even be proven at scale. Our nation should be doing everything possible to make sure our families, businesses and manufacturers have a modern, strong and reliable electrical grid, especially at a time when global turmoil threatens our energy security. This new rule does the opposite, creating a threat to our national and economic security that literally could leave Americans in the dark and factories offline. In short, the EPA is rolling the dice with Americans’ electricity and therefore with President Biden’s manufacturing legacy.

“Our industry has made transformational investments in these technologies and clean energy solutions, and we are leading the way in their deployment. The EPA should be partnering with us—not undermining this progress. We will continue to press the administration to achieve a more balanced regulatory framework to help reach our climate goals.”

-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 $2.89 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 Biden administration has placed new restrictions on traditional energy exploration and production in large portions of Alaska’s Arctic (Law360, subscription).

What’s going on: A rule handed down last Friday by the U.S. Department of the Interior’s Bureau of Land Management puts “[n]ew limits on fossil fuel production in the National Petroleum Reserve-Alaska,” a 22.8 million–acre site that holds large reserves of oil and natural gas.

• The rule limits future oil-and-gas leases and industrial development and “codifies a ban on new leasing across a further 10.6 million acres of the reserve, about 40% of its total area,” according to the agency.
• The regulation also rules out construction of a road proposed by the Alaska Industrial Development and Export Authority to allow miners to reach mining sites in Alaska’s north-central region.

Why it’s problematic: The move—which the administration said is intended to protect wildlife habitats and “honor the culture [and] history” of Alaska Natives—erodes U.S. energy security and independence while financially harming local indigenous people.

• “The final rule ‘will hurt the very residents the federal government purports to help by rolling back years of progress, impoverishing our communities, and imperiling our Iñupiaq culture,’ Voice of the Arctic Iñupiat President Nagruk Harcharek said.”
• The NPR-A contains approximately 8.7 billion barrels of oil and 25 trillion cubic feet of natural gas resources, according to the U.S. Geological Survey.

The last word: “The rich resources of the Arctic should be part of a responsible, all-of-the-above approach to U.S. energy security and independence,” said NAM Director of Energy and Resources Policy Michael Davin. “This rule is a step backward on the path to achieving a sustainable energy future.”

Energy Secretary Jennifer Granholm called the Biden administration’s recent moratorium on liquefied natural gas export permits “a pause for a study” at a Senate Energy and Natural Resources Committee hearing Tuesday, according to POLITICO Pro (subscription).

Committee Chairman Sen. Joe Manchin (D-WV) questioned several recent energy-related moves by the Biden administration.

What’s going on: “It is a pause for a study. You don’t need to hype it out beyond what it is,” Granholm told the committee on Tuesday. “It is a pause to get data.”

• The administration has received bipartisan criticism for the freeze of LNG export permits since announcing the move in January. NAM President and CEO Jay Timmons said the pause “undercut[s] President Biden’s own stated goals” and “weakens our country while giving Russia an upper hand.”

An examination of prices: Granholm told the committee the pause “was needed to examine prices and market demand since the last time a study was conducted.”

• She said the study will take into account foreign nations’ emissions “that may be linked to the absence of U.S. natural gas shipments.”

45V guidance: Sen. Manchin asked Granholm about proposed guidance on the Inflation Reduction Act’s first tax credit, known as the 45V. In a news release from the committee, Sen. Manchin said the proposed guidance, “if implemented … would jeopardize the viability of the industry before it even has a chance to get off the ground.”

• Sen. Manchin mentioned a recent letter to the administration from all seven “hydrogen hubs”—locations designated late last year by the administration to scale up the nation’s clean hydrogen production—saying the centers would “no longer be economically viable” without revision to the 45V proposed guidance.
• “Do you think we should heed the warning of [the Department of Energy]’s own seven hubs, and do you have any insight into what might be changed?” he asked.
• Granholm responded that the administration has “gotten over 30,000 responses, and they are working through those responses.”
• She added, according to POLITICO Pro, “The bottom line is clearly we want the hubs to succeed.”

Our take: “No matter what you call it, the administration’s pause on LNG export permits runs counter to the wishes of the American people and the interests of the United States and our allies,” said NAM Director of Energy and Resources Policy Michael Davin.

• “According to a recent NAM survey, 87% of Americans believe the U.S. should continue to export natural gas. The administration should listen.”

Construction of a manufacturing plant that promises to be vital to the world’s move toward electrification is now underway, according to Chemical Industry Digest.

What’s going on: “Orion S.A., a specialty chemicals company, broke ground on a plant in Texas that will be the only facility in the U.S. producing acetylene-based conductive additives for lithium-ion batteries and other applications vital for the global shift to electrification.”

• Batteries require conductive additives, and those produced at the Texas facility southeast of Houston will be made using acetylene, a colorless gas.
• Equistar Chemicals LP, a subsidiary of polymer and polyolefin technologies manufacturer LyondellBasell, will manufacture acetylene at a nearby location.
• The new plant will be similar to an Orion facility already in operation in southern France that also uses acetylene from LyondellBasell.

“A crucial part”: “[W]e see electrification as a crucial part of our plan to reduce carbon emissions across our industries,” said LyondellBasell Executive Vice President of Global Olefins and Polyolefins, Refining and Supply Chain Kim Foley. “By supporting the production of key battery components, we’re contributing to solutions for a better tomorrow.” The company recently released its annual sustainability report.

• The battery additives produced at the Texas facility will have “one-tenth of the carbon footprint of other commonly used materials,” according to the article.
• And the plant “will bring new technology and high-skilled jobs including laborers, millwrights, welders, equipment operators, among others jobs in Texas, and [will] positively impact long-term job creation for the local community,” Energy Job Shop reports.

The number of renewable energy projects awaiting entry onto the power grid rose significantly in 2023, according to POLITICO Pro (subscription).

What’s going on: There were “2,600 gigawatts of energy and storage capacity trying to connect [last year], according to a report released Wednesday by the Energy Department’s Lawrence Berkeley National Laboratory.”

• The waiting projects—most of which are wind, solar and storage capacity initiatives kickstarted with incentives from the Inflation Reduction Act of 2022—could more than double current grid capacity, the report says.
• Solar accounts for most of the generation.

The problem: Despite an order passed by the Federal Energy Regulatory Commission last year intended to speed up the process of getting new resources connected, “most regions have not yet implemented the new rule, leaving power systems across the country jammed.”

• The need to link in new energy sources quickly will only grow in the coming years, as the U.S. moves more toward electrification.

Our view: “Energy security is more important than ever,” NAM Director of Domestic Policy Michael Davin said. “Manufacturers need affordable, reliable energy to power economic growth. This is why we greatly need comprehensive permitting reform to expedite these projects and many more.”

The Department of Energy on Monday announced record-setting funding aimed at decarbonizing energy-intensive sectors, POLITICO Pro (subscription) reports.

What’s going on: The nearly $6 billion in “funding from the Democrats’ climate law and the bipartisan infrastructure law for industrial decarbonization will be spread across 33 projects and 20 states,” where it “will apply to some of the highest-emitting industrial manufacturing sectors—often described as ‘hard-to-decarbonize’ industries—including iron and steel, aluminum, cement, concrete, chemicals, food and beverages, and pulp and paper.”

Where it’s coming from: The money will be drawn from funds set aside under the Inflation Reduction Act ($5.47 billion) and the Bipartisan Infrastructure Law ($489 million).

Why it’s important: The many projects to be funded—which include groundbreaking recycling initiatives, hydrogen-use projects, decarbonization of thermal processes and more—will remove approximately 14 million metric tons of emissions every year, the DOE estimates.

• Five of the highest-dollar-value projects, at half a billion dollars each, “are focused on decarbonizing cement, concrete, aluminum, iron and steel.”
• The work will take place in five states—Indiana, Ohio, California, Iowa and Mississippi—and a still-to-be-determined spot on the Mississippi River Basin.
• Many of the projects are spearheaded by NAM members, who have been critical in innovating decarbonization efforts from within the industry.

The NAM’s take: “Manufacturers are innovating and making tremendous investments to decarbonize their processes and products,” said NAM Vice President of Domestic Policy Brandon Farris. “It is great to see the Department of Energy recognize multiple NAM members for their industry-leading initiatives.”