Energy

With President Biden set to deliver the State of the Union address Thursday, manufacturing is likely to be in the spotlight once again. At the NAM, we will be listening closely for our key priorities—those that have been achieved and those still in progress. 

Promises kept: President Biden has been a partner on a range of issues that are key to manufacturers across the United States. We hope he will outline how pro-growth legislation has helped set the stage for manufacturing growth, with industry employment reaching a 15-year high.

• CHIPS Act: The CHIPS and Science Act marked a major push to boost manufacturers’ competitiveness, supporting large and small businesses up and down the supply chain by investing in domestic semiconductor production and funding programs to support the STEM workforce, advanced technology development, excavation of critical minerals, clean energy and more.

• Bipartisan Infrastructure Bill: President Biden secured a bipartisan $1.2 trillion infrastructure bill, a long-sought, major achievement for manufacturers throughout the country, offering transformational upgrades and significant investments in America’s manufacturing capabilities.

• Inflation Reduction Act: Some of the provisions in the Inflation Reduction Act supported manufacturers across the United States, with direct investments and tax credits generating a major increase in manufacturing construction and jobs.

• Ukraine: The Biden administration has been unwavering in its support of Ukraine. The NAM—which in March 2022 passed a unanimous resolution denouncing Russia’s invasion of the country—has kept the pressure on Congress to pass the stalled Ukraine aid bill.

Progress to come: But this progress will be undermined if the Biden administration continues to issue onerous regulations and call for policies that make it harder to innovate, invest and expand in America. The NAM is working hard to push back against items that would harm manufacturers and encourage the president to refrain from pursuing policies that will make us less competitive.

• Taxes: The NAM is pushing back against any new taxes or attempts to increase tax rates on manufacturers, and we are pressing for tax policies that will make it easier to invest in the future—including the “tax trifecta” found in the recently House-passed Tax Relief for American Families and Workers Act. The NAM urges the Senate to approve these business tax provisions quickly.

• Protecting intellectual property: Late last year the administration proposed invoking “march-in” rights to seize the patents of any products it deems too costly—if those innovations were developed in any part with federal dollars. This move, which would open the door to similar actions in other sectors of manufacturing, would undermine manufacturers’ IP rights, disincentivize early-stage entrepreneurship and dissuade capital investment, all of which could jeopardize our ability to develop future cures. This is just one example of how actions that undermine manufacturers’ IP can have dangerous unintended consequences.

• Regulations: Burdensome rules—such as the tighter National Ambient Air Quality Standards from the Environmental Protection Agency and the Department of Energy’s recent freeze of liquefied natural gas export permits—are preventing manufacturers from creating jobs and harming U.S. competitiveness. We need to end the regulatory onslaught and give manufacturers the chance to grow.

• Energy: Manufacturers in America are at the forefront of the planet’s work to reduce emissions and promote sustainable energy. But to be effective, we need to embrace an all-of-the-above energy strategy that uses the fuel we have while developing the tools we need.

• Immigration: Immigration and border security reforms must be a priority for the administration and Congress. Inaction poses significant economic risks—especially at a time when manufacturers have 600,000 open jobs. Manufacturers are leading on bipartisan solutions, like those found in our A Way Forward plan.

The last word: “Our commitment is to work with anyone, and I truly mean anyone, who will put policy—policy that supports people—ahead of politics, personality or process,” said NAM President and CEO Jay Timmons. “Because here’s what I know: Manufacturers are building an incredible future for our country and our world. And we need partners in the federal government who will work with us to reduce burdens on manufacturers and manufacturing workers, rather than creating barriers to our success.”

Learn more: For more information on the state of manufacturing, check out the 2024 NAM State of Manufacturing Address here.

Washington, D.C. – The National Association of Manufacturers released its Manufacturers’ Outlook Survey for the first quarter of 2024, which reveals that the expiration of federal tax incentives related to R&D, interest deductibility and expensing for capital investments has already caused nearly 40% of respondents to pull back on hiring and investing due to increased taxes.

“Manufacturers’ concerns in this survey should provide a stark warning to both parties ahead of the State of the Union: If you want to continue America’s manufacturing resurgence, focus on constructive policies to strengthen our industry—reinstating key tax provisions, achieving immigration solutions and advancing permitting reform. But if President Biden wants to put his manufacturing legacy at risk, nothing will do that faster than raising taxes on manufacturers or continuing this regulatory onslaught,” said NAM President and CEO Jay Timmons.

The latest data show that two-thirds (65.5%) of manufacturers said that rules coming from the Biden administration will be costly to implement. Additionally, amid the regulatory onslaught, concern about the overall business climate was elevated and not far from levels last seen at the end of 2016.

“President Biden and Sen. Britt will opine on their parties’ respective priorities, many of which manufacturers share. But actions speak louder than words. Congressional inaction and the stream of senseless regulations from the EPA and elsewhere are creating greater uncertainty for businesses, which hurts manufacturers’ ability to create jobs and raise wages. All of this is undermining manufacturers’ confidence and has the potential to drive investment away from the United States,” added Timmons. “Our commitment is to work with anyone who will put policy—policy that supports people—ahead of politics, personality or process.”

Overall, 68.7% of respondents felt either somewhat or very positive about their company’s outlook, edging up slightly from 66.2% in the fourth quarter. It was the sixth straight reading below the historical average of 74.8%.

Key Survey Findings:

• Nearly 94% of respondents say that it is important for the federal tax code to help reduce manufacturers’ costs for conducting R&D, accessing capital via business loans and investing in capital equipment purchases, with 58% saying that it is very important.
• The majority of respondents (72.4%) said that the length and complexity of the current permitting reform process affects their investment decisions in various degrees, with 38.9% suggesting that they were extremely or moderately impacted. In survey responses throughout 2023, manufacturers stated that reform to the current system could allow them to hire more workers, expand their business and increase wages and benefits.
• More than 65% of manufacturers cited the inability to attract and retain employees as their top primary challenge.
• An unfavorable business climate (58.9%), rising health care and insurance costs (58.2%) and weaker domestic economy and sales for manufactured products (53.2%) are also impacting manufacturing optimism.

You can learn more at the NAM’s online tax action center here.

The NAM releases these results to the public each quarter. Further information on the survey is available here.

-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 $2.85 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.

For the past two years, the U.S. Securities and Exchange Commission has been considering a rule that would require businesses to report huge amounts of information about companies’ climate-related risks, strategies and impacts. As the SEC prepares to release its final version of the rule this Wednesday, we spoke with NAM Vice President of Domestic Policy Charles Crain about what manufacturers should expect.

The background: In March 2022, the SEC proposed what the NAM has called an overreaching, unworkable and burdensome climate disclosure rule. According to Crain, the initial proposal would have required extensive disclosures as well as invasive tracking procedures to gauge climate impact and emissions throughout companies’ supply chains—significantly increasing costs and liability for manufacturers.

• “The proposal would have had major implications for the entire manufacturing sector, including both large and small public companies—and even privately held businesses throughout manufacturing supply chains,” said Crain. “As proposed, the rule represents a significant threat to manufacturing competitiveness.”

The pushback: In the two years since the rule was first proposed, the NAM has pressed for significant changes—in detailed letters to the SEC, in congressional testimony and in meetings with SEC commissioners and staff.

• “Manufacturers have made it a top priority over the past two years to convince the SEC that they need to change their approach,” said Crain. “The NAM has spent significant time and effort explaining to the SEC why its proposal was unworkable and likely unlawful and illustrating the impact of the rule’s overwhelming cost burden on manufacturers.”
• “But we also offered specific and actionable suggestions to help the agency tailor the rule, make it more workable to manufacturers and bring it back within the SEC’s statutory authority.”

The preview: With the SEC set to publish its final rule tomorrow, Crain says the NAM is keeping an eye on key inflection points, including the following:

• Scope 3 emissions reporting: The proposal’s Scope 3 mandate would require public companies to disclose the emissions of their supply chain partners—including small and family-owned businesses. If Scope 3 is curtailed or absent, that would represent significant progress for manufacturers.
• Financial statement reporting requirements: The NAM will be tracking the degree to which companies are required to incorporate climate information into their financial statements. The NAM called the proposal’s approach to financial statement reporting “unworkable [and] highly burdensome.”
• Materiality: The SEC is only allowed by law to require “material” disclosures—i.e., financial information that allows investors to make informed decisions. Mandates in the final rule that require immaterial disclosures or seek to redefine materiality could exceed the SEC’s legal authority.
• Implementation: The NAM will consider when and how the rule takes effect, and whether the SEC has provided scaled requirements for smaller companies or tailored implementation plans for certain provisions within the rule.
• Small-business impact: The proposal would have harmed small and privately held businesses disproportionately. The SEC must do a better job at protecting these companies in the final rule.

The expectation: Crain says the NAM’s advocacy appears to have made a difference.

• “Recent news reports suggested that some provisions in the rule may have been modified in alignment with the NAM’s suggested changes,” said Crain. “But it remains to be seen whether the final rule, taken as a whole, is actually workable for manufacturers.”

The next step: The NAM’s next moves will depend on the specifics of the final rule—but the conversation is unlikely to end there.

• “The NAM has been clear that a failure to bring the rule back within the agency’s statutory authority could invite legal action. On the other hand, a balanced, workable rule could obviate the need for litigation,” said Crain.
• “Regardless of the exact content of the rule, the NAM is committed to providing resources to our members to help companies understand and comply with any new requirements. We will also continue to engage with the SEC and Congress to address any implementation issues, seek guidance on any unclear provisions and, if necessary, push for changes to the final rule.”
• “As we have for the past two years, the NAM will continue to advocate on manufacturers’ behalf.” 

The Department of Energy is urging Treasury to loosen proposed rules for the Inflation Reduction Act’s first tax credit—the 45V, or clean hydrogen tax credit, POLITICO Pro (subscription) reports.

• The request is in line with suggestions the NAM made to the Internal Revenue Service—which, with Treasury, set forth the guidance for claiming the credit—earlier this week.

What’s going on: “The Department of Energy is pushing Treasury to relax the rules to give the industry time to embark on a massive expansion, according to three people familiar with the discussions.”

• The 45V was intended as a longer-term accompaniment to the DoE’s $7 billion regional hydrogen hubs program, which agency officials are concerned will be hamstrung if the tax guidance is too stringent, according to the article.
• The credit “will directly impact how much hydrogen the U.S. produces and the financial bottom line for many companies.”

Why it’s important: The 45V is a major pillar of the Biden administration’s climate agenda, which seeks to make low-carbon hydrogen cost-effective enough to help decarbonize various industries, according to E&E News’ ENERGYWIRE (subscription).

The NAM’s view: “If implemented properly, the 45V credit would provide the certainty needed for manufacturers to make investment decisions that encourage further production, transportation and use of clean hydrogen,” NAM Vice President of Domestic Policy Brandon Farris said.

• “However, the NAM is concerned Treasury is considering renewable sourcing provisions regarding incrementality, temporal-matching and deliverability requirements, which would limit the amount of energy sources available to power the hydrogen production process.”

What should be done: To create a workable, fair 45V framework, Treasury and the IRS should do the following:

• Lengthen the three-year time frame for incrementality, the time frame within which new electricity must be put into service.
• Push back to 2032 (at the earliest) the date by which energy projects must match clean electricity and hydrogen production at an hourly level.
• Recognize energy attribute certificates from outside manufacturers’ own regions as capable of delivering electricity or natural gas into the region where the clean hydrogen production is taking place.
• Follow congressional intent and provide a more reasonable process for taxpayers to prove their food stocks are lower in carbon intensity and therefore eligible for the maximum credit.

America’s fastest-growing industries increasingly rely on copper.

The critical minerals Rio Tinto produces play an essential role in making modern life work and help power the clean energy transition, said Rio Tinto Copper Chief Operating Officer Clayton Walker. “Think of increasing demand for things like electric vehicles, the copper plumbing in our houses … transmission lines, smartphones, electronic devices—the things you can’t live without all include copper.”

This criticality was brought home to the NAM during a site visit by leadership last Friday to the company’s Resolution Copper mine, an Arizona project with the potential to supply up to 25% of the nation’s copper demand.

Electrifying a revolution: Rio Tinto—which produces more than 10 different minerals and metals around the world—has copper operations in Utah and Mongolia with joint ventures in Chile and Peru and is working to open Resolution Copper and another copper-mining site, in Australia.

• These operations are going to become increasingly important as the world’s appetite for EVs grows, Walker told the NAM, because EVs require more copper than traditional vehicles.
• EV charging stations also require the metal, as do wind turbines, which “can contain up to 4.7 tons of copper,” according to Walker.

Speed permitting now: The U.S. consumes about 2 million metric tons of copper per year but produces just more than 1 million metric tons. However, “by 2035, that demand is estimated to be around 4 to 5 million tons of copper a year,” said Walker. “The question is, where are we going to get all that additional copper?”

• The answer, in his opinion, should be here at home. Once approved, Resolution Copper will be instrumental in making that happen. “The copper produced at Resolution would strengthen U.S. supply chains, reduce import dependency [and] add jobs, while employing world-class sustainability standards.”
• At that site, “we’ve been working on permitting for the last 11 years,” Walker continued. “The average time to permit [a mining project] in the U.S. is 17 to 20 years. That’s a long time. We’re not asking people to cut corners, but could we speed that process up?”

Critical minerals list: Policymakers could also help bolster copper and other critical materials production by harmonizing the efforts of numerous agencies to spur domestic production.

• For instance, the Interior Department curates a list of critical minerals that are “essential to the economic or national security of the U.S. and which have a supply chain vulnerable to disruption.” The Energy Department conducts critical materials assessments for materials vital for energy.

• Harmonizing these lists “would create more avenues for domestic supplies,” Walker said. “That would help projects get permitted faster and let us supply manufacturers with the minerals and materials they need sooner, including copper.” 

Not your grandfather’s mining company: Another task on the company’s to-do list is changing the public’s perception of its industry.

• “We aren’t using pickaxes and wheelbarrows,” Walker laughed. “We have a control center that would rival NASA. We use drones, AI and autonomous equipment. Rio Tinto has the first fleet of driverless trucks in the world, and our team continues to leverage and benefit from high-tech innovation.”

• Effectively conveying the sophistication of their businesses is an ongoing task for manufacturers, Walker said. “We need to continue engaging with schools, educating and discussing the various trades and opportunities available while highlighting the potential within manufacturing—a career path that provides a great job with multiple opportunities.”

The last word: “It’s our responsibility to help show the next generation what opportunities are available,” Walker concluded.

The NAM isn’t playing favorites in an election year. Instead, it’s redoubling its post-partisan approach to advocacy. NAM President and CEO Jay Timmons’ message to manufacturers: the association will leverage its hard-won, bipartisan influence to advance manufacturers’ priorities, no matter who’s in charge.

• “That’s what we’re about. Policy that helps people. Policy—not politics, personality or process. That’s what will guide us in 2024 and beyond,” Timmons said in a speech that helped kick off the NAM board meeting this week, before more than 200 of manufacturing’s leading executives in Phoenix, Arizona.

Why it’s important: “Both sides want us on their side,” Timmons emphasized while recounting a recent legislative debate. That trust and respect, he said, translates into wins: agencies modifying rules to avoid lawsuits and high-level White House officials acknowledging the impact of NAM campaigns.

Battles loom: But the very system enabling these victories is under threat, Timmons warned, placing the onus on manufacturers to not just build products, but to empower the NAM to utilize their voices and stories to advance policies that strengthen the economy and underpin democracy and free enterprise.

• Tax showdown: Any new taxes on manufacturers are a nonstarter, Timmons vowed, staking a claim in the looming 2025 tax fight and reiterating manufacturers’ call for immediate passage in the Senate of full capital expensing, R&D expensing and interest deductibility.
• Regulatory onslaught: From new Environmental Protection Agency air standards to the broader regulatory agenda, Timmons argued that overzealous rules impede manufacturing competitiveness. He specifically criticized the new PM2.5 standards, saying the EPA “set them at a level that is lower than the EU or the UK, and imposed a compliance timeline that is far more aggressive.”
• LNG halt: Timmons blasted the Biden administration’s liquefied natural gas export permit freeze, calling it shortsighted and detrimental to both manufacturers and broader U.S. energy and climate goals. “They want to address climate change?” he asked. “So they’re going to have other countries buying and burning dirtier energy? They want to support our allies around the world? So they’re going to force Europe and Japan and others to get their fuel from the likes of Russia?”
• Immigration deadlock: He criticized inaction on both sides of the aisle, saying border security and workforce solutions can—and must—coexist.

Opportunity ahead: Despite considerable challenges, Timmons sees an opportunity for manufacturers to take the lead in promoting American values and sound policies that fuel the industry’s strength.

• “This election year, manufacturers can help renew a shared sense of purpose,” Timmons told executives. “Remind Americans why our country—our system rooted in God-given human rights and fundamental freedom—is worth celebrating and defending.” At stake is not just the next regulatory win, but the very system that made U.S. manufacturing a global powerhouse, he said.
• America’s bicentennial celebration helped us see beyond the divisions of the day, Timmons observed. As we approach the 250th anniversary of the signing of the Declaration of Independence, “it’s manufacturers who are positioned to cultivate that patriotic spirit,” Timmons said. It’s more than just bottom lines. “We can help mend the divides—so that we can promote policy that will strengthen manufacturing in America.”

What’s the state of manufacturing in the U.S.? Strong and resilient—but under threat.

That was the message delivered by NAM President and CEO Jay Timmons and other speakers at the NAM’s 2024 State of Manufacturing Address at RCO Engineering in Roseville, Michigan, on Thursday.

• Attending the address were nearly 100 RCO Engineering team members—some of whom are second- or even third-generation manufacturing workers—as well as local education leaders, including Macomb Community College President James O. Sawyer IV and Macomb Intermediate School District Superintendent Michael R. DeVault.
• The address was the keystone event of this week’s launch of the 2024 Competing to Win Tour, an opportunity to visit local manufacturers and report on where the industry stands at the start of 2024. 

A place of strength: “The state of the manufacturing industry depends on the people in it,” Timmons said in remarks covered by POLITICO Influence (subscription). “And we are now 13 million strong—the largest in more than 15 years. If we can continue on this trajectory, this resurgence, imagine what the state of manufacturing might look like in 2030.”

• Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel echoed that sentiment in her opening remarks. “Manufacturers are improving the quality of life for everyone. … Together, we can lead the way.”
• And Michigan Manufacturers Association President and CEO John Walsh told the audience at RCO Engineering, “You are making parts here that are going everywhere. It’s a phenomenal story for us in Michigan. It not only helps you as employees here, but it helps your families, it helps your communities. It builds our state. It builds our nation.”
• “Manufacturing … is an industry that is vital to our economic competitiveness,” said Macomb County Executive Mark Hackel. “In Macomb County, we’re not just witnessing the growth of manufacturing; we’re actively contributing to it. What we are doing here is creating an environment where innovation thrives and where manufacturers can grow as well as compete.”
• RCO Engineering General Manager Jeff Simek agreed. “The manufacturing brand is coming back, and it’s coming back alive—and you guys are a big, huge piece of that,” he said to loud applause. 

Fork in the road: But continued manufacturing strength isn’t guaranteed, Timmons said. Rather, it’s in large part contingent on sound policy decisions by U.S. leaders.

• “We will head in the wrong direction if Congress lets taxes go up on small businesses when rates expire next year,” Timmons said. “Or if they hit you with even more regulations—regulations even harsher than ones they have in Europe. Or if they fail to solve the immigration crisis because they put politics over good policy. Or choose trade barriers rather than trade agreements, or … abandon our allies overseas and put our national security at risk.”
• The recent regulatory onslaught by federal agencies—which Timmons discussed with Fox Business earlier this week—must stop and be replaced with sensible rulemaking done in cooperation with manufacturers, he said.
• He cited the Environmental Protection Agency’s recently finalized, overly stringent standard for particulate matter and the Biden administration’s decision to freeze liquefied natural gas export permits. This “forc[es] our allies, like Europe and Japan, to buy dirtier energy from countries we can’t trust, potentially enriching the likes of Russia … undercut[ting] our most basic national security objectives,” Timmons said.

No new taxes: The NAM’s message to Congress on taxes is simple: “No new taxes on manufacturers in America,” Timmons said. 

• “And while we’re at it, Congress should bring back some of the tax policies that made it easier for manufacturers to invest in the future.”

On immigration: The U.S. needs a common-sense solution to immigration, and it needs it now, Timmons said.

• While manufacturers may not like every piece of the bipartisan border deal that was recently killed in the Senate, “here was my test: Does it make us more secure than we are today? Yes. Does it make our workforce stronger than it is today? Yes. And does it help our allies overseas? Yes,” said Timmons.

Come what may: No matter what the November elections bring, manufacturers will continue to do the jobs so many people depend on them to do, Timmons concluded.

• “Our commitment is to work with anyone, and I truly mean anyone, who will put policy—policy that supports people—ahead of politics, personality or process. We will stand with you if you stand with us in advancing the values that have made America exceptional and keep manufacturing strong.” 

The Biden administration is “very concerned” about U.S. reliance on China for critical minerals, U.S. Energy Secretary Jennifer Granholm said Wednesday, according to CNBC.

What’s going on: China’s dominance in the world’s critical minerals supply chain is “one of the pieces of the supply chain that we’re very concerned about in the United States,” Granholm told the news outlet on the sidelines of the International Energy Agency’s 2024 Ministerial Meeting in Paris.

• China produces approximately 60% of all rare earth elements, which are critical to alternative-energy technologies, such as electric vehicles.

Why it’s important: “As part of a rapid uptick in demand for critical minerals, the IEA has warned that today’s supply falls short of what is needed to transform the energy sector,” according to the article.

What the administration is doing: Both production and processing of critical minerals “have to be addressed,” Granholm said.

• “And that’s why we are working very closely to ensure that we have identified which raw materials [or] critical minerals we need to be able to do our transition to a clean energy economy.”

The NAM says: “Other countries are taking all possible measures to develop domestic sources of critical minerals, and it should be a wake-up call to the U.S. that we need to be doing the same,” said NAM Vice President of Domestic Policy Brandon Farris. “We also need to reform our broken permitting system to get these projects operational as soon as possible.”

For nearly 50 years, Rinnai America Corporation has been selling innovative products in the United States. But as the Department of Energy prepares to unveil new rules in April, the water heater manufacturer is bracing for a big—and unnecessary—setback to its operations.

The background: There are a lot of water heater options on the market, and consumers must make a few key choices.

• First, they can choose between electric and gas heaters.
• Second, if they choose a gas heater, they can select one with a tank or one without.
• Finally, even tankless gas heaters come in two forms: condensing or noncondensing. Condensing heaters are used generally in colder environments, while noncondensing units are better for warmer climates.

The rule: The Department of Energy has proposed regulations on gas water heaters that would go into effect in 2029.

• However, the proposed efficiency requirements for tankless gas water heaters are so strict that noncondensing tankless units would not qualify—removing a cost-effective option from the market, and one that is in fact comparatively efficient.
• “The DOE is not taking into consideration what is best for the consumer, best for the industry and best for the environment overall,” said Frank Windsor, president of Rinnai America Corporation. “This is a shortsighted decision that doesn’t take into account the ramifications.”

The consumer impact: The DOE’s rule would restrict consumer choice severely by creating a de facto ban on noncondensing tankless heaters.

• “Consumers are getting hurt,” said Windsor. “Around 20% of consumers want tankless options”—including noncondensing tankless heaters. 

The industry effect: Rinnai invested $70 million in 2022 in a new Georgia facility that makes noncondensing tankless gas heaters.

• “We built this new facility to make tankless water heaters that give consumers significant energy efficiency at a low price—and now the DOE is saying that, by 2029, you can’t make noncondensing units anymore,” said Windsor.
• “We’ve got close to 200 people working for us in Griffin, Georgia, so it impacts a lot of people.”

The innovation loss: According to Windsor, the rule is also counterproductive because it forces companies like Rinnai to reallocate funds that otherwise could go toward product innovation.

• “We’re going to have to spend money to retool that plant, and then we’ll get taxed on the capital for the plant that we can’t use anymore—and that’s all money that we would’ve spent on product innovation,” said Windsor.

The last word: “Why would you eliminate the availability of a cost-effective, efficient product and force the consumer to buy a more expensive option?” asked Windsor.

Learn more about the high costs of regulations, and the extreme burden on small manufacturers, in this recent NAM study. And check out Manufacturers for Sensible Regulations, a coalition created by the NAM and members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, which is intended to address the regulatory onslaught coming from federal agencies in recent years.

A senior Department of Energy official told the Senate at a Thursday hearing that the Biden administration’s recent decision to pause liquefied natural gas export permits will neither affect supplies to U.S. allies nor jeopardize international energy security, Reuters reports.

• Yet, data supplied by the NAM to the Senate Committee on Energy and Natural Resources ahead of the hearing shows otherwise.

What’s going on: “‘It will not affect our ability to supply our allies,’ [U.S. Deputy Energy Secretary David] Turk said, adding that it does not affect already approved exports.”

• “A U.S. official earlier on Thursday told Reuters ‘I don’t think we’re concerned at all about our ability to meet (European) demand.’”
• The Senate hearing on the LNG permit export pause follows a House hearing on the same topic earlier in the week.

However … Since the 2022 start of Russia’s war against Ukraine, Europe has come to rely increasingly on the U.S.—the world’s top LNG exporter—for natural gas, the NAM told lawmakers.

• “Europe is currently the primary destination for U.S. LNG, accounting for 67% of total exports in the first six months of 2023,” NAM Managing Vice President of Policy Chris Netram said. “For comparison, 64% of the United States’ global LNG exports in 2022, and 23% of American exports in 2021, went to the European Union. … [T]he war in Europe [even] forced diversions of LNG cargo that was bound for Asia.”

“Wrong direction”: Sen. Joe Manchin (D-WV), who called the hearing, said freezing liquefied natural gas export permits is “the wrong direction for our country,” whose LNG exports are helping allies in need.

• “Shockingly, in the White House statements [regarding the permit freeze], there is no reference at all to the crisis created by Putin’s invasion of Ukraine, to the growing instability in the oil-and-gas-producing regions in the Middle East following Hamas’ attack on Israel or to any other crisis that U.S. LNG exports can help address.”

Environmental concerns: Though “Turk said the review will also consider pollution impacts on people living near LNG facilities … [and] ‘take into account all of the health environmental impacts,’” CNBC reports, the permit freeze could “benefit producers of energy sources with significantly higher emissions than [U.S.] LNG,” Netram continued.

• “According to the DOE, Russian exports to Europe had 40% more global warming potential than U.S. LNG across 20 years. Russian gas also had 20% more global warming potential than European coal. Clearly, U.S. LNG exports are better for the environment and help the U.S. and our allies achieve our climate goals.”

What’s next: The moratorium “could face court challenges,” according to CNBC. “A group of 23 Republican state attorneys general in a letter sent to the administration on Tuesday [said] that the Biden administration’s pause is illegal, arguing that the natural gas law requires the DOE to approve LNG exports unless it shows that doing so would not be in the public interest.”