News

The previous administration’s significant regulatory changes issued under the Clean Air Act—in particular, its unworkable tightening of allowable soot levels—will create hardship for local economies and must be revised, the NAM told the House Energy and Commerce Subcommittee on Environment ahead of a hearing today.

• Manufacturers that fail to meet the National Ambient Air Quality Standards will be unable to obtain permits to either construct new facilities or expand existing facilities, the NAM pointed out.

What’s going on: In 2024, the Environmental Protection Agency lowered the primary annual standard for fine particulate matter (PM2.5, or soot) from 12 micrograms per cubic meter to 9 μg/m3 .

• “By lowering the standard to 9 μg/m3, which is essentially the same as the background levels that naturally occur in the environment across the nation, the Biden EPA was increasing the number of industrial centers and U.S. population hubs that would be placed into nonattainment status,” NAM Managing Vice President of Policy Charles Crain said.
• In the past 25 years, thanks to manufacturer-developed technologies, U.S. air quality has seen a 37% reduction in PM2.5, Crain continued, adding that an EPA analysis found that less than 20% of PM2.5 emissions come from industrial processes or stationary fuel consumption. Most of it is from sources well outside manufacturers’ control, such as wildfires and crop and livestock dust.

Why it’s important: Enacting the Biden-era tightened standards would mean severe economic losses for the U.S., the NAM told the subcommittee.

• An NAM-commissioned Oxford Economics study found that a standard just slightly stricter than the one set by the Biden administration—8 μg/m3—“would result in a loss of $162.4 billion to $197.4 billion in economic activity and put 852,100 to 973,900 jobs at risk, both directly from manufacturing and indirectly from supply chain spending.”

What they’re doing: In today’s hearing, the House Energy and Commerce Committee discussed two draft pieces of legislation, both supported by the NAM, that would reform the process for establishing NAAQS, which the Clean Air Act mandates the EPA set. The measures include:

• The Clean Air and Economic Advancement Reform (CLEAR) Act, which would make the NAAQS process more workable for manufacturers while “maintaining the regulatory guardrails that protect the health and welfare of our local communities,” according to the NAM; and
• The Clean Air and Building Infrastructure Improvement Act, which “seeks to inject clearer guidance into the process for obtaining preconstruction permits and meeting compliance requirements under a revised NAAQS.”

Our take: “Manufacturers strongly support the Energy and Commerce Committee’s efforts to address policy challenges with the NAAQS and to explore solutions that will pave the way for greater investment in the infrastructure that will allow America to compete in the 21st century,” Crain concluded.

GE Appliances, a Haier company, has opened an advanced primary care clinic onsite at its Monogram Refrigeration LLC plant in Selmer, Tennessee, the company announced this week.

What it does: The third onsite clinic at a GE Appliances facility, the Selmer clinic will serve employees and covered family members who are at least 2 years old. It is offered in addition to traditional health care benefits, the company said, and it will be managed by third-party health care provider CareATC. The clinic’s services include:

• Advanced primary care;
• Mental health services;
• Access to a registered dietician; and
• Prescription services for common medications.

Impressive results: GE Appliances’ existing two clinics have shown impressive results in caring for employees, most notably a 35% increase in preventative care visits and a 70% reduction in avoidable ER visits among employees using the clinics.

• Employees average 4.82 visits per year—which is far more than the industry benchmark, according to GE Appliances.

GE Appliances says: “In today’s fast-paced world, providing accessible and comprehensive health care is more important than ever—especially in rural manufacturing communities,” said GE Appliances Chief Human Resources Officer Rocki Rockingham.

• “This clinic is more than a benefit; it’s a key part of our strategy to be an employer of choice and attract and retain the talent we need to operate and grow in a competitive labor market. Our employees deserve the best, and that includes health care that’s close to work, easy to access and focused on their whole well-being.”

The MI says: The Manufacturing Institute, the workforce development and education affiliate of the NAM, supports manufacturers in their efforts to offer high-quality benefits to workers, including medical care.

• “When manufacturers invest in the holistic well-being of their workforce, they’re doing more than offering benefits—they’re making a powerful statement that their people are their greatest asset,” said MI President and Executive Director Carolyn Lee.
• “These investments in people play a critical role in both attracting and retaining talent. At the MI, our research consistently shows that team members are more likely to stay—and thrive—when they believe their employer truly cares about them. It’s not just the right thing to do; it’s a smart strategy for attracting and retaining the skilled talent that drives our industry forward.”

Everyone’s talking about where artificial intelligence is taking us, but few are discussing the immense amount of energy that will be needed to get there. That’s where Lubrizol comes in.

Cool operator: The global specialty chemicals company, with headquarters in Ohio, has a unique method of cooling IT in data centers, those behemoth facilities that power generative AI. As anyone who’s used a computer for long periods of time knows, that equipment can get hot.

• To cool high-performance data centers’ graphics processing units—powerful accelerators that enable AI and other technologies and can generate huge amounts of heat—Lubrizol employs immersion cooling, a method of heat removal that uses liquid.
• “It’s like a blacksmith—when you try to remove heat from hot metal, you immerse it in cold water and the water removes the heat,” Lubrizol Vice President of Corporate Innovation Abhishek Shrivastava told us.
• But at Lubrizol, “we are immersing the computer chips in a formulated oil” instead of water. “These GPUs are working so hard with higher power consumption, they can actually melt if they get too hot. So, you need to remove the heat quickly and efficiently.”

Why we need it: Most current data centers use air cooling, but their increasing workloads and processing capacity—driven by the fast-growing appetite for AI—will require something more efficient, Shrivastava said.

• Meanwhile, next-generation processing units will maintain a thermal design power (i.e., heat) of more than three times today’s commonly used systems, according to Lubrizol.
• “AI is needed for the future—for economic development, for global leadership,” Shrivastava said. “It will come down to who can deploy it faster.”

The tech: Lubrizol believes its method of immersion cooling—which relies on nonconducting, dielectric fluids, or liquids that act as electrical insulators—is the key to winning that race.

• “As AI infrastructure is deployed [in the U.S.], there must be efficient cooling in place too,” Shrivastava continued. “It’s going to require a lot of infrastructure-level investment.”
• Up to 40% of data centers’ total annual energy consumption goes to their cooling systems, according to a recent study by the Electric Power Research Institute. Lubrizol’s technology greatly reduces that percentage for its customers.

Getting started: Lubrizol’s immersion cooling technology has been deployed at multiple data centers, and the company is working with its customers to scale up installations. “A lot of small players are using it, because if you’re small, your risk is low and deployment is fast, but there are some large-scale deployments across the world including in China and the U.S. that show the big players have identified the value,” Shrivastava said.

• Among the company’s next steps: getting the solution deployed at larger centers—though that will take some time. “Larger-scale operations need more data, more confidence in [new] technology,” Shrivastava noted.

Years, not decades: In the long term, however, the cost-benefit analysis is very favorable, said Shrivastava, even with infrastructure development outlay. And Shrivastava foresees widespread use of the technology.

• Awareness of the need for high-powered, efficient cooling is growing. “We’re not talking about a matter of decades” before it’s in wide use; “it’s a matter of years and months.”

The last word: “The industry needs to pick up the pace” on the data center cooling front, Shrivastava told the NAM. “Otherwise, we’re not going to realize the full potential of AI.”

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.”

Manufacturing employment dipped slightly in May, losing 8,000 jobs on a seasonally adjusted basis, according to the monthly employment report from the Bureau of Labor Statistics. Nonfarm payrolls overall added 139,000 jobs last month.

The details: “The unemployment rate held at 4.2% in May and has remained in a narrow range of 4.0% to 4.2% since May 2024.”

• Meanwhile, nonfarm payrolls have averaged a monthly gain of 149,000 over the past 12 months, in line with the reading from May.

In manufacturing: “In manufacturing, the average workweek was little changed at 40.1
hours, and overtime was unchanged at 2.9 hours.”

• Meanwhile, average hourly earnings in manufacturing crept up from $35.11 in April to $35.28 in May on a seasonally adjusted basis.

The long view: Manufacturing employment has declined over the past year to date, yet remains above pre-pandemic levels, with 12,761,000 workers in May. The sector averaged 12,648,000 employees pre-pandemic (2017–2019).

The NAM says: “In order to support manufacturing growth and job creation in the U.S., manufacturers are calling on Congress to pass the One Big Beautiful Bill Act swiftly and make pro-manufacturing tax policies permanent,” said NAM Managing Vice President of Policy Charles Crain.

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.”

Mexico’s first judicial elections occurred on Sunday, and the results, while not yet completely final, raise questions about the integrity of the country’s judges going forward (AP News).

State of play: With more than 98% of the vote tallied as of Tuesday night, President Claudia Sheinbaum’s party is poised to control the Supreme Court, with a majority of judges holding ideological or political ties to the ruling party.

• Experts, allied nations and companies that do business in Mexico—including manufacturers—have voiced concerns that judicial elections will turn the judiciary into a political arm of the president’s party.

The background: Before leaving office, Sheinbaum’s mentor and predecessor President Andrés Manuel López Obrador forced through a controversial reform mandating elections for judges.

• The NAM has issued multiple warnings since these reforms were first proposed last year, telling Mexican officials in person that companies investing in Mexico need assurance that their portfolios will be protected under the new judicial regime.
• “We’re concerned that some of the reforms as proposed could harm Mexico’s standing as an attractive place to do business,” NAM Vice President of International Policy Andrea Durkin said on the “Imagen Empresarial” (“Corporate Image”) podcast in September. “Manufacturers pay attention to how banks are factoring these potential changes to the constitution into Mexico’s risk profile.”

More to come: “Votes were still being counted for the majority of the 2,600 federal, state and local judge positions up for grabs in Sunday’s elections.”

The NAM says: “A lack of confidence in Mexico’s judicial system could imperil future U.S. investments, particularly at a time of great uncertainty in trade relations between our countries,” said Durkin today.

Some economists are questioning the accuracy of recent U.S. inflation data—and say it could have big economic implications (The Wall Street Journal, subscription).

What’s going on: “The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices.”

• In the April inflation report, government statisticians had to use a less precise price-change measurement method than they had used previously.

Why it’s important: The staffing shortage poses questions about the accuracy of recent and coming inflation reports, economists say.

The details: To determine the inflation rate, hundreds of government staffers known as enumerators disperse across U.S. cities, checking—often at brick-and-mortar locations—how much businesses are charging for goods and services.

• Statisticians pull that data into the consumer price index, which shows how the cost of living is changing for Americans.
• If enumerators can’t find specific prices, they make educated guesses based on close substitutes.
• But in April, with the hiring freeze on, they often had to “base their guesses on less comparable products or other regions of the country—a process called different-cell imputation—much more often than usual, according to the BLS.”

The effect: In the April inflation data, 29% of price guesses—a percentage twice as high as any month in the past five years—were made using these less-accurate comparisons.

• One economist told the Journal: “We don’t know if this is a big issue or a small issue, but we just know that directionally, it’s making things worse.”

Americans are socking away a record amount in their retirement accounts (The Wall Street Journal, subscription).

The details: “The average savings rate in 401(k) plans rose to a record high 14.3% of income in the first three months of this year, according to a Fidelity Investments analysis of the millions of accounts it manages.”

• That’s almost as much as the 15% annual savings rate that financial advisors recommend.

Upward trend: Average savings rates have increased from 13.5% in 2020.

• Meanwhile, older savers are putting in more than younger ones: “At Fidelity, baby boomers saved 17.2% on average, while generation X and millennials put away 15.4% and 13.5%, respectively.”

More 401(k)s: “About 70% of the private-sector workforce now has access” to a 401(k)—and many more companies are using automatic enrollment to increase participation.

Still at risk: However, “About 40% of U.S. households are now at risk of being unable to maintain their standard of living in retirement, according to Boston College’s Center for Retirement Research.”

The NAM’s contribution: The NAM is helping more manufacturing workers gain access to 401(k)s through its Manufacturers Retirement & 401(k) Savings Plan, which allows many companies to participate in one 401(k) plan.

• Retirement benefits are a huge draw for prospective workers, and the NAM 401(k) plan makes it much easier for small and medium-sized manufacturers to offer them.
• Read our interview with one manufacturing leader who saw a huge benefit from moving to the NAM 401(k) plan—and find out what she learned in the process.

The spotlight is on Western Pennsylvania—and EQT Corp.’s Toby Rice (The Washington Post, subscription).

What’s going on: The region’s plentiful natural gas is making it a crucial location as energy demand surges thanks to artificial intelligence. At the center of things is Toby Rice, president and CEO of energy company EQT Corp., the largest natural gas producer in the Appalachian Basin.

• “The size of [AI’s energy appetite] … it’s crazy,” Rice told opinion writer Salena Zito. “We are hearing estimates for power demand for AI that’s anywhere [from] 50 to 75 gigawatts of power, which is the equivalent of the power needed to power 10 to 15 New York Cities.”
• EQT is expected to be among the few natural gas providers in contention to support the switchover of the Homer City Generating Station, formerly Pennsylvania’s largest coal-fired power plant, “to natural gas to power an adjacent AI data center.”

From baseball to energy: Massachusetts native Rice wanted to make his career in professional baseball, but after he was passed over by Major League Baseball in college, his father suggested he go into the oil and gas industry.

• After moving to Texas, Rice started out working on an oil rig and eventually founded his own company, Rice Energy.
• “There was a lot of sweat along the way—he left Texas for Appalachia, and slowly grew Rice Energy from a no-name company to a top 10 producer of natural gas in the country.”
• It merged with EQT in 2017, creating America’s biggest independent producer of natural gas.

AI revolution—and opposition: “This is the biggest gas field in the world. This is the biggest energy source,” Rice told the Post. “Pittsburgh has powered, has been the ground zero, for the industrial revolutions that have taken place in this country. This AI revolution that’s taking place—no different.”

• However, AI growth has a sizable hurdle in its way in the form of opposition to natural gas.
• Said Rice: “We’re going to do everything we can to make sure they have all the energy they need to meet their AI aspirations. But we should still have the ability to build more infrastructure here.”