American Energy Innovation: Investing in Renewables, Carbon Capture, Advanced Nuclear Power, & Rare Earth Mineral Security (S. 2657)

What is S. 2657?

(Updated January 28, 2021)

This bill — known as the American Energy Innovation Act — would aim to modernize U.S. energy policies, strengthen national security & international competitiveness, and invest in clean energy technologies, including renewables, carbon capture & advanced nuclear power. It would also aim to improve the security & reliability of the electric grid, secure the supply chain of critical rare earth minerals, and provide for the training of a 21st century energy sector workforce. A breakdown of its various provisions can be found below.

INNOVATION

Energy Efficiency: This section would establish grants for public schools to make energy efficiency & renewable energy improvements through the Dept. of Energy (DOE). It would provide grants to institutions of higher education that cover a portion of the cost of career skills training programs as part of an industry certification for installing energy efficient building technologies. 

Additionally, it would require reports on federal agencies’ use of energy & water efficiency measures; expand existing energy standards for new federal buildings & major renovations; and revise rebate programs to encourage the replacement of inefficient motors & transformers. This section would also reauthorize the Weatherization Assistance Program (WAP) through FY2025.

Renewables: This section would extend incentives for hydroelectric energy production through FY2036 and reauthorize DOE research into marine & hydrokinetic renewable energy. A wind energy technology program would be established through FY2025, and a solar energy technology program that seeks to address near-term, mid-term, and long-term challenges in solar energy development would be authorized through FY2025.

The U.S. Geological Survey (USGS) would update its geothermal resource assessment, establish a program to transfer & adapt key oil & gas technologies for geothermal development, and reauthorize existing geothermal development and R&D programs. It would also establish national goals for geothermal development, allow non-competitive leasing for geothermal production on federal lands if it’s co-produced from an existing oil or gas well, and provide for exploration on public lands under strict, environmentally protective parameters.

Energy Storage: This section would establish a research, development, and deployment (RD&D) program to advance energy storage technologies. The DOE would carry out at least five demonstration projects, as well as a competitive pilot project grant program, and establish a joint long-term demonstration initiative with the Dept. of Defense (DOD). It would also direct the Federal Energy Regulatory Commission (FERC) to issue a regulation on energy storage cost recovery.

Carbon Capture, Utilization, & Storage: This section would establish a DOE coal & natural gas technology program to improve the efficiency, effectiveness, costs, and environmental performance of coal & natural gas use. It would include an R&D program, large-scale pilot projects, demonstration projects, and a front-end engineering and design program.

The DOE would establish a RD&D carbon storage program, a large-scale carbon sequestration demonstration program, and an integrated storage program; a RD&D program for carbon utilization to identify & assess novel uses for carbon, carbon dioxide, carbon capture technologies for industrial systems, and alternative uses for coal. Further, a program would be established to develop technologies to remove carbon dioxide from the atmosphere on a large scale, an air capture technology prize competition, a direct air capture test center, and a direct air capture pilot & demonstration program.

Advanced Nuclear: This section would authorize a research program to develop innovative technologies to improve the safety, functionality, and affordability of nuclear energy. A new Light Water Reactor Sustainability Program would replace the DOE’s existing Nuclear Energy Systems Support Program to achieve maximum benefit from existing nuclear generation, enable continued operation of existing nuclear power plants through technology development, and improve performance and reduce plant operating and maintenance costs.

This section would also: 

• Modernize advanced nuclear fuels research and carry out a research program on next-generation light water reactor & advanced reactor fuels through FY2025; 

• Update the DOE’s university research reactor support activities & reauthorize the university nuclear scholarship program; 

• Construct a fast neutron-capable research facility to test important reactor components, demonstrate safe & reliable operation, and license advanced reactor concepts;

• Develop a 10-year strategic plan to support advanced nuclear R&D goals on breakthrough innovation to help advanced nuclear reactors reach the market;

• Ensure the DOE provides a minimum amount of high-assay low-enriched uranium (HALEU) to U.S. advanced nuclear developers until a domestic supply is available, while also facilitating the development of HALEU-appropriate transportation equipment.

Industrial & Vehicle Technologies: This section would establish an Industrial Technology Innovation Advisory Committee and a program to provide technical assistance for implementing industrial emissions reductions and establish goals to accelerate technology development. It would also develop a national plan for smart manufacturing technology development & deployment to improve the productivity & efficiency of the domestic manufacturing sector.

It would direct the DOE to carry out a program of basic & applied research, development, engineering, demonstration, and commercial application activities for materials, technologies, and processes that can increase the efficiency of, and reduce petroleum use in, passenger & commercial vehicles. Further, it would carry out similar RD&D programs for medium- and heavy-duty commercial & transit vehicles.

Dept. of Energy: The DOE would carry out a research program in artificial intelligence and high-performance computing focused on the development of tools to solve big data challenges associated with veterans’ healthcare. 

The Advanced Research Projects Agency-Energy (ARPA-E) would be reauthorized through FY2025.

The Strategic Petroleum Reserve Drawdown timeframe would be modified.

This section would also require the DOE to:

• Expedite the approval process for exports of small volumes of natural gas (less than 51.75 billion cubic feet per year) to any country consistent with the public interest.

• Study the potential national security & economic benefits of building ethane & other natural gas liquids-related petrochemical infrastructure in the vicinity of the Marcellus, Utica, and Rogersville shale plays in conjunction with the DOD & Treasury Dept.

SECURITY & WORKFORCE

Mineral Security: This section would promote a secure & robust critical minerals supply chain by: 

• Updating Congress’s declaration of policy on mineral security & expressing the sense of Congress that critical minerals are fundamental to U.S. economic & national security; 

• Requiring the executive branch to designate a list of critical minerals and to update that list every three years;

• Requiring USGS to conduct domestic resource assessments of critical minerals and to make that information publicly available;

• Encouraging the Depts. of the Interior & Agriculture to complete federal permits efficiently, without compromising environmental reviews;

• Requiring Federal Register notices to be published within 45 days of being finalized;

• Directing the DOE to conduct R&D on recycling of and developing alternatives to critical minerals, and to develop analytical & forecasting tools to evaluate critical minerals markets;

• Requiring the Labor Dept. and the National Science Foundation to develop curriculum & a program for institutions of higher education to build a strong critical minerals workforce; and

• Reauthorizing the National Geological & Geophysical Data Preservation Program through FY2029.

Additionally, this section would require the DOE to carry out a program to develop advanced separation technologies for the extraction & recovery of rare earth elements (REEs) and minerals from coal & coal byproducts. A report would be provided to Congress evaluating those developments within one year of enactment.

Cybersecurity & Grid Modernization: This section would require the DOE, FERC, and other electricity regulators to establish incentive-based rate treatments to encourage utility investments in advanced cybersecurity technology & participation in cybersecurity threat information sharing programs. DOE would be authorized to provide financial assistance for a State Energy Security Plan that assesses the state’s current circumstances and proposes methods to strengthen its ability to secure infrastructure & minimize supply disruptions through FY2025. The DOE would carry out programs to develop advanced energy sector cybersecurity technologies, and a public-private partnership program that prioritizes utilities with fewer resources.

The DOE would carry out a program focused on grid-scale energy storage that addresses the challenges identified in its 2013 strategic plan, including systems research, power conversion technologies research, grid-scale testing and storage device analysis, and electric storage device safety & reliability. It would also carry out a program to promote the development of hybrid microgrid systems for isolated communities and microgrid systems to increase the resilience of critical infrastructure.

Workforce Development: This section would establish a 21st Century Energy Workforce Advisory Board to propose a strategy for DOE to support the development of a skilled energy workforce. The board would be required to conduct outreach to institutions serving minorities, veterans, and displaced or unemployed energy workers. The DOE would be required to conduct an annual survey and analysis of energy employment in the U.S.

A pilot program would be established in the Labor Dept. to provide competitively awarded cost-shared grants to support on-the-job training or pre-apprenticeship programs related to careers working in renewable energy, energy efficiency, grid modernization, or the reduction of greenhouse gas emissions.

Argument in favor

This bipartisan bill would invest in research for critical emissions-reducing technologies in the energy sector, reassert America’s role as a leader in global markets, enhance cybersecurity & grid security, and bolster mineral security. It may not be perfect, but this bill would provide a long overdue modernization of U.S. energy policy that balances innovation and climate action.

Argument opposed

This bill may be bipartisan, but it doesn’t go far enough in terms of achieving emissions reductions. It not only invests in carbon capture technologies that foster the continued use of fossil fuels, but it would further the development of nuclear power, geothermal energy, and hydropower technologies in addition to the extraction of rare earth minerals.

Impact

The U.S. energy sector; utilities; the DOE and related agencies.

Cost of S. 2657

The CBO estimates that enacting provisions of this bill would have a net decrease in spending of $20 million.

Additional Info

In-Depth: Senate Energy & Natural Resources Committee Chairwoman Lisa Murkowski (R-AK) introduced this bill to modernize U.S. domestic energy laws, invest in clean energy technologies, and strengthen national security:

“This bill is our best chance to modernize our nation’s energy policies in more than 12 years. By working together to pass it into law, we can promote a range of emerging technologies that will help keep energy affordable even as it becomes cleaner and cleaner. Our bill also addresses national needs by taking overdue steps to enhance cybersecurity, grid security, and mineral security. I’m proud of the bipartisan work we have done and encourage all members of the Senate to work with us to advance it through the legislative process.”

The lead Democratic cosponsor, Ranking Member Joe Manchin (D-WV), added:

“This legislation is the result of strong bipartisan work with my colleagues on the Senate Energy and Natural Resources Committee to make a down payment on emissions-reducing technologies, reassert the United States’ leadership role in global markets, enhance our grid security and protect consumers. Importantly, this bill will connect energy-producing communities, including in states like West Virginia and Alaska, to new markets and job opportunities while laying the groundwork for the Department of Energy to advance new and necessary critical emissions-reducing technologies.”

The Senate voted 84-3 to begin its consideration of this bill on March 2, 2020, with Sens. Mike Lee (R-UT), Rand Paul (R-KY), and Brian Schatz (D-HI) the only senators opposed. Minority Leader Chuck Schumer (D-NY) said he voted yes as a show of good faith but expressed that Democrats want amendments to the bill. The sponsors acknowledged that the bill alone wouldn’t solve climate change, but called it “a critical step in the right direction”. Murkowski warned that Democratic amendments extending tax incentives would raise a “blue slip” issue from the House, which requires tax provisions to originate in the House, and said those would “effectively kill” the bill.

The U.S. Chamber of Commerce and several dozen organizations strongly urged lawmakers to support this bill in a letter, which read in part:

“Our diverse organizations recognize and agree that climate change is an important national priority that demands Congressional attention. While we may not agree on everything, we believe there is much common ground upon which all sides of the debate can come together to begin to address climate change, promote American technological leadership, and foster continued economic growth. In particular, there is a growing consensus that the development of new technologies are important factors that will help determine how quickly and at what cost greenhouse gas emissions can be reduced. The American Energy Innovation Act will help to do just that. It is the culmination of extensive efforts by a bipartisan group of senators, led by the Energy and Natural Resources Committee, to develop practical legislative solutions that will accelerate these breakthroughs and enable adoption of lower-emitting and more efficient technologies.”

Media:

• Senate Energy & Natural Resources Committee Press Release

• Senate Energy & Natural Resources Committee Section-by-Section

• Senate Energy & Natural Resources Committee Summary

• CBO Cost Estimate

• Washington Examiner

• U.S. Chamber of Commerce (In Favor)

• Countable (Blue Slip Issue Context)