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Policy moves made last week by both congress and the White House signal an increasingly dramatic shift in U.S. energy policy resulting from the November 2024 elections. While congress is not moving towards a full repeal of the 2022 Inflation Reduction Act which Democrats herald as one of the Biden presidency's signature achievements, the version of the reconciliation bill passed by the House last Wednesday - the One Big Beautiful Bill Act - places some of the heaviest subsidies for intermittent wind and solar generation and electric vehicles clearly in congress's sights, with a new focus on nuclear power gaining favor.
While that bill severely limits the ability of wind and solar developers to access the investment tax credit for new projects, it simultaneously expands the credit for the builders of new nuclear power facilities. That alone signals a major shift in policy priorities: Taken together with the four executive orders designed to boost nuclear generation signed by President Donald Trump on Friday, the shift becomes a rising sea change.
Out is the Biden era's focus on conforming U.S. energy and climate policies to the strictures of international agreements ostensibly designed to fight climate change. In is the Trump focus on creating a new era of American dominance in not just energy but also AI technology advancements and leveraging both to facilitate the energy and commerce-base foreign policy doctrine the President laid out in his speech in Riyadh, Saudi Arabia two weeks ago.
Energy Secretary Chris Wright signaled the intent of the Trump executive orders in testimony before the Senate Appropriations Subcommittee on Energy and Water Development last Wednesday. During an exchange with Tennessee Republican Senator Bill Hagerty, Wright said nuclear is "the critical technology that could scale wildly beyond where it is today, which is just electricity production into huge scale...I am all in with you on advancing nuclear...Nuclear is the [energy source]
Trump's decision in one of Friday's executive orders to invoke the Defense Production Act declaring a national emergency over America's heavy reliance on imports of uranium - much of it from Russia - is an extension of his Day 1 declaration of a national energy emergency related to what he views as a dangerously low level of national energy security.
"When President Trump declared a national emergency on his first day in office it was, in large part, because of what we're facing with our electrical grid and making sure that we've got enough power to be able to win the AI arms race with China," Burgum said last week, as first reported by RealClearPolitics. "That is absolutely critical."
That second of four orders signed by Trump aims to boost domestic production and processing of uranium by prioritizing domestic supply chains and using presidential emergency powers to help streamline the permitting process for qualifying projects. The third order authorizes the secretaries of Defense, Energy, and interior to utilize federally owned lands and laboratories to accelerate research and testing, and to serve as sites for rapid development of both nuclear generation facilities and AI datacenters.
Since its first day in office, the Trump administration has made a top priority of searching for ways the Administration could streamline permitting processes for energy projects without the need for congressional legislation. The leveraging of federal facilities and lands will serve to avoid many of the common factors that tend to delay permitting for energy projects of all kinds.
Examples include fights over landowner rights, rights of way, multi-jurisdictional traffic and noise restrictions, and even some endangered species and archaeological considerations. It is a truly ingenious approach which could have national application given federal ownership of large tracts of land in almost every state.
The fourth Trump order sets an ambitious goal of quadrupling U.S. nuclear capacity from approximately 100 gigawatts to 400 gigawatts by 2050, a target some experts deem unlikely given historical construction timelines and costs. For context, the addition of 300 gigawatts of generating capacity would equate to adding three Texas power grids in just 25 years. This order would promote both traditional large-scale plants and the new generation of modular reactor technology currently being developed, with a goal of incentivizing such development by U.S. companies performed in the U.S.
All of those orders tie in with the first order signed by Trump on Friday. That order seeks to reform the immensely bureaucratic and outdated processes of the Nuclear Regulatory Commission, a regulatory body established in 1974 and designed to deal with 1970s-era technologies and issues. No domestic revolution in nuclear power can take place without a full modernization of the NRC and its processes, which have made it near-impossible to obtain the permits needed to build new facilities.
To help speed the permitting process, this Trump order requires the NRC approve new reactor licenses within 18 months and existing reactor operations within 12 months. It also mandates the NRC to propose a comprehensive revision in its regulatory structure within 18 months, a very ambitious timeline.
From charging electric vehicles to bitcoin mining to AI and its related datacenters popping up all over the nation, the major new power demands on the U.S. grid will be impossible to meet in a regulatory environment in which permitting of new generating facilities under current rules and procedures can take as long as 15 years. The need for those datacenters to have 99.999% uptime means that the preferred rent-seeking client industries of the Biden era - wind and solar - cannot fill the bill. The technology simply isn't there.
These realities have led many big tech datacenter developers to adopt a two-step approach to securing their power needs: A near-term reliance on combined cycle natural gas generation, backed up by a longer-term plan to incorporate or convert entirely to nuclear generation. Last week's moves by both congress and the White House are designed to cut the amount of time needed to get to the second step of those plans. Only time, and the vagaries of the American system of elections, will tell if the policy shifts can produce the desired result.