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Same goes for the Midwest, according to Stanford air quality researcher Marshall Burke.

It’s not just you: Summers are getting smokier.
For the third year in a row, cities like Detroit, Minneapolis, Boston, and New York are experiencing dangerously polluted air for days at a time as smoke drifts into the U.S. from wildfires in Canada.
Smoke has traveled to these places in the past, Stanford University researcher Marshall Burke told me. But the data is clear that the haze is becoming more severe.
“The worst days are worse,” said Burke, “and you can see that in the averages, the last couple of years are much, much higher across the Midwest and the East Coast than we’ve observed in the past many decades.”
Burke is one of the leading scholars studying wildfire smoke, investigating everything from its effect on air quality, public health, and behavior, to preventative and adaptive public policy responses. In one of his most recent papers, which has not yet been peer reviewed, he and his co-authors analyzed the influence of smoke on air quality over the past two decades, using satellite imagery of smoke plumes to disentangle how much of the fine particulate matter, or PM2.5, measured by air monitoring stations came from fires versus more typical sources like cars and furnaces.
The study shows a sharp increase in the amount of smoke in the air around the U.S. in just the past few years. From 2020 to 2023, the average American breathed in concentrations of smoke-related PM2.5 that were between 2.6 and 6.7 times higher than the 2006 to 2019 average.
The paper also contains a stunning set of charts that show that wildfires are eroding decades of air quality gains — and the efficacy of air quality regulation in general — and that without these smoke events, PM2.5 levels would have been significantly lower.

I caught up with Burke to better understand what we know about this seemingly sudden escalation of smoke events, and what we can do to better protect ourselves from them moving forward. Our conversation has been lightly edited for clarity.
Given the smoke events we’ve seen in the last three years, can we say anything about the next three years?
I don’t think you want to make bets on any specific years. The long run trend, unfortunately, suggests that the last few years are going to be more representative than the sorts of years we got 10 to 15 to 20 years ago. And that is due to the underlying physical climate that’s warming and drying out fuels and making fire spread faster and fires much larger. Larger fires generate more smoke.
Has it all been driven by Canadian wildfires?
No. The East Coast and the Midwest will get exposure from fires as far as California, often in the Northern Rockies. But the recent very bad exposure — 2023 was by far the worst year in the Midwest and East Coast — that was nearly all from Canadian fires. This year, again, it’s nearly all from Canadian fires.
Why is that?
The reason we’ve seen a lot more Canadian fires is the same reason we’ve seen a lot more fires in the U.S. West — increasing fuel aridity. As temperatures warm, forests dry out. And so when you get lightning strikes, which tend to start most of the large fires in Canada, you get faster fire spread and much larger fires.
Interestingly, we’ve seen in Canada fewer total fires over time. Often I see people posting this on Twitter — Climate change is not a problem, we’re getting fewer fires in Canada — and that’s true. I think they’ve reduced other sources of ignitions. But you still get lightning ignitions.
Burned area has gone the other way — you’ve seen an increase in burned area. So, fewer fires, but much larger fires, and these larger fires are the ones that put out a lot more smoke, and the smoke gets pushed into population centers in Canada and into the U.S.
There were really large wildfires in California before 2023. Why weren’t places on the East Coast having smoky days as a result of those?
It’s the way the wind blows and how far it has to go. In the large 2020 and 2021 fire seasons we had in the U.S. West, some of that smoke certainly was making it to the East Coast, but given the prevailing wind patterns and the distance the smoke had to travel, the influence of those fires on air quality was not as big as the recent Canadian fires.
Are there other events that cause comparable air quality degradation to wildfires?
You can get really specific things — if a train crashes and lights on fire and a given town is exposed to really high levels of whatever pollutant for a few days. Sometimes you can get dust events that have broad scale exposure. But basically never do you reach the AQI levels that we see in wildfires. Wildfires are pretty unique in their ability to expose very large numbers of people to a very high level of pollutants for days, or unfortunately now, weeks, at a time. Nothing else compares in the U.S.
If you go to other parts of the world where you have large anthropogenic sources — Indian cities, Chinese cities — it can be quite different. There’s some exceptions. Salt Lake City and places where you get inversions and you get pollution trapped for many days, you can get pretty high levels of exposure, but typically nowhere close to what you get during these acute wildfire events.
When the AQI goes back down to levels that are more common in a city after a smoke event and people feel safer going outside, are you able to measure how much of the PM2.5 remaining in the air is from a wildfire? Does it matter?
We try to measure that directly — on any given day, how much of the PM that you’re experiencing is from wildfires versus from other sources. What you see is these events can turn on really quickly, and they can also turn off really quickly, either because the wind direction changes or because it rains — if it rains, you rain out a lot of these pollutants, and then you’re breathing mostly clean air right away.
We also try to measure, how does human health respond? One thing that science doesn’t give us a crisp answer to yet is, is one day of 100 micrograms better or worse than 10 days of 10 micrograms of exposure? We don’t actually really know. What we do see is people respond very differently to those two scenarios in ways that likely affect health outcomes. On really bad days, people tend to stay inside. In California, total emergency department visits go down instead of up, and that’s because people are not getting in their cars, they’re not getting in car accidents, they’re not spraining their ankle playing football or whatever because they’re staying at home.
On lower smoke days, we see emergency department visits go up. That’s probably because people are not changing their behavior. But, maybe surprisingly, we still don’t have a crisp answer if you’re thinking about asthma or mortality or other cardiovascular outcomes.
What are some of the other questions researchers are trying to answer as this becomes more of a national issue?
All sorts of things. The immediate health impacts that you think about — respiratory outcomes have been the one that’s been measured best in a lot of different settings. Cardiovascular outcomes, I would say the evidence is surprisingly more mixed on that. There’s a long-standing literature that shows cardiovascular mortality impacts of exposure to PM, but for wildfire PM, specifically, that evidence is less clear. Sorting that out and trying to understand whether there are differences is important.
Cognitive outcomes — does it increase your risk of dementia? Does student learning go down? Does it reduce cognitive performance at work? I think there’s emerging evidence that smoke is pretty important. Exposure to air pollution, more broadly, is important, but wildfire smoke, specifically, can impact these outcomes.
Birth outcomes is another one we and others have looked at. You see a pretty clear signature of wildfire smoke in birth outcomes — increases to the risk of pre-term birth, for instance. We used to just think about sensitive populations as elderly populations or people with pre-existing conditions. And basically what the research is showing is, no, actually, everyone is sensitive in some way. The list of people who are likely affected probably includes most, if not all of us.
What are the potential policy responses to this in places that haven’t had to deal with it in the past?
I think there’s three policy buckets. This is more true in the U.S. than Canada, but our fire problem is a combination of a warming climate and a century of fire suppression that has left abundant fuel in our landscapes, so number one is dealing with climate change as best we can, and two is doing something about the accumulated fuel loads. There’s a lot we can do there — prescribed burning is one approach that we and others are studying a lot; mechanical thinning, where you go out and actually remove the fuel. Understanding when and where to do that and what the benefits are is an ongoing scientific challenge, but I think most of the evidence would suggest we’re going to need a lot more of that than we’ve done, historically.
But even if we do a lot of that, we’re going to get more of these smoke events, unfortunately. And so we need to protect ourselves when these events happen. Indoor air filtration works really well, so we need to make sure people have access to filters of various types. The evidence would suggest that we see health impacts even at pretty low levels of exposure, and so if you have a portable filter — I drive my family crazy, I’m turning ours on all the time. You should basically just be running them all the time.
What about in terms of messaging? I’m thinking about city officials or state officials, when a smoke event is coming — and maybe this is still an active area of research — but what’s the current thinking on what message to send to people?
Yeah, I think it is an ongoing area, in terms of exactly how to do this and who to target with the information. The way we typically do this is to set these thresholds, right? So, above some threshold, you get a notice, and below, you don’t. That is understandable.
But what we see in the data is that there’s not some level below which you’re fine and above which you’re screwed. What we see is the more smoke you’re exposed to, the worse off you are, and so our goal should just be to reduce our exposure as best we can. How to message that effectively is not something we have a crisp social scientific answer to yet.
A lot of the advice has historically been that you should stay at home with your windows and doors closed. In California homes that is not very protective because California homes tend to be not very tight. In my view, just telling people to close their windows and doors is not sufficient for protecting health. They need some sort of active filtration — portable air filter, central air — to do that.
The other thing that’s happened in California, and I’ve seen this with my own kids — should we cancel school on really bad days? The assumption is that kids are better protected at home than they would be in the school environment, and that’s just not obviously true. It could be the case that for many kids, schools are better. We don’t know, because we do not have comprehensive measurement of indoor air quality, and this is a huge failing that we need to fix. Just as we measure it pretty comprehensively outside, we’ve got to do the same thing inside, and we just haven’t done this.
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Microsoft dominated this year.
It’s been a quiet year for carbon dioxide removal, the nascent industry trying to lower the concentration of carbon already trapped in the atmosphere.
After a stretch as the hottest thing in climate tech, the CDR hype cycle has died down. 2025 saw fewer investments and fewer big projects or new companies announced.
This story isn’t immediately apparent if you look at the sales data for carbon removal credits, which paints 2025 as a year of breakout growth. CDR companies sold nearly 30 million tons of carbon removal, according to the leading industry database, CDR.fyi — more than three times the amount sold in 2024. But that topline number hides a more troubling reality — about 90% of those credits were bought by a single company: Microsoft.
If you exclude Microsoft, the total volume of carbon removal purchased this year actually declined by about 100,000 tons. This buyer concentration is the continuation of a trend CDR.fyi observed in its 2024 Year In Review report, although non-Microsoft sales had grown a bit that year compared to 2023.
Trump’s crusade against climate action has likely played a role in the market stasis of this year. Under the Biden administration, federal investment in carbon removal research, development, and deployment grew to new heights. Biden’s Securities and Exchange Commission was also getting ready to require large companies to disclose their greenhouse gas emissions and climate targets, a move that many expected to increase demand for carbon credits. But Trump’s SEC scrapped the rule, and his agency heads have canceled most of the planned investments. (At the time of publication, the two direct air capture projects that Biden’s Department of Energy selected to receive up to $1.2 billion have not yet had their contracts officially terminated, despite both showing up on a leaked list of DOE grant cancellations in October.)
Trump’s overall posture on climate change reduced pressure on companies to act, which probably contributed to there being fewer new buyers entering the carbon removal market, Robert Hoglund, a carbon removal advisor who co-founded CDR.fyi, told me. “I heard several companies say that, yeah, we wouldn't have been able to do this commitment this year. We're glad that we made it several years ago,” he told me.
Kyle Harrison, a carbon markets analyst at BloombergNEF, told me he didn’t view Microsoft’s dominance in the market as a bad sign. In the early days of corporate wind and solar energy contracts, he said, Microsoft, Google, and Amazon were the only ones signing deals, which raised similar questions about the sustainability of the market. “But what it did is it created a blueprint for how you sign these deals and make these nascent technologies more financeable, and then it brings down the cost, and then all of a sudden, you start to get a second generation of companies that start to sign these deals.”
Harrison expects the market to see slower growth in the coming years until either carbon removal companies are able to bring down costs or a more reliable regulatory signal puts pressure on buyers.
Governments in Europe and the United Kingdom introduced a few weak-ish signals this year. The European Union continued to advance a government certification program for carbon removal and expects to finalize methodologies for several CDR methods in 2026. That government stamp of approval may give potential buyers more confidence in the market.
The EU also announced plans to set up a carbon removal “buyers’ club” next year to spur more demand for CDR by pooling and coordinating procurement, although the proposal is light on detail. There were similar developments in the United Kingdom, which announced a new “contract for differences” policy through which the government would finance early-stage direct air capture and bioenergy with carbon capture projects.
A stronger signal, though, could eventually come from places with mandatory emissions cap and trade policies, such as California, Japan, China, the European Union, or the United Kingdom. California already allows companies to use carbon removal credits for compliance with its cap and invest program. The U.K. plans to begin integrating CDR into its scheme in 2029, and the EU and Japan are considering when and how to do the same.
Giana Amador, the executive director of the U.S.-based Carbon Removal Alliance, told me these demand pulls were extremely important. “It tells investors, if you invest in this today, in 10 years, companies will be able to access those markets,” she said.
At the same time, carbon removal companies are not going to be competitive in any of these markets until carbon trades at a substantially higher price, or until companies can make carbon removal less expensive. “We need to both figure out how we can drive down the cost of carbon removal and how to make these carbon removal solutions more effective, and really kind of hone the technology. Those are what is going to unlock demand in the future,” she said.
There’s certainly some progress being made on that front. This year saw more real-world deployments and field tests. Whereas a few years ago, the state of knowledge about various carbon removal methods was based on academic studies of modeling exercises or lab experiments, now there’s starting to be a lot more real-world data. “For me, that is the most important thing that we have seen — continued learning,” Hoglund said.
There’s also been a lot more international interest in the sector. “It feels like there’s this global competition building about what country will be the leader in the industry,” Ben Rubin, the executive director of the Carbon Business Council, told me.
There’s another somewhat deceptive trend in the year’s carbon removal data: The market also appeared to be highly concentrated within one carbon removal method — 75% of Microsoft’s purchases, and 70% of the total sales tracked by CDR.fyi, were credits for bioenergy with carbon capture, where biomass is burned for energy and the resulting emissions are captured and stored. Despite making up the largest volume of credits, however, these were actually just a rare few deals. “It’s the least common method,” Hoglund said.
Companies reported delivering about 450,000 tons of carbon removal this year, according to CDR.fyi’s data, bringing the cumulative total to over 1 million tons to date. Some 80% of the total came from biochar projects, but the remaining deliveries run the gamut of carbon removal methods, including ocean-based techniques and enhanced rock weathering.
Amador predicted that in the near-term, we may see increased buying from the tech sector, as the growth of artificial intelligence and power-hungry data centers sets those companies’ further back on their climate commitments. She’s also optimistic about a growing trend of exploring “industrial integrations” — basically incorporating carbon removal into existing industrial processes such as municipal waste management, agricultural operations, wastewater treatment, mining, and pulp and paper factories. “I think that's something that we'll see a spotlight on next year,” she said.
Another place that may help unlock demand is the Science Based Targets initiative, a nonprofit that develops voluntary standards for corporate climate action. The group has been in the process of revising its Net-Zero Standard, which will give companies more direction about what role carbon removal should play in their sustainability strategies.
The question is whether any of these policy developments will come soon enough or be significant enough to sustain this capital-intensive, immature industry long enough for it to prove its utility. Investment in the industry has been predicated on the idea that demand for carbon removal will grow, Hoglund told me. If growth continues at the pace we saw this year, it’s going to get a lot harder for startups to raise their series B or C.
“When you can't raise that, and you haven't sold enough to keep yourself afloat, then you go out of business,” he said. “I would expect quite a few companies to go out of business in 2026.”
Hoglund was quick to qualify his dire prediction, however, adding that these were normal growing pains for any industry and shouldn’t be viewed as a sign of failure. “It could be interpreted that way, and the vibe may shift, especially if you see a lot of the prolific companies come down,” he said. “But it’s natural. I think that’s something we should be prepared for and not panic about.”
America runs on natural gas.
That’s not an exaggeration. Almost half of home heating is done with natural gas, and around 40% — the plurality — of our electricity is generated with natural gas. Data center developers are pouring billions into natural gas power plants built on-site to feed their need for computational power. In its -260 degree Fahrenheit liquid form, the gas has attracted tens of billions of dollars in investments to export it abroad.
The energy and climate landscape in the United States going into 2026 — and for a long time afterward — will be largely determined by the forces pushing and pulling on natural gas. Those could lead to higher or more volatile prices for electricity and home heating, and even possibly to structural changes in the electricity market.
But first, the weather.
“Heating demand is still the main way gas is used in the U.S.,” longtime natural gas analyst Amber McCullagh explained to me. That makes cold weather — experienced and expected — the main driver of natural gas prices, even with new price pressures from electricity demand.
New sources of demand don’t help, however. While estimates for data center construction are highly speculative, East Daily Analytics figures cited by trade publication Natural Gas Intel puts a ballpark figure of new data center gas demand at 2.5 billion cubic feet per day by the end of next year, compared to 0.8 billion cubic feet per day for the end of this year. By 2030, new demand from data centers could add up to over 6 billion cubic feet per day of natural gas demand, East Daley Analytics projects. That’s roughly in line with the total annual gas production of the Eagle Ford Shale in southwest Texas.
Then there are exports. The U.S. Energy Information Administration expects outbound liquified natural gas shipments to rise to 14.9 billion cubic feet per day this year, and to 16.3 billion cubic feet in 2026. In 2024, by contrast, exports were just under 12 billion cubic feet per day.
“Even as we’ve added demand for data centers, we’re getting close to 20 billion per day of LNG exports,” McCullagh said, putting more pressure on natural gas prices.
That’s had a predictable effect on domestic gas prices. Already, the Henry Hub natural gas benchmark price has risen to above $5 per million British thermal units earlier this month before falling to $3.90, compared to under $3.50 at the end of last year. By contrast, LNG export prices, according to the most recent EIA data, are at around $7 per million BTUs.
This yawning gap between benchmark domestic prices and export prices is precisely why so many billions of dollars are being poured into LNG export capacity — and why some have long been wary of it, including Democratic politicians in the Northeast, which is chronically short of natural gas due to insufficient pipeline infrastructure. A group of progressive Democrats in Congress wrote a letter to Secretary of Energy Chris Wright earlier this year opposing additional licenses for LNG exports, arguing that “LNG exports lead to higher energy prices for both American families and businesses.”
Industry observers agree — or at least agree that LNG exports are likely to pull up domestic prices. “Henry Hub is clearly bullish right now until U.S. gas production catches up,” Ira Joseph, a senior research associate at the Center for Global Energy Policy at Columbia University, told me. “We’re definitely heading towards convergence” between domestic and global natural gas prices.
But while higher natural gas prices may seem like an obvious boon to renewables, the actual effect may be more ambiguous. The EIA expects the Henry Hub benchmark to average $4 per million BTUs for 2026. That’s nothing like the $9 the benchmark hit in August 2022, the result of post-COVID economic restart, supply tightness, and the Russian invasion of Ukraine.
Still, a tighter natural gas market could mean a more volatile electricity and energy sector in 2026. The United States is basically unique globally in having both large-scale domestic production of coal and natural gas that allows its electricity generation to switch between them. When natural gas prices go up, coal burning becomes more economically attractive.
Add to that, the EIA forecasts that electricity generation will have grown 2.4% by the end of 2025, and will grow another 1.7% in 2026, “in contrast to relatively flat generation from 2010 to 2020. That is “primarily driven by increasing demand from large customers, including data centers,” the agency says.
This is the load growth story. With the help of the Trump administration, it’s turning into a coal growth story, too.
Already several coal plants have extended out their retirement dates, either to maintain reliability on local grids or because the Trump administration ordered them to. In America’s largest electricity market, PJM Interconnection, where about a fifth of the installed capacity is coal, diversified energy company Alliance Resource Partners expects 4% to 6% demand growth, meaning it might even be able to increase coal production. Coal consumption has jumped 16% in PJM in the first nine months of 2025, the company’s Chairman Joseph Kraft told analysts.
“The domestic thermal coal market is continuing to experience strong fundamentals, supported by an unprecedented combination of federal energy and environmental policy support plus rapid demand growth,” Kraft said in a statement accompanying the company’s October third quarter earnings report. He pointed specifically to “natural gas pricing dynamics” and “the dramatic load growth required by artificial intelligence.”
Observers are also taking notice. “The key driver for coal prices remains strong natural gas prices,” industry newsletter The Coal Trader wrote.
In its December short term outlook, the EIA said that it expects “coal consumption to increase by 9% in 2025, driven by an 11% increase in coal consumption in the electric power sector this year as both natural gas costs and electricity demand increased,” while falling slightly in 2026 (compared to 2025), leaving coal consumption sill above 2024 levels.
“2025 coal generation will have increased for the first time since the last time gas prices spiked,” McCullagh told me.
Assuming all this comes to pass, the U.S.’s total carbon dioxide emissions will have essentially flattened out at around 4.8 million metric tons. The ultimate cost of higher natural gas prices will likely be felt far beyond the borders of the United States and far past 2026.
Lawmakers today should study the Energy Security Act of 1980.
The past few years have seen wild, rapid swings in energy policy in the United States, from President Biden’s enthusiastic embrace of clean energy to President Trump’s equally enthusiastic re-embrace of fossil fuels.
Where energy industrial policy goes next is less certain than any other moment in recent memory. Regardless of the direction, however, we will need creative and effective policy tools to secure our energy future — especially for those of us who wish to see a cleaner, greener energy system. To meet the moment, we can draw inspiration from a largely forgotten piece of energy industrial policy history: the Energy Security Act of 1980.
After a decade of oil shocks and energy crises spanning three presidencies, President Carter called for — and Congress passed — a new law that would “mobilize American determination and ability to win the energy war.” To meet that challenge, lawmakers declared their intent “to utilize to the fullest extent the constitutional powers of the Congress” to reduce the nation’s dependence on imported oil and shield the economy from future supply shocks. Forty-five years later, that brief moment of determined national mobilization may hold valuable lessons for the next stage of our energy industrial policy.
The 1970s were a decade of energy volatility for Americans, with spiking prices and gasoline shortages, as Middle Eastern fossil fuel-producing countries wielded the “oil weapon” to throttle supply. In his 1979 “Crisis of Confidence” address to the nation, Carter warned that America faced a “clear and present danger” from its reliance on foreign oil and urged domestic producers to mobilize new energy sources, akin to the way industry responded to World War II by building up a domestic synthetic rubber industry.
To develop energy alternatives, Congress passed the Energy Security Act, which created a new government-run corporation dedicated to investing in alternative fuels projects, a solar bank, and programs to promote geothermal, biomass, and renewable energy sources. The law also authorized the president to create a system of five-year national energy targets and ordered one of the federal government’s first studies on the impacts of greenhouse gases from fossil fuels.
Carter saw the ESA as the beginning of an historic national mission. “[T]he Energy Security Act will launch this decade with the greatest outpouring of capital investment, technology, manpower, and resources since the space program,” he said at the signing. “Its scope, in fact, is so great that it will dwarf the combined efforts expended to put Americans on the Moon and to build the entire Interstate Highway System of our country.” The ESA was a recognition that, in a moment of crisis, the federal government could revive the tools it once used in wartime to meet an urgent civilian challenge.
In its pursuit of energy security, the Act deployed several remarkable industrial policy tools, with the Synthetic Fuels Corporation as the centerpiece. The corporation was a government-run investment bank chartered to finance — and in some cases, directly undertake — alternative fuels projects, including those derived from coal, shale, and oil.. Regardless of the desirability or feasibility of synthetic fuels, the SFC as an institution illustrates the type of extraordinary authority Congress was once willing to deploy to address energy security and stand up an entirely new industry. It operated outside of federal agencies, unencumbered by the normal bureaucracy and restrictions that apply to government.
Along with everything else created by the ESA, the Sustainable Fuels Corporation was also financed by a windfall profits tax assessed on oil companies, essentially redistributing income from big oil toward its nascent competition. Both the law and the corporation had huge bipartisan support, to the tune of 317 votes for the ESA in the House compared to 93 against, and 78 to 12 in the Senate.
The Synthetic Fuels Corporation was meant to be a public catalyst where private investment was unlikely to materialize on its own. Investors feared that oil prices could fall, or that OPEC might deliberately flood the market to undercut synthetic fuels before they ever reached scale. Synthetic fuel projects were also technically complex, capital-intensive undertakings, with each plant costing several billion dollars, requiring up to a decade to plan and build.
To address this, Congress equipped the corporation with an unusually broad set of tools. The corporation could offer loans, loan guarantees, price guarantees, purchase agreements, and even enter joint ventures — forms of support meant to make first-of-a-kind projects bankable. It could assemble financing packages that traditional lenders viewed as too risky. And while the corporation was being stood up, the president was temporarily authorized to use Defense Production Act powers to initiate early synthetic fuel projects. Taken together, these authorities amounted to a federal attempt to build an entirely new energy industry.
While the ESA gave the private sector the first shot at creating a synthetic fuels industry, it also created opportunities for the federal government to invest. The law authorized the Synthetic Fuels Corporation to undertake and retain ownership over synthetic fuels construction projects if private investment was insufficient to meet production targets. The SFC was also allowed to impose conditions on loans and financial assistance to private developers that gave it a share of project profits and intellectual property rights arising out of federally-funded projects. Congress was not willing to let the national imperative of energy security rise or fall on the whims of the market, nor to let the private sector reap publicly-funded windfalls.
Employing logic that will be familiar to many today, Carter was particularly concerned that alternative fuel sources would be unduly delayed by permitting rules and proposed an Energy Mobilization Board to streamline the review process for energy projects. Congress ultimately refused to create it, worried it would trample state authority and environmental protections. But the impulse survived elsewhere. At a time when the National Environmental Policy Act was barely 10 years old and had become the central mechanism for scrutinizing major federal actions, Congress provided an exemption for all projects financed by the Synthetic Fuels Corporation, although other technologies supported in the law — like geothermal energy — were still required to go through NEPA review. The contrast is revealing — a reminder that when lawmakers see an energy technology as strategically essential, they have been willing not only to fund it but also to redesign the permitting system around it.
Another forgotten feature of the corporation is how far Congress went to ensure it could actually hire top tier talent. Lawmakers concluded that the federal government’s standard pay scales were too low and too rigid for the kind of financial, engineering, and project development expertise the Synthetic Fuels Corporation needed. So it gave the corporation unusual salary flexibility, allowing it to pay above normal civil service rates to attract people with the skills to evaluate multibillion dollar industrial projects. In today’s debates about whether federal agencies have the capacity to manage complex clean energy investments, this detail is striking. Congress once knew that ambitious industrial policy requires not just money, but people who understand how deals get done.
But the Energy Security Act never had the chance to mature. The corporation was still getting off the ground when Carter lost the 1980 election to Ronald Reagan. Reagan’s advisers viewed the project as a distortion of free enterprise — precisely the kind of government intervention they believed had fueled the broader malaise of the 1970s. While Reagan had campaigned on abolishing the Department of Energy, the corporation proved an easier and more symbolic target. His administration hollowed it out, leaving it an empty shell until Congress defunded it entirely in 1986.
At the same time, the crisis atmosphere that had justified the Energy Security Act began to wane. Oil prices fell nearly 60% during Reagan’s first five years, and with them the political urgency behind alternative fuels. Drained of its economic rationale, the synthetic fuels industry collapsed before it ever had a chance to prove whether it could succeed under more favorable conditions. What had looked like a wartime mobilization suddenly appeared to many lawmakers to be an expensive overreaction to a crisis that had passed.
Yet the ESA’s legacy is more than an artifact of a bygone moment. It offers at least three lessons that remain strikingly relevant today:
As we now scramble to make up for lost time, today’s clean energy push requires institutions that can survive electoral swings. Nearly half a century after the ESA, we must find our way back to that type of institutional imagination to meet the energy challenges we still face.