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New federal safety regulations could push PET plastic-makers out of the country for good.

There are an estimated 40,000 to 60,000 chemicals used commercially today worldwide, and the vast majority of them haven’t been tested for human safety. Many that have been tested are linked to serious human health risks like cancer and reproductive harm. And yet, they continue to pollute our air, water, food, and consumer products.
Among these is 1,4-dioxane, a chemical solvent that’s been linked to liver cancer in lab rodents and classified as a probable human carcinogen. It’s a multipurpose petrochemical, issuing from the brownfields of defunct industrial sites, chemical plants, and factories that use it in solvents, paint strippers, and degreasers. It shows up as an unintentional contaminant in consumer personal care products, detergents, and cleaning products and then goes down the drain into sewer systems.
It is also an unavoidable byproduct from the production of polyethylene terephthalate, more commonly known as PET, one of the most ubiquitous materials in the world. PET is the clear, odorless, food-safe plastic bottle you drink water out of. It’s also the basis of the world’s most popular fabric, used in everything from yoga leggings to baby onesies and area rugs; more than half of all fabric manufactured worldwide today is polyester. “You can't make PET polyester without creating this toxic byproduct 1,4-dioxane,” Mike Belliveau, co-founder of the advocacy organization Defend Our Health, told me. “It’s uniquely tied to the chemistry of the polymer.”
To be clear, there is no 1,4-dioxane in polyester products themselves. But like so-called “forever chemicals,” 1,4-dioxane dissolves quickly and completely into water, making it almost impossible to remove once it gets into a river or reservoir.
In 2012, the U.S. Environmental Protection Agency included 1,4-dioxane in the third iteration of what’s called the Unregulated Contaminant Monitoring Rule, a list the agency puts out every five years of chemicals it considers suspicious and wants states to start testing for. The EPA’s Toxic Release Inventory data shows that in 2019, the top four industrial producers of 1,4-dioxane in the U.S. were PET plastic or polyester factories; in 2022, it was five out of the top 10. That same year, a polyester manufacturer lost its permit to dispose of its waste at a treatment plant in New Jersey after state authorities discovered 1,4-dioxane in the drinking water and traced it back to the company.
Now, nearly 12 years later, not only has 1,4-dioxane proved to be shockingly prevalent, it has also been shown to be shockingly dangerous. The EPA may be on the verge of declaring, effectively, that almost any exposure to 1,4-dioxane constitutes an unreasonable risk to human health. Doing so would rock the American chemical and plastics manufacturing industry. But the alternative is being okay with rising cancer rates – an inconvenient fact the chemical industry would rather you not think about when you’re at the store.
North Carolina offers one representative case study. In 2013, a team from NC State University began testing for and finding 1,4-dioxane throughout the Cape Fear watershed, a network of rivers that starts in the mountains above Greensboro and flows southeast through Fayetteville and Wilmington before emptying into the ocean. At first, it was unclear exactly who the culprit of this widespread carcinogenic contamination could be. But by 2015, researchers had pinpointed a handful of sources: the wastewater treatment plants of Asheboro, Greensboro, and Reidsville.
Greensboro processed wastewater from an industrial waste transporter and chemical plant, Asheboro from a plastics plant, and Reidsville from Dystar, a dye and chemical manufacturer, and Unifi, a polyester manufacturer. DAK (now known as Alpek), another plastic manufacturer in Fayetteville, was also releasing 1,4-dioxane into the Lower Cape Fear River near Wilmington at a high enough level to consistently violate its permit. It is impossible at the moment to distinguish 1,4-dioxane’s impact on the health of people in the Cape Fear watershed from the impact of the more infamous class of carcinogenic forever chemicals that also lurk there: PFAS. But as with many pollutants, in the U.S., 1,4-dioxane’s is disproportionately found in Black and Brown communities.
Wherever PET or polyester is made, from the Gulf Coast to the Nakdonggang watershed in Korea, 1,4-dioxane is a problem. Typical water treatment technology can’t remove it, so when polyester manufacturers or other industries discharge contaminated wastewater to municipal treatment plants, the carcinogen flows right through and ends up in the groundwater or watershed.
In North Carolina, the state, the cities, and manufacturers began arguing about what could, and should, be done about it. “My biggest concern in drinking water in North Carolina right now, it’s 1-4 dioxane,” Tom Reeder, Assistant Secretary for the Environment at the state Department of Environmental Quality, said in 2016.
Dystar and Unifi submitted remediation plans to Reidsville, and Dystar told the NC Department of Environmental Quality’s Division of Water Resources that it was distilling the 1,4-dioxane out of its wastewater and storing it on-site. Dystar didn’t answer Heatmap’s questions, and Unifi said the spokesperson qualified to speak on the topic wasn’t available. The NC DEQ referred Heatmap to Reidsville, which didn’t respond to calls and emails. The lead 1,4-dioxane researcher at NC State also did not respond to requests for information or an interview.
Perhaps this is because of how contentious this issue has been for all involved parties. In 2022, the NC Environmental Management Commission attempted to make a rule limiting 1,4-dioxane in factory wastewater to .35 parts per billion. Unifi and Dystar wrote letters protesting the rule and Asheboro filed a lawsuit against the limits, with Reidsville attempting to join. The rule was eventually nullified because it didn’t fully consider the financial burden it would impose on these cities.
But the way the science is going, these decisions may be taken out of North Carolina’s hands.
In 2016, Congress passed an amendment to the Toxic Substances Control Act (TSCA, or “toss kuh”) instructing the EPA to fast-track risk analyses of chemicals of concern. Under the new law, if the EPA finds that a chemical poses an “unreasonable risk” to human health, it is required to regulate it down to reasonable levels — regardless of the economic impact. One of the first 10 chemicals on the docket was 1,4-dioxane.
Then, of course, came 2017 and the arrival of the Trump administration, which interfered to weaken EPA’s published toxicity findings to make them cheaper for industry to comply with. For example, the 1,4-dioxane analysis excluded the risk of exposure via drinking water, even though more than 7 million people in the U.S. have drinking water with detectable levels of 1,4-dioxane. Many of the findings were repeatedly challenged in court.
When the Biden administration reanalyzed 1,4-dioxane, the draft findings published in 2023 said that 1,4-dioxane poses an “unreasonable risk” to the health of PET and polyester plant workers and people with contaminated drinking water. “As high as 2.3 in 100 exposed workers would be at risk of cancer over a lifetime of exposure,” Jon Kalmuss-Katz, a senior attorney with Earthjustice, which has submitted comments to the EPA, told me. “The EPA considers the range of unreasonable risk to be one in 10,000 to one in a million.” That’s a 100- to 10,000-fold difference.
Some advocates saw a death knell for any remaining environmental arguments for polyester. “The federal government basically concluded that polyester PET poses an unreasonable risk to human health,” Belliveau told me.
The risk evaluation has already gone through a comment period and a peer-review process, and the EPA expects to finalize its evaluation this year. When asked for comment, an EPA representative said, “Actual conditions and releases are highly variable and subject to site-by-site process conditions. The draft supplement to the risk evaluation should not be interpreted to suggest all sites that manufacture PET or polyester present unreasonable risk.”
Despite letters from the American Chemistry Council, the Cleaning Institute, the Plastics Industry Association, and the PET manufacturer Alpek (formerly DAK) attempting to poke holes in the science, the advocates I spoke to were confident the “unreasonable risk” determination will stay.
At that point, the EPA has several tools it can use. “EPA can regulate manufacturing, can ban the chemical, can ban uses of the chemical, can restrict releases of the chemical to the environment,” says Kalmuss-Katz. “But the underlying mandate is always the same. EPA has to ensure that the chemical no longer presents an unreasonable risk.”
According to Thomas Mohr, a hydrogeologist who wrote the book on the investigation and remediation of 1,4-dioxane, polyester plants could simply require employees to wear respirators, and there are commercially available technologies available to filter out the chemical from wastewater — things like vacuum stripping and incineration, collecting it on a resin, or blasting it with ultraviolet light. But these processes are specialized and come with added costs.
That latter consideration is important for an industry that is already struggling to compete with low-cost polyester from China and other developing countries. Of the 115 American polyester manufacturing companies in the 1970s, only 12 remain in business today, according to a history book by Unifi, the polyester manufacturer in Reidsville.
Unifi barely survived the great textile offshoring of the late 1990s and early 2000s, mostly by shrinking and laying off large swaths of its workforce, buying and setting up plants in China and South America, and specializing in premium recycled polyester in its North Carolina plant. At the beginning of February, Unifi announced it would cut costs to shore up its finances. Adding a high-price treatment unit might be too much for it to bear. (Unifi said its spokesperson on this topic was not available for comment.)
Belliveau of Defend Our Health said he would be happy to see PET and polyester go away. But that’s a far-off vision for such a popular material. “EPA is not known for its radical vision, so I doubt they’re going to call for the shut-down of PET polyester in the U.S.,” he told me. “They might say that we need to adopt a drinking water standard or put better control in plants for workers.”
“Often there is a multi-year phase-out period,” Kalmuss-Katz said. “There is time to respond to innovate and to develop safer alternatives and to get those out into use.” Some of those alternatives could be polyester recycling technologies. France-based Carbios and California-based Ambercycle, both startups working on textile-to-textile polyester recycling, say their processes don’t produce 1,4-dioxane. A representative for Circ, a Virginia-based textile recycling startup, would only say that it, “is adhering to all local and federal regulations to ensure its process is in line with the highest regulatory standards for safe chemistry… this is something the team will be following closely as data becomes more available.”
Polyester has become a core part of almost everyone’s wardrobe, used for its high performance, versatility, and affordability. More importantly for the Carolinas, it provides some of the few remaining jobs in a formerly vibrant textile center. To that, Kalmuss-Katz said, “Congress made pretty clear that the price of producing polyester cannot be fenceline communities are left with disproportionate and unreasonable cancer burdens.”
Still, even if the EPA’s decision is the final nail in the coffin of the PET and polyester industry in the U.S., it doesn’t really solve the problem, or rather, not for everyone. Like other industries before it — leather tanning, rayon manufacturing, dye houses and dye manufacturing — it will continue to exist in its dirtiest form in other, less regulated countries. If the United States’ past history of offshoring turns out to be prologue, most consumers probably won’t notice the difference, except perhaps in slightly cheaper prices. Fashion companies will certainly notice, but are incentivized to look the other way.
For a few people paying attention, polyester will simply join a long list of products — chocolate, electronics, cheap meat — that come with a niggling feeling in the back of our minds: this has probably harmed someone on its way to me.
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Spoiler: They’re mostly winners.
There’s seemingly plenty to celebrate in the Senate’s new 400-plus-page permitting reform bill, the Bipartisan American Affordability and Jobs Act, or BAAJA. The headline benefit — and the one drawing the most praise from energy hawks — is that expediting the buildout of energy infrastructure and transmission lines ought to bring tons more zero-carbon energy online. No doubt it will speed up fossil fuel projects as well, but modeling shows that renewables like wind and solar are disproportionately held back by the notoriously contentious and slow planning and permitting processes the bill seeks to overhaul.
Old-school renewables aren’t the only technologies that stand to benefit from BAAJA, however.
Here are four more climate tech sectors — and the startups working in them — that are probably pretty happy to see that, after four years of debate and countless failed negotiations, a permitting bill finally appears poised to become law.
No surprises here: It’s well known at this point that geothermal is a beloved bipartisan technology, and BAAJA affirms the government’s commitment to bringing more of this clean, firm energy source online as soon as possible.
The bill would categorically exclude drilling exploratory geothermal test wells from review under the National Environmental Policy Act, and exempt lower-impact activities such as mapping and surface surveying from NEPA entirely. It would also require the Interior Department to hold annual geothermal lease sales, and drop the federal drilling permit requirement for geothermal exploration on non-federal land, so long as the government owns less than half of the underground resource.
Next-generation geothermal companies such as Fervo Energy, Sage Geosystems, Mazama Energy, and Quaise Energy stand to benefit, of course, as finding viable sites to trial their tech and build early commercial projects requires plenty of mapping and exploratory drilling. This cohort aims to expand geothermal beyond the relatively small number of geographies with the ideal combination of high heat at shallow depths, naturally occurring subsurface water or steam, and permeable rock that conventional geothermal power plants rely on. But a company like Zanskar, which uses AI to identify overlooked conventional geothermal resources, stands to benefit, too — its approach also depends on scouting and drilling across many sites.
BAAJA is intent on advancing tech that can squeeze more capacity out of the transmission lines we already have. The bill requires utilities to conduct recurring evaluations on technologies that could increase the capacity of existing transmission infrastructure, such as higher-capacity replacement wires or monitoring systems that determine when the lines can safely carry more power. Investor-owned utilities have historically had little incentive to adopt any of this, since they earn money by building new infrastructure, not by making existing infrastructure more efficient. Now, that math could change. If the evaluations find this tech will provide net benefits, utilities are required to deploy it within a certain timeframe, lest the Federal Energy Regulatory Commission impose penalties.
That’s welcome news for dynamic line rating startups such as LineVision and Heimdall Power, which use sensors to monitor power lines in real time to determine when they’re capable of carrying more electricity than their fixed ratings allow. Companies building higher-capacity lines are also likely to see more business. This includes TS Conductor, which makes a carbon-fiber core wire that it says can double or even triple a line’s capacity, and VEIR, which originally aimed to build “high-temperature superconducting transmission lines,” though it recently pivoted to data center power solutions. Startups like NewGrid, whose software finds ways to avoid congested lines and route more electricity through the existing grid, could benefit, too.
The bill also opens doors for virtual power plants, networks of distributed energy resources such as rooftop solar panels, batteries, smart thermostats, and electric vehicle chargers that operate like a single power plant, responding to spikes in energy demand or shifting load to off-peak hours. Like grid-enhancing technologies, VPPs can reduce the need for new poles, wires, and power plants by making better use of the energy resources already installed in homes and businesses. And they also include an added perk: They pay these customers for adjusting their energy use when the grid needs it.
While FERC ordered grid operators to open their markets to these aggregators in 2020, implementation has dragged. BAAJA would speed things up by requiring operators to allow VPPs into their markets within 18 months of the bill’s passage and setting a low, 100-kilowatt threshold for device networks to be considered VPP-eligible. It would also require utilities to connect VPPs quickly and allow them to export power, while barring utilities from requiring aggregators to install the utilities’ own equipment like separate submeters and switches, which adds delays and added costs for hardware and installation. Separately, the bill directs the Department of Energy to fund efforts to streamline local government permitting and inspections for distributed energy resources like rooftop solar and batteries.
This is a boon for aggregators including Voltus, Renew Home, and David Energy, which sell grid services like demand response, capacity, and frequency regulation into utility programs and wholesale markets. Under this bill, they could do so more easily thanks to guaranteed market access and lower entry thresholds.
VPP software platforms like Leap could benefit, too. Leap helps manufacturers of devices such as smart thermostats and EV chargers enroll customers in VPP programs, so fewer utility equipment requirements and what will presumably be a much bigger addressable market would help. Home battery companies such as Lunar Energy and Base Power, which aggregate their residential batteries into VPPs, and smart panel-maker Span, which coordinates home appliances to respond to grid needs, could see similar benefits.
Hard rock mining is also among the bill’s clear winners. It clarifies that miners can use as much federal land as is “reasonably necessary” to store waste rock and tailings, and opens additional federal land for hard-rock mining leases. It also requires lawsuits challenging mining approvals to be filed within 150 days. Broader changes to NEPA, the National Historic Preservation Act, and the Clean Water Act will also accelerate the mining approval process.
This will undoubtedly be controversial for many climate advocates; while the energy transition demands more critical minerals, mining itself is a dirty endeavor. Yet there are a number of climate tech-adjacent companies focused on extracting, refining, and processing materials like lithium, nickel, cobalt and copper that stand to benefit.
One of the buzziest startups trying to develop new critical minerals mines, AI-driven exploration and development company KoBold Metals, is mainly working abroad right now. But a more favorable domestic environment could prove an enticement to invest more at home. Mariana Minerals, a software-driven developer working to bring mines online faster and cheaper, definitely stands to benefit given its current domestic focus. So could startups like Jetti and Endolith, which are developing technology to extract more copper from low-grade ores. Both work with existing mines, so could stand to profit from a domestic mining boom.
Of course not everyone will win here. For the horde of climate-tech adjacent startups trying to jump on the data center bandwagon — perhaps those working on chip cooling or capturing and recycling the waste heat from data center servers — maybe the added costs this bill imposes on data centers will reduce demand for their services just a bit. But I wouldn’t count on that. The bill certainly won’t stop the buildout so much as change who pays for some of the infrastructure required to serve it, shifting the cost of new power lines and grid upgrades from ratepayers onto the tech giants and developers themselves.
Then there are the myriad software startups such as Nira Energy, Paces, and Piq Energy that help energy developers navigate the grid interconnection process. Since the bill requires regional grids to streamline their queues, this could reduce demand for their services. But developers will still need to know where the grid has room and where projects pencil out, and utilities and grid operators will have to rebuild their interconnection processes, a transition that could generate demand for software of this sort.
There’s also just an array of climate industries that go largely unaddressed. While the Inflation Reduction Act offered incentives for practically every decarbonization technology under the sun, this bill is far more targeted, leaving sectors such as EV manufacturing, industrial decarbonization products like clean cement and steel, agricultural technologies, and methane abatement relatively untouched.
Carbon capture and removal projects, EV charging, and hydrogen get only minor nods: protection from administrative delays for carbon management projects and DOE funding to help local governments expedite permitting for EV chargers and hydrogen refueling stations. All of these industries could still benefit when building manufacturing plants or other facilities that need federal sign offs. But they could also lose ground if speedier approvals for fossil fuel infrastructure make cleaner alternatives less competitive.
On Korean reactors, California plug-in solar, and Europe’s green steel champion
Current conditions: Floodwaters from the remnants of Hurricane Polo breached a 20-foot dam in southern New Mexico, forcing evacuations • The Pacific’s active hurricane season continues as Hurricane Rachel threatens dangerous rip tides off Baja California • Further north in the Pacific, Tropical Storm Choi-wan is headed toward the Northern Mariana Islands.
It’s 417 pages — or, for those of you who think in such terms, roughly two-and-a-three-quarters the length of a standard environmental impact statement. And it the landed yesterday with much fanfare. The Senate’s grand compromise on permitting reform, dubbed the Bipartisan American Affordability and Jobs Act, or BAAJA, is packed with sweeping changes that promise to upend how data centers are built, whether transmission lines get constructed at all, and speed up deployments of all kinds of energy infrastructure. My colleagues — there are five bylines on this sucker, if you have any doubt about how seriously Heatmap is taking this — have a dense and comprehensive explainer here.
Whether the bill becomes law is another question. Already, House Democrats are casting doubt over whether they will vote for the legislation during the lame-duck session after Republicans likely lose control of at least the lower chamber of Congress in November’s midterm elections. “Most Democrats will want to see how things go on Nov. 3 and then do a reality check,” Representative Jared Huffman, a California Democrat, told Bloomberg reporter Ari Natter. “If we’re on our way to a majority in one or both Houses, it makes no sense to fold our hand when we could wait a few months and have a much better deal early next year.” Any hope of brokering a deal to vote on the bill before the election seems unlikely. A GOP source told me “there is no way” House Speaker Mike Johnson, the Louisiana Republican, “will call back people from the campaign trail to vote on this in the House.” So it may be too soon to turn the acronym into a name. But my humble suggestion is to pronounce BAAJA as BAH-zhuh, which sounds like Basha, my late grandmother’s name. I can only assume the rest of you are equally moved by that association.
South Korea is the only country in the democratic world with a strong, recent track record of building nuclear reactors competently and on time. Seoul’s state nuclear giant is also bound by a settlement with America’s flagship nuclear company, Westinghouse, which accused Korea Hydro & Nuclear Power of ripping off the design of the U.S. reactor, the AP1000. As a result, the Koreans can’t build their own reactors in North America or Europe. But in a bid to stave off President Donald Trump’s tariffs, South Korea has agreed to spend $200 billion on U.S. energy projects. That includes an investment into Alaska LNG, a major liquified natural gas terminal, a gas-fired station in Texas, and eight nuclear reactors, according to Bloomberg and Politico. The deal is the culmination of talks ongoing since the spring, as I previously reported, and comes amid swirling rumors in the South Korean press over whether Seoul could secure a stake in Westinghouse if the American company makes a debut on the stock market. In a statement, the Canadian uranium giant Cameco, which owns 49% of Westinghouse, said the eight reactors in the Korean deal “contemplates” the construction of as many as six new AP1000s and up to two Korean APR1400 reactors. Still, the company emphasized that it was focused on the Department of Energy’s condition loan commitment to finance AP1000 components for any joint venture between Westinghouse and a utility building one of its reactors. But it said that, if both the American and Korean reactors can be built successfully, “both technologies are expected to be deployed on federal sites designated” by the U.S. government, “beginning with the deployment of two AP1000 reactors.”
It’s unclear when the South Korean money will flow into actual projects on the ground. But New York is putting up dollars. On Tuesday, New York Governor Kathy Hochul awarded another $10 million to the New York Power Authority to support workforce development programs in a bid to train more people to staff the nuclear power stations her administration has tasked the state utility with financing. “Advanced nuclear is a cornerstone of my all-of-the-above strategy to keep the lights on and costs down for New Yorkers,” Hochul said in a statement. “The $10 million in funding approved today by the NYPA board will help ensure New York’s advanced nuclear future will be built by and for New Yorkers and also re-energize an industry that will create thousands of high-quality jobs while complementing our nation-leading efforts on wind and solar.” Canada, meanwhile, is upping its ambition. Saskatchewan’s provincial government announced plans this week to build at least two large-scale reactors by the early 2040s, NucNet reported.
When Secretary of Energy Chris Wright sat down with my colleague Robinson Meyer last week, he said he doubted the Trump administration would impose a temporary ban on exporting diesel amid record-high prices. But the Financial Times reported Wednesday that the White House was holding “crisis talks” to determine whether the move was merited. Experts have cautioned that it could lower diesel prices in the U.S. slightly, but would send prices soaring in Europe.
Russia, meanwhile, just renewed its ban on diesel exports, blunting both the effects of the global market chaos and the profits the Kremlin could be yielding given its rising crude exports, Bloomberg reported.
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California Governor Gavin Newsom signed a series of bills Wednesday that clear the way for more homeowners in the state to slash their electricity costs and personal carbon footprints. Under one new law, utilities will offer a voluntary incentive to electrify homes whenever the pipe connecting a home to a gas main line is due for replacement. Under another, homeowners and even renters will be able to install plug-in solar panels that can generate small amounts of electricity on roofs or balconies.
As grows a market in the nation’s most populous state, so goes the country. The so-called balcony solar bill in particular is expected to supercharge the market, making cheap, personal solar panels more widely accessible. As my colleague Katie Brigham wrote last year, plug-in solar is popular in Europe, and could find a big market in the U.S. New York, for example, passed legislation this spring, though Hochul has yet to sign it.
Europe once boasted two cutting-edge green industrial manufacturers, both in Sweden, with shared investors and executives. Northvolt, an electric vehicle battery manufacturer, declared bankruptcy last year. That left only Stegra, the green steelmaker. Shortly after Northvolt went under, Stegra went looking for another financial lifeline to cover the mounting costs of commercializing its renewable electricity-based method for forging steel. It ultimately received one from a French hydrogen investor. Now Stegra says it needs more money to complete its flagship first project in northern Sweden. The company named former Saab aerospace executive Håkan Buskhe as its new chief executive, replacing Henrik Henriksson who served in the top role since 2021. The new leadership’s review of its books and plans revealed “that additional capital is required to complete the project, as estimated costs of completing it are significantly higher than assumed in June.” The high costs “are mainly the result of substantial ramp-up costs following the prolonged scaling back of work earlier this year, as well as inflation.”
The U.S., meanwhile, may be getting what Canary Media called a “lower carbon steel mill” in Iowa. Mesabi Metallics, which is already building America’s first new iron ore mine in 50 years, announced plans this week for a $15 billion steel plant in southeast Iowa that would rely on what’s called direct reduced iron, a cleaner method of making iron than a traditional coal-fired blast furnace. As my colleague Emily Pontecorvo wrote last year, the Trump administration may have violated the law when it diverted Energy Department funding from a green steel project in Ohio to instead reboot a blast furnace. Hyundai is also building a gas-powered DRI steel mill in Louisiana, which the automaker plans to eventually run on low-carbon hydrogen, as I previously reported.

Before the artificial intelligence boom (and its less sexy older brother, the cryptomining boom), electricity demand growth was a problem many proponents of decarbonization actually wanted, because it would mean electrification was taking off. Last year, record EV sales translated into record 16% growth in electricity demand for charging the light-duty battery electric vehicles. But this year the growth fell by half to just 8%, according to the latest analysis by the U.S. Energy Information Administration.
Controlled Thermal Resources has completed key financial steps ahead of its planned Nasdaq debut.
California’s inland Salton Sea is a potential clean energy double dip, with vast and largely untapped geothermal hotspots for generating heat and electricity and rich deposits of lithium, manganese, and other critical minerals needed to fuel the battery revolution.
Now one of the companies looking to commercialize both resources is taking a big step toward debuting on the stock market.
On Thursday, Controlled Thermal Resources is set to announce that it’s converting $205 million of debt into equity ahead of a planned initial public offering on the Nasdaq later this year, Heatmap can exclusively report. Among the big investors swapping debt for a stake in the Imperial, California-headquartered startup is the automaker Stellantis, according to a source with direct knowledge of the deal.
“Like a lot of our colleagues in this industry, we need to raise a lot of capital to build out a multi-stage project,” Rod Colwell, CTR’s chief executive, told me this week. An IPO, he said, “is a mechanism that enables us to keep going back to the market as we build out our 650-plus megawatts and supporting infrastructure that follows.”
He declined to comment on what interest Stellantis, which owns brands such as Chrysler, Jeep, and Maserati, has in the deal. The Dutch auto giant did not respond to multiple requests for comment.
“Automakers who successfully build out a resilient EV supply chain, including mining and mineral processing, will be in a good position to compete as the U.S. auto market continues to evolve in the years ahead,” Corey Cantor, the research director at the trade group Zero Emission Transportation Association, told me via email. With electric vehicles sales also booming globally, “having a more resilient supply chain up and running soon is more important than ever.”
CTR isn’t pursuing a traditional IPO. Instead, the startup is planning to go public via a merger with a special purpose acquisition company, a so-called blank-check firm that’s already trading, allowing the actual primary entity to swiftly issue stock to retail investors. While plenty of SPAC deals have proven volatile in recent years, particularly in cutting-edge clean energy, geothermal stocks are particularly — forgive me — hot.
Fervo Energy, the country’s frontrunner in developing next-generation geothermal power plants, is racing to complete its first major facility, known as Cape Station. Shares in the Houston-based firm skyrocketed after its IPO in May, though the price has sunk in the intervening months.
With demand for electricity soaring, CTR shifted its strategy to focus on building its debut 50-megawatt geothermal power station. Power and heat from that facility will, in turn, be used to extract and process lithium and other minerals from the briny inland lake.
CTR said it aims to move forward with its plant next June, with the facility expected to come online in 2028.
“Shortly thereafter, we’ll be building out the critical minerals component,” Colwell said. “That’ll be commissioned in 2030.”
Editor’s note: This story has been updated to correct the generation capacity of CTR’s debut power station.