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Policy Watch

Mineral Mania

The week’s biggest news in renewable energy policy.

Mineral mining.
Getty Images / Chris Briggs / Heatmap

1. Global minerals mania – The U.S. government and allies this week announced the Minerals Security Partnership Finance Network, a global minerals investment operation focused on battery metals and other resources key to the energy transition.

  • Along with the announcement came the disclosure of specific U.S. financing decisions – $600 million to Australian Strategic Materials for a rare earths project in New South Wales; $20 million to Electra Ontario Cobalt, a Canadian company, for a cobalt refinery; $50 million to ESS Inc. for iron flow battery assembly lines at its Oregon plant; and $3.6 million to Pensana Rare Earths for researching the expansion of a rare earths mine in Angola.
  • This represents a new norm where U.S. dollars can go to mining overseas. I’ve covered mining my whole career and can safely say the U.S. has never organized this hard to counter China’s outsized influence in global minerals markets through direct investments.
  • What else does this mean? Companies that rely on raw materials abroad are probably thinking internally about whether their resources could qualify for federal money one day, too.

2. Mining at home – Meanwhile, the Energy Department on Friday announced $3 billion (!) for 25 battery minerals and manufacturing projects in the United States.

  • A noteworthy name on the recipient list: SWA Lithium, a joint venture between Norwegian state-owned oil major Equinor and the Koch-backed mining company Standard Lithium. The money will go towards extracting lithium chemicals from the Smackover formation in Arkansas.

3. Buckwheat bucked – Domestic lithium extraction got another major boost from the government late last week when the Bureau of Land Management published the final environmental review for the Rhyolite Ridge mine in Nevada, one of the few U.S. lithium mining projects close to completing its permitting.

  • Publication of the review without adverse recommendations means the project is all but assured to be approved.
  • It’s another blow to the Center for Biological Diversity, which has fought to block the mine because studies, including research funded by the mining company, show a clear danger to an endangered flower present at dig sites called Tiehm’s buckwheat.
  • I’d expect litigation here from CBD. I’d also treat this as a bellwether for how the Biden administration looks generally at mining vs. species protection.

4. Semiconductors souped – Congress passed legislation on Monday to provide for federal regulators to fund semiconductor projects under the CHIPS Act without environmental reviews, sending it to the president’s desk where it’ll likely be enacted into law.

  • Semiconductor industry representatives had bemoaned the risk of NEPA reviews impacting CHIPS money going out. Now they won’t have to worry.

5. Content standards – The Solar Energy Industries Association published a new draft standard for compliance with U.S. customs requirements against the use of inputs from the Xinjiang region of China, where the U.S. government suspects forced labor is involved with solar materials manufacturing.

  • The draft standard is intended as a series of recommendations for companies to most easily meet the existing customs requirements.
  • They’re open for comment through Nov. 4. You can comment here.

Here’s what else I’m watching…

  • Anti-offshore activists in Nantucket petitioned the Supreme Court to take up their failed appeal of a lawsuit claiming the Vineyard Wind project violated the Endangered Species Act, citing the court’s recent decision to undo the so-called “Chevron Doctrine.”
  • A Senate committee is poised to vote on bipartisan legislation this week that would create revenue sharing for states with offshore wind – which may not easily become law in an election year but could be on the horizon soon after.
  • Nearly half of all IRA funding has gone to seven swing states for the U.S. presidential election, according to analysis conducted by a public policy firm at the request of The Guardian.
  • Colorado is offering a fresh round of grant money to localities in the state that want to use automated rooftop solar permitting software.

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Spotlight

The Real vs. Imagined Problems with Data Centers’ Water Use

How much water is too much?

Water, a data center, and a protester.
Heatmap Illustration/Getty Images

The data center water issues are real – but they aren’t what you think.

Too often, I hear people say the number one reason they’re against data center development is water use. Heatmap’s data shows water consumption is historically the reason cited most often by activists when opposing projects. This complaint, they often say, is rooted in the fear that this nascent buildout of AI infrastructure will simply draw so much H2O it will leave little liquid left for the rest of us.

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Texas Is the Eye of the Bipartisan Data Center Hurricane

And more of this week’s biggest news around project fights.

The United States.
Heatmap Illustration/Getty Images

1. Matagorda County, Texas – The bipartisan data center backlash is now so powerful that a top Republican Texas state official is doing an event with the Democrat vying to replace him.

  • On Thursday afternoon, outgoing Republican agriculture commissioner Sid Miller and Democratic candidate Clayton Tucker are marqueeing a forum hosted by Matagorda County Against Data Centers, an opposition group that appears to also monitor solar and battery storage for potential opposition, too. Miller is leaving his post at the end of the year after being defeated in a GOP primary by Nate Sheets, who was supported by Gov. Greg Abbott.
  • This bipartisan forum will take place after Abbott himself called for new laws and regulations on data centers in a letter to Texas Public Utility Commission Chair Thomas Gleeson and ERCOT CEO Pablo Vegas. Abbott said he’d push to require data centers to pay costs for electric infrastructure and use “water-efficient technologies such as closed-loop cooling systems.” Also on the to-do list? Mandatory property setbacks and noise reduction.
  • It’s becoming clear the frustrations against AI infrastructure and associated energy projects are starting to boil without a vent. The first county to issue a data center moratorium in Texas has withdrawn the effort after facing a $100 million lawsuit from a developer, and other counties are delaying future moratoria on fears of legal risks. Where will all of this frustration go without the option to pause development locally?
  • We’re starting to see Texas legislators seek to channel this anger. Last week, Rep. Veronica Escobar – a Democrat who represents the dry, data center-anxious city of El Paso – offered an amendment in a House committee to block funding for the EPA’s new data center construction rules. The amendment failed but I’d hardly be surprised to see this sort of rider gain traction if Democrats retake the lower chamber, especially if data centers are a major election issue.

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One Investor’s Climate ‘Realism’ In the Data Center Era

A conversation with Craig Lawrence of Energy Transition Ventures

The Q&A subject.
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This week’s conversation is one of my favorites so far – Craig Lawrence of Energy Transition Ventures. Lawrence has been around the block and back again when it comes to the cleantech investment landscape. So I took note when he got into a brief back-and-forth with an activist fighting data centers in Indiana who claimed there were “so many clean energy people who no longer care about climate change” because they “now support fossil fuel data centers if some nominal amount is met with clean energy.”

Lawrence replied, “Some of us are simply realists.”

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