U.S. Energy Policies Should Focus on Reliability, Affordability, and Minimizing Environmental Impacts
Executive Summary
- The U.S. must increase baseload (24/7 dispatchable) energy production to satisfy forecasted skyrocketing demands for electricity to power AI, manufacturing, EVs, and other uses.
- Addressing climate concerns by reducing emissions from energy generation versus providing reliable and affordable energy is not a binary choice. Increasing domestic energy production can be done while maintaining a clean and safe environment and minimizing CO2 emissions through technology advancements.
- The recent focus on reducing CO2 emissions by replacing baseload coal and natural gas generation with intermittent wind and solar power has weakened grid reliability and created national security and economic threats, which have stimulated recent policies to use coal, natural gas, and nuclear power to improve energy reliability.
- Goals to minimize CO2 emissions must be balanced with the national security and economic imperatives to maintain and improve grid reliability and energy affordability, which will require combining baseload power from coal, natural gas, and nuclear with renewable energy from wind and solar.
- Meeting future power demands will require permitting reform to facilitate building new energy infrastructure including high-voltage transmission lines and natural gas/LNG pipelines.
- President Trumps’ energy, minerals, and coal Executive Orders recognize that energy and minerals are essential for national and economic security and seek to make the U.S. energy and minerals dominant by reducing regulatory barriers that currently impede responsible development of these domestic resources.
- Energy policies should reflect that there is no universal, one-size-fits-all, nationwide best form of energy and allow site- and use-specific conditions to define the best mix of energy sources to satisfy the energy demands for different locations and applications.
- SME supports all forms of energy supplies that provide reliable and affordable energy where and when it is needed and Research & Development programs to discover new and enhance existing technically and economically feasible emissions control technologies.
Energy Policy and Permitting Reforms to Improve Grid Reliability
President Trump’s April 8, 2025 Executive Order, Strengthening the Reliability and Security of the United States Electric Grid states:
Lack of reliability in the electric grid puts the national and economic security of the American people at risk. The United States’ ability to remain at the forefront of technological innovation depends on a reliable supply of energy from all available electric generation sources and the integrity of our Nation’s electric grid.
ExxonMobil predicts that energy production in 2050 is likely to come from the same energy sources upon which we rely today with some increase in alternative energy production (e.g., from hydro, wind, solar, and geothermal) and a decrease in coal use. However, President Trump’s April 2025 Coal Executive Order aims to increase future power generation from coal, stating the Nation’s abundant coal resources, “will be critical to meeting the rise in electricity demand due to the resurgence of domestic manufacturing and the construction of artificial intelligence data processing centers,” and sets a policy to “encourage and support our Nation’s coal industry to increase our energy supply, lower electricity costs, stabilize our grid, create high-paying jobs, support burgeoning industries, and assist our allies” through coal exports.
The International Energy Agency (IEA) reports that worldwide coal-fired power generation hit a record high in 2024, with China leading the way in new coal powerplant construction, and India and Indonesia also reporting substantial coal use. The reliance on coal in these countries offsets declines in coal use in the U.S. and the E.U.
The renewed focus on coal in the U.S. underscores the need to balance the range of energy sources needed to address growing concerns that substituting intermittent wind and solar energy for baseload power has destabilized the reliability of the electrical grid. The North American Electric Reliability Corporation’s (NERC’s) 2024 State of Reliability Overview found that although the Nation’s grid is resilient and capable of withstanding and responding effectively to severe weather events, the evolving resource mix of power generation types and the replacement of baseload coal power sources with intermittent wind and solar power is challenging generation reliability and increasing risks of power shortages and outages.
Another important energy policy consideration is the urgent need to expand the U.S. high-voltage transmission grid. According to a JPMorgan Chase March 2025 report, U.S. “transmission line growth is stuck in a rut, way below DOE targets for 2030 and 2035.” Substantial shortages of transformer equipment and delivery times, which have extended from just four to six weeks in 2019 to two to three years today, are cited as another significant impediment to constructing new transmission lines. This report documents that in 2023, the U.S. added only about 600 line-miles of new transmission compared to roughly 4,000 line miles that were added to the grid in 2013. Without significant permit streamlining and supply chain improvements, the likelihood of meeting DOE’s transmission line construction goals seems slim.
New Electricity Uses will Drive Power and Mineral Demands
Forecasts show soaring demand for electricity and minerals due to the rapid growth of power-hungry data centers and AI, industrial and manufacturing growth, and electrification of the transportation sector. According to the IEA, after almost two decades of relatively flat demand, electricity consumption grew by 2% in 2024 and is forecast to continue to grow by 2% in both 2025 and 2026. The EIA says this growth is attributable to demand from new semiconductor and battery manufacturing factories and from data centers. In December 2024, a U.S. Department of Energy report found that domestic energy use for data centers is expected to double by 2028. Meeting these demands will require more domestic energy from a variety of reliable energy sources, more minerals – especially copper – and significant expansions in the Nation’s transmission grid and natural gas pipeline infrastructure.
The need to provide always available energy for data centers has increased interest in nuclear power, which is virtually CO2-emissions free and 24/7 dispatchable. For example, in 2024, Microsoft made a deal with Constellation Energy, the owner of the Three Mile Island (TMI) nuclear facility, to refurbish the undamaged TMI reactor and purchase all of the electricity generated by this reactor to power an AI data center.
Increased Electricity Demands Create Skyrocketing Demands for Minerals
Increased demand for electricity is expected to substantially increase the need for copper, which is essential for electrification. BHP, the world’s second largest copper mining company, recently projected the world will require over 50 million tonnes (Mt) of copper per year by 2050, representing a 70% increase in copper demand compared to current copper production levels. In addition to traditional copper uses for construction and consumer goods, BHP predicts a substantial increase in copper demand for building and charging electric vehicles, manufacturing wind and solar infrastructure, and satisfying digital demands – particularly AI-driven data centers. BHP projects that EVs will account for over 20% of the increased copper demand by 2050, whereas the need for copper for data centers is expected to grow sixfold by 2050.
EVs, solar panels, wind turbines and other alternative energy infrastructure create significant demands for minerals besides copper. For example, IEA’s 2024 report, “Global Critical Minerals Outlook 2024,” found that EV batteries are the largest consumer of lithium and a significant consumer of nickel, cobalt and graphite, whereas solar photovoltaic and wind energy systems and the related expansion of electricity transmission networks create demand for copper and aluminum. This report also predicts shortfalls for copper and nickel starting in 2025.
Conclusions
SME is committed to providing technical information to policy makers about the coal, uranium, and other minerals that are the fuel stocks and mineral building blocks needed to power America’s national energy security. The following conclusions present an “all-that-we-have/all-that-works” energy perspective that balances economic, reliability and environmental objectives:
- Because energy security is essential to national and economic security, capitalizing on the country’s diverse mix of energy resources is essential in providing the energy necessary for national defense and maintaining a strong economy.
- U.S. energy policies must recognize there is no one-size-fits-all, nationwide blueprint for the best way to provide clean, reliable, and affordable energy. Clean, reliable, and affordable electric generation using coal must continue to be in our energy mix.
- Balancing reliability, economics, and environmental objectives involves tradeoffs that must consider numerous factors including the site-specific availability of power resources, the types of energy consumers, existing infrastructure (e.g., transmission lines and natural gas and LNG pipelines), and the need for future expanded infrastructure.
- There must be an ongoing commitment to develop new practical and economically feasible emission reduction technologies that reflect constraints and opportunities and that may vary regionally and from site to site.
https://www.nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/NERC_SOR_2024_Overview.pdf
https://assets.jpmprivatebank.com/content/dam/jpm-pb-aem/global/en/documents/eotm/heliocentrism.pdf
https://www.eia.gov/todayinenergy/detail.php?id=64264
https://www.technologyreview.com/2024/09/26/1104516/three-mile-island-microsoft/
https://www.bhp.com/news/bhp-insights/2024/09/how-copper-will-shape-our-future
https://www.iea.org/reports/global-critical-minerals-outlook-2024.