WHAT’S HAPPENING TODAY: Good afternoon and happy Thursday, readers! In today’s Daily on Energy, we explore a newly approved graphite mining project in Alaska that will be covered by the federal government’s fast-track permitting program, also known as FAST-41.
We also take a look at talks between President Donald Trump and Chinese President Xi Jinping on the two countries’ trade relations. The leaders focused on trade policy, specifically discussing rare earth exports, which China has dominated.
As the Trump administration explores ways to revive the coal industry, a report indicates that the cost of coal continues to rise. Read on to find out how much coal prices are expected to increase.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
FIRST FAST-41 MINING PROJECT IN ALASKA APPROVED: Graphite One, a mining company, has won the first approval for a mining project for critical minerals in Alaska under the federal government’s fast-track permitting program.
Earlier this week, Graphite One announced that its project Graphite Creek in Alaska has been approved under the federal government’s FAST-41 program. Graphite Creek is considered one of the largest deposits of graphite in the U.S.
FAST-41, which stands for Fixing America’s Surface Transportation Act, is a federal program that helps to streamline the permitting process for critical infrastructure projects.
The program, which began during the Obama administration, covers a range of economic sectors, including mining. As of today, the program covers five mining projects, Graphite One being the most recent approval.
Dan McGroarty, who is on the Graphite One Advisory Board, told Maydeen that the company’s strategy is to build a complete supply chain, from the upstream mining to the midstream processing and the production of lithium-ion battery anode materials and other graphite products for the U.S. market.
“If we just developed the mine and created a graphite concentrate of 95% purity and did nothing more, we would end up shipping it to China for processing. We would ship Alaska graphite to China, and then it would get caught in tariffs. We would have to potentially buy it back, or other companies would buy it back,” McGroarty said.
A number of factors, including regulations, labor, and more, have made it challenging to maintain entire supply chains of rare earths or critical minerals in the U.S. Currently, the U.S. relies heavily on China to process critical minerals that are mined in the states.
“It’s a big deal to try to recreate the entire supply chain,” McGroarty said.
Following Graphite One’s FAST-41 approval, the company entered into an agreement to provide natural graphite to EV maker Lucid Motors.
TRUMP TALKS TRADE WITH CHINA’S XI JINPING: Earlier today, President Donald Trump held a lengthy phone call with Chinese President Xi Jinping to discuss U.S.-China trade relations.
Trump said on Truth Social that he had a “very good phone call” with Xi, which lasted about 90 minutes and focused almost entirely on trade.
Trade relations between the U.S. and China have been tense since the Trump administration imposed sweeping tariffs on all Chinese goods. China responded to the U.S. tariffs by imposing export restrictions on rare earth materials, which are crucial for products in the energy and defense sectors. China is responsible for nearly 90% of the world’s rare earth supply chain.
Earlier this week, it was reported that major automakers are examining ways to work around China’s export restrictions. The Wall Street Journal reported that four major automotive companies are considering moving production of electric motors to China to navigate the export restrictions and have the rare-earth magnets installed.
“There should no longer be any questions respecting the complexity of Rare Earth products,” Trump said on Truth Social.
Trump added that U.S. and China trade officials plan to meet soon.
COST OF COAL CONTINUES TO CLIMB: While the Trump administration has touted coal power as one of the cheapest forms of energy the U.S. can use to meet growing demand from artificial intelligence, a new report has found the cost of generating electricity from the fossil fuel has only increased in recent years.
The details: In the report released today, climate and energy research firm Energy Innovation Policy and Technology found that coal is generally not competitive with other alternative sources of energy like renewables and was around 28% more expensive than it was in 2021.
The firm estimated that the average cost of energy generated by coal-fired plants was around $46 per megawatt hour of energy, $10 more than it was in 2021. As a result, the report claimed that in 2024 coal plant owners spent more than $6.2 billion more than they would have for the same amount of energy generated by their plants in 2021.
These higher costs have been primarily attributed to rising fuel and maintenance costs, as well as the increased number of coal plant retirements that occurred during that time frame. As Trump has sought to keep aging plants planned for closure open for longer, Energy Innovation warned in the report that it could ultimately leave customers footing the bill.
ENERGY INVESTMENT EXPECTED TO RISE IN 2025 DESPITE ECONOMIC UNCERTAINTY: Investment in the energy sector is expected to increase this year globally by 2%, totaling about $3.3 trillion, according to the International Energy Agency.
The IEA said that, despite economic uncertainty and geopolitical tensions, about $2.2 trillion is being invested in renewable energy. About $1.1 trillion is being invested into oil, natural gas, and coal.
IEA noted that the outlook suggests that investors are “adopting a wait-and-see approach to new project approvals” but that there has yet to be significant implications for spending on current projects. The report said that the investment trend is particularly due to the rise in energy demand from emerging technologies like artificial intelligence and data centers.
A decade ago, investment in fossil fuel supply was about 30% higher than investment in electricity generation, grids, and storage. Today, the positions have reversed, with investment in the electricity sector set to reach $1.5 trillion this year.
Tristan Pelham Webb, a partner in King & Spalding’s Finance practice, told Maydeen that IEA’s summary “confirms” what he has seen and heard within the energy space.
“There’s still some uncertainty about where U.S. tax and energy policy is going to shake out,” Webb said. But, he added, there are two underlying fundamentals that have driven recent growth in the energy sector: demand growth and the rush to start construction on projects, especially before Trump took office.
“There was this massive, massive rush to order equipment and onshore equipment and start construction for federal income tax purposes on projects as soon as possible,” Webb said. “There’s been all of this money thrown at getting projects ready and in the queue and so you have a lot of near term projects – they are ready to go.”
CARGO SHIP CARRYING ELECTRIC VEHICLES CATCHES FIRE: A cargo ship sailing off the coast of Alaska caught fire this week, creating greater risk of a larger explosion as hundreds of electric vehicles are stored on board.
The details: The U.S. Coast Guard confirmed that the fire first began on Tuesday at around 3:15 p.m. local time on the 600-foot cargo ship Morning Midas, which was located around 300 miles south of Adak, Alaska, in the Pacific Ocean.
The vessel is carrying more than 3,000 vehicles, including 70 that are fully electric and 681 that are hybrid EVs. Its cargo is also made up of 350 metric tons of gas fuel and 1,530 metric tons of very low sulfur fuel oil. The vessel was headed for Lázaro Cárdenas in Mexico, after pushing off from Yantai, China last week.
All 22 members of the ship’s crew have since been evacuated and rescued, with no reported injuries. The Coast Guard has not moved to put out the blaze, telling the New York Times that it is allowing the fire to burn out, given the risk of an explosion, due to the lithium-ion batteries in the EVs. Lithium-ion batteries are known to overheat, causing greater fire risks to their surroundings. Fires involving these batteries can also produce toxic gases, and make them more difficult to extinguish.
The source: Petty Officer First Class Shannon Kearney of the Coast Guard’s 17th District in Alaska told the New York Times that it was too early to determine whether the fire started from the EVs on board. There is a large risk of transporting these vehicles by sea, as saltwater from the ocean can corrode materials covering the flammable batteries.
ICYMI – SENATE ENVIRONMENT COMMITTEE RELEASES TEXT FOR ‘BIG, BEAUTIFUL BILL’: Late yesterday afternoon, the Senate Committee on Environment and Public Works released the text for its portion of the reconciliation budget set to implement Trump’s agenda.
The details: The proposed text closely aligns with the House version of the mega tax bill, passed in the lower chamber at the end of last month, by recommending repealing all sections of the 2022 Inflation Reduction Act relating to the committee that have unspent money associated with those programs.
This includes rolling back grants related to replacing gas-powered vehicles with electrics, funds related to the Greenhouse Gas Reduction Fund program, funding for grants related to air monitoring and testing, and funding for grants for non-profits conducting projects related to climate and environmental justice.
The text also proposes pausing the IRA’s tax on methane emissions by 10 years and moves to rescind the Environmental Protection Agency’s regulations on tailpipe emissions. It also would create a fee program for project developers to opt into in order to accelerate expedited reviews as required by the National Environmental Policy Act. This fee would be 125% of the costs associated with preparing environmental reviews.
What’s next: EPW’s proposed portion of the reconciliation package will still need to make its way through committee before being added to the final bill. The text released yesterday is subject to change, as Democratic and Republican members of the committee will be expected to propose amendments. Republican lawmakers are aiming to get the final version of the bill on the president’s desk by July 4.
MEANWHILE, ENERGY COMPANY SEEKS TO BUILD LNG TERMINAL IN PHILLY: Penn America Energy Holdings met with White House personnel earlier this week to discuss building a liquefied natural gas terminal near Philadelphia, Reuters reported.
Reuters reported yesterday that Franc James, the CEO, had a meeting at the White House on Tuesday. The company wants to export 7.2 million tons a year of LNG from Philadelphia to export to markets in Europe and Asia.
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