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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Will Biden’s $1 Trillion Infrastructure Bet Pay Off?

  • After months of deliberation, the $1 trillion infrastructure bill has finally been passed and signed into law by President Biden.
  • The U.S. Department of Energy is set to receive tens of billions of dollars in new funding, with an emphasis on new technological innovations.
  • The law will also give the country’s aging energy grid a facelift, helping secure and modernize America’s most vulnerable infrastructure. 

The $1 trillion Infrastructure Bill has finally been passed by a bi-partisan Congressional vote and signed into law by President Biden. The Bill has undergone many revisions and different negotiated iterations in order to satisfy both sides of the aisle. As with any compromise, there are plenty of dissatisfied parties -- some think that the Bill kowtowed to Big Oil and was gutted of its most promising climate mitigation clauses, while others think that it’s a bloated threat to the United States deficit that threatens to take away coal and oil jobs from communities that depend on them.  Who is right? The answer, of course, is complicated. At the end of the day, the Bill will have major impacts on the U.S. energy industry, and more specifically will have major changes in store for the nuclear sector, the energy grid, and the U.S. Department of Energy (DOE). The Bill’s overall focus on emerging technologies and innovative research and development will have major implications for the way the future of the domestic energy sector unfolds.

The bill will send tens of billions of dollars in new funding to the DOE, most of which is specifically allocated for new technological innovations. The DOE will add about 1,000 people to its workforce and open new offices tasked with this mission, including an Office of Clean Energy Demonstrations which will direct $21.5 billion at the oversight of brand new pilot projects. These initiatives are aimed at helping startup companies scale up promising new approaches including long-term energy storage, small modular nuclear energy, green hydrogen, carbon capture, and direct air capture. “DOE is no stranger to stewarding along new technology,” E&E’s Energywire reports. “Tesla Inc., the EV colossus valued at more than $1,000 a share, traces its origins to a $465 million government loan in 2010, which it used to open its first assembly plant in Fremont, Calif.”

The Infrastructure Bill also includes some desperately needed provisions to update the aging U.S. power grid. If the country is to have any hope of supporting a clean energy transition, the grid will need to be modernized in order to accommodate for the added complexity of renewable energy flows. Unlike fossil fuels, which provide a steady, one-way flow of energy from producer to consumer, renewable energies like solar and wind are variable -- meaning that their output is dependent on factors like weather and daylight hours. What’s more, the flow of energy to and from the grid is no longer a one-way street, now consumers can also be producers of energy thanks to residential solar panels. And then there’s the projected added demand of increased electric vehicles adoption (also bolstered by the Bill) which will put further strain on the electric grid.

Related: SPR Release Only Triggered A Brief Selloff In Crude Oil

All of this adds up to a much more complicated calculation of energy flows throughout the day. Keeping energy supply balanced with demand is essential for the maintenance of electric grids, which can be damaged if there is too much of a mismatch between these factors. Enter the “smart grid” which uses two-way communication technologies, control systems, and computer processing for better, more adaptable grid management. While the Infrastructure Bill aims to be a critical first step in this direction, however, the grid still has a long, long way to go. “The plan allocates billions of dollars toward developing new electric transmission lines, enhancing the existing transmission system, and encouraging regulators to prepare for expansive changes in energy resources and consumption needs,” E&E reports. “Even so, funding may only cover a fraction of the expected costs of building out the power grid to support both carbon-free electricity and zero-emissions transportation and heating.”

The last, and perhaps most controversial energy sector impact of the Infrastructure Bill has to do with the U.S. nuclear industry. The domestic nuclear sector has been on the decline for decades, and many of the country’s aging nuclear plants are highly dependent on government handouts to keep the lights on. The Bill will continue to offer credits and subsidies to the nuclear sector as an important source of emissions-free electricity and as a vital portion -- around 20% -- of the U.S. energy mix. Advocates say that eliminating any kind of reliable and proven climate-friendly energy production would be a critical error. Critics, however, argue that the continued support of nuclear power is distracting from the more important imperative to develop clean energies. 

Nuclear power is currently the subject of considerable international debate as world leaders continue to be divided over whether this form of energy production -- which produces no greenhouse gases but leaves behind radioactive waste that must be managed for hundreds if not thousands of years -- should be classified as green and included in climate adaptation plans, or whether it should be eliminated from the future energy mix. The Biden administration’s decision to include funding for established nuclear plants as well as innovative small modular reactors could have a far-reaching influence on the global nuclear debate.

By Haley Zaremba for Oilprice.com

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Leave a comment
  • Kay Uwe Boehm on November 23 2021 said:
    Before bancrupcy because gas & oil price to low now a little to high but very much gas reserves in world for a decade of increase
    likely USA in investment pig cycle and fracking blocked from Joe Biden administration investing more in solar & wind power feeding next hurricanes stopping canada oil pipeline etc.

    USA oil & gas more and more from fracking more expansive than own coal international for export to asia instead LNG etc.
    Europe has gas alsi fracking gas reserves awaiting much more from mefiterian sea counries main reserves russia, quatar and iran in world can increase much.
    No gas supply & storage reserve problem in europe mucg from norway increasing already more but winter still normal cold last winter special long 2012 cold.

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