US awards $3B for EV battery production in Texas, other states

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The grants will fund a total of 25 projects in 14 states, including Texas. Photo via Getty Images

The Biden administration is awarding over $3 billion to U.S. companies to boost domestic production of advanced batteries and other materials used for electric vehicles, part of a continuing push to reduce China’s global dominance in battery production for EVs and other electronics.

The grants will fund a total of 25 projects in 14 states, including Texas, as well as Ohio, South Carolina, Michigan, North Carolina, and Louisiana.

The grants announced Friday mark the second round of EV battery funding under the bipartisan infrastructure law approved in 2021. An earlier round allocated $1.8 billion for 14 projects that are ongoing. The totals are down from amounts officials announced in October 2022 and reflect a number of projects that were withdrawn or rejected by U.S. officials during sometimes lengthy negotiations.

The money is part of a larger effort by President Joe Biden and Vice President Kamala Harris to boost production and sales of electric vehicles as a key element of their strategy to slow climate change and build up U.S. manufacturing. Companies receiving awards process lithium, graphite or other battery materials, or manufacture components used in EV batteries.

“Today’s awards move us closer to achieving the administration’s goal of building an end-to-end supply chain for batteries and critical minerals here in America, from mining to processing to manufacturing and recycling, which is vital to reduce China’s dominance of this critical sector,'' White House economic adviser Lael Brainard said.

The Biden-Harris administration is "committed to making batteries in the United States that are going to be vital for powering our grid, our homes and businesses and America’s iconic auto industry,'' Brainard told reporters Thursday during a White House call.

The awards announced Friday bring to nearly $35 billion total U.S. investments to bolster domestic critical minerals and battery supply chains, Brainard said, citing projects from major lithium mines in Nevada and North Carolina to battery factories in Michigan and Ohio to production of rare earth elements and magnets in California and Texas.

“We’re using every tool at our disposal, from grants and loans to allocated tax credits,'' she said, adding that the administration's approach has leveraged more $100 billion in private sector investment since Biden took office.

In recent years, China has cornered the market for processing and refining key minerals such as lithium, rare earth elements and gallium, and also has dominated battery production, leaving the U.S. and its allies and partners "vulnerable,'' Brainard said.

The U.S. has responded by taking what she called “tough, targeted measures to enforce against unfair actions by China.” Just last week, officials finalized higher tariffs on Chinese imports of critical minerals such as graphite used in EV and grid-storage batteries. The administration also has acted under the 2022 climate law to incentivize domestic sourcing for EVs sold in the U.S. and placed restrictions on products from China and other adversaries labeled by the U.S. as foreign entities of concern.

"We're committed to making batteries in the United States of America,'' Energy Secretary Jennifer Granholm said.

If finalized, awards announced Friday will support 25 projects with 8,000 construction jobs and over 4,000 permanent jobs, officials said. Companies will be required to match grants on a 50-50 basis, with a minimum $50 million investment, the Energy Department said.

While federal funding may not be make-or-break for some projects, the infusion of cash from the infrastructure and climate laws has dramatically transformed the U.S. battery manufacturing sector in the past few years, said Matthew McDowell, associate professor of engineering at Georgia Institute of Technology.

McDowell said he is excited about the next generation of batteries for clean energy storage, including solid state batteries, which could potentially hold more energy than lithium ion.

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A proposed Environmental Protection Agency rule intended to encourage industry to adopt best practices that reduce emissions of methane and thereby avoid paying. Photo via Canva

EPA sets out rules for proposed 'methane fee' for waste generated by oil and natural gas companies

pollution deterrent

Oil and natural gas companies for the first time would have to pay a fee for methane emissions that exceed certain levels under a rule proposed Friday by the Biden administration.

The proposed Environmental Protection Agency rule follows through on a directive from Congress included in the 2022 climate law. The new fee is intended to encourage industry to adopt best practices that reduce emissions of methane and thereby avoid paying.

Methane is a climate “super pollutant” that is more potent in the short term than carbon dioxide and is responsible for about one-third of greenhouse gas emissions. The oil and natural gas sector is the largest industrial source of methane emissions in the United States, and advocates say reduction of methane emissions is an important way to slow climate change.

Excess methane produced this year would result in a fee of $900 per ton, with fees rising to $1,500 per ton by 2026.

EPA Administrator Michael Regan said the proposed fee would work in tandem with a final rule on methane emissions EPA announced last month. The fee, formally known as the Methane Emissions Reduction Program, will encourage early deployment of available technologies to reduce methane emissions and other harmful air pollutants before the new standards take effect, he said.

The rule announced in December includes a two-year phase-in period for companies to eliminate routine flaring of natural gas from new oil wells.

“EPA is delivering on a comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis,” Regan said in a statement. When finalized later this year, the proposed methane fee will set technology standards that will “incentivize industry innovation'' and spur action to reduce pollution, he said.

Leading oil and gas companies already meet or exceed performance levels set by Congress under the climate law, meaning they will not have to pay the proposed fee, Regan and other officials said.

Sen. Tom Carper, chairman of the Senate Environment and Public Works Committee, said he was pleased the administration was moving forward with the methane fee as directed by Congress.

“We know methane is over 80 times more potent than carbon dioxide at trapping heat in our atmosphere in the short term,'' said Carper, D-Del. He said the program "will incentivize producers to cut wasteful and excessive methane emissions during oil and gas production.”

New Jersey Rep. Frank Pallone, the top Democrat on the House Energy and Commerce Committee, said oil and gas companies have long calculated that it's cheaper to waste methane through flaring and other techniques than to make necessary upgrades to prevent leaks.

“Wasted methane never makes its way to consumers, but they are nevertheless stuck with the bill,” Pallone said. The proposed methane fee “will ensure consumers no longer pay for wasted energy or the harm its emissions can cause.''

Republicans call the methane fee a tax that could raise the price of natural gas. “This proposal means increased costs for employers and higher energy bills for millions of Americans,” said Sen. Shelley Moore Capito, R-West Virginia.

The American Petroleum Institute, the oil and gas industry's largest lobbying group, slammed the proposal Friday and called for Congress to repeal it.

“As the world looks to U.S. energy producers to provide stability in an increasingly unstable world, this punitive tax increase is a serious misstep that undermines America’s energy advantage,'' said Dustin Meyer, API's senior vice president of policy, economics and regulatory affairs.

While the group supports “smart” federal methane regulation, the EPA proposal “creates an incoherent, confusing regulatory regime that will only stifle innovation and undermine our ability to meet rising energy demand,'' Meyer said. “We look forward to working with Congress to repeal the IRA’s misguided new tax on American energy.”

Fred Krupp, president of the Environmental Defense Fund, called the proposed fee "common sense,'' adding that oil and gas companies should be held accountable for methane pollution, a primary source of global warming.

In a related development, EPA said it is working with industry and others to improve how methane emissions are reported, citing numerous studies showing that and oil and gas companies have significantly underreported their methane emissions to the EPA under the agency's Greenhouse Gas Reporting Program.

The climate law, formally known as the Inflation Reduction Act, established a waste-emissions charge for methane from oil and gas facilities that report emissions of more than 25,000 metric tons of carbon dioxide equivalent per year to the EPA. The proposal announced Friday sets out details of how the fee will be implemented, including how exemptions will be applied.

The agency said it expects that over time, fewer oil and gas sites will be charged as they reduce their emissions in compliance with the rule.

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Houston nonprofit launches new energy education platform

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The Energy Education Foundation, a Houston-based nonprofit, will roll out a new app-based education platform just in time for back-to-school season.

Starting this fall, EEF will offer its new EnergyXP platform to students in middle schools and through community and education events across the country. The STEM-focused platform aims to boost exposure to oil and gas concepts and career paths, according to a release from the non-profit.

EnergyXP represents a fully redesigned, interactive version of the foundation's former Mobile Energy Learning Units, which now feature upgraded technology, enhanced curricula and app integration.

“EnergyXP marks the most recent development in our educational initiatives. We aim to inspire students nationwide to explore real-world energy concepts and careers,” Kristen Barley, executive director of the Energy Education Foundation, said in the release. “Our collaborative approach involves strong partnerships with educators, industry experts and local organizations to ensure that our programs are responsive to community needs. By prioritizing equitable access to quality STEM education, we can help build a more inclusive, future-ready energy workforce.”

The new platform offers 16 hands-on and digital STEM activities that introduce a variety of energy concepts through real-world applications while "showcasing the relevance of energy in everyday life," according to the release.

EEF will host two virtual sneak peeks of the platform on Aug. 7 and Aug. 8. Register here.

Enbridge's new Texas solar project to power Meta data centers

solar deal

Construction is underway on a new 600-megawatt solar project in Texas that will supply renewable energy to Meta Platforms Inc., the owner of Facebook, Instagram and other tech platforms.

Calgary-based Enbridge Inc., whose gas transmission and midstream operations are based in Houston, announced that Meta has agreed to purchase 100 percent of the power generated by its new $900 million solar project known as Clear Fork.

The clean energy developed at Clear Fork will be used to support Meta’s data center operations, according to a news release from Enbridge. Meta has had net-zero emissions across its operational portfolio since 2020, according to its 2024 environmental report. The company matches 100 percent of its data center usage with renewable energy.

"We are thrilled to partner with Enbridge to bring new renewable energy to Texas and help support our operations with 100% clean energy, " Urvi Parekh, Head of Global Energy at Meta, said in a news release.

The Clear Fork project is expected to be operational by the summer of 2027. It will join Enbridge’s first solar power project in Texas, Orange Grove, which was activated earlier this year, as well as the company’s Sequoia solar project, which is scheduled to go online in early 2026.

"Clear Fork demonstrates the growing demand for renewable power across North America from blue-chip companies who are involved in technology and data center operations," Matthew Akman, executive vice president of corporate strategy and president of power at Enbridge, said in the news release. "Enbridge continues to advance its world-class renewables development portfolio using our financial strength, supply chain reach and construction expertise under a low-risk commercial model that delivers strong competitive returns."

Energy experts: Executive order enhances federal permitting for AI data centers

Guest column

In an effort to accelerate the development of artificial intelligence, President Trump signed an executive order (EO) aimed at expediting the federal permitting process for data centers, particularly those supporting AI inference, training, simulation, or synthetic data generation.

Following the White House’s issuance of a broader AI Action Plan, the EO seeks to streamline regulatory burdens and utilize federal resources to encourage the development of data centers supporting AI, as well as the physical components and energy infrastructure needed to construct and provide power to these data centers.

Qualifying Projects

The EO directs several federal agencies to take actions to incentivize the development of “Qualifying Projects,” which the EO defines as “Data Centers” and “Covered Component Projects.” The EO defines “Data Center Projects” as facilities that require over 100 megawatts (MW) of new load dedicated to AI inference, training, simulation, or synthetic data generation. The EO defines Covered Component Projects as materials, products, and infrastructure that are required to build Data Center Projects or upon which Data Center Projects depend, including energy infrastructure projects like transmission lines and substations, dispatchable base load energy sources like natural gas, geothermal, and nuclear used principally to power Data Center Projects, and semiconductors and related equipment. For eligibility as a Qualifying Project, the project sponsor must commit at least $500 million in capital expenditures. Data Center Projects and Covered Component Projects may also meet the definition of Qualifying Project if they protect national security or are otherwise designated as Qualifying Projects by the Secretary of Defense, Secretary of the Interior, Secretary of Commerce, or Secretary of Energy.

Streamlining Permitting of Qualifying Projects

The EO outlines the following strategies aimed at improving the efficiency of environmental reviews and permitting for Qualifying Projects:

NEPA Applicability: The Council on Environmental Quality (CEQ), in coordination with relevant agencies, is directed to utilize existing and new categorical exclusions under the National Environmental Policy Act (NEPA) to cover actions related to Qualifying Projects, which “normally do not have a significant effect on the human environment.” The EO states that where federal financial assistance represents less than 50 percent of total project costs of a Qualifying Project, the Project shall be presumed not to be a “major Federal action” requiring NEPA review.
FAST-41: The Executive Director of the Federal Permitting Improvement Steering Council (FPISC) is empowered to designate a Qualifying Project as a “transparency project” under the Fixing America’s Surface Transportation Act (FAST-41) and expedite its transition from a transparency project to a “covered project” under FAST-41. FPISC is directed to consider all available options to designate a Qualifying Project as a FAST-41 covered project, even where the Qualifying Project may not be eligible.
EPA Permitting: The US Environmental Protection Agency (EPA) is directed to modify applicable regulations under several environmental protection statutes impacting the development of Qualifying Projects on federal and non-federal lands. EPA is also directed to develop guidance to expedite environmental reviews for identification and reuse of Brownfield and Superfund Sites suitable for Qualifying Projects. Importantly, state environmental permitting agencies are not subject to the EO.
Corps Permitting: The US Army Corps of Engineers is directed to review the nationwide permits issued under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899 to determine whether an activity-specific nationwide permit is needed to facilitate the efficient permitting of activities related to Qualifying Projects.
Interior Permitting: The US Department of the Interior is directed to consult with the US Department of Commerce regarding the streamlining of Endangered Species Act consultations for Qualifying Projects, and to work with the US Department of Energy to identify federal lands that may be available for use by Qualifying Projects and offer appropriate authorizations to project sponsors.

Federal Incentives for Qualifying Projects

The EO also directs the US Secretary of Commerce to “launch an initiative to provide financial support for Qualifying Projects,” which may include loans, grants, tax incentives, and offtake agreements. The EO further directs all “relevant agencies” to identify and submit to the White House Office of Office of Science and Technology Policy any relevant existing financial support that can be used to assist Qualifying Projects, consistent with the protection of national security.

The EO reinforces the Trump administration’s focus on AI and creates new opportunities for both AI data center developers and energy infrastructure companies providing power or project components to these data centers. Proactive engagement with relevant agencies will be crucial for capitalizing on the opportunities created by this EO and the broader AI Action Plan. By leveraging these financial and environmental incentives, project developers may be able to shorten permitting timelines, reduce costs, and take advantage of federal financial support.

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Jason B. Hutt, Taylor M. Stuart and Anouk Nouet are lawyers at Bracewell. Hutt is chair of the firm’s environment, lands and resources department. Stuart counsels energy, infrastructure, and industrial clients on matters involving environmental and natural resources law and policy. Nouet advises clients on litigation, enforcement and project development matters with a focus on complex environmental and natural resources law and policy.

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