Policy Alert: Energy Department Order on Energy Production and Net Zero

Action: Department of Energy Secretarial Order

What it does: Energy Secretary Chris Wright reportedly issued an order stating that the Energy Department will prioritize expanding US energy production over efforts to achieve net-zero emissions. Wright wrote that “Net-zero policies raise energy costs for American families and businesses, threaten the reliability of our energy system, and undermine our energy and national security. Going forward, the Department’s goal will be to unleash the great abundance of American energy required to power modern life and to achieve a durable state of American energy dominance.”

Key Insights

• The action gives direction to and significantly shifts Energy Department priorities. The Department’s new website has a tagline of “Restoring Energy Dominance.”
• The US’ withdrawal from the Paris Agreement already effectively withdrew the US’ previous stated goal of achieving net zero by 2050; this new action simply reaffirms that the former formal net zero goal does not drive US energy policy.
• While the order reportedly provided no details on achieving the goals, it indicates that among the Department’s goals will be to speed energy permitting, strengthen grid resilience, expand nuclear power, and replenish the Strategic Petroleum Reserve. These are consistent with the “Unleashing American Energy” Executive Order from Inauguration Day.
• US crude oil and gas production remain at very high and occasionally record levels.
• Senate Majority Leader John Thune supports an “all of the above” energy policy, which would clearly encompass renewables as well as fossil fuels and nuclear. The President has issued a moratorium on offshore wind development, but Interior Secretary Burgum has strongly supported onshore wind. Nothing in the order directly affects private sector renewables projects, such as use of renewables, including solar at a factory or corporate goals for net zero.
• But questions remain about how aggressively the Department will support renewables in comparison to fossil fuels and whether the Administration will push Congress to rescind many of the clean energy tax credits in the Inflation Reduction Act.