Energy Security Matters | November 5, 2024
In this issue: SAFE welcomes five new military members to the Energy Security Leadership Council, Finalized 45x rule supports domestic minerals and manufacturing, and more…
This week, we are proud to announce new military members of our Energy Security Leadership Council.
SAFE’s Energy Security Leadership Council (ESLC) has convened for two decades as a peerless, non-partisan coalition of business and retired military leaders committed to advancing energy policies to strengthen the economic and national security of the United States and allied nations. SAFE and the ESLC’s founding purpose has been to protect America’s blood and treasure by working to ensure our foreign policy and international positioning is not dictated by our energy needs—and now by our supply chains and other critical resources—so we as a nation can live by our values.
SAFE is proud to announce the addition of the following five new members:?
These additions “open an important new chapter” for the ESLC. “As individuals, they have served our nation in a broad array of geographies, military branches, and tactical programs. Together, this cohort brings a formidable depth and range of expertise to SAFE’s important work,” said Admiral Jonathan Greenert, Co-Chair of the ESLC.
“Washington needs the perspective of four-star admirals and generals who have served our nation at the highest level,” and it is “SAFE’s honor and mission to share their gravitas and wisdom on the steps we must take to position America and her allies for success in the decades to come” said Robbie Diamond, Founder, President, and CEO of SAFE.
Finalized 45X Tax Credit Incentivizes Domestic Production of Critical Minerals by Addressing Production Costs
In today’s low-price environment for critical minerals, addressing the costs of higher standard production is necessary to drive domestic supply. The administration’s finalized guidance on Section 45X of the Inflation Reduction Act (IRA), which provides a tax credit for the production and sale of eligible energy components including applicable critical minerals, is a game-changer for companies refining, smelting, and processing critical minerals in the United States.
The finalized guidance incorporates a suggestion made by SAFE and other organizations working towards domestic battery manufacturing and mineral processing, and allows companies and taxpayers to include materials and extraction costs in the overall determination of production costs, providing a greater incentive to this nascent industry.
For the domestic aluminum industry, the Final Rule affirms the eligibility of energy and alumina production costs from the Initial Rule, and expands the raw material input costs to include anodes, the third largest production cost behind energy and alumina. The finalized guidance will support domestic aluminum production and strengthen US global competitiveness, said Joe Quinn, Executive Director of SAFE’s Center for Strategic Industrial Materials, who was quoted in FastMarkets regarding the 45X announcement.
ReMo Urges Enhanced Protections in U.S. Connected Vehicle Supply Chains to Mitigate National Security Risks
Advanced vehicle technologies will define the automotive and transportation sectors for the next several decades. However, “foreign adversaries are cornering and leveraging key supply chains” in this sector, Avery Ash, Executive Director of SAFE’s Coalition for Reimagined Mobility, explained in a New York Times interview earlier this year.?
Components and software from adversarial nations that are utilized in advanced vehicle technology introduce undue risks by presenting opportunities for espionage and cyberattacks, and this risk is heightened given American vehicles’ and infrastructure’s dependence on these components.?
Last week, SAFE’s Coalition for Reimagined Mobility (ReMo) submitted comments in response to the Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles Notice of Proposed Rulemaking (NPRM) issued by the U.S. Department of Commerce. The NPRM addresses the sale or import of connected vehicles utilizing components sufficiently linked to the People’s Republic of China (PRC) or Russia, specifically focusing on hardware and software integrated into the Vehicle Connectivity System (VCS) and the Automated Driving Systems (ADS) – the critical mechanisms that allow for external connectivity and autonomous driving capabilities in these vehicles.?
The proposed rule is a significant step forward and ReMo’s comments outline additional areas where the proposed rule can be refined to strengthen its protections, particularly around clarifying definitions of key terms, addressing supply chain complexities, and ensuring the rule’s scope is comprehensive without disproportionately impacting U.S. businesses.
Moreover, ReMo emphasizes the importance of clear, actionable guidance that addresses the evolving threats posed by foreign adversaries and the need to protect critical sectors, like transportation, from exploitation. ReMo urges the Commerce Department to continue identifying additional actions necessary to secure not only the transportation sector but also other key industries that are integral to national security.
SAFE Speaks on Capitol Hill on the Role of Transmission in U.S. Strategic Competitiveness with China
SAFE’s Center for Grid Security Executive Director Danielle Russo?recently briefed Congressional staff on the House Energy and Commerce and the House Select Committee on the Chinese Communist Party about the strategic importance America’s grid plays in maintaining our competitive advantage against China. Russo joined policy experts from the Energy Systems Integration Group, the Center for Strategic and International Studies, Grid United, and Google at the briefing.?
Russo and the other experts covered America’s transmission and grid security, national security issues relating to China, and China’s current investments in transmission infrastructure and critical mineral production.?
Russo focused on the Center for Grid Security’s recently published fact sheet detailing the PRC’s strategic investments in their transmission network and grid infrastructure. Russo emphasized that China’s approach reflects the strategic advantage created by strong electrical infrastructure, and presents a stark difference between the United States’ approach to future energy expansion, presenting China an opportunity to edge out America’s advantage in advanced technologies.
Takeaways from the fact sheet include:?
In Case You Missed It: “Trading Tensions” Report and Webinar Explore Role of Trade Policy in Mineral Security
SAFE’s Center for Critical Minerals Strategy brought together a panel of experts on October 23rd to discuss the strategic importance of critical minerals and the challenges and opportunities that exist within securing our critical minerals supply chain – a critical aspect of SAFE’s recently released report, “Trading Tensions: Navigating Policy Tools for a Diverse Critical Minerals Supply Chain.” The panel included Georgetown Law professor Jennifer Hillman, CEO and Executive Director of Silverado Policy Accelerator Sarah Stewart, Hogan Lovells Partner Hon. Kelly Ann Shaw, and SAFE’s Center for Critical Minerals Strategy’s Executive Director Abigail Hunter, and was moderated by New York Times journalist Ana Swanson. Prior to the panel discussion,?SAFE's Center for Critical Minerals Strategy's Senior Policy Analyst, Zoe Oysul, gave an overview of the report findings and the tensions amongst policies.
The panelists examined the path ahead and how to ensure that the United States can secure critical minerals in a way that supports economic growth, technological advancements, and national security, while also adhering to high environmental and social standards. Additionally, the panelists discussed how trade tools can be utilized to secure and strengthen critical minerals supply chains, although, a more comprehensive approach is needed as “trade tools cannot succeed in isolation.” Thank you to the panelists for joining this conversation on this urgent issue.