Conservative solutions for a greener future, post election
My apologies for the delay in getting this week’s newsletter out. One Degree Apart is a one-woman show and I was trying to keep up with flight delays. As part of my role on the Executive Advisory Board for DNX Ventures, I gave a talk last week focused on “Climate-tech at the Enterprise”. This was the day after the election and I ended up fielding a series of questions about the future of climate tech and sustainability funding in the aftermath of the election.
It is inevitable that we will see a change in levels of funding for climate and sustainability-focused projects, the type of projects that receive this funding, and potential loosening of regulations and mandates, at the federal level. I’d be lying if I said I was not worried about many of these pull backs and that our collective efforts to slow down climate change, tackle emissions, and ensure environmental justice might be delayed or denied.
However, before examining what could change (or worse, be scrapped), I wanted to explore what Republican-led, red-state climate/sustainability initiatives are already in place around the country, and which I speculate (and hope) will likely continue with little to no interference. Here is what the election map looks like as a refresher for a portion of my readers that don’t live in the U.S.
Here is a quick summary of the various initiatives, technologies, and regulations at play in red states, that I could find (if you find more please leave them in the comments):
Texas: State-level legislation advancing renewable energy. Texas leads the U.S. in wind energy production, providing more than 20% of the state’s electricity from wind alone. Despite the vary mean naysayers about wind energy, it seems virtually impossible that the state can scrap this capacity.
Renewable energy adoption across red states: Based on total renewable energy capacity at the utility level, Iowa and New Mexico stand out as the only states that boast more than 50% of utility-scale generation capacity from renewable sources. South Dakota, Kansas, North Dakota, and Oklahoma follow closely behind. Despite the
Texas - Carbon capture and storage projects. Occidental Petroleum (Oxy), headquartered in Houston, is leading the STRATOS project—a $1 billion initiative aimed at capturing 500,000 metric tons of carbon dioxide from the atmosphere each year. This large-scale carbon removal operation is expected to be commercially functional by mid-2025. The STRATOS project, covering 65 acres in Ector County received support, including tax credits from the Biden administration’s Inflation Reduction Act and partnerships with prominent tech firms. Microsoft has committed to purchasing 500,000 metric tons of carbon credits from STRATOS, highlighting a growing corporate interest in carbon capture and removal technologies. Federally, Republican lawmakers have championed the 45Q tax credit, which incentivizes companies to capture and store CO₂. Whether this stays, has a reduced scope and value, remains to be seen.
The Great American Outdoors Act (GAOA) across a number of states: In 2020, President Donald Trump signed the GAOA into law. The law has two primary components: First, it permanently allocates funding to the Land and Water Conservation Fund (LWCF), enhancing access to public lands, particularly for recreational purposes. The GAOA now receives $900 million annually, sourced largely from fees paid by oil and gas companies for federal offshore drilling rights, rather than from taxpayer dollars. The second part of the act allocates $9.5 billion over five years to the National Parks and Public Land Legacy Restoration Fund. This funding will address the backlog of infrastructure maintenance and repairs on public lands, with the majority directed toward national parks. Here are examples of projects that have benefited from these dollars:
Yellowstone National Park (Montana): The Norris to Madison Road was resurfaced and upgraded to improve visitor access and safety. Funds have also supported the restoration of historic buildings, such as the Old Faithful Inn, to preserve the park's cultural and architectural heritage.
Grand Canyon National Park (Arizona): The South Kaibab Trail and Bright Angel Trail, two of the park's most popular hiking routes, have received upgrades to reduce erosion and improve trail safety for visitors. This includes the installation of new steps and enhanced drainage systems.
Everglades National Park (Florida): Everglades has used GAOA funds for projects aimed at restoring natural water flow and mitigating flooding. This includes work on the Everglades Protection Area, which involves rebuilding canals and levees that help manage water levels in the park.
Investment in nuclear energy as a clean power source (Montana, Wyoming, and Utah): States such as Utah and Idaho have attempted to pioneered small modular reactor (SMR) projects as an alternative to fossil fuels. In Utah, the Utah Associated Municipal Power Systems (UAMPS) has partnered with the Department of Energy to develop SMRs, which provide scalable, carbon-free power that supports grid stability and reduces emissions. Despite best efforts, the NuScale SMR project, intended to be near Idaho falls, was cancelled due to rising project costs. On the other hand, TerraPower, a Bill Gates’ company, broke ground in the community of Kemmerer in Wyoming. The company applied to the Nuclear Regulatory Commission in March for a construction permit for an advanced nuclear reactor that uses sodium instead of water, for cooling. If approved, it would operate as a commercial nuclear power plant.
Wildlife protection and conservation: The America’s Conservation Enhancement (ACE) Act, was signed into law by President Trump in October 2020. This bipartisan bill reauthorizes key conservation programs, including the North American Wetlands Conservation Act and the National Fish and Wildlife Foundation Act. It also addresses emerging wildlife diseases like Chronic Wasting Disease (CWD) and provides mechanisms for compensating ranchers for losses from federally protected predators. Examples of projects that have received this funding are:
The National Fish Habitat Partnership: This is a collaborative program involving federal, state, and tribal agencies, as well as private partners, to protect, restore, and enhance fish habitats across the United States.
ACE funding helped improve fish passage on the Yakima River in Washington state, where barriers to migratory fish were removed, benefiting species such as steelhead and Chinook salmon.
Another involves the restoration of ancestral lands of the Upper Mattaponi Indian Tribe in Virginia. This project specifically focused on restoring natural habitats along the Mattaponi River, with an emphasis on improving water quality and fish habitats.
Loan Program Office (LPO) funding to projects in Indiana, Nevada, Utah: Even though the LPO was revived during the Biden administration, projects in red states have received considerable support. With an allocation of $30 billion, the LPO’s office is rushing to deploy funds by the end of this year to ensure deserving projects around the country that can enable a clean energy transition/revolution receive much needed financial support. As an example, a conditional loan guarantee was provided to Wabash Valley Resources in Indiana, a state with a conservative lean, for repurposing a fossil fuel plant into a clean energy facility. Additionally, significant funding has gone to Utah's Advanced Clean Energy Storage project, and a $2 billion commitment was given to Redwood Materials in Nevada to build a battery materials campus.
There is no denying that there is plenty of work to do and we need to find a way to forge ahead, collaboratively. It is also evident that we cannot rely on one or even just a handful of technologies to solve the crisis we are in; we need an “all of the above” approach to make a difference. I’ll talk about how these changing regulations impact the climate tech approach to investing at the enterprise in subsequent posts.
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Wait till they start talking about pyrolysis!