Energy Secretary Visits New Mexico, Shares Plan For U.S. Energy Future

This week, the new Energy Secretary, Chris Wright, flew into New Mexico to visit two National Laboratories: Los Alamos and Sandia. These are the first of 17 national labs he plans to visit. His first news conference was outside the Oppenheimer home, after a tour of the Los Alamos lab where he was introduced to plutonium pits, the key to many advanced nuclear weapons. The Trump administration want to beef up the production of these pits, to strengthen U.S. military. In fact, Wright’s first secretarial order, signed on February 5, “included a command to modernize the country’s nuclear arsenal, which includes work at Los Alamos and Sandia to produce new plutonium pits.”

Wright is from Colorado, a neighboring state where his company, Liberty Energy, is located. The company, valued at almost $3 billion, provides services to oil and gas companies, principally fracking of wells which became big business in the U.S. shale revolution that began in 2003.

A few weeks ago, President Trump declared, without definition, the U.S. was in an energy emergency. This was easily rebutted because the country is number 1 in the world in oil and gas production. It turns out Trump meant the U.S. has an electricity crisis, which was clarified by Wright in his visit to New Mexico. Artificial Intelligence, or AI, needs data centers, which are enormous collections of computers that massage incredible amounts of data on which AI depends. Such a factory of computers requires electricity to run, but where will the additional electricity come from is the big question?

Plan For U.S. Energy Future

That first secretarial order of February 5 also included upgrading the U.S. electrical and transmission line grid. Trump’s ambition, he has made clear, is to be world number 1 in AI. The Energy Secretary doubled down on this by saying, “AI is the next Manhattan Project. This is an incredibly fast-moving science and pace, and it’s critical that we win this race as well. It’s equally harrowing if we end up second and behind in AI. It’s hard to overstate the importance and the impact AI will have in defense, in economics, in science.” Estimated at $66 billion, the AI industry in the U.S. will be competing with China.

Aside from the dubious comparison with a wartime threat, mention of the Manhattan Project would go over well in Los Alamos where the Manhattan Project was carried out. Another statement that would please the listeners was about government cuts that are taking place under the direction of Elon Musk. Wright stated the impact of cuts on Los Alamos and Sandia labs would be minor.

After Los Alamos, Wright visited Sandia National Laboratories in Albuquerque, site of some of the earliest AI research, Wright said after a Tuesday visit to the labs. With its supercomputers and a recently announced partnership with OpenAI, LANL will likely be a key part of U.S. AI development.

Wright gave a press conference at the National Museum of Nuclear Science and History in Albuquerque. He acknowledged the vast oil and gas resources of New Mexico, which is number 2 after Texas in oil production, especially in the Permian Basin which is the premiere basin in the U.S.

He also gave credit to solar renewables in New Mexico, but apparently ignored wind renewables which are out of favor with the Trump administration. This is surprising because in his first administration, Trump urged then Secretary of Energy, Rick Perry, to do for the U.S. what he had done as governor of Texas. A big part of that was constructing a massive network of wind turbines and transmission lines that in 2022 provided almost 30% of generated energy in Texas, and about a quarter of U.S. total wind energy. Amazingly, the governor raised Texas, if it were its own country, to rank number 5 in the world in wind energy.

Wright went on to add that “growing commercial nuclear and geothermal production could help meet increasing energy demands.” This was an apparent reference to electrical power because this is what nuclear reactors provide. And so does geothermal, witness Fervo’s EGS (enhanced geothermal system) out of Reno that provides power to a Nevada utility and to a Google data center. Perhaps Wright was encouraging the two national labs to embark on new projects in these areas.

Wright continued by addressing regulations that in his perspective are a problem for nuclear and geothermal sources of energy. “They’re such high bars that we’ve just seen almost nothing happen in next-generation nuclear. Our goal is to get that out of the way, bring private businesses together and figure out what kind of nudge we might need to get shovels in the ground and next-generation small modular reactors happening.”

Small modular reactors are called SMRs. They have a checkered history. The only one that has been authorized by the NRC (Nuclear Regulatory Commission) was for community usage in Utah, but the community reneged on the deal because the price was 50% higher than agreed to (admittedly there were delays in approvals). Still, costs have been assessed independently by a government organization in Australia, who concluded that costs by 2030 were too high to be viable for future SMRs.

Then there is the ever-present problem of radioactive nuclear waste.

Storage Of Nuclear Waste

Chris Wright touched on the subject of storage of nuclear waste, which is a low-key fear that pops into the minds of many Americans when nuclear power plants are proposed—even SMRs. But the subject is a hot potato in New Mexico for a few reasons. One, the Downwinders have complained of long-lasting inter-generational health issues from atom bomb testing in the White Sands Missile Range. Congress has finally included compensation for the Downwinders.

Two, the only permanent nuclear waste storage in the U.S. is located in New Mexico, but its only for waste from nuclear weapons development. An accident at the WIPP site several years ago took 3 years to repair and cost upwards of $1 billion to clean up—all this caused by leakage from a single storage drum.

Three, the proposed temporary Holtec nuclear waste site in New Mexico, not far from Carlsbad, would be surrounded by hundreds of oil and gas wells, and might not be immune from earthquake damage. However, an Appeals court has in March 2024 vacated the NRC license provided to Holtec. Holtec has appealed this to the Supreme Court.

Four, the largest release of radioactive material in U.S. history occurred in the 1979 Church Rock uranium mine spill not far from Gallup, New Mexico.

Providing The New Electrical Power

The clean energy industry is well positioned to provide the new power demanded by AI and its data centers. Figure 1 shows steady growth in wind and solar renewables since 2010, including an uptick following 2021 when President Biden’s clean energy incentives were passed by congress: the Infrastructure Act first, then the Inflation Reduction Act.

In contrast, geothermal provides just 1%, while next-generation nuclear in the form of SMRs provide only 1%. Large-scale nuclear reactors do provide 18% of U.S. power, but nobody is serious about building such new reactors.

The Biden incentives to decarbonize across the U.S. economies have taken root in many states, even Republican states, where they add to energy security while creating new jobs. It makes sense to continue the growth of Figure 1 rather than starting over with SMRs and geothermal. These can contribute, of course, but it’s a case of too little, too late to go mainstream.

This approach is also consistent with Wright’s statement in New Mexico: “Whatever provides affordable, reliable, secure energy, this administration will do everything we can, which is mostly to unleash the private sector to allow those energy sources to grow.”

So what has happened with renewables in the year 2024, which is not shown in Figure 1? Solar and battery energy storage (BESS) have zoomed up, while wind energy has flattened. Renewables plus BESS are now 30% of U.S. power. SMR and geothermal are both at 1%. In 2024, renewables accounted for about 90% of new installed capacity. What has been established, it seems clear, is what should be accelerated to provide the power surge needed for AI data centers.

Finally, the need for dispatchable power has been put forward as an argument against intermittent solar and wind renewables. But this argument has been put to bed in South Australia, where over 70% of power is provided by wind and solar. The key is battery storage, first implemented by Elon Musk in South Australia. This technology is advancing rapidly both in battery size (MW) and in storage/drainage hours (MWh). It began in Australia but now the U.S. is catching up in what is bound to be a golden age for BESS.