U.S. Fossil fuel spending projected to exceed China's for first time in decades

WHAT’S HAPPENING TODAY: Good afternoon and happy July, Daily on Energy readers! What better way to kick off America’s birthday month than by cheering on the men’s national team as they face off against Bosnia in the World Cup tonight. The game is scheduled to start around 8 p.m., Go USA!

Last year, President Donald Trump set the ambitious target of having three new advanced nuclear reactors achieve criticality by July 4th. As of late yesterday, the industry was able to deliver on just that. Below, we have all the details on the third company to hit the milestone before the deadline, and what other developers could be next.

Plus, there appears to be some division amongst Republicans in Texas over one rural town’s decision to ban the construction of data centers. Keep reading to find out what camp the state’s governor sits in.

Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson). Email cpatteson@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

TRUMP’S JULY 4 DEADLINE FOR NUCLEAR MET: The Department of Energy has hit President Donald Trump’s ambitious Fourth of July goal of seeing three advanced small nuclear reactors reach “criticality,” meaning the reactors are perfectly stable and their nuclear chain reactions are self-sustaining and able to produce energy.

Three reactors hit this goal in June, with the third developed by Deployable Energy achieving criticality late yesterday, reaching Trump’s deadline four days early.

Deployable Energy developed the reactor under the Department of Energy’s Nuclear Energy Launch Pad initiative. It is the first reactor under this program to achieve criticality. The microreactor, known as Unity, is designed to be a 1 megawatt nuclear battery. For comparison, 1 megawatt of energy can typically power 400 to 900 homes.

Can’t remember what criticality is? Check out Callie’s explainer on the milestone here.

Two other companies had their reactors achieve criticality earlier this month under the agency’s Pilot Reactor Program: Antares Nuclear and Valar Atomics.

Who to watch: Another reactor expected to achieve criticality before the July 4 deadline is the Aalo-X reactor, under development by Aalo Atomics at Idaho National Laboratory under the pilot reactor program. Wright gave his approval for the reactor to move forward last week.

Plus, Oklo received approval from the Department of Energy for its final safety analysis, advancing its reactor to its first criticality test. As the approval was received this week, Oklo is unlikely to hit criticality before July 4. We’ll be sure to provide you with all the updates as they come before Saturday!

OIL PRICES EXTEND LOSSES AS NEGOTIATIONS CONTINUE: Crude traders remain confident that a lasting deal between the U.S. and Iran will be agreed to, with oil prices having fallen by nearly $30 over the course of the last month.

Earlier this morning, President Donald Trump indicated that progress was being made in the indirect negotiations between officials from Washington and Tehran in Doha, Qatar.

“As far as things are going, the denuclearization of Iran is moving along well,” Trump said. “They’ve had very good meetings, and we’ll see.”

Markets are also taking an optimistic perspective, with international and domestic benchmarks dropping more than 1% today. Around 2:30 p.m. EDT, Brent was down 2.12% and selling at $71.40 a barrel. West Texas Intermediate had fallen 1.64% and was priced at $68.36 a barrel.

ING analysts have pointed out that tanker traffic through the Strait of Hormuz does still appear limited, with just around 11 crossings inbound and outbound yesterday. However, they noted there is a slight uptick in the number of vessels traveling inbound, signalling that while the waterway is still considered a war zone by many, shipowners are more confident about returning to the Persian Gulf.

“If this trend accelerates, it becomes a clear headwind, and potentially a direct challenge, to our view that oil prices should rise from current levels,” the analysts wrote.

HOUSE REPUBLICANS CALL FOR JONES ACT WAIVER TO EXPIRE: As we touched on in yesterday’s edition of Daily on Energy, there is growing support from Republicans in Congress to keep the Jones Act in place and eliminate waivers to the law that have allowed refiners to use foreign-flagged ships to transport fuel between U.S. ports.

While the Trump administration has leveraged these waivers in its attempt to lower oil and gasoline prices, even the speaker of the House is ready for the exceptions to end.

In a letter made public today, House Speaker Mike Johnson, House Majority Leader Steve Scalise and 50 other House Republicans urged Trump to let the waiver expire.

“The domestic maritime industry is deeply concerned about the length, scope, and possible extension of the current Jones Act waiver, which was issued in part to address increases in fuel and fertilizer prices,” the letter reads. “In practice, foreign-flagged vessels have operated under the waiver even in circumstances where U.S.-flagged vessels were available, creating understandable concern about the effect on American jobs, manufacturing, and investment.”

The Republicans argued that the Jones Act waiver has become a loophole for foreign countries to “erode America’s maritime dominance.”

The existing waiver is expected to expire on August 16.

TEXAS GOVERNOR BACKS LOCAL BAN ON DATA CENTERS: Republican Gov. Greg Abbott has said he supports a ban on building data centers in rural Texas neighborhoods, breaking with Republican lawmakers in the state who pushed against the ban earlier in the week.

The details: Abbott has long toed the line between supporting data center expansion, calling Texas the “epicenter” of artificial intelligence, and pressing for regulation that requires developers to assume the weight of growth.

During an event this week in Bullard, a town about 110 miles southeast of Dallas, he said “fighting for East Texas values” meant “pushing back against these AI data centers that are trying to build in our neighborhoods.”

“We must prohibit them from building AI data centers in rural Texas neighborhoods,” Abbott said.

Some background: Last month, the San Marcos City Council voted 4-3 to make data centers ineligible in the city’s zoning laws. There were concerns over data centers impact over water and energy resources.

As we touched on in yesterday’s newsletter, Republican state Sen. Paul Bettencourt has criticized the ban, claiming that it defies state laws.

Read more from the Washington Examiner’s Emily Hallas here.

U.S. OUTPACING CHINA IN FOSSIL FUEL INVESTMENTS FOR FIRST TIME: The Financial Times is reporting that the United States’ investments in fossil fuel technologies is on track to surpass those made in China for the first time, in a large part thanks to the race for artificial intelligence.

The details: Data from the International Energy Agency obtained by the Financial Times reportedly shows that the Paris-based agency is estimating that U.S. spending on fossil fuel power plants will hit $50 billion this year.

This is projected to be roughly $3 billion more than similar investments made in China.

The biggest driver behind this jump in spending is increased orders for natural gas turbines. The IEA data estimates that the U.S. ordered roughly 20 gigawatts of these turbines during the first quarter of this year.

Most of these turbines are expected to be used for “behind-the-meter” generation, meaning for companies that are looking to secure their own power to support their operations and facilities like AI data centers without taking existing power from the grid.

Why this matters: If the IEA’s projections prove accurate, the jump in spending in the U.S. would be considered a major win for the Trump administration, which has described beating China in the race for AI as a matter of national security.

ICYMI, U.S. OIL PRODUCTION HITS MONTHLY RECORD: Data released by the Department of Energy’s Energy Information Administration yesterday revealed that U.S. crude oil production hit the highest level it has ever been on a month-to-month basis during April.

The EIA reported that during the month of April, crude production hit 13.934 million barrels per day. This jumps past the previous record of 13.718 million barrels per day set in March.

The increase in production is a clear sign that domestic oil and gas producers took advantage of higher crude prices caused by supply disruptions from the war in Iran to increase their own output. Producers in the Permian Basin also hit records, with New Mexico recording its highest level of production at 2.37 million barrels per day. Texas recorded 5.83 million barrels per day in April, the highest level seen in the state since November of last year.

You can find the full breakdown from the EIA here.

RUNDOWN

Canary Media Martha’s Vineyard solar array will cut bills for low-income islanders

Associated Press A marine heat wave caused seabird deaths off California. El Nino could worsen the die-off

The Guardian New Orleans residents on warning to abandon sinking city: ‘Nobody wants to leave home’