The Next Wave for Energy: Q&A with Capital Innovations’ Michael Underhill 

U.S. Secretary of Energy Chris Wright signed his first order on February 5, 2025, titled “Unleashing the Golden Era of American Energy Dominance.” It’s a hefty directive, pushing the Department of Energy to fast-track efforts to ramp up domestic energy production and sharpen America’s edge on the global stage.   

The focus is to produce more energy through innovation — think next-gen nuclear, geothermal, and fossil fuel technology — while reinforcing infrastructure like the grid and LNG export terminals. Wright is also gunning for deregulation, aiming to slash red tape that’s choked projects, from permitting delays to appliance efficiency rules, all to get energy flowing faster and cheaper. 

Michael Underhill, CIO of Capital Innovations, shared his views with Connect about the current state of US energy sources, the types of energy technologies the Department should prioritize, the role of nuclear energy and increasing demand for electricity, and much more. 

CM: What is the current state of America’s energy resources?   

MU: The current state is a mix of traditional fossil fuels and growing renewable energy sources. Here are some key points: 

Energy Production and Consumption: In 2022, the U.S. exported about 27.1% more energy than it imported. Petroleum and natural gas sources accounted for 72% of energy consumed in the US, while renewable and nuclear sources accounted for 17%. Coal was 10% of energy consumption. (Source:  Total Energy – U.S. Energy Information Administration (EIA) 

Energy Prices: Average prices for a gallon of regular-grade gas fluctuated between $3.29 and $3.81 in 2023. Several factors affect fuel prices, including crude oil prices, the cost of oil refining, distribution, and marketing. (Source: Total Energy – U.S. Energy Information Administration (EIA) 

Energy Jobs: Out of 8.1 million energy-related jobs in 2022, jobs in energy efficiency technology employed more people than any other field, with 2.2 million people. 

Renewable Energy: Renewable energy sources, including hydroelectric, wind, solar, biomass, and geothermal, have provided an increasing amount of energy in recent decades. Combined, renewable energy sources overtook nuclear power as the second-leading energy category in 2011. (Source: US Energy Statistics and Data Trends: Renewables, fossil fuels, electricity costs and more | USAFacts 

Energy Emissions: In 2020, there were 13.9 metric tons of energy-related greenhouse gas emissions per person in the U.S. While total energy consumption has increased since 1970, the amount of energy-related emissions per person has decreased due to the increase in renewable and nuclear power. (Source: US Energy Statistics and Data Trends: Renewables, fossil fuels, electricity costs and more | USAFacts 

CM: What types of energy technologies should the Department prioritize? 

MU: The U.S. Department of Energy (DOE) should prioritize several key energy technologies to meet national energy and climate goals. Here are some areas of focus: 

Renewable Energy: Investing in solar, wind, hydroelectric, and geothermal energy technologies to increase the share of clean energy in the national grid. 

Energy Storage: Developing advanced energy storage solutions, such as batteries and other technologies, to store renewable energy and ensure a stable and reliable energy supply. 

Hydrogen: Promoting the production and use of clean hydrogen as a versatile energy carrier and fuel for various applications, including transportation and industrial processes. 

Carbon Capture and Storage (CCS): Advancing technologies to capture and store carbon dioxide emissions from power plants and industrial sources to reduce greenhouse gas emissions. 

Energy Efficiency: Enhancing energy efficiency in buildings, transportation, and industrial processes to reduce energy consumption and lower emissions. 

Nuclear Energy: Supporting the development of advanced nuclear reactors and small modular reactors (SMRs) to provide a reliable and low-carbon energy source. 

Critical Minerals and Materials: Ensuring a secure supply of critical minerals and materials needed for clean energy technologies, such as batteries, wind turbines, and solar panels. 

Grid Modernization: Upgrading the national grid to improve its resilience, reliability, and ability to integrate renewable energy sources. 

These priorities align with the DOE’s goals to achieve net-zero greenhouse gas emissions by 2050 and to promote a cleaner, more secure, and more affordable energy future 

CM: How can the Department ensure taxpayer resources are used appropriately? 

MU: The DOE ensures taxpayer resources are used appropriately through several key measures: 

Annual Performance Reports: These reports provide key performance information that demonstrates DOE’s accountability in addressing energy, environmental, and nuclear challenges through transformative science and technology solutions. 

Agency Financial Reports: These reports consolidate various performance, financial, and related information in a meaningful and useful format. They include sections on management’s discussion and analysis, financial results, and other information. 

Budget Requests to Congress: The DOE submits detailed budget requests to Congress, outlining the allocation and purpose of funds. 

Uncosted Balances Reports: These reports identify uncosted obligations at the end of the previous fiscal year, describe the purpose of those funds, and explain the effect this information has on the annual budget request. 

Financial Management Handbook: This handbook sets forth financial, accounting, and budgetary policies and operational requirements to ensure proper financial management. 

These measures help the DOE maintain transparency and accountability in the use of taxpayer resources. You can find more detailed information on their [official website] (https://www.energy.gov/cfo/reports). 

CM: The Department has resumed consideration of pending applications to export American liquefied natural gas (LNG) to countries that do not have a free trade agreement (FTA) with the U.S. Why is this action significant? 

MU: Resuming consideration of pending applications to export American liquefied natural gas (LNG) to non-FTA countries is significant for several reasons: 

Economic Impact: Exporting LNG can boost the U.S. economy by creating jobs, increasing revenue, and enhancing energy security. 

Global Energy Market: It allows the U.S. to play a more prominent role in the global energy market, providing an alternative to other major LNG exporters. 

Geopolitical Influence: By exporting LNG to non-FTA countries, the U.S. can strengthen its geopolitical influence and foster stronger relationships with countries that rely on LNG imports. 

Environmental Considerations: The DOE’s recent study found that increasing U.S. LNG exports would have a negligible effect on global greenhouse gas emissions. This finding supports the argument that LNG exports can be part of a balanced approach to energy and environmental policy. 

Public Interest: The DOE evaluates whether LNG export applications are consistent with the public interest, considering factors such as economic benefits, environmental impact, and energy security. 

CM: What actions do you believe should be taken regarding the Strategic Petroleum Reserve (SPR) and how can it be safeguarded? 

MU: To ensure the SPR is effectively managed and safeguarded, several actions can be taken: 

Regular Audits and Inspections**: Conducting regular audits and inspections of the SPR facilities to ensure they are maintained properly and that the oil reserves are secure. 

Modernization and Maintenance: Investing in the modernization and maintenance of the SPR infrastructure to ensure it remains functional and efficient. This includes upgrading storage facilities and improving security measures. 

Strategic Releases and Replenishments: Implementing a strategic approach to releasing and replenishing the oil reserves. This involves selling oil during periods of high prices and replenishing the reserves when prices are lower, ensuring the SPR remains adequately stocked. 

Enhanced Security Measures: Strengthening security measures to protect the SPR from potential threats, including cyber-attacks, physical breaches, and natural disasters. This can involve collaboration with security firms and the use of advanced technology] (https://www.soc-usa.com/portfolio/protecting-americas-strategic-petroleum-reserve). 

Policy and Legislation: Ensuring that policies and legislation governing the SPR are up-to-date and reflect current energy needs and market conditions. This includes reviewing and updating the Energy Policy and Conservation Act (EPCA) as necessary. 

Public Transparency: Maintaining transparency with the public regarding the status and use of the SPR. This can be achieved through regular reports and updates from the DOE. 

By taking these actions, the SPR can be effectively managed and safeguarded, ensuring it continues to serve as a critical component of the U.S. energy infrastructure.  

CM: What role does nuclear energy play in the context of global energy needs? 

MU: Nuclear energy plays a crucial role in meeting global energy needs for several reasons: 

Low-Carbon Energy Source: Nuclear power is a significant source of low-carbon electricity, contributing to the reduction of greenhouse gas emissions. It accounts for about 10% of the world’s clean electricity and nearly half of the low-carbon electricity in the United States. 

Reliable Baseload Power: Nuclear energy provides a stable and reliable source of baseload power, which is essential for maintaining grid stability and meeting continuous energy demands. 

Energy Security: Nuclear power enhances energy security by diversifying the energy mix and reducing dependence on fossil fuels. This is particularly important in the context of geopolitical tensions and energy supply disruptions. 

Climate Change Mitigation: Nuclear energy is a key player in the fight against climate change. It has already prevented over 60 gigatons of CO2 emissions over the past 50 years. As countries strive to achieve net-zero emissions by 2050, nuclear power is expected to play an increasingly vital role. 

Partnership with Renewables: Nuclear energy complements renewable energy sources like wind and solar by providing consistent power when renewable sources are intermittent. This synergy is essential for a cleaner and more sustainable energy future. 

Technological Advancements: Advances in nuclear technology, such as small modular reactors (SMRs) and next-generation reactors, promise to make nuclear power safer, more efficient, and more cost-effective.  

CM: Why is fortifying America’s electric grid important? Are there any challenges? 

MU: Fortifying America’s electric grid is crucial for several reasons: 

Reliability: A robust grid ensures a consistent and reliable supply of electricity, which is essential for daily life, businesses, and critical infrastructure. 

Resilience: Strengthening the grid enhances its ability to withstand and recover from extreme weather events, natural disasters, and other disruptions. This is increasingly important as climate change leads to more frequent and severe weather events. 

Security: A fortified grid is better protected against cyber-attacks and physical threats. Ensuring the security of the grid is vital for national security and the protection of sensitive information. 

Integration of Renewable Energy: Modernizing the grid allows for the integration of more renewable energy sources, such as wind and solar power. This supports the transition to a cleaner and more sustainable energy future. 

Economic Benefits: Investing in grid infrastructure creates jobs and stimulates economic growth. It also helps to lower energy costs for consumers by improving efficiency and reducing outages. 

Technological Advancements: Upgrading the grid with advanced technologies, such as smart grids and microgrids, improves its overall performance and allows for better management of energy resources. 

CM: What are some strategies to meet growing electricity demand? 

MU: Meeting the growing electricity demand requires a multifaceted approach. Here are some key strategies: 

Grid Modernization: Upgrading the existing grid infrastructure to handle increased loads and integrate advanced technologies. This includes implementing smart grids and microgrids for better energy management and efficiency. 

Diverse Energy Mix: Utilizing a balanced mix of energy sources, including renewable energy (solar, wind, hydro), nuclear power, and natural gas. This ensures a reliable and sustainable energy supply. 

Energy Storage: Investing in energy storage solutions, such as batteries and pumped hydro storage, to store excess energy generated during low-demand periods and release it during peak demand. 

Demand Response Programs: Implementing demand response programs that incentivize consumers to reduce or shift their electricity usage during peak periods. This helps balance supply and demand without the need for additional generation capacity. 

Energy Efficiency: Promoting energy efficiency measures in homes, businesses, and industries to reduce overall electricity consumption. This includes using energy-efficient appliances, lighting, and building materials. 

Infrastructure Expansion: Expanding transmission and distribution infrastructure to ensure that electricity can be delivered efficiently to areas with growing demand. 

Public-Private Partnerships: Collaborating with private sector partners to invest in and develop new energy projects and technologies. 

Regulatory and Policy Support: Implementing supportive policies and regulations that encourage investment in clean energy and grid modernization. 

CM: How does the federal permitting process impact America’s competitiveness and national security? 

MU: The federal permitting process significantly impacts America’s competitiveness and national security in several ways: 

Efficiency and Timeliness: The current permitting process can be lengthy and complex, delaying critical infrastructure projects by several years or even decades. This inefficiency hampers the timely modernization of the U.S. power grid and other essential infrastructure, affecting both economic stability and national security. 

Energy Infrastructure: Delays in permitting can compromise the reliability and resilience of the energy grid, which is crucial for military installations and national defense operations. A secure and resilient grid is essential for maintaining operational readiness and protecting sensitive military and intelligence activities. 

Economic Competitiveness: A streamlined permitting process can attract and retain high-tech and defense-critical industries, such as artificial intelligence (AI) and semiconductor manufacturing. These industries rely on abundant and affordable energy from a secure grid. Without permitting reform, there is a risk of losing these vital industries to competitors with more dependable infrastructure. 

Geopolitical Influence: Efficient permitting processes can enhance the U.S.’s ability to compete globally, particularly against nations like China that have been investing in resilient grids to secure strategic advantages. Permitting reform can help the U.S. maintain its leadership in technological advancement and promote the on-shoring of defense-critical supply chains. 

National Security: The vulnerabilities within the power grid extend beyond economic competitiveness and have significant implications for national security. Permitting reform can reduce risks, ensure the security of military installations, and alleviate budget pressures by allowing the military to focus resources where they matter most. 

CM: What is your overall message regarding energy policy 

MU: Our overall message regarding energy policy is the importance of transitioning to a sustainable, secure, and resilient energy system. This can be achieved through the following key principles: 

Diversification: Utilizing a mix of energy sources, including renewables, nuclear, and natural gas, to ensure a reliable and balanced energy supply. 

Innovation: Investing in research and development to drive technological advancements in clean energy and energy efficiency. 

Resilience: Strengthening the energy grid to withstand and recover from disruptions, including extreme weather events and cyber threats. 

Environmental Responsibility: Reducing greenhouse gas emissions and minimizing the environmental impact of energy production and consumption. 

Economic Growth: Promoting energy policies that support economic development, job creation, and competitiveness in the global market. 

Energy Security: Ensuring a secure energy supply that reduces dependence on foreign sources and enhances national security. 

By adhering to these principles, energy policy can effectively address current challenges and pave the way for a sustainable and prosperous energy future.