Annual motor gasoline consumption in the United States decreased in 2025 even as vehicle miles traveled (VMT) increased because of increasing fuel efficiency, a trend we forecast will continue in 2026 and 2027. U.S. motor gasoline consumption averaged 8.9 million barrels per day (b/d) in 2025, 1% less than 2024 and 4% less than pre-pandemic demand in 2019. In our April Short-Term Energy Outlook (STEO), we estimate that motor gasoline consumption will continue to decline as forecast fuel efficiency increases and VMT growth slows.
A common eye-health nutrient, zeaxanthin, may also help the body fight cancer more effectively. Scientists discovered it strengthens T cells and enhances the impact of immunotherapy treatments. Found in everyday vegetables and supplements, it’s safe, accessible, and shows strong potential as a cancer therapy booster. Human trials are the next step.
A breakthrough in microbiome research could change how colorectal cancer is detected—no colonoscopy required. Scientists used AI to map gut bacteria at an unprecedented level of detail, revealing subtle microbial patterns linked to cancer. By analyzing simple stool samples, their method identified 90% of cases, rivaling one of medicine’s most trusted diagnostic tools.
Alzheimer’s isn’t just one problem—it’s a tangled mix of biology, aging, and overall health. That’s why drugs targeting a single factor have fallen short, even as new treatments show modest benefits. Scientists are now pushing toward multi-pronged strategies, from gene editing to brain-cell rejuvenation and gut health interventions. The goal: stop treating Alzheimer’s as one disease and start tackling it as a complex system.
Scientists have proposed a surprising new way to detect gravitational waves—by observing how they change the light emitted by atoms. These waves can subtly shift photon frequencies in different directions, leaving behind a detectable signature. The effect doesn’t change how much light atoms emit, which is why it’s gone unnoticed until now. If confirmed, this approach could lead to ultra-compact detectors using cold-atom systems.
A strange new kind of superconductivity has been uncovered in uranium ditelluride (UTe2), where electricity flows with zero resistance—but only under extremely strong magnetic fields that should normally destroy it. Even more surprising, the superconductivity disappears at first and then dramatically reappears at even higher fields, earning it the nickname the “Lazarus phase.”
Perovskite solar cells shouldn’t work as well as they do—but they do. Scientists have now discovered that defects inside the material actually help, creating networks that separate and guide electric charges efficiently. Using a novel imaging method, they revealed hidden structures acting like charge “highways.” This insight could unlock even more powerful, low-cost solar cells.
A new chip design from UC San Diego could make data centers far more energy-efficient by rethinking how power is converted for GPUs. By combining vibrating piezoelectric components with a clever circuit layout, the system overcomes limitations of traditional designs. The prototype achieved impressive efficiency and delivered much more power than previous attempts. Though not ready for widespread use yet, it points to a promising future for high-performance computing.
A mysterious glow of gamma rays at the center of the Milky Way has long hinted at dark matter, but the lack of similar signals in smaller dwarf galaxies has cast doubt on that idea. Now, researchers propose a bold twist: dark matter might not be a single particle at all, but a mix of two different types that must interact with each other to produce detectable signals.
Dragonflies may see the world in a way that pushes beyond human limits—and surprisingly, they do it using the same molecular trick we evolved ourselves. Scientists discovered that these insects can detect extremely deep red light, even edging into near-infrared, thanks to a specialized visual protein strikingly similar to the one in human eyes. This ability likely helps them spot mates mid-flight by picking up subtle differences in reflected light.
Earth’s nights are steadily getting brighter overall, but the changes vary dramatically by region. Rapid urban growth is lighting up countries like China and India, while parts of Europe are dimming due to energy-saving efforts and new lighting technologies. The most detailed satellite analysis yet shows these shifts happening faster and more unevenly than expected. Even global trends can mask sharp local contrasts, from war-related blackouts to deliberate reductions in light pollution.
Cancer drugs known as BET inhibitors once looked like a breakthrough, but in real patients they’ve often fallen short. New research reveals a key reason why: two closely related proteins, BRD2 and BRD4, don’t actually do the same job. Instead, BRD2 acts like a “stage manager,” preparing genes for activation, while BRD4 triggers the final step that turns them on. By blocking both at once, current drugs may be disrupting the process in unpredictable ways.
There are some circumstances — think disaster recovery zones or forward military bases — that cry out for portable, reliable, resilient power. I talk with Lauren Flanagan about Sesame Solar’s self-contained nanogrids, which use solar PV, batteries, and hydrogen storage to provide energy that works around the clock in remote or inclement environments.
Hey. Hi, everyone. This is Volts for April 10, 2026, “Ruggedized solar power for the hard places.” I’m your host, David Roberts.
Way back in 2011, roughly 400 years ago, I wrote a piece for Outside Magazine about Marines in Afghanistan’s Helmand province using portable solar panels in the field. The pitch was simple: fuel convoys are targets, liquid fuels are a liability, and solar panels can make soldiers more mobile, quieter, and harder to kill.
The underlying insight extends beyond the battlefield. There’s a whole category of places — disaster zones, remote clinics, island nations, forward operating bases — where liquid fuels are a cost and logistics nightmare, and where conventional solar systems aren’t quite up to the job. These environments need something more rugged: power systems that can be rapidly deployed, run autonomously for months at a time, and don’t depend on a supply chain that may not show up.
Lauren Flanagan
Lauren Flanagan has spent the last decade building something for those times and places. Her company, Sesame Solar, makes mobile nanogrids — self-contained power systems that run on solar, battery storage, and hydrogen — that can be deployed by one person in fifteen minutes and run, with minimal intervention, for months on end. The only fuel supply chain is the sun.
Today we're going to talk about what it actually takes to deliver clean, reliable power to the places the grid doesn't reach — and who, ultimately, gets access to that kind of power.
With no further ado, Lauren Flanagan, welcome to Volts. Thank you so much for coming.
Lauren Flanagan
Thank you, David. I loved that intro. I didn’t know about that 2011 article, but how prescient of you.
David Roberts
I know, it’s funny that it’s coming back now, 15 years later. It made me wonder, what is the state of that program in the Marines? I haven’t checked up on it in a long time. I guess where I’d want to start is trying to get a sense of what business nerds call the total addressable market here. Who exactly are we after? When I threw this out on social media that I would be talking to you about portable, rugged solar systems, a lot of people said, “Oh, rural Africa,” or, “Oh, I want one for my rural home,” or something like that.
I was trying to explain to people, no, for that you just buy normal solar panels and batteries — that would work fine. This thing is designed to be bombproof, bulletproof. This is an extreme bit of engineering designed for extreme circumstances. I want to start with what are those circumstances? What is the market here? What are the kinds of places where this technology would be useful?
Lauren Flanagan
At Sesame, we’re riding two huge tailwinds. The first one is the increasing severity and frequency of extreme weather events — hurricanes, wildfires, floods, atmospheric rivers — which knock out power, communications, water. The second is it’s increasingly a world of robotic warfare where we need UAS, USV surface vessels, ground vehicles, and we need power everywhere.
As we can see in the Middle East, we have oil supply disruption. Having fuel supply disruption, the need for power everywhere, and all of these cataclysmic events happening worldwide, there is a huge need — it’s a $100 billion plus need — for mobile power that is ruggedized, fast to deploy, easy to use, and can run without a fuel supply. That’s the market we’re at. It’s not Jane Doe prepper or your home solar system. This is really solving fundamental life and death Maslowian survival problems.
David Roberts
Which is important to remember later in the conversation when we talk about costs and price and everything else. Just to give people a little background, talk about the cost of liquid fuels in some of these environments you’re talking about. This is one of the things I remember from that 2011 piece — the mind-blowing final cost. Out in Afghanistan, out on the battlefield, they’re using jet fuel. They’re not importing diesel; they all use jet fuel. The all-in cost of jet fuel, once you make it, buy it, transport it, convoy it to the troops, is mind-boggling. I don’t remember the number, but it knocked my mouth open. What price levels are you competing against?
Lauren Flanagan
It’s not only the astronomical price of transport, whether by land, sea, or air — going higher right now with various blockages in the Middle East — but it’s the cost of life, the life of humans in a fuel convoy who, once you track the convoy, you follow them to the target and blow everybody up with the fuel.
David Roberts
Yes.
Lauren Flanagan
There are really two, and then you can’t always get that fuel when you need it. Increasingly, our military is looking at small teams of specialized war fighters that they can drop in a location for a mission of 30 to 60 days and pick up. They don’t want any fuel supply chain; they want it to be able to endure for the mission. You’ve got a wide open world where the issues are in the Indo-Pacific and the Arctic, where they suffer from what we call the tyranny of distance. It’s such a long way to transport it that not only is that cost per gallon high, but that logistics travel from a C-17 or a C-130 or even a ship or a combination and then on a truck is just massive.
David Roberts
I think in one of the stories I read — they’re all blurring together now — but you were talking about, I think maybe it was in one of these Arctic places, but they’re bringing in diesel by helicopter and it’s coming to something like $400 a gallon.
Lauren Flanagan
Absolutely.
David Roberts
Or something along those lines. Which is good to keep in mind when we talk about the cost of this thing later. The alternative is not diesel at the gas station. The alternative is very hard to get.
Lauren Flanagan
Very hard to get fuel, and an increasingly unfriendly world that might not let us stop at their port to get it.
David Roberts
Yes. Nobody’s really enjoying what’s going on in the world right now, but it’s good for resilience businesses, I guess.
Lauren Flanagan
That’s the irony — this administration doesn’t want to talk about climate change. On the other hand, they’re one of the largest users of fossil fuels. If we can make a dent by having renewable energy when and where needed just to solve operational energy needs, the byproduct will be a dent in CO2 emissions and greenhouse gases. But you can’t talk that way. You’ve got to talk about mission endurance and operational efficiency and logistics being streamlined.
David Roberts
Geopolitics too.
Lauren Flanagan
Oh, yeah.
David Roberts
One of the points I keep making to people is, if nothing else, Trump is showing the world the dangers of being reliant on another country for liquid fuels — showing our enemies and our allies at once how bad that is. No one is enjoying being dependent on someone else for liquid fuel these days.
Lauren Flanagan
We just need to keep our war fighters safe and they need the power when and where they need it — however it can be provided. It’s an all-of-the-above strategy. We’re not going to replace it overnight, but we’re a piece of filling in those missing locations and ability to have it when needed. That’s a massive market, as I mentioned, not only our US but our allies. With all these global catastrophes due to extreme weather.
David Roberts
The two markets you describe in that first answer are very different and we are going to return to that in a minute. Before that, for listeners’ sake, let’s just talk about what is — what are we talking about? What is the technology or what is in the box you are selling — basically a big, roughly a tractor trailer-sized box. What’s in it?
Lauren Flanagan
They’re different sized boxes. We call them nanogrids. They can be a standard Conex or shipping container that’s 20 ft by 8 ft, or they can be a tricon, which is a third of that, or they can be a trailer which could be anywhere from 16 to 40 ft. Typically, they’re in the 10 to 28 ft range. This box has everything it needs to be set up by one person in 15 minutes to generate power. It starts with solar — that’s the primary power. It’s stored in batteries.
David Roberts
Before we move on from the solar, there’s a solar panel on top and then there are two or three other, I guess depending on the size of the box, there are two or four others that can flip up from the side of the box to face the sun. Is that so?
Lauren Flanagan
There are deployable solar arrays. “Open sesame” is where our name comes from, if you remember the caves of Alibaba, the treasures inside.
David Roberts
Yes, yes.
Lauren Flanagan
The treasure inside is the solution we have, whether it’s for emergencies or for the military. It’s a complete self-sustaining, self-generating power solution.
David Roberts
You flip out six, eight solar panels, something like that. Then you have these LFP batteries which you’re charging, or supercapacitors.
Lauren Flanagan
We have a variety of storage units that we have.
David Roberts
If I just go with a contractor to put together a solar and storage system for myself for my house, I’m going to pay, what, $20,000, $30,000. Your boxes are between $100,000 and $300,000.
Lauren Flanagan
Or more.
David Roberts
What is that delta?
Lauren Flanagan
First of all, it’s all integrated and mobile and can be set up by one person in 15 minutes. That’s a hard thing to do. If you’re doing your home thing, you’re going to put it on your roof or your house. This is a mobile box that does it and it has everything — all the electronics, inverter, and then we have backup power in the form of stored hydrogen.
We make hydrogen on board. We store it safely as a low-pressure solid and it acts as an extra fuel source — a battery almost — for the fuel cell. If you’re not getting enough solar power or there’s a peak load, you can have the fuel cell kick in and power the batteries. The combination of those can provide a continuous energy loop.
David Roberts
You’re providing solar when it’s sunny, then you shift to the batteries when it’s not sunny, then you go to the hydrogen when the batteries are out. Is that how it works? Is it a hierarchy?
Lauren Flanagan
No, you’re always pulling from the battery. The battery management system through the inverter manages all the power inside and outside the nanogrid, and the battery is the source. You’re always powering the battery with solar. There’s even some when the sun isn’t shining — great metaphor for life, there’s still power coming, but it’s a low basis. If you have backup power in the form of stored hydrogen, then if the voltage isn’t high enough, and this is all pre-programmed, the fuel cell will kick in and power the battery. To the user, it’s seamless. They’re just plugged in and power happens.
David Roberts
The battery is doing the power output, and the input to the battery is either coming from the solar panels or from the hydrogen fuel cell.
Lauren Flanagan
Or it could be another source, because these can be standalone or daisy-chained or in a microgrid. You could have another source — like wind, or even in the military, a fuel generator backing it up. There’s no religion on it. Whatever power you might need to keep the juice on, we keep the juice on.
David Roberts
For the hydrogen people out there, you have an onboard — you’re gathering ambient moisture from the air and you have an electrolyzer on board. You’re splitting that water to make hydrogen and you’re storing hydrogen as a metal. All of that is crazy and interesting. Just start with, why aren’t solar and batteries enough?
Lauren Flanagan
They are in certain locations. If you’re in a lot of places in the Indo-Pacific, you can have a nice big solar array. We typically have 8 or 10 kilowatts on one of the Conex boxes. You give yourself 120 or 150 kilowatt-hours of battery storage. We have some units like that out for the Marines. It just works day and night without any backup hydrogen. We have all the comms integrated and the power systems and software to manage it.
But if you’re in places like Michigan or Ukraine or 45th parallel locations where you don’t have a lot of sunshine in the winter or north in the Arctic, then you cannot rely on solar. Particularly for the Arctic, hydrogen is ideal because you can get some sustained power from it. The real challenge is that the electrolysis of hydrogen is highly energy consuming.
David Roberts
You’re losing a lot of energy in your conversion there.
Lauren Flanagan
But there are other ways to make it and you can also store it. The concept is if it’s movable but semi-stationary — say it’s up in the Yukon — then in the good weather, you store a lot of hydrogen in our solid-state safe low-pressure tanks and you use the sunshine. Then in the winter, when there’s not a lot of sun, you pull on that stored hydrogen and you can create this asynchronous cycle where you’re not having to make it at the low energy times.
David Roberts
Even in the Arctic with its low sunlight, you can be running year-round?
Lauren Flanagan
You can be with a properly sized unit. If the power draw is matched to the weather and we map it by day through the exact geolocation, you can store enough hydrogen and run that in the winter. We’re not talking huge loads, but we’re talking about the kind of loads necessary for local operations or to back up a small cell tower or things like that. You can put a larger ground-mounted system, but if you want it movable, that you could pack it up, there are limits to how much power a single unit can do. It’s typically going to be 5 kW continuous, but that’s a lot. We put one in White Sands Missile Range for the Army Corps of Engineers. That’s in New Mexico desert — wide range of temperatures, close to zero in winter.
David Roberts
Not a ton of ambient moisture in the air, I would think.
Lauren Flanagan
No, very dry. That’s another thing. We store the deionized water in a large tank. You start with stored water. If it’s in a favorable area, you can do the atmospheric water generation or you can filter water from a water source and deionize it, but you’re typically matching it to how long you’re going to be on that location. How many gallons of DI water do you need to store? What capability of making it atmospherically is there by that season or what local water sources could be filtered to do it? You can potentially make the water out of air or filter it out of a water source to then make the hydrogen gas. We carry a lot on board because there’s room.
David Roberts
I think Volts listeners are familiar with the basic hydrogen technologies, and you have to decide if you want to store hydrogen, how to do it. There are different ways. You can pressurize it. You bought this metal hydride storage company. I wonder if you could talk us through the considerations you had when deciding to opt for hydrogen and to opt specifically for low-temperature metal hydride hydrogen. Very specific.
Lauren Flanagan
Low pressure. Solid state. We were their first customer and we had more business than they did, and we ended up buying them. We had vetted it and worked with the technology, and it’s great. You make the hydrogen, you dry it, it’s pure, and you store it. It’s a proprietary formula of a metal hydride powder, which is introduced in canisters that have a proprietary infrastructure of tubing. When you introduce the hydrogen gas, a chemical absorption happens and the gas is formed as a solid and literally hangs on these tubes.
David Roberts
Which means you don’t need ongoing pressure, and it’s stable as long as you want.
Lauren Flanagan
Correct. It’s non-volatile. It’s at less than 300 psi, which is like a spray paint can. It’s safe to put on an airplane, a ship, or any ground vehicle, as opposed to high-pressure hydrogen, which is highly volatile. There’s a lot of consideration about moving it, which is why hydrogen has been so slow to be adopted in a lot of these environments, because the Hazmat side is even worse than batteries and they all have a Hindenburg fear.
But hydrogen is an ideal fuel. It gives a lot of endurance, for example, for drones, and it goes a lot longer and farther on hydrogen. If you can break that — not needing to have hydrogen be brought to the field, but make it in the field and have it stored — that is a big solution.
David Roberts
One of the big knocks always on these things is their expense. Being able to say to an installation in the Arctic, “A solar and battery box will get you a couple of months, a solar and battery and hydrogen box will get you year-round.” That’s a huge value add. You’re adding a lot of value when you add the hydrogen, but are you not also adding a ton of cost? What is the proportion of the total cost that this hydrogen system is representing?
Lauren Flanagan
It adds cost, but compared to what? Compared to prime to bring in fuels. Let’s take a use case. You take one of our hydrogen-powered drones. We partnered with a company called Heven AeroTech and they have a drone that will fly for 10 plus hours on a canister — one canister, about 400 grams of hydrogen. We can show up with 10 kg of hydrogen already stored, giving it 100 or more hours of flight time without ever stopping. You get somewhere and the thing is just running. You can even have two of them going at the same time and swap the canisters. There’s no fuel supply chain needed. This is giving continuous surveillance and maybe there’s not another alternative like that.
David Roberts
What you’re doing for these drone systems is synthesizing hydrogen fuel for them in the field.
Lauren Flanagan
At the edge.
David Roberts
Yeah, at the edge, such that they don’t need any supply chain and they can operate autonomously indefinitely.
Lauren Flanagan
You have to swap the fuel can, but you’ve still got to swap the canisters. That’s not automated yet.
David Roberts
You have to figure they’re going to automate though, if that’s the last thing the human’s doing. You have to figure they’re going to automate that.
Lauren Flanagan
Our vision is we have a little robot that’s doing that. We’re going to ship it with a robot as a service down the road that’s going to provide a lot of those ancillary services. If you’re talking battery-powered drone, for example, if there’s an operator, you can swap batteries, which is fast, but let’s say it’s unmanned, then it can just land on an induction charger, get charged, and take off again.
David Roberts
Yes.
Lauren Flanagan
Go back to that White Sands Missile Range. We were there 13 months, unmanned, 24/7. AI, hardware, software, zero power outages, zero. You could have had battery drones flying everywhere. They didn’t because it’s a missile range, but you could have — let’s say it’s for homeland defense or for infrastructure. We have so much infrastructure that’s vulnerable right now to bad actor drones. You could have drones up, watching everything, running continuously and landing and charging. That’s the kind of thing we power. Hydrogen adds some cost, but compared to what?
David Roberts
I did an article for Vox a few years ago on different methods of charging batteries at a distance, and they are working on some crazy stuff in the labs. One of the use cases that, if I am to believe all these articles, is already technologically possible is they can charge a drone battery with a laser — with a ground-mounted laser, shoot at the drone battery in the sky, which then would enable the drone to be in the sky forever, to never land.
Lauren Flanagan
There’s going to be all kinds of exciting things in space with focused solar from space. I don’t know if you’ve seen Israel’s laser beam that can shoot a plane or drone right out of the sky with a laser. That’s quite something.
David Roberts
Oh, gee.
Lauren Flanagan
The future is going to be very different with a lot of space engagement and focused energy to certain points. You’ll still have to have receptors that can receive it. We’re looking at how we can be playing in that world down the road.
David Roberts
You mentioned at the beginning these two big headwinds, these two big markets. On the one hand you have the military, which is more and more relying on electronics generally, but drones specifically. This is a use case where you need rugged, you need autonomous, etc. And cost is basically no object.
Lauren Flanagan
Not really. To do it in volume, we could be putting these in every C-17 and C-130. That needs to be modular, plug and play. The cost matters. When you get into volumes, you get the economies of scale.
David Roberts
You’ll acknowledge the US military is not as cost-conscious as some other buyers of technology.
Lauren Flanagan
But in volume they are increasingly. They are and they should be. We should be getting the best value and the best products we can for our military.
David Roberts
When I think about the latter market — you talked about disasters, which are unfortunately more and more common all over the place. A disaster-struck, small rural town can’t afford a $100,000 power box, can they? How is that market supposed to access these things, or do you anticipate them getting cheaper?
Lauren Flanagan
They can share them in communities. We’ve had that happen with cities and counties. Ultimately there will be more of this inventory in the power rentals. Today if you have a hurricane in Louisiana and FEMA comes in, they’re not buying it. They’re renting resources from providers to the utilities, from the power rental companies like United Rentals and Sunbelt. The power rental market ultimately is a source. The big future play for the rural environment is pay as you go — energy as a service for these things where you pay by energy consumed.
That’s a high-volume play. That’s the big market opportunity. Right now we’re selling to cities and counties and utilities who can pay for it, and some tribal nations. They’re looking at how to collaborate with their surrounding communities and engage so that the assets are put to use. Just like a horse, you have to ride it. You don’t want it just sitting around. The more you use it, the better.
David Roberts
For any given county, it’d be nice to have one of these around. But almost by definition, the disaster is the exception.
Lauren Flanagan
Right.
David Roberts
You don’t just want it sitting around. It makes more sense to have one that is traveling to disasters. One of the analogies that occurred to me — and maybe you’ll think this is a silly analogy — is solar panels themselves. One of the very first buyers of solar panels was NASA, because they had operational circumstances where nothing else would work and they didn’t care about cost, they just needed it to work. They needed something that would do power in space so they could pay anything. They helped immensely to buy down that initial cost curve, that initial bringing down the cost of things.
Do you think if the military starts buying these things in bulk, do you envision a cost curve? Do you envision the boxes you’re making coming down in cost, or are they just as cheap as they’re going to get and they cost what they cost? How do you think about that?
Lauren Flanagan
That’s why we have what we call the dual-use focus — these two markets — because the volumes feed each other. There are specific use cases for military and sometimes more broad ones for commercial and local government. It’s still the same product. We’re just making slight differences in them for those use cases. The more use cases and the more plug and play it can be, the more Legos it can be, then that’s easier to have one that can meet a budget price point.
David Roberts
You do envision over time these things falling in cost.
Lauren Flanagan
Not only that, but different ways of buying them — either renting them through providers or power-as-a-service type offerings.
David Roberts
Another question I had is, and maybe this is the same question, but when it comes to the evolution of the product itself, you could imagine going even more hyper-rugged, gold-plated, everything you need integrated in one ultimate box. Or you can imagine going the other way, making budget versions, less gold-plated ones, maybe some that have slightly less hydrogen storage or whatever. Budget versions. Those are two different directions of the product evolution. Do you have a sense of which way you’re going to go?
Lauren Flanagan
We go for increasingly complete, moving towards automated, ultimately as autonomous or unmanned as possible with robotics in there. That tends to go premium, but premium in terms of CapEx. It’s lower operating expense if there are fewer people needed to operate it. I think the total cost will ultimately have a lower trajectory. The integration is going to be increasingly sophisticated — even robots as a service or focused energy from space. There are a lot of things going on that are exciting — solar panels floating in space that can be focused.
There are a lot of exciting new technologies that we would want to integrate. We were asked on one RFP and we were scratching our head, “Could we put it in a rocket, shoot it across the Atlantic, have it land and open up and work?” We said, “Really? I think there might be easier ways.” But that was literally an RFP.
David Roberts
Good grief. Why don’t they just manufacture them closer?
Lauren Flanagan
Exactly.
David Roberts
That would be one way to go other than the rocket.
Lauren Flanagan
Yeah. I was like, really? But there will be different uses than we are thinking about today. Highly mobile, highly modular. The more complete, the more autonomous, the more intelligent, the more AI is integrated. That doesn’t initially lower costs. In time and huge volume, it does, but initially no.
David Roberts
Are there specific automation pieces of that that you’re working on right now? Can you give us a sense of what bits and pieces you can envision automating in the future?
Lauren Flanagan
Right now we already have software that allows for a certain amount of remote operations in the case where a customer will let you do it. The military’s not going to let us manage something in a forward expeditionary — but they would have the ability to do it. We’re thinking a lot about all the sensors and mechatronics you need to set it down from a helicopter and open it up and it runs itself. That’s very expensive.
I’m only half kidding when I say I want R2D2. I want my robot to roll out, set it up, be able to stretch itself up like the Amazon ones, and clean the rooftop panels and run all the localized stuff. No people involved. That’s easier. Robots are coming because you have the problem of getting around, logistics, and the instruction set, but it’s really just running some precise recipes and instruction sets. That’s a perfect thing for a robot to do.
David Roberts
I’m just envisioning you at a base firing these things in rockets all around the world with little robots riding on them. Delightful mental image.
Lauren Flanagan
My one that makes me smile is my R2D2, but obviously more sophisticated than that. Remember how handy he was. He could do everything.
David Roberts
As of 2022, I think the article was, you said you raised about $2 million. You were planning a $10 million round. I don’t know how that turned out or where you stand now. Where is your capital structure now and what is the path to scale? Are you going for traditional VC financing? Are you looking more for government grants and contracts? What’s the current financial situation?
Lauren Flanagan
We have revenues, we’ve had revenues. We haven’t needed to raise a lot of money just to get where we are. We’ve raised about $5 million in capital to date. We will do a larger round to scale manufacturing. We’re waiting to hear some of these pending larger orders that we expect to come from some of these big customers. That will have a combination of strategic investors, defense tech investors. I’m not sure how much traditional VC we’ll have.
Then economic development — there’s state monies, there’s debt to finance large transactions. We’ve had a lot of private equity interested, and we are in an enviable position of having had profitable unit economics from sale one. Now the company is hitting profitability, and we’ve done it the good old-fashioned way by making sales.
David Roberts
Not sure I’ve ever talked to a company in this space that is actually making money, much less from the beginning. You started the company — the origin story of the company is in response to climate disasters, as a response to seeing the devastation that follows these hurricanes and stuff, even in the US, even in an extremely rich country. It’s grim how we respond to these things. That’s a basic humanitarian motivation. As you started growing, you found the defense industry as a client. Now that’s about half your business, I think.
Is defense — has your mission itself shifted or do you just view this as a dual mission? How do you view the relationship between those? Do you feel you’ve drifted from your humanitarian origins or do you view it all as of a piece?
Lauren Flanagan
It’s all of a piece. It wasn’t so much humanitarian as how can we solve these power outage problems without making it worse, without compounding the environmental damage after, say, a hurricane or a wildfire, by putting tons of diesel generators that are further polluting the air and water in the ecosystem. How can we find a better way to do it? I picked that particularly because I thought, that’s a very finite problem.
If we can solve that in a way where there is uptake, there are all kinds of adjacent markets where power is being used in construction and military. We did not think of events, but the entertainment industry came to us and said, “We want to stop using...”
David Roberts
I’ve been meaning to do a pod on that. I hear about that more and more. A lot of solar-powered tours or solar-powered concerts with these boxes. I went to a conference last year, DERVOS, where the final event was a concert powered by a big box much like the one you make. It seems a hot area.
Lauren Flanagan
Some of our cities and counties use it. City of Ann Arbor, its original purpose was to back up a particular fire station to be there for emergencies. Fortunately, in Michigan we don’t have too many extreme weather events, but they have it for events. It becomes the office and workspace for the city personnel and they use it for education and community engagement. You can run a concert on it. You could do a lot of different things to keep it busy. That’s good. It’s reducing, from their perspective of sustainability, it’s helping them hit their greenhouse gas reduction goals.
David Roberts
The whole question of dealing with the US military is a little more fraught today than it might have been five or ten years ago. You’re probably following this big conflict between the Department of Defense and Anthropic — Department of Defense saying, “You need to enable your tools to kill autonomously,” and Anthropic saying, “No, we have moral objections to that. We’re not going to create an agent that will do that.” The big ongoing fight, which raises the issue that the technological capacities of the military are getting such that they are at least capable of a lot of scary dystopian things.
Are there military applications of your technology that you wouldn’t support or is there a customer that you wouldn’t sell to?
Lauren Flanagan
We’re not making weapons. We’re providing power and surveillance equipment and empowering the war fighters. We want to help empower, defend, and protect our war fighters. On the whole Anthropic issue, where I end up is that Congress needs to legislate the guardrails because you can’t have a contractor telling the Department of Defense how to use the product to do operations. That doesn’t scale if every contractor has a different vision of what you can and can’t do. That said, I don’t want to see it being used for mass surveillance or lethal actions without a human in the kill chain.
That’s up to Congress to set those guardrails and to approve them, or if they’re going to reject them for some reason, get congressional approval. There are dystopian situations where you might have to do it. You have to have that possibility open. We came into this to have power when and where needed in life and death situations. The military is an extension of that. What we’ve had to do is meet the customer where they are and speak to them in the language that they can hear. It still hits our overall power goal and does less harm to the environment. Those are the same missions we’ve always had, but we now have another place to do good in the world, in the way of helping our war fighters.
David Roberts
Can you talk a little bit about the rhetorical shift that you made when you started dealing more with the defense industry?
Lauren Flanagan
I call it schizophrenia. Even our new website that’s coming out, we have it divided into military and commercial. Normally you’d say government and commercial, but local governments have different goals than our federal government does at present under this administration. For example, city of Ann Arbor or Santa Barbara County, they do care about reducing their carbon footprint and reducing CO2 emissions, and they have metrics about that.
Our government is concerned about strengthening our military, protecting our war fighters, having power when and where we need it, and protecting American interests. The only place where that matches up, though, is because I’ve had a general look at me and say, “I don’t care about this climate stuff, but I need power where I need it, when I need it, and I don’t care where it comes from.” I’m like, “Good, if I can make it in the field, you don’t care if it’s made from sun and air?” “No, as long as it works.” You just have to learn to speak to them in the way they can hear, and then we can have a good dual mission — that’s going to help our country, help our war fighters, bring manufacturing back to the US. I’m all pro all those things and at the same time provide some of the research and volume to help us serve more cities, counties, and rural areas.
David Roberts
One final question on the product evolution. As I said at my very first question, I’ve been struggling with what are the boundaries of this market. I think about diesel gensets. Anybody who follows power and sustainability and all these issues knows that the world is just chock-a-block with diesel gensets. They’re all over the place and they’re incredibly dirty. On a per unit basis they’re some of the dirtiest things you can do. But they’re also super cheap. Backup power — all these things where you need portable, self-contained power — diesel gensets are doing most of that work in the world today. The distance between a $100 to $300 diesel generator and a $100,000 power box is a large distance.
How many of those diesel gensets — you’ve got a confined set you’re displacing. The pool, the total pool of diesel gensets, is huge. When your eyes sparkle and you think about 10 years from now, you think about the possibilities. How much of that pool of diesel gensets do you think can ultimately be displaced by portable clean power?
Lauren Flanagan
There are lots of small portable batteries and solar. That’s not our market, but if oil goes to $200 a barrel and potentially up depending on what happens in the world, it’s the cost of fuel and its availability. You can’t even get it in parts of Africa, which is where it’s most used. If fuel becomes scarce and very expensive, which will happen, it’s just a function of time. Batteries and solar get cheaper, that cost delta will change even for the small user. We’re more at a larger organization user versus an individual.
Ultimately, the cost of the batteries and small solar — there are ones in the military, little portable man-portable batteries and flat panels that fold out. Back to your Afghanistan article. They’re using them. They can power small mission devices, even a small battery drone and set it off. It may not go very far, maybe 45 minutes. Maybe it’s got a small payload, but that’s maybe all they needed to do. It’s in wide use in the military.
David Roberts
And it doesn’t make a roaring sound that you can hear from miles away either.
Lauren Flanagan
That’s the huge advantage of hydrogen — the low audio and thermal signature. It’s much lower detection. For example, the vertical takeoff and landing (VTOL) drone that Heaven Aerotech makes — not only can it fly for 10 hours, but it can fly virtually undetected because you cannot hear the thing.
David Roberts
Because it is quiet and there is no combustion.
Lauren Flanagan
No, it’s using a fuel cell. The hydrogen makes electricity to run the fuel cell. It’s silent.
David Roberts
Is it true that you can’t see drones coming unless you visually — there is no way to detect drones?
Lauren Flanagan
They have lots of ways to detect them —
David Roberts
I don’t know how it all works. It all seems vaguely dystopian to me.
Lauren Flanagan
There are lots of ways to detect. Clearly lower signatures, flying at lower altitudes — those are big wins in terms of survivability. Those are the kinds of things we are powering. We’re not powering the kamikaze killer weapon drones. We’re powering for law enforcement or checking a wildfire afterwards. Instead of a plane or surveillance of infrastructure or military surveillance or counter-UAS, we’re doing things that aren’t weapons.
David Roberts
One of the things I study a lot is transmission lines. In California specifically, they have all these old transmission lines that are strung off through wilderness areas. A lot of them were built so long ago they barely even know where they all are, much less can track the vegetation around them or if they’re sagging, all these things. The best they can do is send a person out every 10 years or whatever to fly around.
I kept thinking about one of these boxes sitting out there and a little drone that just parks on it and charges and then goes and monitors those transmission lines and then comes back and recharges and then — bada bing, bada boom. You have real-time monitoring of hundreds of miles of transmission lines. You’re avoiding blackouts, you’re avoiding fires. That would pay for itself. Have you — I don’t know why I’m thinking of new applications for your business, but I guess...
Lauren Flanagan
Should I hire you, David?
David Roberts
Has anyone come to you with that? That seems like an obvious one.
Lauren Flanagan
We’ve thought about both that and wildfire surveillance. Right now they send big planes up. It’s very expensive, all the fuel and the people to do that. This is a perfect case for hydrogen-powered drones to be able to survey and send back the data from a variety of cameras and sensors. Those are perfect applications not only for wildfires, but any natural disaster. You need to get the aerial view and to get it without the whole aviation requirements, and jet fuel is a definite cost saving.
These are additional new markets. I believe that the hydrogen-fueled UAS is going to be a significant breakthrough as we start waking up to our infrastructure vulnerability here in this country.
David Roberts
Or just monitoring or defending transformers or power stations.
Lauren Flanagan
Dams, bridges. These are all places — power, military bases. We have billions of dollars worth of equipment on the ground. This is all stuff that has to be surveyed.
David Roberts
This is your immediate business focus then? Is this drone market? Are there other — we’re talking about fanciful, all kinds of things you can imagine doing with this box. Is there an approximate next market or are you just focused on the drone thing for now?
Lauren Flanagan
The drone is new. Our core bread and butter business is just power, communications, and water. Whether it’s for war fighters at a base or forward expeditionary, a city, a county, a large corporation. We’ve got telco broadbands using it for backing up cell towers. That’s our bread and butter. These are the normal. The drone adds another layer of surveillance, another thing you can do with that power box. We’re not making the drone. They can buy whatever drone they want and we can power it. That’s just another functionality you add to it.
We’re interested in the entertainment market. They couldn’t cross the chasm. They don’t want to own it. The Disneys and Netflixes, they want to rent it and the rental companies are like, “We’ll buy it, but you have to give us enough business that we’re going to get our money back from that inventory.”
That’s the chicken and the egg problem. I think they’ll cross it.
David Roberts
I bet that’s solvable. There’s a lot of will, there’s a lot of impetus in that industry.
Lauren Flanagan
Absolutely. The PR value of being able to say, “This was a completely sustainably made film, no animals were hurt, no CO2 emissions were put in the air.” That’s going to matter to certain studios, not to others.
David Roberts
This is very interesting. Just wrapping up — what is the limiter on your expansion here? Is cost a barrier or is it logistics? Is it just getting people familiar with what you have to offer? What are your bottlenecks?
Lauren Flanagan
Being able to manufacture faster at lower costs.
David Roberts
Where are these manufactured now?
Lauren Flanagan
We have a factory in Jackson, Michigan, 38,000 square feet. We have room to expand and we’re currently one shift, but we can go to three. Expanding manufacturing. We’ve been broadening our supply chain the last year and a half so that we can be ready for some of the larger orders. We’ve been running the gauntlet through various Department of War branches, getting the necessary approvals and test results.
David Roberts
Are there approvals? A bunch of stuff just came out in the OBBB, the big stupid bill they passed. There are a bunch of domestic sourcing requirements to get various tax breaks. Are you making an effort to source most or all of your materials?
Lauren Flanagan
We always have. We’re proudly made in Michigan, made in the USA.
David Roberts
Where are the solar panels coming from?
Lauren Flanagan
We get them in the US. We get as much of it as we can in the US and as much as we can in the Midwest, particularly Michigan. I’m a foodie. I like to cook farm to table. If you get it from Michigan, it’s sourced to manufacturing like farm to table. That’s what we’re trying to do — to source as much locally and to reduce the time and the logistics expense and to create jobs in the communities where we work. That’s part of American reindustrialization. We’re super committed to that. Very proud of that. That’s an exciting part of our mission.
David Roberts
Very cool. I love seeing solar doing things that people said it couldn’t do, which is a frequent occasion. Thank you so much for coming on. This is a really interesting niche that I had never looked into before. Thanks for walking through it with us.
Lauren Flanagan
Thank you for having me. It was a fun conversation. Going back to your first article in 2011 in Outside for Afghanistan, I love that and it feels like it’s full circle.
David Roberts
Thank you for listening to Volts. It takes a village to make this podcast work. Shout out especially to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. It is all supported entirely by listeners like you. If you value conversations like this, please consider joining our community of paid subscribers at Volts.wtf, leaving a nice review, telling a friend about Volts, or all three.
A new study reveals that gut bacteria may play a key role in triggering ALS and frontotemporal dementia. Harmful sugars produced by these microbes can spark immune responses that damage the brain. This breakthrough explains why some genetically at-risk people develop the diseases while others don’t. Even more promising, reducing these sugars improved brain health in experiments, hinting at new treatment possibilities.
Your brain might be quietly deciding what tastes good before you even take a sip. Researchers found that simply changing what people thought they were drinking—sugar or artificial sweetener—could dramatically shift how much they enjoyed it. When participants believed a drink had artificial sweeteners, real sugar tasted less enjoyable, but when they expected sugar, even artificially sweetened drinks became more pleasurable.
Scientists are uncovering a surprising connection between autism and ADHD that goes deeper than labels. Instead of diagnoses, it’s the severity of autism-like traits that seems to shape how the brain is wired—even in children who don’t officially have autism. The study found that certain brain networks tied to thinking and social behavior stay unusually connected in kids with stronger autism symptoms, hinting at a different developmental path.
A hidden waste-removal pathway in the brain has finally been caught in action. Using cutting-edge MRI scans, researchers discovered that fluid flows along the middle meningeal artery in a slow, lymphatic-like pattern—very different from blood. This confirms the presence of a previously unknown drainage hub in humans. The finding could transform how scientists approach brain aging, injury, and diseases like Alzheimer’s.
We write today to provide comments regarding the prevailing wage and apprenticeship (PWA)
requirements set forth in T.D. 9998,1 as applied to the Section 45Z Clean Fuel Production Credit, and the
Treas. Reg. §1.45Z-3 regulation that further define the PWA requirements under section 45Z. Since the
publication of these final rules on June 25, 2024, the companies we represent have been diligently
attempting to comply with their provisions. We strongly support the objectives of Treas. Reg. §1.45Z;
however, our members’ efforts to apply this regulation to our businesses to claim the enhanced section
45Z credit have raised a number of issues. We have the following concerns regarding application of the
PWA rules in the 45Z context, and we are hopeful you will consider addressing them.
I. PWA Rules for Facilities in Construction Prior to the Inflation Reduction Act (IRA)
Taxpayers have faced substantial uncertainty regarding how to manage the PWA rules for section 45Z
purposessince their original enactment in the Inflation Reduction Act of 2022 (IRA). The original transition
rules set forth in subsections 45Z(f)(6) and (f)(7) were wholly prospective in nature and addressed only
the application of the PWA rules for projects placed in service after the January 1, 2025,2 effective date
for section 45Z. This created significant problems and inequity for projects that started construction
before the enactment of the PWA rules under the IRA and placed in service after December 31, 2024.
After the enactment of the IRA and the PWA rules, the only guidance taxpayers had to rely on in managing
PWA was set forth in Notice 2022-61. Taxpayers logically assumed this guidance would ultimately be
extended for section 45Z purposes. In particular, taxpayers assumed that a single unified approach to
grandfathering projects from the scope of PWA would ultimately apply for all IRA credits.3
Due to the
absence of meaningful and actionable PWA guidance for section 45Z, taxpayers were unable to develop practical approaches to addressing PWA for facilities already well into construction before these rules
were enacted.
The promulgation of the final PWA regulationsin June 2024 wasthe first time taxpayers were made aware
that construction delays could cause a facility to become subject to PWA requirements. The following
example illustrates this outcome:
Taxpayer X commenced development of a biofuels production facility prior to the
enactment of the IRA. Due to natural disasters, fires or other unavoidable construction
delays, the facility was placed in service on August 1, 2025. Based on the plain language
of section 45Z(f)(6) and (f)(7) and Treas. Reg. § 1.45Z-3, the facility would be required to
obtain PWA information for the construction period between 2023 and August 1, 2025,
in addition to being subject to penalties and interest for lack thereof.
This example highlights the unduly burdensome application of the PWA rules under section 45Z(f)(6) and
(f)(7) and Treas. Reg. § 1.45Z-3. Although Treas. Reg. § 1.45Z-3 attempts to provide a limited transition
period for PWA during the construction period,4 it failed to address the common instance of facilities for
which construction began prior to the existence of the PWA rules and to the PWA grandfathering date set
forth in Notice 2022-61. As a result, taxpayers would be unfairly subject to penalties and interest for
noncompliance with a law that was not, under the IRS’s own guidance, applicable to pre-IRA construction
periods with respect to all other tax credits.
There is no indication that Congress anticipated, or intended, such an outcome. Notice 2022-61 was
consistent with congressional intent and established a clear, workable, and administrable bright-line rule
for determining the application of PWA requirements for other IRA credits. By contrast, the retroactive
and inflexible application of the PWA rules in the section 45Z context does not further that intent.
We acknowledge that the statutory transitional rules in sections 45Z(f)(6) and (f)(7) expressly reference
the placed-in-service date as determinative of PWA applicability for section 45Z purposes. Nevertheless,
equitable relief is warranted for taxpayers that have taken timely and affirmative steps to address
technical PWA noncompliance for projects such as the one described above.
Requested Solution: We are seeking equitable relief for projects that began construction prior to January
29, 2023, but were not placed-in-service until after December 31, 2024. This equitable relief could take
several forms, including but not limited to: (i) sub-regulatory guidance such as an IRS Notice5 offering
targeted relief to taxpayers seeking to bring these projects into a PWA compliant status to claim the
maximum allowable 45Z PTC; (ii) an industry directive; or (iii) a voluntary amnesty program with predefined rules of the road for taxpayers willing to take the appropriate steps to bring these projects into
PWA compliant status.
This request should take into account the following factors:(1) Retroactive remediation of PWA compliance across multiple, unrelated construction service
providers over a multi-year period is impracticable, and in most cases, unworkable. If Treasury
determines that some degree of retroactive remediation is necessary, such remediation should
be narrowly scoped, timelimited, and subject to a reasonable, goodfaith compliance standard.
At a minimum, remediation should not be required for work subject to PWA that occurred
prior to January 1, 2025.
(2) Retroactive application of the apprenticeship requirements under section 45(b)(8) would only
require taxpayers to pay significant penalty payments without any real enhancements to
apprenticeship programs across the energy industry. This is not the intent of the law nor the
intent of Congress. Taxpayers should not be subject to these penalties when they did not have
the opportunity to adhere to these rules in a timely manner; and
(3) Taxpayers that have shown a good faith effort to comply with PWA for projects that were not
placed in service by January 1, 2025, should not be subject to penalties and interest. The IRS
should issue guidance to support a mechanism that helps taxpayers who have been clearly
disadvantaged by these rules. Taxpayersshould not be subject to penalties and interest for failing
to follow rules that did not exist when they began their construction activities.
We respectfully urge Treasury and the IRS to develop equitable relief in whatever form deemed most
appropriate so taxpayers may meet the 2025 tax return filing requirements.
II. Other Dates of Applicability Issues
A. Although subsections 45Z(f)(6)(B)(i) and (ii) excuse facilities placed in service prior to 2025 from
compliance with PWA requirements with respect to construction, such facilities are not excused from
ongoing compliance with respect to alterations or repairs performed after 2024. In Treas. Reg. §
1.45Z-3(b)(2), Treasury has followed the statute by requiring continued compliance with PW
requirements for alterations and repairs even for facilities placed in service prior to 2025. The
regulation does not reflect, however, the statement made in the Preamble of T.D. 9998, that Treasury
interprets the PWA requirements as applying only to facilities placed in service after 2021:
Undersection 13010(k) of the IRA, the rules ofsection 45(b)(7) and 45(b)(8) apply with
respect to facilities that are placed in service after December 31, 2021. Thus, the
Treasury Department and the IRS interpret the PWA requirements of sections
45Z(f)(6) and 45Z(f)(7) generally as applying to any qualified facility that is placed in
service after December 31, 2021, subject to the transition rule described in Section II.
of this Summary of Comments and Explanation of Revisions. (Summary of Comments
and Explanation of Revisions, Section IX.G.) (Emphasis added.)
The implication of thisstatement isthat the PWA requirements do not apply at all to any clean fuel facility
placed in service before 2022. On its face, however, Treas. Reg. § 1.45Z-3(b)(2) simply provides that any
facility placed in service before 2025 must comply with the requirements for alterations and repairs,
thereby including even facilities placed in service before 2022.
Understandably, without confirmation that the preamble statement may be relied upon to relieve
taxpayers of PW compliance as to alterations and repairs of facilities placed in service before 2022,
taxpayers that are using older facilities to produce clean fuel are confronted with an ambiguity as towhether they are obligated to comply with PW with regard to alterations and repairs since the regulation
is inconsistent with the Preamble statement.
Requested Solution: We request guidance clarifying that facilities placed in service prior to 2022 are not
subject to PW compliance with respect to alterations and repairs.
B. Additionally, the statutory language of the IRA and the final PWA rules raise an ambiguity
regarding the applicability of PWA compliance for section 45Z. The IRA provides that the PWA
requirements apply to section 45Z “with respect to any taxable year beginning after December 31,
2024, for which the credit is allowed under this section.” (Emphasis added.) (P.L. 117-169, Aug. 16,
2022, Section 13704(a)). This bolded language could be taken to mean that PWA compliance as to
alterations and repairs is required only in years for which the 45Z enhanced credit is claimed.6
However, in the final PWA guidance applicable to 45Z, Section 1.45Z-3(b)(2) simply states that a qualified
facility placed in service prior to January 1, 2025, is one “that meets the prevailing wage requirements of
section 45(b)(7) and § 1.45-7 with respect to any alteration or repair of such qualified facility that is
performed in taxable years beginning after December 31, 2024,” implying that PWA compliance is
required for all years beginning with 2025, regardless of whether the enhanced credit is claimed.
Requested Solution: We request that the Treasury Department provide additional guidance with respect
to the PWA rules to clarify that PW compliance for alterations and repairs is required only for those years
for which the enhanced 45Z credit is claimed.
III. Definition of Alteration or Repair
Since the release of the final PWA regulations, taxpayers continue to experience frustration with the
definitions of “alteration or repair” included in the final PWA rules. For instance, many taxpayers believe
that the current definition of maintenance isso narrow that almost every activity is classified as a “repair.”
For taxpayers in the clean fuel industry, certainty as to whether an activity is a repair or maintenance is
crucial as failure to comply with the applicable requirements for repairs will prevent taxpayers from
accessing the full credit amount.
For example, clean fuel production plants are extremely complicated and involve a number of parts
subject to routine wear. A production plant must be actively maintained on both a daily and routine basis
and many parts are subject to periodic replacement protocols. For example, many parts have a commonly
accepted useful life but are generally only replaced when they fail to avoid incurring the significant waste
and capital cost of procuring replacement parts before they are necessary.
Requested Solution: We request that the Treasury Department continue to work with taxpayersto further
refine the definition of “alteration or repair,” particularly as distinguished from “maintenance.” There are
several ways to do this, all of which could be handled in a Revenue Procedure:
(1) Provide additional examples of maintenance and “alteration or repair.”
(2) Clarify that taxpayers may demonstrate that tasks are properly treated as “maintenance” by
reference to written materials provided by an equipment manufacturer.(3) Clarify that “maintenance” istreated as amountsthat would not be capitalized to the qualified
facility and “repair or alteration” includes only costs that may be capitalized to the qualified
facility, in each case, under existing U.S. federal income tax capitalization requirements.
(4) Provide a de minimis threshold for the cost of labor or number of hours of labor required per
task. This could correlate with the $2,000 contract applicability threshold from Davis-Bacon that
is intended to apply in the context of 45Z PWA requirements. In other words, if the labor
associated with a task would cost lessthan $2,000 at a service provider’stypical rate (or the wages
typically paid by the taxpayer to its employees for similar work), then the task is not treated as
“repair or alteration.”
IV. Prevailing Wage
“Prevailing Wage” in 45Z relies on Davis-Bacon Act wage determinations issued by the Department of
Labor for the “locality” in which the facility is located, which means that a taxpayer must pay the wages
set by DOL under general wage determinations for a geographic area. However, the unique geography of
biofuels production and the relative novelty of the technology create situations where the DOL has
insufficient data to issue a prevailing wage determination in some counties where these facilities are
located.
While current IRS regulations provide a mechanism to request “supplemental wage determinations” or
“additional classifications and rates for those localities or specific types of labor,” that process creates
additional burdens and delays for the taxpayer.
Requested Solution: We request that taxpayers claiming the 45Z credit be permitted to use the relevant
prevailing wage determination or labor classification from the nearest locality (defined as any locality
adjacent to or sharing a border with the subject locality) if that information is not available for the locality
where the facility is located.
V. Compliance Testing
A. While periodic reviews are important and necessary to ensure and demonstrate compliance with
the PWA requirements, pursuant to regulation 1.45-7(c)(3)(iii)(B), taxpayers find themselves
compelled to perform burdensome current quarterly reviews.
Requested Solution: We request that additional guidance for the PWA rules instead allow for annual
reviews for compliance.
B. Frequently, work undertaken to effect an “alteration or repair” is performed by a contractor
rather than directly by the taxpayer. Notwithstanding any contractual agreement requiring the
contractor to provide the necessary payroll data to allow the taxpayer to meet PWA compliance
record-keeping requirements, many of these actors are small companiesthat may go into bankruptcy,
refuse to provide information for various reasons (including concerns about personally identifiable
information (PII)), or simply disappear.
Requested Solution: We request that the additional guidance for the PWA rules allow the taxpayer to rely
on an affidavit provided by the contractor affirming its compliance and permit such affidavit to satisfy the
taxpayer’s compliance obligation. We also request that a good faith exception apply in cases where the
taxpayer has attempted multiple times without success to reach an unresponsive or uncooperative
contractor and has been unable to procure the data required or an affidavit of compliance.VI. Penalty Abatement
Taxpayers often find themselves in the position of having underpaid by extremely small amounts.
However, in addition to being required to cure the underpayment, they are also potentially subject to a
$5,000 penalty multiplied by the total number of workers who were paid wages below the prevailing rate
(section 45(b)(7)(B)(i)(II)), regardless of how small the required corrective payment might be. While
regulation 1.45-7(c)(6)(i) provides a penalty waiver under certain circumstances, the amount of time
provided to the facility owner to correct the underpayment (1 month) is very restrictive, particularly if the
quarter in question happens to be the final quarter of the year.
Requested Solution: We request that any additional guidance for the PWA rules create a safe harbor de
minimis dollar amount beneath which no penalty isincurred for underpayment. In addition, development
of a de minimis amount of failure to comply, under which no cure payment is required, would be helpful
in cases for which information is not available to allow for the corrective payment to the affected worker.
Finally, we ask that taxpayers be provided 90 days beyond the end of the quarter in question to make
corrective payments.
Conclusion
Thank you for all the hard work you have put into the further implementation of the IRA and OBBBA and
for your commitment to ensuring the clean energy provisions work as intended. We hope that you will
consider the above requests for guidance in the spirit in which they are offered, and that is to make these
rules more administrable and workable for both industry and government. We encourage you to reach
out to any of the undersigned as a resource on these issues.
Sincerely,
Advanced Biofuels Association
Alternative Fuels & Chemicals Coalition
American Biogas Council
American Petroleum Institute
Clean Fuels Alliance America
Fuel Cell and Hydrogen Energy Association
Growth Energy
Methanol Institute
Renewable Fuels Association
RNG Coalition
SAF Coalition
American farmers deeply appreciate the Trump Administration’s actions to support farmers during an incredibly tenuous time for American agriculture. Actions like the recent Farmer Bridge Assistance Program have provided a crucial opportunity for a return on the 2025 crop, but unfortunately, the outlook for 2026 returns to negative margins. Farmers are facing structural economic issues where projected costs exceed expected revenues. As you know, biofuels are a critical market for American farmers, and tax incentives like the 45Z tax credit are essential policy instruments to secure long-term demand for liquid fuels made from American-grown feedstock. Stable, long-term market incentives will help farmers outpace their global competitors, and allow them to make capital, input, and management decisions that shape the next several growing seasons.
This Administration has committed to putting farmers first and to securing the future of liquid fuels. Ensuring that farmers can reap the potential market benefits of the 45Z tax credit comes at a critical time for farmers across the country.
For 45Z to function as it should, three actions are urgently needed. First, USDA’s updated guidance and carbon intensity (CI) calculator must be transmitted to and processed through OMB. Next, the Department of Energy (DOE) needs to include USDA’s updated CI calculator (FD-CIC) in the updated 45Z-CF GREET model. Finally, Treasury must adopt guidance to formally recognize the ability of verified on-farm practices to lower CI scores in a way that does not distort planting decisions. To maximize farmer participation and ensure the program’s success—without disrupting the nation’s highly efficient grain markets and logistics—Treasury should incorporate book-and-claim alongside mass-balance supply-chain traceability systems. Without this regulatory clarity, farmers, biofuel producers, and lenders may lack the certainty required to invest and participate at scale.
Agricultural conservation practices, such as use of cover crops and no-till or strip-till, improve soil structure and organic matter, increase water infiltration, and enhance drought tolerance. These outcomes reduce crop damage during periods of excessive precipitation while also stabilizing yields under drought stress ultimately lowering risk and reducing indemnity payments. 45Z can serve as a catalyst for creating an environment that enables these practices to scale.
45Z also contributes to economic stability. Adoption of regenerative agricultural practices, which has been emphasized by President Trump’s Cabinet, have increased cost implications. Farmers often must make significant capital investments in equipment, absorb variable costs such as cover crop seed, and undertake significant management changes. Especially in a distressed farm economy, these investments are not practical without a predictable and bankable return. Clear 45Z guidance is critical for farmers and their lenders to plan with confidence. Without regulatory certainty on the inclusion of on-farm practices, those incentives will not materialize at the scale necessary to drive participation.
Finally, the precedent set by formally incorporating on-farm practice-based CI reductions into 45Z will shape future market opportunities well beyond liquid fuels. As row crop commodities increasingly serve as bio-feedstocks for bio-plastics, bio-textiles, and bio-chemicals, this guidance can serve as a durable framework for farmers to expand their income streams. Leveraging an optimized 45Z as a model could unlock new domestic markets for U.S. farmers while accelerating the transition to a healthier food, fuel, and fiber system.
We respectfully urge USDA, DOE, Treasury, and the White House to complete the remaining regulatory steps necessary to operationalize 45Z so that farmers can participate effectively. Timely, durable guidance is essential to provide farmers, biofuel producers, and lenders with the certainty needed to invest, innovate, and deliver on the Administration’s stated goals for soil health, market expansion, and farm profitability.
Sincerely,
National Corn Growers Association
American Soybean Association
National Sorghum Producers Association
Renewable Fuels Association
Growth Energy
National Oilseed Processors Association
Clean Fuels Alliance America
The SAF Coalition
Alabama Soybean and Corn Association
Illinois Corn Growers Association
Indiana Corn Growers Association
Iowa Corn Growers Association
Kansas Corn Growers Association
Kentucky Corn Growers Association
Michigan Corn Growers Association
Minnesota Corn Growers Association
Missouri Corn Growers Association
Nebraska Corn Growers Association
North Dakota Corn Growers Association
Ohio Corn and Wheat Growers Association
South Dakota Corn Growers Association
Tennessee Corn Growers Association
Texas Corn Producers Association
Virginia Grain Producers Association
Wisconsin Corn Growers Association
Texas Grain Sorghum Association
New Mexico Sorghum Producers
Nebraska Sorghum Producers
Chair Putnam, Vice Chair Kupec, and Members of the Committee:
Growth Energy is the nation’s largest association of biofuel producers, representing 97 U.S. plants that each year produce more than 9.5 billion gallons of cleaner-burning, renewable fuel, including eight biorefineries in Minnesota. We also represent 128 businesses—including twelve associate members in Minnesota—associated with the production process; and tens of thousands of biofuel supporters around the country. Together, we remain committed to bringing better and more affordable choices at the fuel pump to consumers, helping our country diversify our energy portfolio in order to grow more energy jobs, sustaining family farms, and driving down the costs of transportation fuels for consumers with a lower carbon fuel.
Today, 98 percent of all gasoline sold in the U.S. contains 10 percent bioethanol. E15, a fuel containing up to 15 percent bioethanol, is now available at more than 4,700 retail locations in 34 states around the country.
E15 is approved for all 2001 and newer vehicles, more than 96 percent of all light duty vehicles on the road today. Most vehicles require a minimum octane rating of 87. Bioethanol, with an octane rating of 113, helps meet that in modern cars. Bioethanol is a cleaner, renewable, and cost-effective alternative to toxic chemicals like lead and MTBE. Consumers have now driven more than 205 billion miles on E15, and retailers have conducted millions of transactions with this fuel. There have been no adverse reports of fuel quality experienced with E15 since first being approved 13 years ago.
Growth Energy strongly supports Senate File 4263, which would provide an important incentive for higher bioethanol fuel blends. Specifically, this legislation would provide a 5 cent per gallon incentive to fuel retailers for every gallon of E15 sold. This incentive will
help Minnesota retailers continue to build out the market and invest in additional infrastructure to offer higher bioethanol blends of fuel.
Increased E15 access also give consumers more affordable choices at the pump. Earlier this year, drivers in Minnesota saw as much as 52 cents per gallon in savings when compared to E10. Providing a 5 cent per gallon incentive to offer higher bioethanol blend helps hardworking Minnesotans save on fuel costs without any impact to the state’s fuel tax revenue.
These economic benefits of increased E15 availability to Minnesota consumers could be even more pronounced as the price of oil increases if the current instability in the Middle East and Iran’s actions to disrupt the global energy market continues.
This incentive will also help Minnesota bioethanol producers and corn growers. At a time when American farmers are facing a 25% decrease in farm incomes, Minnesota corn growers can benefit from the increased demand for their crop.
When considering the consumer savings, the benefits to the agriculture and bioethanol industries, and noting no impact on Minnesota’s fuel tax revenue, the proposed incentive doesn’t affect the state’s bottom line. Several Midwestern states have successfully implemented similar incentives for higher bioethanol blends. As more states consider incentives, Minnesota should ensure its product made from Minnesota-grown corn benefits in-state drivers and saves them at the pump.
Given our experience with retailers around the country offering E15, we are happy to assist the committee with technical questions as they consider this important legislation. We look forward to working with you to finalize this important benefit for Minnesota drivers,
fuel retailers and farmers. Thank you in advance for your consideration.
Login
