Energy policy in Washington is undergoing a significant shift, with lawmakers increasingly prioritizing energy security, grid reliability, domestic production, and critical mineral supply chains. While clean energy remains part of the conversation, the focus has moved toward ensuring the U.S. can meet growing electricity demand, strengthen domestic manufacturing, and reduce reliance on foreign suppliers.
Federal Budget
Congress has approved the Department of Energy’s FY2026 budget, preserving many research and infrastructure programs while trimming funding for some climate-focused initiatives. The budget’s key priorities reflect the broader policy shift: grid modernization, transmission infrastructure, nuclear energy, domestic manufacturing, and critical minerals. The administration also recently moved oversight of the long-running ENERGY STAR program from the EPA to DOE, a symbolic indicator of how energy priorities are being consolidated under federal energy leadership.
Grants and Funding Opportunities
Significant funding opportunities are actively open for energy organizations. In March, DOE launched a $500 million funding opportunity to expand domestic critical mineral and materials processing, battery manufacturing, and recycling, representing the third round under DOE’s Battery Materials Processing and Battery Manufacturing and Recycling programs. In April, DOE announced an additional funding opportunity of up to $69 million for technologies that advance domestic production and refining of critical materials, with topic areas including rare earth elements, gallium, germanium, and direct lithium extraction. Most recently, in May, DOE awarded $45.7 million to 19 projects focused on filling domestic critical minerals supply chain gaps, with a particular focus on pilot-scale processing of magnesium and rare earth mineral elements. Organizations should continue monitoring DOE and Grants.gov for additional announcements throughout the year.
Legislative Activity
Congress is advancing a slate of energy-related bills, with permitting reform taking center stage. The House passed, by unanimous voice vote, a bipartisan bill to ease permitting barriers for geothermal energy, drawing support from an unlikely coalition spanning both parties. Separately, Senator Dave McCormick introduced the “Unlock American Energy and Jobs Act of 2026,” which includes provisions to streamline the permitting process for LNG facilities and other energy infrastructure. Lawmakers are also pushing bills focused on strengthening domestic critical mineral supplies and improving energy infrastructure nationwide.
Rare Earth Minerals
Rare earth minerals have emerged as one of Washington’s most pressing concerns. Essential to batteries, electric vehicles, defense systems, electronics, and renewable energy technologies, these materials are currently dominated by China in the global supply chain. Policymakers from both parties are backing efforts to expand domestic mining and processing capacity as a matter of both economic and national security. On the international front, the U.S. and Japan recently signed a new Action Plan on Critical Minerals, designed to align trade tools, investment strategies, and industrial policy between the two countries, a sign that Washington is pursuing both domestic and allied solutions to reduce dependence on Chinese supply chains.
Outlook
For the remainder of 2026, the defining themes in federal energy policy will be grid reliability, domestic energy production, critical minerals, and infrastructure development. The potential for disruptions to global oil supply through the Strait of Hormuz is also prompting countries and companies to rethink energy supply chains, adding further urgency to domestic production priorities. Organizations operating in energy, manufacturing, transmission, or mineral supply chains are well-positioned to benefit from continued federal attention and funding as these priorities advance.