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On carbon sinks, the Malibu fire, and monarch butterflies
Current conditions: A bomb cyclone and atmospheric river are expected to bring “a firehose” of moisture and damaging winds to the eastern U.S. today • A former rugby star died in flooding from Storm Darragh in England • There is now a 55% chance of La Niña developing between now and February, but if the weather pattern does emerge, it will be weak and brief.
President-elect Donald Trump on Tuesday rocked the energy world when he promised “fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals” for “Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America,” in a post on Truth Social. “GET READY TO ROCK!!!” he added. Trump has frequently derided regulatory barriers to development, including in his announcements of various economic and policy roles in his upcoming administration. He did not support his announcement with any additional materials laying out the legal authorities he plans to exercise to exempt these projects from regulation or proposed legislation, but his post attracted criticism from environmentalists, with the Sierra Club describing it as a “plan to sell out communities and environment to the highest bidder.” Trump’s appointed co-deregulator-in-chief had a different take: “This is awesome 🚀🇺🇸,” Elon Musk wrote on X.
Powerful Santa Ana winds are fanning the flames of the Franklin Fire in Malibu, California, which remained 0% contained as of early this morning. So far nearly 3,000 acres have been charred. Thousands of people, including celebrities like Dick Van Dyke and Cher, have been forced to evacuate the city. Much of Southern California is under a red flag warning because of the winds and a lot of potential fuel in the form of dry vegetation.
Mario Tama/Getty Images
“The hot and extremely dry wind conditions that are driving the Franklin Fire are similar to what we saw just a few weeks ago with the destructive Mountain Fire in Santa Barbara,” said Alex Hall, director of UCLA’s Center for Climate Science. “It’s a sobering reminder that we must learn to live with wildfire, especially as the fires become larger and more intense with a changing climate.”
The U.S. Energy Information Administration expects power consumption in the U.S. to reach new record highs this year and next. Here are some key takeaways from its latest Short Term Energy Outlook:
The U.S. Fish & Wildlife Service is proposing that the iconic monarch butterfly be listed as a “threatened” species under the Endangered Species Act so that it may be better protected. Monarch numbers have declined between 80% and 95% in recent decades due to climate change, habitat loss, and insecticide exposure. Western populations face a near 100% risk of extinction by 2080 if current trends continue, and eastern monarchs face a 56% to 74% chance of extinction. “Additional habitat and protections are needed to ensure the species is conserved for future generations,” the agency said in its announcement. The public will be able to comment on the proposal until March 12. Reutersnoted that the ESA helped save other species from the brink of extinction, including the bald eagle and California condor.
A tagged monarch butterfly. Brett Billings/USFWS
NOAA’s 2024 Arctic Report Card concluded that the Arctic tundra is now emitting more carbon dioxide than it is absorbing thanks to thawing permafrost and wildfires. This means the tundra is no longer a carbon sink, as it has been for thousands of years, but a carbon source. “Increasing surface air temperatures are causing permafrost to warm and thaw,” the report stated, adding that permafrost temperatures this year were the highest ever recorded. “Once thawed, permafrost carbon can be decomposed by microbes and released into the atmosphere as greenhouse gases.” At the same time, increased wildfire activity in the region has contributed significantly to rising emissions. The region’s soils and permafrost contain at least 1.4 trillion metric tons of carbon, or about 60% of all the carbon stored in the Earth’s soil.
“Excessive heat” was the second-highest ranking news topic to be Googled worldwide in 2024. “Hurricane Milton” ranked fourth.
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Revisiting a favorite episode with guest Ilaria Mazzocco.
The Chinese electric automaker BYD is entering a new stage in its history. Last month, it sold more than half a million electric vehicles and plug-in hybrids. BYD has already shipped more cars this year than Ford and Honda, and it is fast coming for Volkswagen, GM, and Toyota’s crowns as the world’s three largest automakers.
Earlier this year, Rob and Jesse spoke with Ilaria Mazzocco, a senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies in Washington, D.C. She has watched China’s EV industry grow from a small regional experiment into a planet-reshaping juggernaut. On this week’s episode of Shift Key, we’re re-running that conversation — one of our favorites ever to happen on the show. We’ll be back with a new episode next week.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: It’s been clear since Trump pulled out of the Paris Agreement, to some degree, that China was trying to race ahead in these clean technologies in a way that America was not. But I feel like the full arrival of the Chinese EV industry in the U.S. discourse has only happened in the past year. Can you zoom out and just give us a sense of how we went from the Chinese car industry being … not a joke, necessarily, but not really seen as a serious global competitor, to now, where the Chinese EV industry is shaping U.S. and European policy at the highest levels?
Ilaria Mazzocco: I actually think the fact that the traditional internal combustion engine automotive industry in China was so uncompetitive is part of the reason why we’re here, right? So the Chinese government for decades tried to come up with ways of getting a world-class industry. So it’s like, you know, to access the Chinese market, you have to create a joint venture, and the government picked — usually it was state-owned enterprises, which are not known for their dynamism and creativity and innovation.
And in fact the car companies that did do better in China were often sort of the private, or like the small state-owned enterprises that were sort of coming in from the margins and maybe struggled to get a license to operate initially — like Geely, right? Geely was sort of a classic example of that.
But essentially, by around the global financial crisis, there was the sense that this just wasn’t working. And this was also at a time when the Chinese bureaucracy is starting to think more and more about industrial upgrading. Salaries in China are going up. So you want to think of what’s next steps as maybe textiles and other sort of lower-end manufacturing moves outside of China. And so the thinking was, well, why don’t we invest and put our weight behind the next-generation technology in automotive, and sort of invest in that. And that way, we’re competing on a level playing field.
Ironically, that’s sort of the idea — or in the sense that, you know, you’re not competing with companies that have been accumulating IP for over 100 years, you’re sort of playing … Chinese companies may have even an advantage if they start early.
This was sort of the brainchild of the minister at the time, the minister of science and technology, who was an auto guy, Wan Gang. And so this was a fairly small project, to be honest. This wasn’t something that the secretary of the party or the premier who came up with it. It was a ministry-level initiative. There were four ministries working on it, but yeah, pretty small. It was really pilot city programs, not a big success initially — kind of expensive — but they stick with it. And that’s kind of the key there, right? So that’s what the big advantage that the Chinese bureaucracy has, that it can have that policy continuity. These are not politicized things, issues. These are, there’s also not, there’s no voters there looking at the budget and saying, You’re spending a ton of money on this unproven technology. And so that’s one advantage.
What I also like to point out is that it was the right time. This is, they started the program to commercialize, right? Obviously there’d been R&D grants and that sort of thing, but there’s a program to start actually giving consumers rebates to buy EVs and incentivizing taxi fleets, which was pretty crucial in China, and bus fleets to electrify self-starts around 2009, 2010. And you know, in those years, that’s also when Tesla is starting to emerge, right? This is a moment in which the technology is … not mature, but it’s mature enough that it can actually make real strides when it starts to be commercialized.
And then the third part is you had really good entrepreneurs. You had BYD that was just there lobbying to get this. You actually had Tesla in there trying to get more incentives for this, as well. But, you know, you had Chinese companies like BYD that were really at the margins and quite hungry that really took up this opportunity and started investing and really believed in it. So I think you had that combination of factors and, you know, now we’re like 15 years later, I think we’re seeing the results of it.
I will say it doesn’t always work that way. To an extent, there’s an element of luck, right? This is the problem with industrial policy. You can do the work right in the research and you can get it right, but it’s still not a … you don’t always know that it’s going to work out. And I give the example of fuel cell technology. They received the same types of subsidies, fuel cell passenger vehicles in China. And that, you know, we’re nowhere close to seeing a mass market for that.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Intersolar & Energy Storage North America is the premier U.S.-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. To learn more, visit intersolar.us.
Music for Shift Key is by Adam Kromelow.
Building new capacity isn’t always as straightforward as it sounds.
When you think of companies whose valuations are soaring due to artificial intelligence, the ones that come to mind first are probably the chip designer Nvidia, whose shares are up 180% this year, or Elon Musk’s xAI, which its investors recently valued at $50 billion.
But aside from those, some of the best performing companies of this year have been those that own or supply equipment for the power plants that generate the energy to run all that AI infrastructure in the first place.
GE Vernova’s gas turbine orders have almost doubled so far this year, chief executive Scott Strazik said in an October earnings call; since then, the company has secured orders for another nearly 9 gigawatts’ worth of turbines in the U.S., the company said in an investor presentation Tuesday. “I can’t think of a time that the gas business has had more fun than they’re having right now,” Strazik told investors. The company’s stock is up almost 150% from the end of 2023.
Vistra, which owns over 40,000 megawatts of generation assets, including around 6,500 megawatts of nuclear power plants and more than two dozen gas-fired power plants, is planning on developing 2,000 megawatts of natural gas capacity, its chief executive Jim Burke said in November; its share price is up 272% for the year. The utility Entergy, which last week signed a deal with Meta to power a planned data center in northeastern Louisiana, is up 45%. Compare those impressive results to the S&P 500, which is up a healthy but comparatively modest 27% on the year.
Much of that enthusiasm comes from huge expected increases in energy demand. Grid Strategies, an energy policy consulting firm, last week updated its forecast for energy demand growth over the next five years, raising it from an increase of 39 gigawatts as of the end of 2023 to a rise of 128 gigawatts. That works out to annual projected growth of around 3%, compared to less than 1% annual growth in the first two decades of this century.
Where will all that additional energy come from? “Quite frankly, in the next five years, we’re going to see a lot of new gas turbines being built,” Cy McGeady, a fellow at the Center for Strategic and International Studies, told me, adding that the “prospects are good for a natural gas boom.”
The data centers that are driving renewable demand tend to require a constant flow of energy at all times — except when their power demands surge — while renewables are intermittent and may be far away from planned load growth. While so-called hyperscalers such as Amazon, Meta, and Google have made deals to support the development of 24/7 clean power sources like nuclear, the most optimistic time frame for any of these new developments to start producing power is sometime in the early 2030s.
Rob Gramlich, the president of Grid Strategies, told me the technology companies generating all this demand growth typically want it satisfied with renewables, but “they really need transmission in order to do that.”
“If everyone had done this 10 years ago, we could have connected a lot of generation a lot quicker. It could have been a lot cleaner generation mix,” Gramlich told me. Now, though, even if a utility wants to build solar, wind, and storage that can provide power at costs comparable to new gas, “it’s only available as an option if you build the grid infrastructure ahead of time,” he said.
McGeady agrees. “It’s the only path forward,” he said of natural gas. “Nobody is willing to not build the next data center because of inability to access renewables.”
But therein lies the difficulty: While natural gas plants are not as transmission-dependent as renewables, some analysts worry that even gas generators won’t be able to respond quickly enough to the increase in demand.
“When we look at the hot spots of Data Center development, in the U.S. and around the world, we see a significant overlap with regions that have favorable policy support for natural gas,” Morgan Stanley analysts wrote in a note to clients. And yet, “there will in our view be a significant shortfall in available U.S. power grid access relative to the magnitude of new data centers needed to ‘absorb’ the AI equipment purchases over the next several years, with the bottleneck becoming apparent in mid-to-late 2025,” the analysts wrote.
The utilities in these areas — places like Georgia, Arizona, and North Carolina — are indeed building new natural gas capacity. In other places where the laws and regulations aren’t as favorable to gas development, however, analysts expect to see more data centers sited at existing power plants. Some of those may be powered by fossil fuels, as in the case of a New Jersey facility recently taken over by the cloud computing company Core Weave, while others may wind up taking zero-carbon power off the grid, as Amazon attempted to do with the Susquehanna nuclear station in Pennsylvania.
Building new natural gas capacity is more difficult in the PJM Interconnection, the country’s largest electricity market, which spans the Eastern Seaboard and a large chunk of the Midwest. Its leadership is hoping high prices can lure new gas generation, but the complexity and uncertainty of the system’s reward structure for companies that agree to supply failsafe capacity has hindered the massive new investment PJM says it needs.
Some clean energy advocates argue that utilities are being short-sighted in their plans to develop new gas resources that could be around for decades — well past corporate, state, or national goals for electric system decarbonization.
“They’re used to building gas plants more so than they’re used to building other things. It reflects a lack of creativity on their part,” Michelle Solomon, a senior policy analyst at Energy Innovation, told me.
But until the system for building and paying for transmission can be reformed to clarify who pays for what and what transmission can be built where — as federal regulators and Congress are trying to do — utilities will likely default to what they know best.
“The difficulty of building transmission certainly can constrain utilities’ ability to serve new load, and it can constrain the ability to serve the load with clean generation,” Gramlich told me.
Chris Seiple, Wood Mackenzie’s vice president of energy transition and power and renewables, echoed Gramlich’s thought in a note from October. “The constraint is not the demand for renewables,” he wrote, “but the ability to get through permitting, interconnection, and building out the transmission system accordingly.”
But ... how?
President-elect Donald Trump on Tuesday rocked the energy world when he promised “fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals” for “Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America,” in a post on Truth Social Tuesday.
“GET READY TO ROCK!!!” he added.
Trump has frequently derided regulatory barriers to development, including in his announcements of various economic and policy roles in his upcoming administration. His designee for Secretary of the Interior, Doug Burgum, for instance, will also head a
National Energy Council that will “oversee the path to U.S. ENERGY DOMINANCE by cutting red tape … by focusing on INNOVATION over longstanding, but totally unnecessary, regulation.”
When Trump
announced his nomination of Lee Zeldin to head the Environmental Protection Agency, he said Zeldin would “ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American business.”
Current interpretations of existing laws dictate that any project constituting a major federal action (e.g. one that uses public lands) must be reviewed under the National Environmental Policy Act, the country’s signature permitting law. Federal courts are often asked in litigation to sign off on whether that review process — although not the outcome — was sufficient.
Regardless of any changes Trump may make to the federal regulatory system as president, that infrastructure is already in flux. The D.C. Circuit Court of Appeals recently issued a ruling that throws into doubt decades of NEPA enforcement. Also on Tuesday, the Supreme Court heard a separate case on the limits of NEPA as it relates to aproposed rail line expansion to transport oil from Utah’s Uinta Basin to refineries on the Gulf of Mexico. Although the court is unlikely to issue a decision until next year, its current membership has shown itself plenty willing to scrap longstanding precedent in the name of cutting the regulatory state down to size.
Trump did not support his announcement with any additional materials laying out the legal authorities he plans to exercise to exempt these projects from regulation or proposed legislation, but it already attracted criticism from environmentalists, with the Sierra Club describing it as a “plan to sell out communities and environment to the highest bidder.It’s also unclear whether Trump was referring to foreign direct investment in the United States, of which there was $177 billion in 2022,according to the Department of Commerce.
Trump’s appointed co-deregulator-in-chief, for one, approved of his message today. “This is awesome 🚀🇺🇸,” Elon Musk wrote on X in response.