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Climate

California’s Insurance Crisis Is Heating Up

On the fallout from the LA fires, Trump’s tariffs, and Tesla’s sales slump

California’s Insurance Crisis Is Heating Up
Heatmap Illustration/Getty Images

Current conditions: A record-breaking 4 feet of snow fell on the Japanese island of Hokkaido • Nearly 6.5 feet of rain has inundated northern Queensland in Australia since Saturday • Cold Arctic air will collide with warm air over central states today, creating dangerous thunderstorm conditions.

THE TOP FIVE

1. China hits back at Trump tariffs

President Trump yesterday agreed to a month-long pause on across-the-board 25% tariffs on Canada and Mexico, but went ahead with an additional 10% tariff on Chinese imports. China retaliated with new levies on U.S. products including fuel – 15% for coal and liquefied natural gas, and 10% for crude oil – starting February 10. “Chinese firms are unlikely to sign new long-term contracts with proposed U.S. projects as long as trade tensions remain high,” noted Bloomberg. “This is bad news for those American exporters that need to lock in buyers before securing necessary financing to begin construction.” Trump recently ended the Biden administration’s pause on LNG export permits. A December report from the Department of Energy found that China was likely to be the largest importer of U.S. LNG through 2050, and many entities in China had already signed contracts with U.S. export projects. Trump is expected to speak with Chinese President Xi Jinping this week.

2. State Farm seeks insurance rate hike after Los Angeles fires

Insurance firm State Farm is looking to hike insurance rates for homeowners in California by 22% after the devastating wildfires that tore through Los Angeles last month. The company, which is the largest insurer in California, sent a letter to the state’s insurance commissioner, asking for its immediate approval to increase home insurance by 22% for homeowners, 15% for tenants and renters, and 38% for “rental dwelling” in order to “help protect California’s fragile insurance market.” So far, the firm has received more than 8,700 claims and paid out more than $1 billion, but it expects to pay more. “Insurance will cost more for customers in California going forward because the risk is greater in California,” the company said yesterday. “Higher risks should pay more for insurance than lower risks.” A report out this week found that climate change is expected to shave $1.5 trillion off of U.S. home values by 2055 as insurance rates rise to account for the growing risk of extreme weather disasters.

3. The urgent quest to decarbonize our buildings

A new report outlines pathways to decarbonizing the buildings sector, which produces about one-third of global emissions. The analysis, from the Energy Transitions Commission, proposes three main priorities that need to be tackled:

  • Electrifying heating and cooking by swapping out fossil fuel-based appliances. Doing this comprehensively by 2050 could “bring annual emissions from building use close to zero” if we manage to decarbonize the grid.
  • Boosting energy efficiency of appliances. Demand for heat pumps and air conditioners will rise as the planet heats up, so we need to find ways of squeezing more from these technologies while using less energy. That includes making our buildings more energy efficient in general.
  • Decarbonizing construction by finding low-carbon ways to make building materials like steel and concrete, and using fewer building materials overall. We should also be better utilizing the buildings we already have.

“This will require collaboration right across sector, between governments, industry bodies, and private companies,” said Stephen Hill, a sustainability and building performance expert at building design firm Arup. “We need to be ambitious, but if we get it right we can cut carbon, generate value for our economy, and improve people’s quality of life through action like improving living conditions and reducing fuel poverty.”

Energy Transitions Commission

4. Chris Wright confirmed as new Energy Secretary

Fracking executive Chris Wright was confirmed yesterday as the new Energy Secretary. Wright is the CEO of the oilfield services firm Liberty Energy (though he has said he plans to step down) and a major Republican donor. He has a history of climate denialism. “There is no climate crisis, and we’re not in the midst of an energy transition,” Wright said in a video posted to LinkedIn last year. Although during his confirmation hearings, he struck a different tone, avowing that climate change is happening and is caused by the combustion of hydrocarbons. He expressed enthusiasm for certain clean energy technologies, including next-generation geothermal and nuclear. Wright will be tasked with executing President Trump’s planned overhaul of U.S. energy policy, and expansion of domestic energy production. The Department of Energy has a $50 billion budget and is also in charge of maintaining the nation’s nuclear weapons stockpile.

5. Tesla registrations drop as buyers recoil from Musk’s political meddling

A few new reports find Tesla is seeing sales drops in some key markets, possibly due to CEO Elon Musk’s push into politics. In California, Tesla registrations fell by about 12% last year, according to the California New Car Dealers Association, and the company’s EV market share in the state fell by 7.6%, while Kia, Hyundai, and Honda all made decent gains. “While high interest rates, tough competition, and the introduction of a restyled Model 3 sedan hurt the EV maker’s sales in California, the loss of business was likely exacerbated by Elon Musk’s involvement in the U.S. election,” Reuters reported. Tesla is also running into trouble across the pond, where Musk has been meddling in European politics, throwing his weight behind far-right parties. In the European Union, Tesla registrations fell 13% last year, but dropped 41% in Germany, the bloc’s biggest BEV market. Last month, Tesla registrations dropped by about 63% in France, 44% in Sweden, and 38% in Norway.

THE KICKER

Researchers have developed a new variety of rice that has a higher crop yield than other varieties, but emits 70% less methane.

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Spotlight

The Loud Fight Over Inaudible Data Center Noise

Why local governments are getting an earful about “infrasound”

Data center noise.
Heatmap Illustration/Getty Images

As the data center boom pressures counties, cities, and towns into fights over noise, the trickiest tone local officials are starting to hear complaints about is one they can’t even hear – a low-frequency rumble known as infrasound.

Infrasound is a phenomenon best described as sounds so low, they’re inaudible. These are the sorts of vibrations and pressure at the heart of earthquakes and volcanic activity. Infrasound can be anything from the waves shot out from a sonic boom or an explosion to very minute changes in air pressure around HVAC systems or refrigerators.

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Hotspots

An Anti-Battery Avalanche Outside Seattle

And more on the week’s top fights around project development.

The United States.
Heatmap Illustration/Getty Images

1. King County, Washington – The Moss Landing battery backlash is alive and well more than a year after the fiery disaster, fomenting an opposition stampede that threatens to delay a massive energy storage project two dozen miles east of Seattle.

  • Moss Landing looms large in Snoqualmie, a city in the Cascade Mountains where Jupiter Power is trying to build Cascade Ridge Resiliency Energy Storage, a 130-megawatt facility conveniently located on unincorporated county land right by a substation and transmission infrastructure.
  • To say residents nearby are upset would be an understatement. A giant number of protestors – reportedly 650 people, which is large for this community of about 14,000 – showed up to rally against the project this weekend, just as Jupiter Power submitted its application for the project to county regulators.
  • The opposition is led by Snoqualmie Valley for Responsible Energy, a grassroots organization that primarily has focused on the risk of thermal runaway from battery storage events and rhetoric about the Moss Landing fire. “The battery chemistry proposed for Cascadia Ridge has not been verified in any public filing. Recent incidents illustrate what is at stake,” state SVRE strategy materials posted to their website.
  • Jupiter Power has tried to combat this campaign with its own organizing coalition – dubbed “Keep the Lights On!” – that includes local union labor and some environmentalists, including volunteers for Sierra Club. This campaign has emphasized how modern engineering around battery storage is nothing like the set-up was at Moss Landing.
  • However, the concerned voices are winning out over those who want the storage project. On Wednesday night, this outcry led the Snoqualmie city council at a special meeting to vote to request via letter for the storage project to be relocated and communicate that dissent to both the local utility, Puget Sound Energy, and King County.
  • “We encourage consideration of alternate locations within the Puget Sound Energy transmission and distribution system to better address the concerns that have been raised,” read a draft version of the letter presented by councilors at the meeting.
  • Jupiter Power told me it “welcome[s] any feedback from the community” and King County said in a statement, “We understand the concerns.” PSE told me they had not “received official notification about the formal action by the City Council and we can't comment on something we have not received.”
  • This degree of on-the-ground frustration will be challenging for any higher-level decision maker in Washington State to ignore. I’d argue the entire storage sector should be watching closely.

2. Prince Williams County, Virginia – It was a big week for data center troubles. Let’s start with Data Center Alley, which started to show cracks this week as data center developer Compass announced it was pulling out of the controversial Digital Gateway mega-project.

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Q&A

Is the Left Making a ‘Massive Strategic Blunder’ on Data Centers?

A conversation with Holly Jean Buck, author of a buzzy story about Bernie Sanders’ proposal for a national data center moratorium.

Holly Jean Buck.
Heatmap Illustration

This week’s conversation is with Holly Jean Buck, an associate professor at the University of Buffalo and former official in the Energy Department’s Office of Fossil Energy and Carbon Management. Buck got into the thicket of the data center siting debate this past week after authoring a polemic epistemology of sorts in Jacobin arguing against a national data center ban. In the piece, she called a moratorium on AI data centers “a massive strategic blunder for the left, and we should think through the global justice implications and follow-on effects.” It argued that environmental and climate activists would be better suited not courting a left-right coalition that doesn’t seem to have shared goals in the long term.

Her article was praised by more Abundance-leaning thinkers like Matthew Yglesias and pilloried by some of the more influential people in the anti-data center organizing space, such as Ben Inskeep of Citizens Action Coalition of Indiana. So I wanted to chat with her about the discourse around her piece. She humbly obliged.

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