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On the fate of climate grants, Greenpeace’s big lawsuit, and Keystone XL

Current conditions: The Pacific Northwest will soon get some relief from back-to-back atmospheric rivers • Wildfires burning in Canada appear to have survived two consecutive winters • Intense thunderstorms are forecast for Rome, Italy, where delegates are gathering this week to hopefully put a plan in place for halting global biodiversity loss.
The battle over Biden-era climate funds continues. As a refresher: Under the Trump administration, the Environmental Protection Agency is trying to claw back some $20 billion in grants awarded through the Greenhouse Gas Reduction Fund, an Inflation Reduction Act program for climate mitigation and adaptation initiatives. Yesterday a group of Senate Democrats called on EPA Administrator Lee Zeldin to abandon the effort to revoke the funds, saying he is illegally ignoring congressional spending authority. And a group of five nonprofits (including United Way, Habitat for Humanity, Rewiring America, and others) who received some of the money said they will start handing it out in the coming weeks and months to “support energy efficiency upgrades, build homes, and boost lending capital for rural, affordable, and multifamily housing,” Politico reported.
Investment in clean energy and transportation reached $272 billion in the U.S. last year, which is a 16% rise on the previous year, according to Rhodium Group’s Q4 analysis. The “primary drivers of investment” were consumers who were buying clean technologies like EVs, heat pumps, and renewable electricity and storage solutions. Here is a look at those “retail” trends over the last four years:

Clean investment accounted for about 5% of U.S. private investment in the last quarter of 2024, up slightly from the same quarter in 2023. Total investment in Q4 was $70 billion, down 1% from Q3. Rhodium’s report said that while the overall investment trend signals growth, “it also reflects a deceleration from the previous streak of quarter-on-quarter increases.” In other words, growth seems to be slowing.
President Trump wants the Keystone XL oil pipeline project to be built, he said in a social media post yesterday. The 1,200-mile pipeline was supposed to carry about 800,000 barrels of Canadian oil sands crude per day to Nebraska, but has been rejected several times – most recently by President Biden in 2021 – over concerns about its environmental impacts. The company that had been trying to develop the pipeline, South Bow Corp., has since abandoned the project, and a spokesperson told Bloomberg the firm has “moved on.” In his post, Trump said, “If not them, perhaps another Pipeline Company.”
And speaking of pipelines, Greenpeace goes to court this week over the Dakota Access Pipeline, or rather the group’s opposition to it. Texas-based Energy Transfer is accusing Greenpeace of coordinating disruptive protests over the pipeline’s construction in 2016 and 2017. The pipeline has since been completed and is transporting oil, but still Energy Transfer is seeking $300 million in damages, an amount that could bankrupt the activist group. Greenpeace says it played a supportive role in the demonstrations, which were largely organized by Native American groups. It calls the trial “a critical test of the future of the First Amendment, both freedom of speech and peaceful protest under the Trump administration and beyond.”
China is aiming to clean up its chronic air pollution problem this year, according to the country’s director of the Department of Atmospheric Environment, Li Tianwei. In the ongoing “battle for blue skies,” the country will roll out new emissions standards, increase the use of electric vehicles and low-carbon machinery at transportation hubs, and move more goods via rail and water, Reuters reported. The country will also focus on improving air quality forecasting and giving advanced warning when pollution is expected to rise. About 2 million people die in China every year from exposure to air pollution, according to the World Health Organization. Pollution levels have been falling in recent years, but still remain above WHO standards.
Tesla sales in the European Union were down 45% last month compared to the same period in 2024. Meanwhile, overall EV sales in the EU were up 37%.
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Average U.S. gasoline prices have slipped back above $4 a gallon.
A decade ago, the Princeton economists Alan Blinder and Mark Watson published a paper about a fact that they called “not nearly as widely known as it should be”: The U.S. economy has done better under Democratic presidents than Republican presidents.
Blinder was not a completely impartial observer — he served on President Bill Clinton’s Council of Economic Advisers, and Clinton later appointed him vice chair of the Federal Reserve — but he and Watson compiled a lengthy list of statistics to back up their claim. The U.S. economy has grown faster, produced more jobs, had a lower unemployment rate, seen higher corporate profits and investment, and experienced better stock market performance under Democrats than Republicans. While the original paper described this divergence from 1947 to 2013, recent research has shown that it held through the subsequent Obama, Trump, and Biden administrations.
The only metric where the two parties come close is inflation, but Democrats still seem to have a tiny edge there, even after the Biden-era inflation.
Why? Blinder and Watson found that it didn’t entirely come down to timing. (Other observers have disputed this, arguing that Republicans tend to get elected at the peak of economic booms, while Democrats win during or just after recessions.) Instead, Blinder and Watson found that a few factors — oil shocks, productivity growth, a more favorable international growth environment, and perhaps better consumer confidence — could explain much of the divergence.
Of course, these factors can’t be entirely separated from a president’s record in office. Oil shocks, for example, tend to drag down global growth, which in turn slows the U.S. economy. And as Watson and Blinder write, some of those oil shocks “may have been induced by [American] foreign policy.” By that mechanism, presidential bellicosity in the Middle East can translate into poorer economic outcomes. This belligerence may even be, as the writer Matt Yglesias contended earlier this year, Republican presidents’ “worst economic policy.”
Why am I recounting all this? Because average U.S. gasoline prices have slipped back above $4 a gallon, according to AAA. (As I write, they stand at $4.01.) The collapse of the ceasefire with Iran — and President Trump’s inability to figure out how to end a war he started — are once again driving up fossil fuel prices.
The numbers add up. Defense Secretary Pete Hegseth told Congress today that the Iran War has cost $37.5 billion so far, but according to a tracker from Brown University researchers, Americans have already paid nearly double that — $71 billion! — on more expensive gasoline and diesel fuel. A billion here, a billion there, and pretty soon you’re talking about real economic underperformance. That estimate suggests the burden of higher energy prices from the Iran War has wiped out the expected $65 billion consumer boost from the One Big Beautiful Bill Act’s expanded tax refunds.
Of course, from a decarbonization perspective, higher gas prices are good, in theory. They encourage people to drive less and to switch to more fuel-efficient — or even fully electrified — vehicles, reducing carbon emissions. (This is part of why I joke about Degrowth Donald, raising fuel prices as he goes.) But short-term oil shocks are the second worst kind of emissions reductions after recessions: They are unlikely to last; they will probably not lead to real decarbonization; and they produce a lot of human misery along the way.
Perhaps this oil spike won’t persist. Perhaps Trump will find a way out of the quagmiring conflict in the Persian Gulf. Perhaps Republican presidential underperformance really does all come down to luck, too. (Or maybe, as a 2020 paper argued, Democratic presidents benefit from a “pre-election growth surge” just before a Republican wins.) But I think it’s worth noting that the recent trickle of news — and the recent and less noticed surge in gas prices — is how an oil interruption results in slower growth overall. If oil shocks really are responsible for GOP presidential underperformance, this is what it would look like.
The irony is that technology finally exists to make the American transportation sector — and the overall economy — less dependent on oil. This technology was developed at the American public’s expense to help manage a scenario much like this one. And the administration has undermined it at almost every opportunity.
The latest forecast from BloombergNEF raises its estimate for AI electricity demand by 83%.
Energy analysts at BloombergNEF predicted last year that U.S. data center electricity demand would reach 106 gigawatts within the next decade. In its latest outlook, released Tuesday, the group increased its forecast by 83%, to 194 gigawatts — enough to light up 150 million homes, or roughly every single household in the country today.
Even that may be a conservative estimate. If data center developers were to max out the total number of the high-powered chips used to train and operate AI models forecast to be delivered by 2035, electricity demand would reach 229 gigawatts.
Over 100 gigawatts of that demand has entered the development pipeline since the beginning of this year, the result of both rising demand for artificial intelligence and shortened construction timelines for data centers. Some developers have oriented their site selection around energy availability, redeveloping brownfield energy generation sites for quick access to electricity and developing relationships with utilities. Others have eschewed grid interconnection entirely and instead relied behind-the-meter power generation.
As Mark Daly, head of technology and innovation at BNEF and a co-author of the report, pointed out to me, a growing share of the project pipeline comes from first-time developers. He and his colleagues project that non-hyperscaler data center capacity will nearly quintuple over the next decade, as hyperscaler capacity almost triples. That could ultimately create pipeline risks, however, as small-scale developers lack the capabilities of more experienced developers to optimize around pre-construction bottlenecks and navigate rapidly growing local opposition. Although local opposition to data centers has become prevalent, historic trends and predictions on how quickly developers are able to navigate hostile environments are built on the proficiency of experienced developers. Because first-time developers may face more challenges, Daly told me that data center projects overall “would see an increase in the number of delays.”
All of this, of course, comes with a big asterisk. The data center sector is rapidly evolving, and therefore highly uncertain. Among leading market research firms, BNEF said, there is a 100-gigawatt spread between the lowest and highest predicted electricity demand from data centers in 2030. Driving this spread are differences in assumptions about the average development timeline for a data center project. Daly told me that BNEF’s “project-based estimate is middle-of-the-road to bearish compared to other outlooks,” but also acknowledged that the fickle nature of local opposition on development timelines may place more constraints on future data center development than currently modeled.
No matter which prediction turns out to be most accurate, hourly U.S. electricity demand will come under intensifying pressure. BNEF predicts that average hourly U.S. electricity demand from AI workloads will grow five-fold over next nine years, reaching 120 gigawatts by 2035. That will put data centers at 12% of total electricity consumption on average by 2030, and 20% in 2035, up from 5% in 2025, according to figures from the International Energy Agency. This will put particular strain on electricity prices in markets like the Mid-Atlantic’s PJM, where data centers already comprise nearly a third of electricity consumption, and Texas’ ERCOT, where data centers currently consume a fifth of the market’s electricity.
Even the most conservative bet on future data center electricity demand is a scenario we’re not prepared for. If the Electric Power Research Institute’s prediction that just 56 gigawatts of new data center capacity will be up and running by 2030 — the lowest estimate BNEF cited — that would still consume the equivalent of Sweden’s total energy supply. Absent investments from utilities into grid resilience and intensive permitting reform to speed up renewable energy siting and development, PJM and ERCOT customers will not be the only ones feeling a serious squeeze in their wallets when their monthly utility bills arrive.
Current conditions: Tropical Depression Two strengthened into Tropical Storm Bertha yesterday, recycling the name of the 1996 Atlantic hurricane season’s first major storm • Floods from the monsoon season killed at least four people in Vietnam and left as many missing • Lightning in Utah sparked the state’s latest wildfire, the Meeks Fire, near the Strawberry Reservoir.
President Donald Trump’s on-again, off-again feud with America’s northern neighbor is, as of Monday, back on again. The White House imposed 50% tariffs on most Canadian goods, accusing the nation’s geographically nearest ally and closest cultural bedfellow of unfairly discriminating against American automotives, alcohol, and dairy products. The move threatens to unleash what the Associated Press called “a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return” to office.
In its announcement, the Trump administration said the new tariffs would “apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement,” referring to the Trump-negotiated North American free trade agreement, which the U.S. opted this month not to renew. This struck my colleague Robinson Meyer as ominous. “If the White House now thinks it can levy taxes despite that pact,” he wrote in yesterday’s Heatmap Daily newsletter, “then the risks for Ford, General Motors, and their suppliers have increased.”
Perhaps the only thing growing faster than voters’ antipathy toward data centers is the market’s desire for more of them. Demand for data centers is ballooning at such a rapid clip that BloombergNEF just raised its total forecast for 2035 by a jaw-dropping 83%. The latest data outlining the best-case scenario from the energy consultancy, released Tuesday morning, shows the total installed capacity of U.S. data centers reaching 194 gigawatts in the next nine years. The surge reflects how quickly new server farms are flowing into the project pipeline. In a bid to hedge against the continued expansion, BNEF created a new scenario based on the implied power demand of forecast shipments of microchips for AI computers up to 2033. This scenario implies an even greater need for power: 229 gigawatts of demand from data centers in just the next seven years. And that doesn’t count the continued growth of demand from data centers carrying out non-AI functions, such as traditional cloud computing workloads. This comes as the latest Heatmap Pro polling shows that seven in 10 Americans now oppose data centers in their backyard, a marked shift from last September, when the same survey showed voters evenly split in support and opposition.
That ballooning demand is already showing up in power markets. Of the $16.4 billion in charges from PJM Interconnection’s most recent capacity auction, $6.3 billion — some 38% — stems from data centers. That’s what Joseph Bowring, president of PJM’s independent market monitor Monitoring Analytics, told Utility Dive last week. In the last four base capacity auctions the nation’s largest grid operator held, 46% of capacity charges were driven by data centers. “PJM is continuing to act like it’s business as usual,” Bowring told the trade publication Friday. “You have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.”

On a logical level, it’s a simple supply and demand problem. The supply of electricity is not growing as quickly as demand, all while the Trump administration eliminates subsidies that once buoyed investments in new supply. As a result, corporate electricity deals look poised to increase in price. But not for every generating source. New estimates from LevelTen, a marketplace for power purchase agreements, found that solar PPAs were 5% cheaper in the second quarter of this year compared to the first quarter. In a piece by my colleague Matthew Zeitlin, LevelTen attributed the decline to an especially steep drop in prices in California’s electricity market. Excluding CAISO, solar PPA prices nationwide dropped slightly less than 2%. While hyperscalers are still buying solar, LevelTen found that commercial and industrial buyers are pulling back, creating a “continued softening in the market’s buy-side.” “We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told Matthew.
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Ah, Germany. The land of the Autobahn. Diesel-powered industry. The purring engines of BMWs, Porsches, and Mercedes-Benzes. The nation’s automotive might makes its latest milestone particularly important: Electric vehicles just outsold gas and diesel cars for the first time. New data from the Federal Motor Transport Authority shows that Germans registered 84,057 new electric vehicles in June, a more than 78% year-over-year increase. Traditional hybrids, meanwhile, saw 83,315 registrations, followed by gasoline-powered cars with 60,796, diesel with 33,862, and plug-in hybrids with 32,212. “The automotive history books will need a new page sooner rather than later, after electric cars outsold every other fuel type in Germany for the first time,” InsideEVs reporter Iulian Dnistran wrote. “It’s a huge shift in Europe’s biggest car market, which has traditionally been associated with diesel-powered cars that could travel hundreds of miles at highway speeds without breaking a sweat.” The Tesla Model Y was by far the best-selling EV in Germany, with nearly twice as many registrations as the No. 2 vehicle, the Volkswagen ID.3.
Putting on my Mesopotamian metal merchant hat again: Copper prices are back up. The price of the metal needed for virtually all electrical infrastructure rose 1.3% to just under $14,000 per metric ton, according to Mining.com. The price ultimately hovered at the red metal’s record set in early June. The spike stems from data showing rising tightness in the Chinese market, namely a hike in the premium buyers will pay in Shanghai for shipments of the metal. The price hiked further after a series of storms halted production in Chile for a few days.
While the West dithers on hydrogen, China is making huge strides. It already may be too late to catch up to Beijing on manufacturing the key machinery needed to produce the zero-carbon fuel. The latest data point, via Hydrogen Insight: China just shipped its largest electrolyzer order yet to Europe, via Romania.