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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,” Politicoreported.
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:
Rhodium Group
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 toldBloomberg 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, Reutersreported. 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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A climate tech company powered by natural gas has always been an odd concept. Now as it moves into developing data centers, it insists it’s remaining true to its roots.
Crusoe Energy has always been a confusing company, whose convoluted green energy credentials raise some eyebrows. It started as a natural gas-powered Bitcoin miner, then became a climate tech unicorn thanks to the fact that its crypto operations utilized waste gas that would have otherwise been flared into the atmosphere. It’s received significant backing from major clean tech investors such as G2 Venture Partners and Lowercarbon Capital. And it touts sustainability as one of its main selling points, describing itself as “on a mission to align the future of computing with the future of the climate,” in part by “harnessing large-scale clean energy.”
But these days, the late-stage startup valued at $2.8 billion makes the majority of its revenue as a modular data center manufacturer and cloud services provider, and is exploring myriad energy solutions — from natural gas to stranded solar and wind assets — beyond its original focus. Earlier this week, it announced that it would acquire more than 4 gigawatts of new natural gas capacity to power its data center buildout. It’s also heavily involved in the Trump-endorsed $500 billion AI push known as the Stargate Project. The company’s Elon Musk-loving CEO Chase Lochmiller told The Information that his team is “pouring concrete at three in the morning” to build out its Stargate Project data centers at “ludicrous speed.”
Some will understandably take a glance at this rising data center behemoth and wonder if climate tech is really an accurate description of what Crusoe actually does these days. As the steady drumbeat of announcements and press surrounding Crusoe’s partnerships and power deals has built up, I certainly wondered whether the company had pivoted to simply churning out data centers as quickly as possible. But investors — and the company itself — told me that’s far from true.
Clay Dumas, a partner at Lowercarbon Capital, which invested in the company’s $128 million Series B and $350 million Series C rounds, told me that Crusoe remains as mission-focused as ever. “When it comes to power, Crusoe is the most aggressive innovator in the AI infrastructure space,” Dumas said via text message. “There is no better team to integrate new energy sources for compute workloads so we don’t turn the whole world into one giant fracking operation.”
Ben Kortlang, a partner at G2 Venture Partners, which led the company’s Series C round, agreed, telling me that Crusoe is best positioned to build out data centers in a way that doesn’t “plant the seeds for 50 or 100 years of environmental damage.”
Yet it’s hard to pin down exactly what the energy mix will end up looking like for the high-profile data centers in Crusoe’s pipeline, including the complex it’s currently building for OpenAI, which is part of the Stargate project in Abilene, Texas. The company announced on Tuesday that it had started construction on the second phase of the facility, which expands the total scope from around 200 megawatts of power across two facilities to include a total of eight buildings over 4 million square feet, using 1.2 gigawatts of power. Crusoe’s spokesperson, Andrew Schmitt, declined to comment on whether this additional capacity would serve Stargate.
What Schmitt did confirm via email is that while the project has a 1.2 gigawatt grid interconnection — enough to meet the entirety of its power needs — Crusoe will also rely on natural gas as “backup energy,” as well as behind-the-meter energy solutions such as solar and battery storage to “create a highly optimized and efficient power plan for the full site.”
The company also won’t speculate on how much energy will come from each particular source. To some degree, the exact grid energy mix and what additional energy resources will get built is unknowable, though Schmitt told me that Crusoe chose Abilene for the area’s abundant wind resources. There’s often too much of it for the grid to handle, meaning the excess energy is curtailed or sold at a negative price. But if a large load — say, a Crusoe data center — were added to the grid, less renewable energy would go to waste, thereby increasing the profitability of renewables projects and incentivizing more buildout overall.
This strategy, Schmitt told me, “reflects [Crusoe’s] guiding principle of bringing load to stranded and under-utilized energy” rather than bringing energy sources to the data center load itself, as the industry has traditionally done. G2, the venture capital firm, is all in on this premise. “By putting a big load center right there in a fantastic renewable resource environment, the thing that will naturally get built is renewables,” Kortlang told me. “Crusoe doesn’t need to mandate that, or control that, or be the one building the renewables. They’re creating the demand.”
But this approach is only net-positive for the climate if it increases the share of renewables in the mix overall, i.e. if new, large loads are leading to more solar and wind buildout than new natural gas buildout. And while a renewables-heavy buildout seems to be what Crusoe and its investors are assuming will happen, Crusoe can’t actually control what gets put on the grid or the economic or political factors that drive those decisions.
It appears to be inevitable that gas will play some role, even if it’s providing power directly to the data center itself and not to the grid overall. According to Business Insider, public filings with the Texas Commission on Environmental Quality show that so far, Crusoe plans to operate on-site natural gas turbines at the Abilene facility totaling 360 megawatts of power. That represents 30% of the data center’s total 1.2 gigawatts of announced capacity.
Although powering data centers with new solar or wind is usually the cheapest option — especially in places like Abilene — building natural gas can be quicker and more reliable, assuming you’re able to acquire the severely backlogged turbines. That’s something Kortlang readily acknowledged to me. “We will see a lot of buildout of natural gas over the last half of this decade, because it’s the easiest thing to controllably build that gets you large amounts of baseload power quickly,” he said.
Kortlang didn’t seem fazed by Crusoe’s announcement this Monday that it’s pursuing a joint venture with the investment firm Engine No. 1, giving the company access to a whopping 4.5 gigawatts of natural gas power. To put that in perspective, there’s only about 25 gigawatts of existing data center capacity in the U.S. today. Schmitt told me this latest announcement is unrelated to the Stargate Project.
Engine No. 1 has secured seven GE Vernova natural gas turbines through a partnership with Chevron announced in January. As Chevron puts it, this joint development will create “scalable, reliable power solutions for United States-based data centers running on U.S. natural gas.” But critically, as Crusoe emphasized, “plans for these data centers include the use of post-combustion carbon capture systems,” which are designed to capture the CO2 from power plants after the fossil fuels are burned, but before they’re released to the atmosphere.
Presumably, these plans will also incorporate either some way to utilize the CO2 in industry or to permanently sequester it underground, though the company hasn’t mentioned anything to this effect. This technology hasn’t been a part of the company’s strategy in the past, though Kortlang told me that Crusoe has been evaluating the viability of carbon capture and storage for as long as G2 has been involved.
Gas-fired power plants paired with carbon capture have never really caught on, simply because they’re pretty much bound to cost more than not building carbon capture. When I asked Kortlang if this meant Crusoe was banking on its data center customers being willing to pay more for greener power, he told me that was “to be determined.” Who exactly was going to design and build the carbon capture technology — Crusoe, Chevron, or another to-be-named project partner — was also “to be determined.” But there’s not actually all that much time to figure it out. In Chevron’s announcement, the company said it was planning to deliver power by the end of 2027.
So, is Crusoe still a climate tech company? The answer seems to be yes — or at least it’s definitely still trying to be.
No other developer has been as diligent about utilizing stranded assets to power data centers. And with its expansion into carbon capture, it certainly seems Crusoe is leaning into an all-of-the-above approach to data center decarbonization. As Dumas told me, “before too long” we’ll also see Crusoe powering its operations with “geothermal, bioenergy, and after that fusion technologies that keep them out ahead of the pack.”
But Crusoe’s business model — and its clean tech bonafides in general — have always relied upon ultimately unprovable counterfactuals. First it was: If this waste gas weren’t powering Bitcoin mining, it would be vented into the atmosphere. That seemed fairly certain, since flaring is common practice in many areas. Now the company is pitching a somewhat fuzzier hypothetical: If this Crusoe data center, powered by some combination of natural gas and stranded renewables, were instead built by another company, it would inevitably be dirtier. Whether or not Crusoe is a boon for the climate ultimately depends upon the degree to which that unquantifiable claim ends up being true.
On Energy Transfer’s legal win, battery storage, and the Cybertruck
Current conditions: Red flag warnings are in place for much of Florida • Spain is bracing for extreme rainfall from Storm Martinho, the fourth named storm in less than two weeks • Today marks the vernal equinox, or the first day of spring.
A jury has ordered Greenpeace to pay more than $660 million in damages to one of the country’s largest fossil fuel infrastructure companies after finding the environmental group liable for defamation, conspiracy, and physical damages at the Dakota Access Pipeline. Greenpeace participated in large protests, some violent and disruptive, at the pipeline in 2016, though it has maintained that its involvement was insignificant and came at the request of the local Standing Rock Sioux Tribe. The project eventually went ahead and is operational today, but Texas-based Energy Transfer sued the environmental organization, accusing it of inciting the uprising and encouraging violence. “We should all be concerned about the future of the First Amendment, and lawsuits like this aimed at destroying our rights to peaceful protest and free speech,” said Deepa Padmanabha, senior legal counsel for Greenpeace USA. The group said it plans to appeal.
The Department of Energy yesterday approved a permit for the Calcasieu Pass 2 liquified natural gas terminal in Louisiana, allowing the facility to export to countries without a free trade agreement. The project hasn’t yet been constructed and is still waiting for final approvals from the independent Federal Energy Regulatory Commission, but the DOE’s green light means it faces one less hurdle.
CP2 was awaiting DOE’s go-ahead when the Biden administration announced its now notorious pause on approvals for new LNG export facilities. The project’s opponents argue it’s a “carbon bomb.” Analysis from the National Resources Defense Council suggested the greenhouse gases from the project would be equivalent to putting more than 1.85 million additional gas-fueled automobiles on the road, while the Sierra Club found it would amount to about 190 million tons of carbon dioxide equivalent annually.
President Trump met with 15 to 20 major oil and gas executives from the American Petroleum Institute at the White House yesterday. This was the president’s first meeting with fossil fuel bosses since his second term began in January. Interior Secretary Doug Burgum and Energy Secretary Chris Wright were also in the room. Everyone is staying pretty quiet about what exactly was said, but according to Burgum and Wright, the conversation focused heavily on permitting reform and bolstering the grid. Reuters reported that “executives had been expected to express concerns over Trump’s tariffs and stress the industry view that higher oil prices are needed to help meet Trump’s promise to grow domestic production.” Burgum, however, stressed that oil prices didn’t come up in the chat. “Price is set by supply and demand,” he said. “There was nothing we could say in that room that could change that one iota, and so it wasn’t really a topic of discussion.” The price of U.S. crude has dropped 13% since Trump returned to office, according to CNBC, on a combination of recession fears triggered by Trump’s tariffs and rising oil output from OPEC countries.
The U.S. installed 1,250 megawatts of residential battery storage last year, the highest amount ever and nearly 60% more than in 2023, according to a new report from the American Clean Power Association and Wood Mackenzie. Overall, battery storage installations across all sectors hit a new record in 2024 at 12.3 gigawatts of new capacity. Storage is expected to continue to grow next year, but uncertainties around tariffs and tax incentives could slow things down.
China is delaying approval for construction of BYD’s Mexico plant because authorities worry the electric carmaker’s technology could leak into the United States, according to the Financial Times. “The commerce ministry’s biggest concern is Mexico’s proximity to the U.S.,” sources told the FT. As Heatmap’s Robinson Meyer writes, BYD continues to set the global standard for EV innovation, and “American and European carmakers are still struggling to catch up.” This week the company unveiled its new “Super e-Platform,” a new standard electronic base for its vehicles that it says will allow incredibly fast charging — enabling its vehicles to add as much as 249 miles of range in just five minutes.
Tesla has recalled 46,096 Cybertrucks over an exterior trim panel that can fall off and become a road hazard. This is the eighth recall for the truck since it went on sale at the end of 2023.
This fusion startup is ahead of schedule.
Thea Energy, one of the newer entrants into the red-hot fusion energy space, raised $20 million last year as investors took a bet on the physics behind the company’s novel approach to creating magnetic fields. Today, in a paper being submitted for peer review, Thea announced that its theoretical science actually works in the real world. The company’s CEO, Brian Berzin, told me that Thea achieved this milestone “quicker and for less capital than we thought,” something that’s rare in an industry long-mocked for perpetually being 30 years away.
Thea is building a stellarator fusion reactor, which typically looks like a twisted version of the more common donut-shaped tokamak. But as Berzin explained to me, Thea’s stellarator is designed to be simpler to manufacture than the industry standard. “We don’t like high tech stuff,” Berzin told me — a statement that sounds equally anathema to industry norms as the idea of a fusion project running ahead of schedule. “We like stuff that can be stamped and forged and have simple manufacturing processes.”
The company thinks it can achieve simplicity via its artificial intelligence software, which controls the reactor’s magnetic field keeping the unruly plasma at the heart of the fusion reaction confined and stabilized. Unlike typical stellarators, which rely on the ultra-precise manufacturing and installment of dozens of huge, twisted magnets, Thea’s design uses exactly 450 smaller, simpler planar magnets, arranged in the more familiar donut-shaped configuration. These magnets are still able to generate a helical magnetic field — thought to keep the plasma better stabilized than a tokamak — because each magnet is individually controlled via the company’s software, just like “the array of pixels in your computer screen,” Berzin told me.
“We’re able to utilize the control system that we built and very specifically modulate and control each magnet slightly differently,” Berzin explained, allowing Thea to “make those really complicated, really precise magnetic fields that you need for a stellarator, but with simple hardware.”
This should make manufacturing a whole lot easier and cheaper, Berzin told me. If one of Thea’s magnets is mounted somewhat imperfectly, or wear and tear of the power plant slightly shifts its location or degrades its performance over time, Thea’s AI system can automatically compensate. “It then can just tune that magnet slightly differently — it turns that magnet down, it turns the one next to it up, and the magnetic field stays perfect,” Berzin explained. As he told me, a system that relies on hardware precision is generally much more expensive than a system that depends on well-designed software. The idea is that Thea’s magnets can thus be mass manufactured in a way that’s conducive to “a business versus a science project.”
In 2023, Thea published a technical report proving out the physics behind its so-called “planar coil stellarator,” which allowed the company to raise its $20 million Series A last year, led by the climate tech firm Prelude Ventures. To validate the hardware behind its initial concept, Thea built a 3x3 array of magnets, representative of one section of its overall “donut” shaped reactor. This array was then integrated with Thea’s software and brought online towards the end of last year.
The results that Thea announced today were obtained during testing last month, and prove that the company can create and precisely control the complex magnetic field shapes necessary for fusion power. These results will allow the company to raise a Series B in the “next couple of years,” Berzin said. During this time, Thea will be working to scale up manufacturing such that it can progress from making one or two magnets per week to making multiple per day at its New Jersey-based facility.
The company’s engineers are also planning to stress test their AI software, such that it can adapt to a range of issues that could arise after decades of fusion power plant operation. “So we’re going to start breaking hardware in this device over the next month or two,” Berzin told me. “We’re purposely going to mismount a magnet by a centimeter, put it back in and not tell the control system what we did. And then we’re going to purposely short out some of the magnetic coils.” If the system can create a strong, stable magnetic field anyway, this will serve as further proof of concept for Thea’s software-oriented approach to a simplified reactor design.
The company is still years away from producing actual fusion power though. Like many others in the space, Thea hopes to bring fusion electrons to the grid sometime in the 2030s. Maybe this simple hardware, advanced software approach is what will finally do the trick.