Government Shutdown Looms as Hurricane Humberto Grows

Current conditions: Hurricane Humberto has strengthened into a Category 4 storm as it makes its way northward, likely hitting Bermuda with heavy rainfall by midweek • Vietnam is evacuating thousands and canceling flights as Typhoon Bualoi makes landfall • Temperatures are surging to 113 degrees Fahrenheit in Paraguay, where the risk of wildfire is rising.

THE TOP FIVE

1. Atlantic storms approach as shutdown looms

The federal government could shut down as early as Tuesday if Congress doesn’t agree to a funding bill. Over the weekend, Republicans urged Democrats to join together to approve a short-term spending bill to stave off a shutdown. Democrats are under pressure to leverage the risk of a shutdown to halt what their supporters see as the more authoritarian actions of the Trump administration. But, as I reported in this newsletter last week, President Donald Trump has threatened to use the temporary closure of federal agencies to institute “mass firings” that could affect the remaining government workforce in charge of climate research, clean-energy financing, and weather forecasting. The risk comes right as Hurricane Humberto and Tropical Storm Imelda gather strength en route toward the East Coast, making steady federal data critical.

About 85% of the federal government’s 25,000 disaster employees would be exempt from furloughs, according to a September 19 memo from the Department of Homeland Security. The National Weather Service, meanwhile, would continue to issue warnings even if Congress doesn’t approve new spending at the end of the fiscal year on Tuesday at midnight, E&E News reported. But a showdown could trigger a lapse in coverage under the National Flood Insurance Program, according to Fox News. That could pose a serious problem to South Carolina, which faces severe flooding if Imelda makes landfall later this week as expected.

2. Judge blocks Trump administration from tying disaster aid to immigration crackdown

A federal judge has blocked the Trump administration’s bid to condition access to disaster aid on whether states participated in immigration authorities’ crackdown, E&E News reported on Friday. In a decision handed down last week, Judge William Smith of the U.S. district court for the District of Rhode Island called the Department of Homeland Security policy threatening distribution of billions of dollars in funding “coercive,” “hopelessly vague,” and “unlawfully ambiguous.”

The effect of halting payments to states is severe. As Heatmap’s Emily Pontecorvo explained in March when states first sued over the Trump administration’s decision to hold up funding from the Federal Emergency Management Agency, the consequences of losing access to money come swiftly. She wrote: “If Hawaii doesn’t start receiving reimbursements for its federally-funded case management program by March 31, for example, it will be forced to immediately discontinue its work helping more than 4,000 wildfire survivors create tailored disaster recovery plans and navigate recovery resources."

3. Niron breaks ground on Minnesota rare earth magnet factory

Niron Magnetics started construction on a new 1,500-ton-per-year permanent magnet factory in Sartell, Minnesota. The company, spun out of Department of Energy research, is among the first to move forward on new domestic manufacturing capacity of a product of which the U.S. wants to claw back control from China. The privately-held Niron already has commercial partners: Stellantis, Samsung, Allison Transmission, and Magma.

While Trump’s signature One Big Beautiful Bill Act killed off the electric vehicle tax credit that was widely seen as an important demand signal for critical minerals, the administration has sought to bolster production of both the metals and magnets. Over the summer, the Department of Defense bought a large stake in MP Materials, the only rare earths producers in the U.S., making the biggest intervention in a private market since the country’s railroads were nationalized in World War I. The boldness of the move made Biden administration officials jealous, as Heatmap’s Matthew Zeitlin reported in July.

4. China’s green steel goals falter

China made history this summer by selling its first shipment of steel forged with green hydrogen to Europe, in a sign Beijing was vaulting ahead of the U.S. on overseas sales of zero-carbon steel. But China’s plans to clean up its steelmaking industry are faltering amid a shortage of the electric-arc furnaces needed to replace traditional coal-fired steel production, Bloomberg reported. New analysis by the Centre for Research and Clean Air found that China will generate roughly 10% of its total steel output this year from electric-arc furnaces. That’s far below the global average of 29%. By comparison, the U.S. — which reduced its coal-fired steel production over the past half century — uses electric-arc furnaces for 72% of steelmaking.

China’s solar installations, meanwhile, fell to a three-year low following electricity market reforms that reduced domestic demand, as this newsletter reported in July. The country added just 7.36 gigawatts of panels last month, down a third from July, before the policy changes kicked in.

5. Russia’s state-owned nuclear company inks $25 billion deal with Iran

Rosatom, Russia’s state-owned nuclear power company, is building the vast majority of newcomer countries’ debut atomic energy stations worldwide, from Egypt to Turkey to Bangladesh to Iran. Now the Kremlin has inked an even bigger deal to expand nuclear energy production in the Islamic Republic. The $25 billion deal announced last week came as the United Nations voted to reimpose sanctions on Iran.

THE KICKER

Brazil's solar boom.EIA

Brazil has long benefited from an electrical system built around hydropower plants. But distributed solar is now the fastest-growing source of new generation in the South American country. Distributed solar capacity grew from less than 1 gigawatt in 2018 to 40 gigawatts this year as of June, according to data from the U.S. Energy Information Administration.