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On Puerto Rico’s water crisis, LNG’s tax scam, a nuclear safety scandal
Current conditions: Wildfire smoke in Alberta, Canada, is so thick that the airport had a visibility of just about 650 feet, and the air quality index hit 2241, 10 times higher than “hazardous” levels • At least 10 Chinese provinces are on alert for heavy rainfall this week, with as much as 8 inches deluging Beijing • Prolonged heatwave conditions in southeastern Europe are raising the risk of fires.
A wildfire in Arizona’s Grand Canyon National Park that has burned for nearly a month has grown into the largest blaze in the continental U.S. so far this year, scorching more than 114,000 acres as of this weekend. The Dragon Bravo fire, near the park’s North Rim, is expected to increase in size in the coming days due to the exceptionally dry, hot weather, The New York Times reported.
It’s far from the only major fire burning out West. The Gifford fire in California grew to nearly 40,000 acres on Sunday within the Los Padres National Forest in south-central California. The fire was just 3% contained as of late Sunday evening, according to the federal wildfire tracker, InciWeb. Last month, my colleague Jeva Lange wrote that the “next big wave” of wildfires out West “could happen any day.” As she reported, “the components for a bad fire season are all there — the landscape just needs a spark.” Lightning has been a particular concern in the Pacific Northwest, where thunderstorms led to 72 fires in two Oregon counties during just one night in June. A lightning strike is the likely cause of the Dragon Bravo fire.
One of many anti-corruption protests in San Juan, Puerto Rico. Jose Jimenez/Getty Images
Nearly eight years after Hurricane María decimated Puerto Rico’s power grid, the United States’ most populous territory still suffers electricity outages every week and faces rising utility bills. But the island of more than 3 million American citizens is reeling this week from yet another utility failure: Water outages. As many as 180,000 households in Puerto Rico lost access to running water last week, and thousands are still without service. The electricity and water issues are combined. Updates on the state-run water utility’s X page indicated that several water pumping stations are out of service due to a lack of electricity. Governor Jenniffer González Colón called in the National Guard to help distribute water.
It’s just the latest crisis afflicting the Caribbean territory’s basic infrastructure as the island enters the peak of hurricane season. The local government last month escalated its battle with New Fortress Energy, the financially troubled New York-based gas company that provides its fuel and operates its power plants. González Colón is considering ending the island’s contract with LUMA Energy, the private consortium that controls the power grid. Faced with ongoing blackouts, the government just scrapped Puerto Rico’s renewable energy targets and extended the life of a highly polluting coal plant, threatening devastating health consequences for the surrounding community, as I reported earlier this summer for the MIT Technology Review. And, despite González Colón’s chummy relationship with President Donald Trump, federal funding for Puerto Rico’s post-María reconstruction is still trickling out almost a decade after the storm.
The One Big Beautiful Bill Act is bringing tax credits for wind turbines, solar panels, and electric vehicles to a swift end on the grounds that the technologies are mature and therefore no longer worth subsidizing. Yet America’s largest exporter of liquified natural gas is seeking “alternative fuel” tax credits simply for running its vessels on the fuel they carry, exactly as they’re designed to do. The tax credit, originally signed into law by former President George W. Bush in 2005, was intended to incentivize the switch from gasoline and diesel to biofuels, LNG, and liquid fuels derived from coal. The tankers Cheniere Energy, the nation’s top overseas seller of American LNG, uses to ship its fuel around the world are built to boil off fuel from the tanks that hold its cargo. But the company is seeking federal rewards for using the LNG, according to an investigation by Inside Climate News. If the Internal Revenue Service approves the request, Cheniere could net more than $140 million.
The Trump administration has vowed to cut back and streamline nuclear regulations to make building new reactors easier, potentially compromising safety. The effort has stirred enough drama at the Nuclear Regulatory Commission that a Republican commissioner resigned last week. Now a scandal at the St. Lucie Nuclear Power Plant in Florida is providing a timely reminder of why strict oversight exists over atomic energy stations. An inspection report on the plant, owned by Florida Power & Light, revealed that workers feared reporting safety problems to upper management lest they face retaliation. And that comes right as a database shows safety violations soared over the past year, according to the Tampa Bay Times.
The investigation came as the Department of Energy discovered four radioactive wasp nests at the defunct Savannah River nuclear facility in South Carolina. The finding suggested that environmental contamination at the site, which previously developed weapons-grade material for the U.S. government, is more extensive than previously understood. While advocates of nuclear energy draw clear distinctions with the military-related sites, political upheaval at the federal agency that oversees radioactive materials could put the growing bipartisan consensus on building more reactors at risk.
Tesla’s board approved a $30 billion payout of shares to Elon Musk in a new compensation deal, according to a regulatory filing on Monday that followed the billionaire's threat to leave the electric automaker if he didn't receive more stock.
The move came days after a jury in Florida found flaws in Tesla’s self-driving software partly responsible for a crash that killed a 22-year-old woman in 2019 and severely injured her boyfriend, The New York Times reported. If Friday's verdict holds, Tesla will be on the hook for as much as $243 million in damages to the parents of the woman and her boyfriend. The jury decided that Tesla bore 33% of the blame for the crash. Tesla said it would appeal. It’s a setback for Musk’s driverless ambitions. As Tesla’s human-driven automotive offerings stalled out last year, Heatmap contributor Andrew Moseman wrote that, “sure, maybe it will be the one to crack full autonomous driving. But in practical terms, that tech is not close to reality, and Tesla’s version of it has encountered its fair share of bugs and been sued over crashes.”
New research from Stanford University has “upended conventional wisdom about electric vehicle battery management. Contrary to popular belief, a more dynamic driving style could significantly extend the lifespan of EV batteries,” including not charging the units to 100%.
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The department creates a seemingly impossible new permitting criteria for renewable energy.
The Interior Department released a new secretarial order Friday saying it may no longer issue any permits to a solar or wind project on federal lands unless the agency believes it will generate as much energy per acre as a coal, gas, or nuclear power plant.
Hypothetically, this could kill off any solar or wind project going through permitting that is sited on federal lands, because these facilities would technically be less energy dense than coal, gas, and nuclear plants. This is irrespective of the potential benefits solar and wind may have for the environment or reducing carbon emissions – none of which are mentioned in the order.
“Gargantuan, unreliable, intermittent energy projects hold America back from achieving U.S. Energy Dominance while weighing heavily on the American taxpayer and environment,” Interior Secretary Doug Burgum said in a statement included in a press release announcing the move. “By considering energy generation optimization, the Department will be able to better manage our federal lands, minimize environmental impact, and maximize energy development to further President Donald Trump’s energy goals.”
Here’s how this new regime, which I and many in the energy sector are now suddenly trying to wrap their heads around, is apparently going to work: solar and wind facilities will now be evaluated based on their “capacity density,” which is calculated based on the ratio of acres used for a project compared to its power generation capacity. If a project has a lower “capacity density” than what the department considers to be a “reasonable alternative,” then it may no longer be able to get a permit.
“On a technology-neutral basis,” the order states, “wind and solar projects use disproportionate Federal lands relative to their energy generation when compared to other energy sources, like nuclear, gas, and coal.” The document going on to give an example, claiming that data from the U.S. Energy Information Administration shows an advanced nuclear plant uses less federal acreage than an offshore wind farm and “thus, when there are reasonable alternatives that can generate the same amount of or more energy on far less Federal land, wind and solar projects may unnecessarily and unduly degrade Federal lands.” The order also includes a chart comparing the capacity density of wind and solar facilities to conventional nuclear, gas, and coal, as well as geothermal, and claims that these sources are superior as well. The document does not reference hydropower.
There’s also a whole host of other implications in this order. Crucially, does the Interior expect that by choking off the flow of permits, cities and companies will just pony up to build what the Trump administration considers “reasonable alternatives” instead? Is the federal government going to tell communities in Nevada, for example, that they must suddenly build gas plants in the desert instead of solar farms to meet their increasing energy needs?
In any case, much more is coming, as this order simply built off of a separate secretarial order earlier this week commanding staff to prepare a litany of recommendations on ending alleged “preferential treatment” for solar and wind facilities. In other words hold my beer – and hold onto yours, too.
That’s okay for clean energy firms, terrible for manufacturers, and a big risk for everyone.
Over the past few months, you could put together three different — and somewhat conflicting — pictures of the American economy.
For companies exposed to the AI boom, business has been good — excellent, even. The surge in ongoing capital investment into data centers and electricity has been larger than other recent booms, such as the telecom buildout. Electricity demand is soaring, especially in Texas and the Mid-Atlantic. Technology companies have signed power offtake deals with nuclear and hydroelectricity companies. If anything, companies exposed to artificial intelligence are more afflicted by congested supply chains and shortages than by slack demand — see the yearslong waiting lists to get a new transformer or natural gas turbine.
Outside of the AI economy, though, the economy has been a fair bit colder. You might even say it’s been frozen by indecision. When you talk to business leaders, they confess confusion about where things are heading. President Trump’s constantly changing tariffs — and his administration’s mercurial policy shifts — have made it difficult for non-AI-exposed businesses to plan long-term capital investment.
You could hear this view from clean energy manufacturing and traditional fossil firms alike. When I talked to John Henry Harris, the CEO of the medium-duty truck maker Harbinger Motors, for an episode of Heatmap’s Shift Key podcast in June, he told me that his company was just about to shift a production process to Mexico when a last-minute Trump change made it cheaper to keep it in China. Meanwhile, an oil and gas executive recently told the Dallas Federal Reserve: “The Liberation Day chaos and tariff antics have harmed the domestic energy industry. Drill, baby, drill will not happen with this level of volatility.”
But the data contradicted that tepid view. This was the third picture that we were getting of the economy. Through the summer, federal surveys showed an economy that was performing okay. In May, according to the Bureau of Labor Statistics, the U.S. economy added 139,000 jobs; it gained another 147,000 jobs, apparently, in June. The AI boom was clearly contributing to those robust reports. But how could an economy that business leaders otherwise described as difficult be going so well?
Now we can finally square these disparate pictures.
On Friday, the federal government released its newest tranche of job numbers. The headline number was mediocre — the U.S. added a mere 73,000 jobs in July — but the guts of the report were worse. The government revised down its estimate of the May and June reports by a total of 258,000 jobs. With these new numbers in hand, it’s clear that the labor market has essentially stalled out since Liberation Day in April.
The unemployment rate slightly rose to 4.2%, which was in line with what economists predicted.
These new reports clarify that the broader American economy wasn’t actually thriving. Its summer strength was a mirage the whole time. Outside of AI, things are downright frigid. And as President Trump continues to shuffle tariffs and increase trade uncertainty, we can expect conditions to worsen. Trump seems hellbent even on clouding our ability to understand the underlying economy: on Friday afternoon, he fired the Bureau of Labor Statistics commissioner, a career civil servant.
If you squint, you can see a hazy “AI sector” versus “non-AI sector” distinction in the data, even among the energy and decarbonization companies we cover at Heatmap. But it’s not obvious. Contrary to what you might expect when power demand is surging, utility employment was basically flat last month. Heavy and civil engineering construction jobs were up by 6,000, and “nonresidential specialty trade contractors” — a category that can include electricians — gained nearly 2,000 jobs.
But manufacturing lost 11,000 jobs last month, with the motor vehicles industry driving 2,600 of those losses. Mining, quarrying, and oil and gas jobs were down. The Institute of Supply Management report, a private survey of U.S. manufacturing activity, showed the sector shrank in July for the fifth month in a row.
And even though the Department of Government Efficiency’s deferred buyout program for more than 150,000 people has yet to hit, the federal government bled 12,000 jobs.
In a way, the clean energy industry — or at least solar, battery, nuclear, and geothermal developers — might consider themselves lucky. Despite the best efforts of Trump’s officials, and despite the chaos of President Trump’s policies, they have been able to eke through the past few months because of the AI boom. Nearly 70% of all new power-generating capacity added to the U.S. grid in the first quarter of this year came from solar panels, and the government has thrown its weight behind next-generation nuclear and geothermal technologies. A tepid jobs report might even bring some interest rate relief from the Federal Reserve.
But if that AI boom slows down, we should all watch out below.
A conversation with Heather O’Neill of Advanced Energy United.
This week’s conversation is with Heather O’Neill, CEO of renewables advocacy group Advanced Energy United. I wanted to chat with O’Neill in light of the recent effective repeal of the Inflation Reduction Act’s clean electricity tax credits and the action at the Interior Department clamping down on development. I’m quite glad she was game to talk hot topics, including the future of wind energy and whether we’ll see blue states step into the vacuum left by the federal government.
The following conversation has been lightly edited for clarity.
During Trump 1.0 we saw blue states really step into the climate role in light of the federal government. Do you see anything similar taking place now?
I think this moment we’re in – it is a different moment.
How are we handling load growth? How are we making sure consumers are not paying for expensive stranded assets? Thinking about energy affordability? All of those challenges absolutely present a different moment and will result in a different response from state leaders.
But that’s where some of the changes our industry has gone through mean we’re able to meet that moment and provide solutions to those challenges. I think we need aggressive action from state leaders and I think we’ll see that from them, because of the challenges in front of them.
What does that look like?
Every state is different. Take Virginia for example. Five years after we passed the Virginia Clean Economy Act – a big, bold promise of action – we’re not on track. So what are the things we need to do to keep the foot on the accelerator there? This last legislative session we passed the virtual power plant legislation that’ll help tremendously in terms of grid flexibility. We made a big push around siting and permitting reform, and we didn’t quite get it over the finish line but that’s the kind of thing where we made a good foundation.
Or Texas. There’s so much advanced energy powering Texas right now. You had catastrophic grid failure in Hurricane Uri and look at what they’ve been able to build out in response to that: wind, solar, and in the last few years, battery storage, and they just passed the energy waste reduction [bill].
We need to build things and make it easier to build – siting and permitting reform – but it’s also states depending on their environment looking at and engaging with their regional transmission organization.
You saw that last week, a robust set of governors across the PJM region called on them to improve their interconnection queue. It’s about pushing and finding reforms at the market level, to get these assets online and get on the grid deployed.
I think the point about forward momentum, I definitely see what you’re saying there about the need for action. Do you see state primacy laws or pre-emption laws? Like what Michigan, New York, and California have done…
I’m not a siting expert, but the reform packages that work the best include engagement from communities in meaningful ways. But they also make sure you’re not having a vocal minority drowning out the benefits and dragging out the process forever. There are timelines and certainty attached to it while still having meaningful local engagement.
Our industry absolutely has to continue to lean into more local engagement and community engagement around the benefits of a project and what they can deliver for a community. I also think there’s a fair amount of making sure the state is creating that pathway, providing that certainty, so we can actually move forward to build out these projects.
From the federal government’s perspective, they’re cracking down on wind and solar projects while changing the tax credits. Do you see states presenting their own incentives for renewables in lieu of federal incentives? I’ve wondered if that’ll happen given inflation and affordability concerns.
No, I think we have to be really creative as an industry, and state leaders have to be creative too. If I’m a governor, affordability concerns were already front and center for me, and now given what just happened, they’re grappling with incredibly tight state budgets that are about to get tighter, including health care. They’re going to see state budgets hit really hard. And there’s energy impacts – we’re cutting off supply, so we’re going to see prices go up.
This is where governors and state leaders can act but I think in this context of tight state budgets I don’t think we can expect to see states replacing incentive packages.
It’ll be: how do we take advantage of all the flexible tools that we have to help shape and reduce demand in meaningful ways that’ll save consumers money, as well as push on building out projects and getting existing juice out of the transmission system we have today.
Is there a future for wind in the United States?
It is an incredibly challenging environment – no question – for all of our technologies, wind included. I don’t want to sugar-coat that at all.
But I look at the whole picture, and I include wind in this: the technologies have improved dramatically in the past couple of decades and the costs have come down. When you look around at what resources are around to deploy, it’s advanced energy. We’re seeing it continue to grow. There’ll be headwinds, and it’ll be more expensive for all of us. But I look at what our industry and our technologies are able to offer and deliver, and I am confident we’ll continue to see growth.