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I’m not normally concerned about having the perfect home — though I’m also not normally interviewing Mr. Christmas Tree himself from my living room, with a scraggly, disco-lit Nordmann fir in the background of my Zoom shot.
A high-quality tree should have “up-turning branches, so they’re not drooping,” he was telling me. “They have really nice dark green needles” and “what I would consider to be a uniform density, all the way to the top of the tree.” As he talked, my eyes slid to the corner of my computer screen, where I noticed that the topper on my rather limp and gappy specimen was also crooked.
But in the true spirit of the holiday season, Gary Chastagner — a plant pathologist at Washington State University whose extensive research on ornamental holiday conifers has earned him his jolly nickname — was generous. He added that there’s also a robust market for imperfect “Charlie Brown” Christmas trees, to the point that growers will actually avoid culling arboreal oddballs that might attract people like, well, me.
Soon, they may not have much choice. The normally cold and rainy Pacific Northwest is the Christmas tree-growing capital of the U.S., producing more than 5.4 million trees every holiday season, many of which get exported to places like New York, where I procured mine from a sidewalk lot. But back in 2021, a heat dome pushed temperatures in the Northwest to nearly 120 degrees Fahrenheit. The event killed the year’s seedlings and browned new growth on older trees — the consequences of which we’re already seeing in the form of patchy trees and shortages, and will continue to feel for years to come.
Unlike most farmed products, Christmas trees grow slowly; it can take seven to 12 years for a seedling to reach 8 feet tall, depending on the species. To ensure a consistent stock of Christmas trees for the years ahead, most growers plant the same number of seedlings each season with the expectation that there will be some amount of loss along the way.
But the heat dome was exceptional; it “killed off virtually every seedling that was planted on farms in 2021, plus some from the year before,” Sheila McKinnon, a former grower and representative of the Puget Sound Christmas Tree Association, in Washington state, told me over email. One dismayed grower told CNN at the time, “There are literally fields with hundreds of acres of dead seedlings. Just 100% mortality across the entire field.”
The timing couldn’t have been worse. Because the heat dome occurred in early summer, young trees as well as the new shoots and buds on older trees had not yet “hardened,” and were therefore especially vulnerable to the high temperatures. Additionally, prevailing drought conditions in the Pacific Northwest in 2021 limited the available groundwater to rehydrate the superheated plants. “They just shut down because they couldn’t get enough water; they literally just cooked,” Judith Kowalski, a researcher in the Christmas tree program at Oregon State University, explained to me.
Not all trees — or tree farms — were affected equally. Nordmann, Turkish, and some Noble firs mature later in the season than Douglas firs, so their tissues were softer and “just fried,” Kowalski said. Regional differences mattered, too. For example, it didn’t get quite as hot in the southern Willamette Valley in Oregon, and trees there faired a little better. But even microclimates could mean the difference between life and death. “On a hill, where there was a breeze, it made a lot of difference,” Kowalski said. By that same token, so did “a little valley, where trees didn’t get any air circulation.”
Some unlucky growers lost as much as 90% of the year’s seedlings; by one estimate, 70% of the Noble fir seedlings planted in Oregon in 2021 died. McKinnon sounded fatalistic when she described the damage. “There is no way to recover from this loss,” she said. “Some folks tried to buy more seedlings the following year,” but “instantly doubling the supply wasn’t possible.”
Call them the Ghosts of Christmas Yet to Come — because conifers take so long to mature, the effects of the 2021 heat dome will cascade into the future, causing shortages of certain trees at certain heights for a decade or more. If the typical Noble fir takes roughly 10 years to grow 8 feet, for example, then the 2021 heat dome could cause shortages of 9-foot-tall Nobles that won’t be felt until 2032.
The good news is, customers don’t usually shop for a specific species and height of Christmas tree; they just want something that looks good (or, in my case, passable) in their living room. While there might be a 9-foot-tall Noble tree shortage in 2032, customers in the market for a large tree that year will probably switch to buying a Douglas fir or some other variety, instead. Unless a grower depends heavily on one specific type of tree that was widely killed off by the heat dome, the impacts of 2021 can “kind of get absorbed” by the other stock, Kowalski said.
Of course, all that assumes that there is only one bad year.
“The heat dome is part of a pattern that we’re seeing of increased frequency of very high temperatures, much more than normal,” Chastagner told me. “2022 was one of the driest summers on record. We only had half of an inch of precipitation during the summer. And unlike other areas, the growers in the Pacific Northwest generally do not irrigate trees.”
Chastagner’s research indicates that trees in the Pacific Northwest have been so stressed by the region’s dry summers that it’s making them vulnerable to diseases like armillaria, a root rot caused by a fungus, “which we normally didn’t see.” And high temperatures don’t just affect a tree’s growth; warmer autumns also lead to worse needle retention once the tree is cut, meaning more needles on your floor in mid-December. And while one summer of extreme temperatures might lead to shortages that other stock can absorb, that stops being true when there are back-to-back heat domes. As Tom Norby, the president of Oregon Christmas Tree Growers Association, told The Oregonian after the 2021 heat dome, “One year is not a catastrophe. Two years becomes a big problem. Three years, it’s a catastrophe.”
With that in mind, Chastagner and his team at WSU — as well as Kowalski and the researchers at OSU — are exploring everything from introducing irrigation to farms (which is complicated and expensive, but also effective) to determining what conifer varieties will be better suited to a hotter future in the region. Already, the makeup of tree farms in the West is changing: In 2017, native Noble firs made up about 54% of the trees grown in the Pacific Northwest, with Nordmann and Turkish firs (which are native to Turkey and Georgia) only making up about 4%. Now, more and more growers are planting exotic Nordmann and Turkish firs due to their drought tolerance.
But don’t worry: Charlie Brown Christmas trees aren’t going anywhere. Heat or no, there will always be evergreens that require aggressive pruning or otherwise turn out a little bit, well, special. “When I get asked to give talks on what the perfect Christmas tree is,” Chastagner said with — did I only imagine it? — a kindly glance over my shoulder, “I say it’s all in the eye of the beholder.”
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The automaker had a decent second quarter, but projects its best-ever year-end performance, as we wrap up a busy week in the energy economy.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
We are now well into the quarterly earning season, and this week we got a bead on some of the energy and climate economy’s biggest stories. Here’s what stuck out to me:
Oil companies had a blow-out quarter. As my colleague Matthew Zeitlin wrote today, oil and gas companies cashed in on the global price surge triggered by the Iran war. Their refining businesses did particularly well. But their results also revealed that global oil demand continues to fall — at least for now.
Some data center bets are starting to pay off. As I wrote on Wednesday, Microsoft had a bonanza quarter, and its Azure cloud business — which allows other companies to rent its data centers — grew faster than Wall Street expected.
That matters because America’s biggest tech companies have spent the past few years transforming into industrial firms, building massive new infrastructure and driving up U.S. electricity demand — and that strategy, contrary to some expectations, seems to be working for now.
Rivian is optimistic. The most important U.S. electric vehicle maker not run by Elon Musk released their second quarter results on Thursday night. The outlook was … decent!
The company delivered almost 12,200 vehicles last quarter. This was Rivian’s best period for sales since the third quarter of last year, when every EV maker’s results were juiced because the Inflation Reduction Act’s EV leasing tax credit expired.
Crucially, this was our first look at Rivian’s sales since it started delivering its more affordable (and well-reviewed) crossover, the R2. That vehicle started going out to customers at the very end of the quarter in mid-June, so we only get a snippet of those deliveries in this number.
More heartening, I think, is Rivian’s forward guidance. It now expects to deliver 65,000 to 70,000 vehicles this year, which implies it will deliver an average of more than 21,000 over the next two quarters. That would make Q3 and Q4 of this year its best sales periods ever.
RJ Scaringe, the company’s CEO, said that R2 sales conversions were running “meaningfully higher” than the company projected. The company still lost $379 million last quarter, but that was much better than analysts had projected.
We last checked in on Rivian when they sold new stock earlier this month to fund collateral for an Energy Department loan that will let them build a second factory in Georgia. On the call yesterday, executives confirmed they expect to start drawing on that loan in early 2027, part of what it painted as a healthy cash flow picture. For all the optimism, though, investors seemingly remain skeptical: Its stock fell 8% today.
It’s 2022 all over again. A war has broken out involving (at least) one large oil-producing country, raising both prices and oil company profits.
Chevron reported Friday a quarterly profit of $12.1 billion, its highest quarterly profit ever. ExxonMobil also announced a blowout quarter on Friday. Its $14.5 billion profit was its highest since the Russian invasion of Ukraine in 2022 (when it posted an almost $20 billion profit in the third quarter). These announcements followed Shell’s Thursday earnings report, which revealed a profit of almost $10 billion, close to double its previous quarter earnings and in range of its 2022-vintage quarters.
What does this mean for decarbonization?
1. It’s refining, stupid.
The story across the oil majors was largely one of getting more profit out of its existing assets, particularly in their refining business.
Shell, for example, said that they were running their refineries at over 100% capacity and that it had shifted production to jet fuel, which had been in especially short supply following the American and Israeli attack on Iran and subsequent closure of the Strait of Hormuz.
The company said it had “significantly higher” trading profits, likely from the volatility of commodity prices due to the start and stop nature of the war. Exxon said that it had “a second-quarter record for diesel production,” and that its chemicals business saw its margins jump by around 180% as its North American facilities were able to count on a steady stream of hydrocarbon feedstocks, unlike rivals in Asia.
“The unprecedented reduction in refining capacity – with nearly 9% of global capacity offline across Russia, China, and the Middle East – limited the supply of gasoline, diesel, and other products,” Exxon said. “As a result, refining margins reached record levels in the quarter.”
Meanwhile Chevron said it was refining over one million barrels of oil per day with “more than 97 percent” utilization.
While this constrained global refining capacity is largely due to military conflict in the Middle East and Russia, refinery capacity has been basically flat in many developed economy markets for decades. In the United States, the newest large refinery was built in 1977, an indication that while the U.S. transportation and energy system is still dominated by fossil fuels, there isn’t much appetite for the billions of capital investment needed to expand capacity for refining gasoline. So, while profits can surge in the short term, it doesn’t necessarily mean blue skies for oil companies.
2. Oil demand is actually falling — for now
Chevron noted that sales of refined products had actually fallen by 4% in the United States and 13% internationally. While in the short run this is likely due to higher prices, it is consistent with falling forecasts for oil demand.
While the International Energy Agency’s “current policies scenario,” which forecasts demand based on a snapshot of existing policies, sees a slow and steady rise through 2050, its “stated policies scenario” based on the trajectory of policy and commitments around energy and climate, sees oil demand peaking at levels slightly about the status quo by around 2030. In the medium run, the IEA said that “Forecast growth of [two million barrels per day] in 2027 results in a two-year pace of expansion well below historical trends.”
BP even announced layoffs of hundreds of employees, according to an internal message seen by Reuters.
This can help explain why, despite the strong profits, investors do not seem particularly jazzed about the oil giants — ExxonMobil and Chevron shares are only up slightly since the beginning of the war in Iran.
3. The high profits are already stoking public outrage
Everyone knew oil prices had risen since the war in Iran began — they could see it at the pump. But the confirmation that the war has spurred record or near-record profits has been fresh meat for environmental groups that want a faster energy transition.
“The mugging at Mar-a-Lago just keeps getting worse. The president said he would sell out Americans to oil and gas CEOs for a billion dollars in campaign donations. Now we know he owns millions of dollars worth of their stock. Those same companies are profiting from Trump’s war of choice, which has killed and injured U.S. service members, and left consumers struggling to stay afloat,” former Washington Governor Jay Inslee said in a statement blasted out by the communications group Climate Power.
The profits also spurred advocates to redouble calls for windfall profit taxes. “It’s fair to put a windfall profits tax on inordinate windfall profits rather than cut off children’s food programs,” Rhode Island Senator Sheldon Whitehouse told the Associated Press. Whitehouse introduced a bill in March that would impose taxes on oil companies in the event of price surges.
And even President Trump, whose presidential campaign was buoyed by donations from the oil and gas industry, called for an investigation into retail gasoline prices last month.
Since 2022, fossil fuels have moved back to the center of the world economy as concerns about shortages, price spikes, and availability have helped push concerns about climate change to the margins of policymaking. However, when oil companies are making more money than ever, it means an uptick in public concern or scrutiny. In the long run, oil companies have to worry about decarbonization; in the short run, they’ll have to worry about their customers.
What’s the deal with all those “America Connects” videos?
The data center lobby is launching a big PR blitz on television and social media, racking up millions of views on evidently AI-generated content boasting economic impacts from new projects and hitting against criticism around energy and water use.
In an interview with me Wednesday, Data Center Coalition CEO Josh Levi explained how and why his organization – the largest and most prominent data center trade group – stood up an “evolving” national advertising campaign called America Connects.
Like me, up until now, you might’ve interacted with the campaign’s materials without knowing it. For weeks I’ve been getting texts from people in my life who know I write about data centers asking if I’d seen these ads on TV streaming platforms and social media sites boasting benefits from data centers, or pushing back on complaints about energy and water use. Most of the videos were quite similar, appeared to be generated using AI (with no AI labeling), and were racking up millions in views and impressions.
“Our paychecks, our hospitals, our national security – all run through data centers,” states one voiceover in a YouTube ad targeted at the Longhorn State with more than 12 million views as of today.
“In Texas, they’re doing more than keeping us connected. Data centers support high-paying jobs and pay billions in taxes. Money that can lower your bills, make schools and roads better and communities safer. And new technology means data centers consume minimal water while funding new power generation for everyone. Data centers: built in Texas. For Texas.”
These videos each are hosted on channels named for specific campaigns in individual states. In Georgia, it’s called Connected Georgia. There’s a Texas Connects, an Indiana Connects, and a Pennsylvania Connects. At least eight state campaigns are happening right now and I’m told more should be expected in the near future. Each state campaign has a near-identical website with links to their promoted videos, statistics about state-level tax contributions, and employment from data centers, and a somewhat modern-looking red, white, and blue design with moving graphics on the landing page.
But finding out who was behind these videos and websites took a lot of digging. None of the state campaign websites have contact information and they were all registered by a proxy firm that gets web addresses for entities that want to remain anonymous. Most of the advertising itself was opaque; it’s not easy to research TV commercial spends and Google doesn’t disclose how much a company or person pays to promote individual ads. But there were signs of significant spending, as Meta’s Facebook and Instagram advertising disclosures revealed to me there was five-figure spending on static images, resulting in millions of potential impressions.
Eventually I was able to figure out what was going on. Each of the state campaigns also described themselves online as nonprofits but in fact, there is one nonprofit. It initially formed for the first state campaign, Virginia Connects. Its public 2024 tax disclosures show the campaign was formed by Levi and others working with the Data Center Coalition. On the DCC’s website, the trade group does have a landing page for what it calls “America Connects” and directs people to each state campaign but, as of today, the organization describes them as “regional coalitions” they “partner” with on “helping educate and engage citizens, policymakers, and other stakeholders on the data center industry, its benefits, and key issues including energy, water, economic development, and community engagement.”
In our interview, Levi explained these state campaigns aren’t just partners – they’re creations of a single nonprofit he said was “stood up” by the trade group named America Connects, and it began in 2024 through the Virginia Connects campaign. America Connects is now “a vehicle by which the broader community can engage and participate” in what Levi described as “broader industry messaging” that isn’t “just project by project.” It’s a direct response, Levi said, to the lack of any industrywide PR offensive challenging the mountain of public opposition to data centers shown in poll after poll. (With the exception of that one Meta ad campaign.)
“What we have heard very clearly is that a lot of the partners we work with, but also a lot of the voices from the public at large, is that the industry broadly needs to do a better job communicating. A better job talking about what we do, how we do it, and about the positive benefits of what localities can expect from data center development,” Levi said.
Levi told me the core of the group is at least three people: himself; Allison Gilmore, the chief operating officer of the DCC; and Kevin Hughes, the group’s treasurer and the chief external affairs officer at the data center developer STACK Infrastructure. He said I should expect “an expansion on the board” but declined to say who or what companies. Part of the team also includes LINK Public Affairs, a communications firm based in Virginia that helped on the initial campaign in the state.
I asked how an industry-backed campaign like this would help with the backlash. “Silence breeds mistrust, fundamentally. It is critically important as we see continuing conversations around the data center industry – what it does, what it doesn’t do, how it does – is part of informing those conversations,” Levi replied. “It is important the industry not be silent and be an active contributor in terms of the public dialogue around data centers. This is that.”
The DCC wouldn’t tell me how much is being spent on the America Connects campaign and it’s impossible to know from what’s publicly available.
Here’s what Levi would say about the money: that America Connects is funded by the data center “ecosystem generally,” including developers, companies within the supply chain, and “workforce voices.” But Levi wouldn’t even confirm if they were spending more than they had in just the Virginia campaign, which sort of logically has to be the case if they’ve expanded this effort.
“White it’s maybe not a satisfying answer, we will spend what we have to when it comes to ensuring we reach people where they are. But I’m not able to provide any kind of concrete number for you.”