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On the storm’s next moves, electrifying oil and gas rigs, and risky real estate
Current conditions: Parts of England could be hit by tornadoes today • Another hurricane is churning in the Atlantic • The border between Switzerland and Italy has to be moved because of rapidly melting glaciers.
Hurricane Helene made landfall in Florida’s Big Bend region last night as a Category 4 storm with top sustained winds of 140 miles per hour. The extent of the damage from the storm so far is unclear, but several locations saw record storm surge, including nearly 10 feet in Ceder Key and 6.3 feet in St. Petersburg. At least three people are known to have been killed, and more than 1.2 million Floridians are without power. “We’re fearing the worst when the sun comes up,” said the sheriff’s office in Suwannee County. “We’re gonna need some prayers folks.”
NOAA
One hurricane scientist said Helene is one of the largest storms on record to strike the Gulf Coast, with its winds covering an area of about 420 miles. The storm’s size means its effects will be felt in cities far north of the coast, even as it weakens. As of Friday morning it had been downgraded to a tropical storm. In Georgia, more than 900,000 are without power. Tornado warnings were issued for parts of South Carolina, with additional tornado watches in effect in Georgia and North Carolina. A quarter of oil production and about 20% of gas output in the Gulf was shut down because of the storm.
Democratic presidential nominee Kamala Harris is under pressure to clarify her position on natural gas. “We need more details,” said Dave Callahan, president of the Marcellus Shale Coalition. Harris has reiterated that she is not against fracking, and has called for investing in “diverse sources of energy,” but hasn’t said much more on the issue yet. President Biden paused approvals for new liquified natural gas export terminals while the Energy Department studied their climate effects, a move that angered the industry but pleased climate activists who say the terminals lock in greenhouse gas pollution for decades to come. A judge has since blocked the freeze, but new approvals remain slow. Pennsylvania is a major natural gas producing state, and a must-win battleground for the 2024 election. Republican candidate Donald Trump has promised to lift the permitting freeze if elected in November.
Texas yesterday approved a plan to expand grid infrastructure in the Permian Basin, the largest oilfield in the U.S., to make sure the basin’s oil and gas facilities have reliable electricity. Last month Permian Basin Petroleum Association Executive vice president Stephen Robertson said access to electricity was the industry’s biggest concern for the basin, where power demand is expected to balloon over the next 15 years as the oil and gas industry electrifies operations.
The International Energy Agency estimates that oil and gas operations account for around 15% of global energy-related emissions. It calls for a 50% reduction in emissions intensity for those operations by the end of the decade to align with a planway toward net zero by 2050, and electrification is one step on that path. But the IEA notes that “tackling methane emissions is the single most important measure that contributes to the overall fall in emissions from oil and gas operations.” Recent data suggests U.S. producers – including those in the Permian Basin – continue to emit methane, a potent greenhouse gas, at rates much higher than current EPA estimates and industry targets.
The United Arab Emirates is expected to outline its new national climate plan – known more formally as a Nationally Determined Contribution (NDC) – ahead of the upcoming COP29 climate summit in November. “That would make it one of the first major emitters to take that step ahead of the February 2025 deadline,” Reutersnoted. Under the Paris Agreement, party nations are required to submit new and updated NDCs every five years, outlining their plans to reduce emissions in line with the goal of limiting warming to 1.5 degrees Celsius. The upcoming deadline for new NDCs is February 2025, but Sultan Al Jaber, president of last year's COP, said the UAE hopes to set an example for other countries to submit their plans asap. Previous NDCs from major fossil fuel producing nations did not mention oil, coal, and gas, so it will be interesting to see if or how the new plans grapple with the stated COP28 goal of “transitioning away” from fossil fuels.
A recent report from the sovereign wealth fund of Singapore and S&P Global warned that the real estate sector could see climate change-related losses of more than $500 billion by 2050. It added that “climate adaptation solutions for non-residential real estate like green or cool roofs and wet or dry floodproofing present investment opportunities.” Last year, the U.S. experienced 28 weather and climate disasters, and together they cost more than $92 billion.
Relatedly, yesterday the online real estate marketplace Zillow said it will start including properties’ climate risks in sale listings, using data from climate research and technology company First Street. Prospective buyers will be able to see flood, fire, wind, heat, and air quality risks, along with insurance requirements and tailored recommendations. More than 80% of home buyers are factoring climate risk into their decisions now, First Street said. The climate risk information will be available on the Zillow website by the end of the year (rolling out on the Zillow apps this year or early 2025).
Zillow/First Street
“I just want to be clear that building the clean energy future that we want and need is not a rhetorical flourish. It means actual construction.” –Hawaii Sen. Brian Schatz, speaking with Heatmap’s Robinson Meyer about how fighting climate change will mean building a new economy. Read their entire conversation here.
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A little-noticed provision would make the payment option used by tax-exempt groups all but impossible to claim.
A little-noticed provision in the Senate tax bill will sabotage the efforts of tribes, rural electric cooperatives, and public power authorities to develop local affordable energy projects by striking a section of the Inflation Reduction Act that enabled tax-exempt groups to claim the clean energy tax credits as direct cash payments from the Treasury.
The IRA included strict domestic sourcing requirements beginning in 2026 for groups utilizing this “direct pay” option. But the law also created exceptions for cases where domestic components were not available in sufficient quantity or quality, or would increase costs by more than 25%. The Senate bill would get rid of these exceptions.
“It just makes it unlikely for those projects to go forward — or more likely for those projects to go forward with a private developer, instead of with a public utility or a tribe or a rural co-op,” Grace Henley, a tax attorney with the Natural Resources Defense Council, told me. “And so they don’t really do anything to increase the amount of domestic material that would be used, they just hurt the projects that are seeking to invest in clean energy infrastructure for these communities to lower costs.”
Public power and tribal energy advocates warn that without the exceptions, energy development will become impossible for their constituents.
Wind and solar projects being developed by these groups are already threatened by the bill’s rapid phase-out of wind and solar tax credits and its complex rules related to using materials from China. Chèri Smith, the executive director of the Alliance for Tribal Energy, told me that Tribes face longer development timelines than the average private developer. “We have multiple stages of approval that are unique to tribal energy development,” she told me, including lengthy internal consultation processes. The changes to direct pay will put these projects further out of reach, she said.
The Alliance provides free energy development consulting services to more than 100 Tribes. Smith sent me a list of projects in Alaska Native villages, Arizona, California, and Oregon that could be killed by the tax credit changes. “Alaska Native villages face some of the highest energy costs in the country,” she said, largely due to their reliance on diesel generators. Just over a third of the Hopi Tribe in Arizona lacks access to electricity, but now multiple microgrid projects meant to close the gap are at risk. Many of the projects on the list are also doubly threatened by grant cancellations and the repeal of the Tribal Energy Loan Guarantee Program.
“The bill is particularly harmful to Tribal Nations, pulling the rug out from under projects that would strengthen their energy sovereignty and power local communities,” Democratic Senators Martin Heinrich, Ron Wyden, and Brian Schatz wrote in a joint statement on Thursday. “Together, the Tribal Energy Loan Guarantee Program and our Inflation Reduction Act’s clean energy tax credits have cleared pathways and removed significant barriers for Tribes to finance and build their own resilient energy infrastructure.”
The American Public Power Association is also sounding the alarm. John Godfrey, the group’s senior government relations director, told me that in addition to wind and solar, municipal utilities and rural electric co-ops are also considering nuclear and hydropower projects. For example, Energy Northwest, a consortium of 29 public utilities in Washington State, has plans to retrofit the Columbia Generating Station nuclear plant to increase its power output. It’s also in early stages to deploy four small, modular nuclear reactors. As my colleague Matthew Zeitlin wrote a few days ago, the governor of New York has also tasked the New York Power Authority with developing a new nuclear plant in the state.
Nuclear and hydropower “are technologies where often there is not a U.S. source, but there is a good trading partner source — Canada, Germany, Japan,” Godfrey said. By tightening the domestic sourcing requirements for direct pay, the bill would “hinder the very technologies that there’s generally a bipartisan consensus we need to be developing.”
Public utilities and electric co-ops, which serve close to 30% of electric customers in the U.S., are also unfairly singled out by the provision, he said. “If my public power utility wants to develop a project and they need a Canadian turbine, they can’t get any credit. But if a taxable corporation down the street develops exactly the same project, they can.”
“If the purpose is to encourage hydropower, that’s not a good use of resources,” he said.
Senate Republicans tucked a carveout into their reconciliation bill that would allow at least one lucky renewable energy project to qualify for a major Inflation Reduction Act tax credit even after the law is all but repealed.
The only problem is, it’s near impossible to be sure right now who may actually benefit from this giveaway — and the mystery is driving me up the wall. I feel like Charlie Day in that episode of It’s Always Sunny in Philadelphia, stringing documents together and ranting like a lunatic.
The Senate bill would phase out the tech-neutral production tax credit starting next year and completely eliminate it by the start of 2028. For the past week and a half, I have been trying to solve the riddle of an exemption tucked into the language that would allow a wind or solar facility that is “part of a single project” to continue to take advantage of the tech-neutral production tax credit as it exists today, which means it would not begin to phase out until 2034.
To qualify for the exemption a project must, according to the Senate text, meet two conditions: It must produce more than 1 gigawatt of electricity, and be sited on federal lands where a “right-of-way grant or lease” had been given by the Bureau of Land Managementbefore June 16, which is the date the text was released.
Only a handful of projects in the U.S. could possibly fit that criteria. But every time I think I’ve identified one that will actually qualify, I learn a new fact that, to me, takes it out of the running.
Here’s why my head hurts so much: A renewables facility that would benefit from this language needs to be sited at least partially on federal lands. But because Trump isn’t issuing new right-of-way approvals or leases to most renewables projects right now, it likely had to get its right-of-way or its lease before he entered office. (The June 16 language feels like a bit of a red herring. Nothing that fits the other definitions has received these documents since the start of Trump 2.0.)
Then there’s another factor: The only projects that would benefit from this language are ones that haven't started construction yet. Even if a project doesn’t have all of its permits for federal land use, its developer can build stuff like roads on any connected private lands and technically meet the deadline to start construction laid out in the new legislation. The construction start date is what counts — it doesn’t matter whether a project is placed in service and provides power to the grid years later, as long as it began construction before that deadline.
Taken together, all this means that a project that would benefit from this language probably has to be sited on federal lands and hold permits already … but for some reason can’t start construction to qualify for the program.
When I first started hunting for an answer, many people — including renewables advocates, anti-wind activists, and even some Senate staff in conversations with me — speculated that the language was a giveaway to two wind projects under construction in Wyoming, Chokecherry and Sierra Madre, which together make up what would likely be the largest wind farm in the U.S. if completed. These two projects are largely sited on federal lands and received all their approvals before Trump entered office.
I understand why people are pointing at Chokecherry and Sierra Madre. They are not expected to be online before 2029, and the House version of the bill would have locked them out of the production tax credit because it added a requirement that projects be “placed in service” — i.e. actively providing power to the grid — by around that same period. Any slippage in construction might have really hurt their finances. They’re also backed by a powerful billionaire, GOP donor and live entertainment power-broker Phil Anschutz, a man who made his initial fortune partially from fossil fuels.
Except … my colleagues and I are still not convinced. That’s because it is not clear that these two projects are at any actual risk of losing the production tax credit. They have been actively under construction for a long time, and the Senate bill killed the House’s “placed in service” requirement.
Another project floated is the Lava Ridge wind farm in Idaho, which was fully permitted under Biden, is largely sited on federal lands, and would produce more power than necessary to qualify for the exception. Hypothetically, this project would be a great candidate for being a beneficiary of the bill because Trump banned work on the project via executive order amid opposition from Idaho politicians, making a carveout to get more time a worthwhile endeavor.
Except … Senate Finance Chair Mike Crapo, the lead author of the pertinent section of the Senate reconciliation bill, was one of those Idaho politicians who pushed Trump to kill Lava Ridge. Why would he give a tax break to a project he wanted dead?
Then there was my personal best guess for the beneficiary: Esmeralda 7, an expansive set of proposed solar farms in the Nevada desert that, as proposed, would produce more than 5 gigawatts of power and is largely sited on federal land. Construction can’t begin until Esmeralda 7 gets its federal approvals, and the Trump administration was expected to complete that work by mid-summer.
Except … I reported last week that the permitting process for Esmeralda 7 is now indefinitely stalled. The project is at best still months away from getting its right-of-way approvals from the Trump administration, which recently pushed back timelines for finishing reviews of other large Nevada solar projects, too.
Ultimately, it will be difficult to glean who the lobbyist giveaway here is for unless the legislators who wrote it disclose their intentions. I reached out to the communications director for Republicans on the Senate Finance Committee to try and find out, but so far I’ve gotten crickets.
It may be that this language is revised and that future changes lay out the true beneficiary. Sometimes lawmakers will put the wrong date or word into a bill and they’ll edit it on the floor before a vote, chalking it up to a drafting error.
If senators decide to add back the “placed in service” requirement to capitulate to the House, this would easily be the Chokecherry-Sierra Madre giveaway. If Republicans were to shift forward the deadline for getting a right-of-way, Esmeralda 7 would qualify. Or maybe they could change some secret third thing and a different project I hadn’t considered will be revealed as the mastermind in the shadows.
Until then, I’ll be in my basement poring over more maps and going slowly insane.
Additional reporting was provided by Emily Pontecorvo.
On resuming rare earth shipments, hurricane tracking, and EV tax credits
Current conditions: The Ohio Valley is still sweltering through the last remnants of this week’s brutal heat wave • The death toll from recent floods in South Africa has risen to 101 • It’s 90 degrees in Venice, Italy, where the world’s rich and famous are gathering for the wedding of Jeff Bezos and Lauren Sanchez.
The U.S. and China have hammered out the details of a trade deal, including an agreement that China will resume rare earth shipments to the U.S. Rare earth materials are essential for everything from planes to EVs to wind turbines. China controls most of the world’s rare earth production and halted exports in April in response to President Trump’s tariff hike, and China’s chokehold on rare earths threatened to derail trade talks between the two countries altogether. Commerce Secretary Howard Lutnick said a deal has now been “signed and sealed.” “They’re going to deliver rare earths to us,” Lutnick said, adding that the U.S. will then “take down our countermeasures.” Lutnick also indicated that Trump plans to announce further trade deals with other nations in the coming two weeks.
As climate talks in Bonn, Germany, wind down, negotiators there have agreed to increase the budget for the United Nations Framework Convention on Climate Change by 10% over the next two years to 81.5 million euros ($95.4 million). The UNFCCC runs some of the world’s largest climate negotiations and tries to ensure countries follow through on their climate commitments. Its budget is funded by government contributions. China will account for 20% of the new budget, Reuters reported. The U.S. is supposed to cover 22%, but President Trump has pulled international climate funding. Former New York Mayor Michael Bloomberg’s philanthropic arm has stepped in to cover the missing U.S. contributions. UN climate chief Simon Stiell said the budget increase was “a clear signal that governments continue to see UN-convened climate cooperation as essential, even in difficult times.”
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Hurricane forecasting is about to get a little bit more difficult. At the end of June, the federal government is going to stop distributing readings from the Defense Meteorological Satellite Program, a tool forecasters all over the world have been using to track and predict hurricane development. As retired federal meteorologist Alan Gerard told Bloomberg, this particular satellite program is unique because it lets forecasters peer inside storms and monitor for rapid intensification. As the planet warms, hurricanes are strengthening much faster than they did in recent decades. Hurricane expert Michael Lowry says the Department of Defense seems to be concerned that the satellite data poses a security concern. Its termination “will severely impede and degrade hurricane forecasts for this season and beyond, affecting tens of millions of Americans who live along its hurricane-prone shorelines,” Lowry wrote.
A group of U.S. car dealers penned a letter urging senators to “reject provisions in the budget reconciliation process that would abruptly eliminate EV-related tax credits from the Inflation Reduction Act,” warning that sudden changes would bring about market uncertainty, damage businesses, and hurt Americans. The signatories – including EV Auto, Carmax, and Caravan – instead call for a “gradual sunset” of the EV tax credits to avoid disruption to the used car market. “A multi-year transitional period would also provide the opportunity for Americans to continue adopting cleaner vehicles more affordably,” they add. The tax and budget bill put forward by Senate Republicans would end the $7,500 EV tax credit within 180 days after the law’s passage.
A report out today from the International Council on Clean Transportation estimates that the world’s private jets produced more greenhouse gas emissions in 2023 than all the flights that took off from Heathrow Airport — the world’s fourth busiest airport — that same year. Emissions from private jets increased 25% over the past decade. A few more interesting (though perhaps not surprising) tidbits from the report:
International Council on Clean Transportation
Solar power accounted for more than 10% of U.S. electrical output in April, while wind provided about 14%. As Michelle Lewis at Electreknotes, “solar is now producing more electricity than hydropower, biomass, and geothermal combined.”