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On Alaskan oil, CCS, and ‘zombie plants’
Current conditions: Flights have resumed to and from Sicily after Mt. Etna’s most powerful eruption in four years on Monday • There have already been almost half as many wildfire ignitions in the U.S. in 2025 as there were in all of 2024 • More than 700 people are feared dead in central Nigeria after heavy rains and flash floods.
USGS
The Department of the Interior announced Monday that it plans to rescind President Biden’s 2024 ban on drilling in more than half of the 23 million-acre National Petroleum Reserve-Alaska. The reserve holds an estimated 8.7 billion barrels of recoverable oil, but it is also some of the “last remaining pristine wilderness in the country,” The New York Times writes.
“Congress was clear: the National Petroleum Reserve in Alaska was set aside to support America’s energy security through responsible development,” Secretary Doug Burgum said in a statement announcing the proposed rule, further arguing that Biden’s ban had “ignored that mandate, prioritizing obstruction over production and undermining our ability to harness domestic resources at a time when American energy independence has never been more critical.” While the department’s announcement — which Burgum shared on Sunday at a heritage center in Utqiagvik, the largest city of the North Slope — was greeted with applause by attendees, Alaska’s senior manager for the Wilderness Society, Matt Jackson, said, “Everyone who cares about public lands and is concerned about the climate crisis should be outraged by this move to exploit America’s public lands for the benefit of corporations and the president’s wealthy donors.”
Applications for carbon capture and storage projects fell by 50% in the first quarter of the year as compared to last year, with no new permits having been approved since President Trump took office, the Financial Times reports. Industry experts blamed the uncertainty over the fate of federal grants and tax credits for the lowest application submissions since 2022 — a concern that isn’t likely to go away anytime soon, since the Energy Department canceled nearly $4 billion in clean energy grants last week, including carbon capture and sequestration projects proposed by Heidelberg Materials and Calpine, as my colleague Emily Pontecorvo has reported. By BloombergNEF’s projections, an estimated 35% of the 152 million metric tons of announced carbon capture capacity expected to come online by 2035 will be canceled before then.
The Department of Energy has ordered Constellation Energy to continue operating its Eddystone power plant through the end of the summer to prevent potential electricity shortfalls on the mid-Atlantic grid, the Associated Press reports. The oil and gas plant, located south of Philadelphia, had been scheduled to shut down its last remaining units this weekend, before Constellation received the DOE’s emergency order.
Late last month, the DOE similarly ordered a coal-fired plant in Michigan to continue operating past its planned May 31 shutdown date, although the chair of the Michigan Public Service Commission said at the time that no energy emergency existed, Bloomberg reports. By contrast, the decision to order Eddystone’s continued operation followed PJM Interconnection expressing concerns about summer grid reliability; the operator has since voiced support for the DOE’s order. But the move also has its critics: “The Department of Energy’s move to keep these zombie plants online will have significant public health impacts and increase electricity costs for people in Michigan and Pennsylvania,” argued Kit Kennedy, a managing director at the Natural Resources Defense Council.
The European Union’s climate science advisers have warned the bloc against softening its 2040 emission goals, arguing that such a move could “undermine domestic value creation by diverting resources from the necessary transformation of the EU’s economy.” The European Commission is set to propose a binding target for member nations to cut emissions by 90% by 2040 from 1990 levels, but it is also considering allowing countries to set lower targets for their domestic industries and make up the gap using carbon credits, Reuters reports. The European Scientific Advisory Board on Climate Change, which issued its warning against the carbon credit loophole on Monday, described the original 90% emission reduction goal as achievable and necessary for both the health of Europeans as well as improving security by limiting the bloc’s reliance on foreign fossil fuel sources.
Oregon-based battery energy storage system integrator Powin has filed a notice with the state warning that it could lay off 250 employees and shut down operations by the end of July. Per the notification, the layoffs would include the company’s chief executives, and “it is presently contemplated that the affected employees will be permanently terminated.”
Powin has the third most gigawatt-hours of batteries installed in the U.S. and the fourth most worldwide. Still, turbulence due to tariffs and the Inflation Reduction Act incentives has reverberated through the industry, Latitude notes. In a statement provided to the publication, Powin described “navigating a period of significant financial challenge, reflective of ongoing headwinds in the broader energy storage industry.”
The partial shading of Colorado grasslands by solar arrays could decrease water stress and increase plant growth during dry years by 20% or more, a new study in Environmental Research Letters has found.
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On rescissions, a nuclear deal, and a solar lawsuit
Current conditions: Thunderstorms today will span 1,000 miles from Detroit to Dallas • NOAA’s Hurricane Hunters aircrews will begin their 2025 season by gathering weather data from a disturbance off the Southeast coast of the U.S.• Romanian officials are rerouting a stream to prevent the further inundation and collapse of one of Europe’s largest salt reserves following historic floods.
The White House on Tuesday formally asked Congress to rescind $9.4 million in federal funds to make permanent some of the Department of Government Efficiency’s spending cuts. The 24-page proposal includes clawing back $1.1 billion from the Corporation for Public Broadcasting, which funds PBS and NPR, as well as $8.3 billion from the U.S. Agency for International Development and the African Development Foundation. Congress has 45 days to pass the measure.
Of particular note to Heatmap readers is the proposed recission of $1.7 billion of the $3.6 billion appropriated for the Economic Support Fund which, in the words of the State Department, “promotes the economic and political foreign policy interests of the United States by providing assistance to allies and countries in transition to democracy.” That has historically included working with partners to mitigate the impacts of climate change, although the White House said it aims to “refocus remaining resources on activities that align with an America First foreign policy.” Similarly, the White House asked Congress to rescind $125 million from the Clean Technology Fund, which provides financial resources for developing countries to invest in clean energy projects, arguing that it does “not reflect America’s values or put the American people first.” The White House also asked Congress to pull the full $460 million appropriated to Assistance for Europe, Eurasia, and Central Asia, which, it argued, has become a “mechanism for funding wasteful programs, including … climate programming.”
Facebook and Instagram’s parent company, Meta, has agreed to a 20-year deal with Constellation Energy to purchase the output of its Clinton Clean Energy Center, an Illinois-based nuclear plant. The deal, which begins in June 2027, includes a power purchase agreement that will entitle Meta to roughly 1.1 gigawatts of energy from the plant’s single nuclear reactor. It also allows the company to “buy the clean attributes of the nuclear-power generation to offset its less-green electricity use elsewhere” — including powering natural gas-reliant data centers in other parts of the country, The Wall Street Journal reports.
Though the financial terms weren’t disclosed, Constellation Chief Executive Joe Dominguez said, “It’s billions of dollars of capital that you’re signing up for to run a plant for 20 more years.” Meta will support the continued operation of the plant as well as upgrades and relicensing, which will prevent the facility’s premature closure, the companies said.
The California Supreme Court will hear arguments today brought by environmental groups in a lawsuit against the California Public Utility Commission for slashing the credits customers receive for selling electricity generated by rooftop solar back to the grid. The new financial structure, called NEM 3, went into effect in 2023, and in some cases cut credits by 80%. This has “stymied efforts to expand rooftop solar in the state, particularly in communities of color and low-income neighborhoods and led to huge layoffs in the solar industry,” Solar Power World explains. NEM 3 encouraged customers to use battery storage systems with their rooftop solar installations, a move viewed as friendlier to California utilities.
The Center for Biological Diversity, the Environmental Working Group, and the San Diego-based Protect Our Communities Foundation attempted to overturn NEM 3 after it went into effect, bringing their case to the California Court of Appeals, which ultimately upheld CPUC’s decision, leading to the California Supreme Court case. “It’s a fight that’s likely to continue, given that the Supreme Court appears poised to rule narrowly — and perhaps not even on the policy debate itself,” Politico’s California Climate newsletter notes.
Texas has removed BlackRock from a list of firms the state says “boycott” the fossil fuel industry, thereby allowing public agencies and pension funds to once again hire the firm, invest in its funds, and purchase shares of the asset manager, Bloomberg reports. State Comptroller Glenn Hegar specifically cited BlackRock’s retreat from climate action as influencing the decision.
BlackRock was first placed on the Texas divestment list in 2022 due to its involvement in the Climate Action 100+ initiative to reduce corporate greenhouse gas emissions, as well as Net Zero Asset Managers. Since then, BlackRock has removed itself from both programs. “We never set out to punish any of these firms, and the hope was always that any firm we included on the list would eventually take steps to ensure they were removed,” Hegar said in his remarks.
The National Weather Service is looking to hire back 125 meteorologists and specialists to its understaffed forecast offices, some of which have ceased around-the-clock monitoring and weather balloon launches due to lack of personnel, CNN reports. The move follows the NWS losing more than 560 employees this year due to the Trump administration’s efficiency cuts and early retirement offers, and functionally means lifting the federal hiring freeze for the agency so it can bolster its workforce heading into the fire, drought, extreme heat, and hurricane seasons. The National Oceanic and Atmospheric Administration is also looking to transfer 155 employees from better-staffed offices to “critical” positions at sparser offices, CNN adds.
But as I’ve reported, it is not so simple to restaff federal agencies after major layoffs. In addition to the deep staffing shortages that preceded and were exacerbated by Trump’s layoffs, the government has also damaged the appeal of working in the public sector. Most people don’t want to work for the government for the paycheck, Don Moynihan, a professor at the Ford School of Public Policy at the University of Michigan, told me last month, but rather for the “opportunity to do meaningful work, and for job stability and security” — both of which have been damaged by the administration’s ongoing hostility toward federal workers.
The American Clean Power Association
The U.S. installed 7.4 gigawatts of utility-scale solar, wind, and energy storage in the first three months of 2025 — the second-strongest quarter on record behind only Q1 of 2024, the American Clean Power Association reports.
Rob and Jesse pick apart Justice Brett Kavanaugh’s latest opinion with University of Michigan law professor Nicholas Bagley.
Did the Supreme Court just make it easier to build things in this country — or did it give a once-in-a-lifetime gift to the fossil fuel industry? Last week, the Supreme Court ruled 8-0 against environmentalists who sought to use a key permitting law, the National Environmental Policy Act, to slow down a railroad in a remote but oil-rich part of Utah. Even the court’s liberals ruled against the green groups.
But the court’s conservative majority issued a much stronger and more expansive ruling, urging lower courts to stop interpreting the law as they have for years. That decision, written by Justice Brett Kavanaugh, may signal a new era for what has been called the “Magna Carta” of environmental law.
On this week’s episode of Shift Key, Rob and Jesse talk with Nicholas Bagley, a University of Michigan law professor and frequent writer on permitting issues. He is also Michigan Governor Gretchen Whitmer’s former chief legal counsel. Rob, Jesse, and Nick discuss what NEPA is, how it has helped (and perhaps hindered) the environment, and why it’s likely to change again in the near future. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: It seems like what the court is doing here is not only basically using this to make a statement, it’s announcing a new jurisprudence on NEPA. We want you to start treating this law really, really differently than you’ve been treating it in the past. And like, we are going to come down into your room and force you to clean up this mess whenever we want to now because of how important we think this is.
Do you think that’s too strong a statement? It seems this is not only declaring what the court’s view on NEPA is, but almost declaring a new plan of action.
Nicholas Bagley: Like many Supreme Court decisions, I think it’s amenable to two competing interpretations. One is exactly as you say: It’s a new era of NEPA jurisprudence, and the basic rule of a NEPA case is now going to be that environmental groups lose. And so I think there’s no way to read the decision except as a walloping loss to environmental groups, at least as a matter of tone and, I think, intention by the Supreme Court.
But there is a narrower reading available, and one that suggests that maybe this decision won’t have as big an effect as maybe the Supreme Court justices want it to. And the reason for that is they didn’t close the door altogether on the judicial evaluation of the reasonableness of its actions. And when a court goes in and says, Hmm, has an agency acted arbitrarily? Again, that’s a multifaceted inquiry. It’s going to involve a lot of different factors. And the court says be deferential, but that’s actually always been the rule.
They use a lot of strident language here, but that strident language is not going to make a lick of difference if you get in front of a highly motivated judge who happens to dislike the project in question in a district court in New Mexico. And that happens. So if you’re an agency and you’re thinking to yourself, Can I cut back on the amount of environmental studies that I do? Can I not investigate these dopey alternatives? You might think to yourself, you know, I have like a 20% or a 30% chance, my odds are a little better than they were before — maybe even a lot better than they were before — at winning if this case is litigated. But they’re also not 100%. So maybe what I ought to do is keep doing what I’ve been doing just to be safe. And I think that’s at least a possibility. We don’t know how it’s going to play out on the ground.
The last thing I’ll say about this is, you said that the Supreme Court is going to act like your mom who’s going to come and tell you to clean up your room.
Meyer: Yeah, exactly. Yes.
Bagley: The trouble is it takes something like, what, 50 cases a year? There are hundreds of these cases brought, and there’s only so much the Supreme Court can do, and in closer cases I think it might just be inclined to let matters lie.
So, you know, I think it is reasonable to think that this is the Supreme Court’s effort to usher in a new era of unique NEPA jurisprudence. It is reasonable to think it is going to have some effects on agency behavior and some effects on lower court behavior. But it may not pretend the revolution that it looks like on its face.
Music for Shift Key is by Adam Kromelow.
Or, why developers may be loading up on solar panels and transformers.
As the Senate gets to work on the budget reconciliation bill, renewables developers are staring down the extremely real possibility that the tax credits they’ve planned around may disappear sooner than expected. In the version of the bill that passed the House, most renewables projects would have to begin construction within 60 days of the bill’s passage and be “placed in service” — i.e. be up and running — by the end of 2028 to qualify for investment and production tax credits.
But that’s tax law language. The reconciliation bill will almost certainly mean grim tidings for the renewable industry, but it will be Christmas for the tax attorneys tasked with figuring out what it all means. They may be the only ones involved in the energy transition to come out ahead, David Burton, a partner at Norton Rose Fulbright — “other than the lobbyists, of course,” he added with a laugh.
If the timeline restrictions on the investment and production tax credits make it to the final law, within 60 days after it’s enacted, developers will likely have to demonstrate that they’ve done some kind of physical work on a project — or spent a serious amount of money to advance it — in order to qualify for the tax credits.
The IRS has a couple of existing tests and guidelines: the 5% safe harbor and the physical work test.
The 5% harbor rule is the most common way to demonstrate a construction start, Burton told me. But it’s not cheap. That 5% refers to the total cost of a project, meaning that a company would have to shell out a lot of money very quickly to keep hold on those tax credits. For example, a 100-megawatt solar project that costs $1.25 per watt — about the average cost for a utility-scale project according to the National Renewable Energy Laboratory — would cost a developer $6.25 million in initial outlays just to prove they’ve started construction to the satisfaction of the IRS.
There are any number of things to spend that money on. “For solar, the most common thing is modules. But it could be inverters, it could be racking,” Burton said.
Right now there’s a particular rush to get transformers, the electrical equipment used to step up voltage for the transmission of electricity from a generator, Burton added. That’s because transformers also fall under the second construction guideline, the “physical work test.” Developers can say they’ve started construction “when physical work of a significant nature begins, provided that the taxpayer maintains a continuous program of construction,” according to the law firm Leo Berwick.
This “significant physical work” can be split into onsite and offsite work. The former is what one might logically think of as “construction” — something along the lines of pouring foundations for wind turbines or building a road to bring in equipment.
Then there’s offsite. Ordering equipment qualifies as offsite work, Burton explained. But it has to be something that’s not held in inventory — this is why modules for a solar project don’t qualify, Burton said — the equipment must be built to order. Transformers are custom designed for the specific project, and can run into the millions of dollars.
“The guidance says expressly that step-up transformers qualify for this,” Burton told me. “It’s the only thing that guidance expressly states qualifies.”
This all adds up to a likely rush for transformer orders, adding more pressure onto a sector that’s been chronically under-supplied.
“The transformer manufacturers’ phones are ringing off the hook,” Burton said. “If I were the CFO of a transformer manufacturer, I would be raising my prices.”
While these tax rules may seem bewildering to anyone not a lawyer, they’re hardly obscure to the industry, which is well aware of how developers might react and is positioning itself to take advantage of this likely rush to start projects.
PV Hardware, which makes a type of solar equipment called a tracker that allows solar panels to track the movement of the sun, sent out a press release last week letting the world know that “it has the capacity to immediately Safe Harbor 5GW of tracker product, offering solar developers a critical opportunity to preserve eligibility for current clean energy tax credits amid legislative uncertainty.” Its trackers, the release said, would help developers meet the “thresholds quickly, mitigating risk and preserving the long-term viability of their project.”
The prospect of tariffs has also been an impetus to get construction work started quickly, Mike Hall, chief executive of the solar and storage data company Anza, told Heatmap. “There’s a slug of projects that would get accelerated, and in fact just having this bill come out of the House is already going to accelerate a number of projects,” Hall said.
But for projects that haven’t started, complying with the rules may be more tricky.
“For projects that are less far along in the pipeline and haven’t had any outlays or expenditures yet, those developers right now are scrambling,” Heather Cooper, a tax attorney at McDermott Will and Emery, told Heatmap. “I’ve gotten probably about 100 emails from my clients today asking me questions about what they can do to establish construction has begun on their project.”
And while developers of larger projects will literally have to do — or spend — more to qualify for tax credits under the new rule, they may still have an advantage.
“It’s increasingly clear to us that large-scale developers with the balance sheet and a pre-existing safe harbor program in place,” Jefferies analyst Julien Dumoulin-Smith wrote to clients last week, “are easily best positioned to keep playing the game.”
Additional reporting by Jael Holzman