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And for his energy czar, Doug Burgum.
When Trump enters the Oval Office again in January, there are some climate change-related programs he could roll back or revise immediately, some that could take years to dismantle, and some that may well be beyond his reach. And then there’s carbon capture and storage.
For all the new regulations and funding the Biden administration issued to reduce emissions and advance the clean energy economy over the past four years, it did little to update the regulatory environment for carbon capture and storage. The Treasury Department never clarified how the changes to the 45Q tax credit for carbon capture under the Inflation Reduction Act affect eligibility. The Department of Transportation has not published its proposal for new safety rules for pipelines that transport carbon dioxide. And the Environmental Protection Agency has yet to determine whether it will give Texas permission to regulate its own carbon dioxide storage wells, a scenario that some of the state’s own representatives advise against.
That means, as the BloombergNEF policy associate Derrick Flakoll put it in an analysis published prior to the election, “the next administration and Congress will encounter a blank canvas of carbon capture infrastructure rules they can shape freely.”
Carbon capture is unique among climate technologies because it is, in most cases, a pure cost with no monetizable benefit. That means the policy environment — that great big blank canvas — is essential to determining which projects actually get built and whether the ones that do are actually useful for fighting climate change.
The next administration may or may not decide to take an interest in carbon capture, of course, but there’s reason to expect it will. Doug Burgum, Trump’s pick for the Department of the Interior who will also head up a new National Energy Council, has been a vocal supporter of carbon capture projects in his home state of North Dakota. Although Trump’s team will be looking for subsidies to cut in order to offset the tax breaks he has promised, his deep-pocketed supporters in the oil and gas industry who have made major investments in carbon capture based, in part, on the 45Q tax credit, will not want to see it on the chopping block. And carbon capture typically enjoys bipartisan support in Congress.
Congress first created the carbon capture tax credit in 2008, under the auspices of cleaning up the image of coal plants. Lawmakers updated the credit in 2018, and then again in 2022 with the Inflation Reduction Act, each iteration increasing the credit amount and expanding the types of projects that are eligible. Companies can now get up to $85 for every ton of CO2 captured from an industrial plant and sequestered underground, and $180 for every ton captured directly from the air. Combined with grants and loans in the 2021 Bipartisan Infrastructure Law, the changes have driven a surge in carbon capture and storage projects in the United States. More than 150 projects have been announced since the start of 2022, according to a database maintained by the International Energy Agency, compared to fewer than 100 over the four years prior.
Many of these projects are notably different from what has been proposed and tried in the past. Historically in the U.S., carbon capture has been used on coal-fired power plants, ethanol refineries, and at natural gas processing facilities, and almost all of the captured gas has been pumped into aging oil fields to help push more fuel out of the ground. But the new policy environment spurred at least some proposals in industries with few other options to decarbonize, including cement, hydrogen, and steel production. It also catalyzed projects that suck carbon directly from the air, versus capturing emissions at the source. Most developers now say they plan to sequester captured carbon underground rather than use it to drill for oil.
Only a handful of projects are actually under construction, however, and the prospects for others reaching that point are far from guaranteed. Inflation has eroded the value of the 45Q tax credit, Madelyn Morrison, the government affairs director for the Carbon Capture Coalition, told me. “Coupled with that, project deployment costs have really skyrocketed over the past several years. Some folks have said that equipment costs have gone up upwards of 50%,” she said.
Others aren’t sure whether they’ll even qualify, Flakoll told me. “There is a sort of shadow struggle going on over how permissive the credit is going to be in practice,” he said. For example, the IRA says that power plants have to capture 75% of their baseline emissions to be eligible, but it doesn’t specify how to calculate those baseline emissions. The Treasury solicited input on these questions and others shortly after the IRA passed. Comments raised concerns about how projects that share pipeline infrastructure should track and report their carbon sequestration claims. Environmental groups sought updates to the reporting and verification requirements to prevent taxpayer money from funding false or inflated claims. A 2020 investigation by the inspector general for tax administration found that during the first decade of the program, nearly $900 million in tax credits were claimed for projects that did not comply with EPA reporting requirements. But the Treasury never followed up its request for comment with a proposed rule.
Permitting for carbon sequestration sites has also lagged. The Environmental Protection Agency has issued final permits for just one carbon sequestration project over the past four years, with a total of two wells. Fifty-five applications are currently under review.
Carbon dioxide pipeline projects have also faced opposition from local governments and landowners. In California, where lawmakers have generally supported the use of carbon capture for achieving state climate goals, and where more than a dozen projects have been announced, the legislature placed a moratorium on CO2 pipeline development until the federal government updates its safety regulations.
The incoming Congress and presidential administration could clear away some of these hurdles. Congress is already expected to get rid of or rewrite many of the IRA’s tax credit programs when it opens the tax code to address other provisions that expire next year. The Carbon Capture Coalition and other proponents are advocating for another increase to the value of the 45Q tax credit to adjust it for inflation. Trump’s Treasury department will have free rein to issue rules that make the credit as cheap and easy as possible to claim. The EPA, under new leadership, could also speed up carbon storage permitting or, perhaps more likely, grant primacy over permitting to the states.
But other Trump administration priorities could end up hurting carbon capture development. The projects with the surest path forward are the ones with the lowest cost of capture and multiple pathways for revenue generation, Rohan Dighe, a research analyst at Wood Mackenzie told me. For example, ethanol plants emit a relatively pure stream of CO2 that’s easy to capture, and doing so enables producers to access low-carbon fuel markets in California and Washington. Carbon capture at a steel plant or power plant is much more difficult, by contrast, as the flue gas contains a mix of pollutants.
On those facilities, the 45Q tax credit is too low to justify the cost, Dighe said, and other sources of revenue such as price premiums for green products are uncertain. “The Trump administration's been pretty clear in terms of wanting to deregulate, broadly speaking,” Dighe said, pointing to plans to axe the EPA’s power plant rules and the Securities and Exchange Commission’s climate disclosure requirements. “So those sorts of drivers for some of these projects moving forward are going to be removed.”
That means projects will depend more on voluntary corporate sustainability initiatives to justify investment. Does Amazon want to build a data center in West Texas? Is it willing to pay a premium for clean electricity from a natural gas plant that captures and stores its carbon?
But the regulatory environment still matters. Flakoll will be watching to see whether lax monitoring and reporting rules for carbon capture, if enacted, will hurt trust and acceptance of carbon capture projects to the point that companies find it difficult to find buyers for their products or insurance companies to underwrite them.
“There will be a more of a policy push for [CCS] to enter the market,” Flakoll said. “But it takes two to tango, and there's a question of how much the private sector will respond to that.”
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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.
The Grain Belt Express was just the beginning.
The anti-renewables movement is now coming for transmission lines as the Trump administration signals a willingness to cut off support for wires that connect to renewable energy sources.
Last week, Trump’s Energy Department with a brief letter rescinded a nearly $5 billion loan guarantee to Invenergy for the Grain Belt Express line that would, if completed, connect wind projects in Kansas to areas of Illinois and Indiana. This decision followed a groundswell of public opposition over concerns about land use and agricultural impacts – factors that ring familiar to readers of The Fight – which culminated in Republican Senator Josh Hawley reportedly asking Donald Trump in a meeting to order the loan’s cancellation. It’s unclear whether questions around the legality of this loan cancellation will be resolved in the courts, meaning Invenergy may just try to trudge ahead and not pick a fight with the Trump administration.
But the Grain Belt Express is not an anomaly. Across the country, transmission lines tied to both renewable sources and more conventional fuels – both fossil and nuclear – are facing a growing chorus of angst and anguish from the same crowds that are fighting renewable energy. In some ways, it’s a tale as old as widespread transmission itself. But I am also talking about farmers, ranchers, and rural towns who all now mention transmission lines in the same exasperated breaths they use to bemoan solar, wind, and battery storage. Many of the same communities fighting zero-carbon energy sources see those conflicts as part of a broader stand against a new age of tech industrial build-out – meaning that after a solar or wind farm is defeated, that activism energy is likely to go elsewhere, including expanding the grid.
I’ve been trying to figure out if there are other situations like Grain Belt, where a project facing local headwinds could potentially be considered no longer investable from a renewables-skeptic federal perspective. And that’s why since Invenergy lost its cash for that project, I have been digging into the Cimarron Link transmission line, another Invenergy facility proposed to carry wind energy from eastern Oklahoma to the western part of the state, according to a map on the developer’s website.
Do you remember the campaign to ban wind energy in Oklahoma that I profiled at the start of this year? Well, one of the most prominent scalps that this activism movement has claimed was bagged in late 2024, when they successfully pressured Governor Kevin Stitt into opposing a priority transmission corridor proposed by the Biden administration. Then another one of the activists’ biggest accomplishments came through an anti-wind law enacted this year that would, among other things, require transmission projects to go through a new certification program before the state’s Corporation Commission. Many of the figures fighting Cimarron and another transmission line project – NextEra’s Heartland Spirit Connector – are also involved in fighting wind and solar across the state, and see the struggles as part and parcel with each other.
Invenergy appears to want to soldier on through this increasingly difficult process, or at least that’s according to a letter some landowners received that was posted to Facebook. But these hurdles will seriously impact the plausibility that Cimarron Link can be completed any time soon.
Now, on top of these hurdles, critics want Cimarron Link to get the Grain Belt treatment. Cimarron Link was told last fall it was awarded north of $300 million from the Energy Department as a part of DOE’s Transmission Facilitation Program.
Enter Darren Blanchard, a farmer who says his property is in the path of Cimarron Link and has been one of the main public faces of opposition against the project. Blanchard has recently been pleading with the DOE to nix the disposition of that money if it hasn’t been given already. Blanchard wrote the agency a lengthy request that Cimarron get similar treatment to Grain Belt which was made public in the appendix of the agency’s decision documents related to the loan cancellation (see page 23 of this document).
To Blanchard’s surprise, he got a reply from the Transmission Facilitation Program office “responding on behalf of” Energy Secretary Chris Wright. The note, to him, read like they wanted him to know they saw his comment: “We appreciate you taking the time to share your views on the project,” it read.
Now, this might’ve been innocuous. I haven’t heard back from the Energy Department about Cimarron Link and I am personally skeptical of the chances a grant is canceled easily. There is no high-level politician calling for the cancellation of this money right now, like there was in Sen. Josh Hawley and the Grain Belt Express.
But I do believe that if there is a will, there is a way with the Trump administration. And as anti-renewables sentiments abound further, there’ll be more ways to create woe for transmission projects like Cimarron that connect to renewable resources. Should voices like Blanchard aim their sights at replicating what happened with Grain Belt, well… bets may be off.
Over the next few weeks, I will be chronicling more fights over individual transmission projects connected to zero-carbon sources. Unique but with implications for a host of proposed wires across the country, they’re trend-setters, so to speak. Next week I’ll be tackling some power lines out West, so stay tuned.
On America’s new crude record, coal costs, and Hungary’s SMR deal
Current conditions: Coastal storms are pushing water levels on New England’s shores two feet above normal levels • Japan just set a new temperature record of more than 106 degrees Fahrenheit • A cold front is settling over South Africa, bringing gale-forces to KwaZulu-Natal on the east coast.
The Department of Energy issued a report on Tuesday calling into question the global consensus on climate change and concluding that global warming poses less economic risk than previously believed. “The rise of human flourishing over the past two centuries is a story worth celebrating. Yet we are told — relentlessly — that the very energy systems that enabled this progress now pose an existential threat,” Secretary of Energy Chris Wright said in a statement. “Climate change is real, and it deserves attention. But it is not the greatest threat facing humanity.” But scientists whose work appeared in the 151-page report decried an analysis they said “fundamentally misrepresents” their research. I rounded up some comments they’ve made over the past couple of days:
A pumpjack in the Permian Basin.Joe Raedle / Getty Images
U.S. crude oil production surged to a record 13.49 million barrels per day in May, despite concerns about oversupply driving prices down to four-year lows, according to a Reuters analysis of data from the U.S. Energy Information Administration. The milestone represents a win for President Donald Trump, who has repeatedly urged the industry to “drill, baby, drill,” even as rival producers in the Organization of the Petroleum Exporting Countries increased output to maintain market share, making profits difficult to turn in the U.S.
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The Bureau of Ocean Energy Management has rescinded its designated areas for offshore wind development in federal waters. The move de-designated more than 3.5 million acres off the continental shelf in the Gulf of Maine, the New York Bight, California, Oregon, the Central Atlantic, and the Gulf of Mexico for potential wind development.
The agency said it was acting in accordance with Secretary of the Interior Doug Burgum’s order this week to weed out any policies that give preferential treatment to wind and solar. While the de-designation will not affect existing leases, the decision makes permanent the temporary pause on offshore wind leases Trump issued via an executive order on his first day in office in January.
In May, Energy Secretary Chris Wright issued an emergency order directing the utility Consumers Energy to keep Michigan’s J.H. Campbell coal plant operating for another 90 days, through August 20, to meet surging electricity demand on the Midwest’s grid. In a public filing as part of its quarterly earnings announced Thursday, Consumers Energy named the price of complying with the administration's order so far: $29 million. And that’s just the cost of operating the plant through June 30. The company said it plans to recoup the cost from ratepayers. The filing did not indicate what the total cost would be for the full three-month period.
Even before Trump returned to office, coal plant retirements were slowing. As Heatmap’s Matthew Zeitlin wrote last year, “Coal and gas were being retired so steadily over the past 20 years not just because plants were aging, but also because power use was essentially flat from the early 2000s through, essentially, yesterday. This meant that older plants — especially dirty coal plants — became uneconomic to run, especially as natural gas prices began to fall.” Coal plant retirements dropped last year to their lowest level since 2011, according to the Energy Information Administration, though at least as of February they were projected to increase this year again by 65%.
Of all the small modular reactors competing for a shot in the West’s ballyhooed nuclear renaissance, GE-Hitachi Nuclear Energy’s 300-megawatt model is among the most promising. Ontario’s public utility just broke ground on what could be the world’s first BWRX-300s. The Tennessee Valley Authority has plans to build the second set. And Finland, Sweden, Estonia, and Poland are all considering buying their own. Add Hungary to that list. Piggybacking off the Polish project, Hungary on Wednesday signed a letter of intent with Poland’s Synthos Green Energy to back construction of up to 10 BWRX-300 reactors, the U.S. Embassy in Hungary announced. “This is American engineering at its best — the kind of trusted technology that reflects the strength, reliability, and excellence of the American industrial base,” Chargé d’Affaires Robert Palladino said in a speech at the signing event.
The move comes as the U.S. looks to broaden its grip on Europe’s nuclear sector. Westinghouse, the legendary American nuclear developer behind the only two new reactors built from scratch in a generation in the U.S., is building Poland’s first atomic power station. Earlier this week, Slovakia skipped its competitive bidding process and picked Westinghouse to construct its next nuclear plant. But after struggling to build its own reactors at home, the U.S. has to prove it can deliver on the deals.
“Wind farms: Loud, ugly, harmful to nature. Who says that? These giants are standing tall against fossil fuels, rising up out of the ocean like a middle finger to CO2,” Samuel L. Jackson says in a new minute-long TV commercial from Swedish wind giant Vattenfall advertising seaweed snacks from aquatic crops grown on the artificial reefs around the behemoth turbine foundations. It may be one of the most defiant, if expletive-laden, defenses made yet of the industry the Trump administration is bent on drowning.