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The Environmental Protection Agency just unveiled its argument against regulating greenhouse emissions from power plants.

In federal policymaking, the weight of the law can rest on a single word. When it comes to reducing planet-warming emissions from the power sector, that word is “significantly.” The Clean Air Act requires the Environmental Protection Agency to regulate any stationary source of emissions that “causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
The EPA has considered power plants a significant source of dangerous greenhouse gases since 2015. But today, Trump’s EPA said, actually, never mind.
A proposed rule published in the Federal Register on Wednesday argues that U.S. fossil fuel-fired power plants make up “a small and decreasing part of global emissions” and therefore are not significant, and do not require regulation under the law. The rule would repeal all greenhouse gas emission standards for new and existing power plants — both the standards the Biden administration finalized last year, which have been tied up in court, as well as the standards that preceded them, which were enacted by Obama in 2015.
In a separate proposal, the EPA also took steps to repeal limits on mercury and hazardous air pollutants from coal plants that were enacted last year, reverting the standard back to one set in 2012.
The argument that U.S. power plants make up a small sliver of global emissions and thus aren’t worth addressing is like having “a five-alarm fire that could be put out if you send out all the trucks, and you don’t send any of the trucks because no one truck could put the fire out by itself,” David Doniger, a senior attorney and strategist at the Natural Resources Defense Council, told me. “We just think that is a wacky reversal and a wacky interpretation of the Clean Air Act.”
When you add up every plug, power button, and light switch across the country, electricity usage produces 25% of U.S. greenhouse gas emissions each year. Over the past 30 years, American power plants have contributed about 5% of the total climate pollution spewed into the atmosphere worldwide.
In the global context, that may sound small. But in a recent report titled “The Scale of Significance," New York University’s Institute for Policy Integrity estimated that if U.S. power plants were a country, it would be the sixth biggest emitter in the world, behind China, the European Union, India, Russia, and the remainder of U.S. emissions. The report also notes that U.S. actions on emissions make other countries more likely to follow, due to technological spillovers that reduce the cost of decarbonization globally.
In addition to the significance finding, the EPA gave two other reasons for repealing the power plant rules. It argued that “cost-effective control measures are not reasonably available,” meaning there’s no economic way to reduce emissions at the source. It also said the new administration’s priority “is to promote the public health or welfare through energy dominance and independence secured by using fossil fuels to generate power.”
The first argument is an attempt to say that Biden’s standards flouted the law. In 2022, the Supreme Court ruled that the EPA could not simply tell states to reduce emissions from the power sector, which is what the Obama administration had initially tried to do. Instead, the agency would have to develop standards that could be applied on a plant-by-plant basis — so long as those rules were “cost-reasonable” and “adequately demonstrated.”
To comply with that ruling, Biden’s EPA based its standards on the potential to install carbon capture technology that can reduce flue gas emissions by 90%. The regulations would have required existing coal plants to install carbon capture by 2039, or else shut down. (To the chagrin of many energy system observers, the administration chose not to apply limits to existing gas-fired power plants.) But while fossil fuel companies and utilities had, in the past, asserted that carbon capture was viable, they deemed the standards impossible to meet.
Trump’s EPA is now agreeing. “In 2024,” Zeldin said on Wednesday, “rules were enacted seeking to suffocate our economy in order to protect the environment, to make all sorts of industries including coal and more disappear, regulate them out of existence.”
When Trump moved to overturn Obama’s power plant regulations during his first term, his EPA did not contest the significance of the sector’s emissions, and simply enacted a weaker standard. A week before he left office, the agency also finalized a rule that set the threshold for “significance” at 3% of U.S. emissions — which exempted major polluters like refineries, but still applied to power plants.
This time, Trump has a new apparent game plan: Strip the Clean Air Act of its jurisdiction over greenhouse gases altogether. Today’s action was the first step; EPA Administrator Lee Zeldin has said the agency will similarly “reconsider” emissions rules for cars and oil and gas drilling. But the cornerstone of the plan is to reverse what’s known as the “endangerment finding” — the 2009 conclusion that greenhouse gases present a threat to public health and welfare, and therefore are one of the pollutants EPA must address under the Clean Air Act.
“The Trump administration is trying to say, don’t worry about the Clean Air Act. It will never apply, so you can go back to your old ways,” said Doniger. But if the argument that power plant emissions are insignificant is a stretch, appraising greenhouse gas emissions as benign is inconceivable, he said. “The endangerment finding was based, in 2009, on a Denali-sized mountain of evidence. Since then, it’s grown to Everest-size, so there’s no way that they would be able to put together a rational record saying the science is wrong.”
These highly technical questions of whether emissions are “significant” or whether carbon capture is “adequately demonstrated” could soon be determined by a group of people who lack both the expertise to answer them and the inclination to wade through thousands of pages of atmospheric science and chemical engineering documents: judges.
Last year, the Supreme Court overturned a long-held precedent known as Chevron deference. That ruling means that the courts are no longer required to defer to an agency’s interpretation of statute — judges must make their own determinations of whether agencies are following the intent of the law.
When environmental groups begin challenging the EPA’s repeals in court, judges are “going to be bombarded with the need to make these highly technical, nuanced decisions,” Michael Wara, a lawyer and scholar focused on climate and energy policy at Stanford University, told me. He said the reason Chevron deference was established in the first place is that judges didn’t want to be making engineering decisions about power plants. “They felt extremely uncomfortable having to make these calls.”
The conservative Supreme Court overturned the precedent because of a sense that political decisions were being dressed up in scientific reasoning. But Wara doesn’t think the courts are going to like being put back into the role of weighing technical minutia and making engineering decisions.
“It’s a past that the courts didn’t like and they tried to engineer a way out of via the Chevron doctrine,” he said. “I would expect that we’re going to see a drift back toward a doctrine that looks a little bit more Chevron-like, maybe less deference to agencies. But it’s hard to predict in the current environment what’s going to happen.”
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A longtime energy analyst argues that there are no solutions to the hyperscale problem, only tradeoffs.
Sam Altman, Dario Amodei, and Elon Musk need sign-off from fewer than a dozen board members to commit their companies to multibillion-dollar moves. The power plants that supply their data centers need sign-off from 13 states (plus D.C.), thousands of generators, millions of customers, and a federal regulator whose ratemaking standard predates the personal computer in order to build anything new.
Everyone in tech knows about the CEOs of the foundational artificial intelligence labs. Only energy nerds know the names of the people running our grid operators. That anonymity is a feature, not a bug. Grid operators generally think in decades, not years. But right now, they’re telling the U.S. that it has years, not decades, to figure out its own new path forward.
For decades, this process sufficed for energy generators (and regulators) grown accustomed to gradual, predictable load growth. But over the past several years, the scale and speed of increasing energy demand has overwhelmed the supply -side’s ability to respond. The resulting strain on the grid has reverberated through every rung of the supply chain, delaying development timelines, increasing costs, and elevating energy from political conversations to dinner table discussions.
The loudest creaks and groans are coming from PJM Interconnection, North America’s largest grid operator. Residential bills in the PJM service area are climbing at a dizzying pace. Recent capacity auctions have ended with record prices, which PJM’s own market monitor blames on the explosive growth in data center power demand. Pennsylvania Governor Josh Shapiro has attempted to pressure PJM to lower its capacity price cap. Even Secretary of Energy Chris Wright has called on the Federal Energy Regulatory Commission to develop new procedures to help get data centers online faster.
David Mills, PJM’s CEO, published a 70-page report in May acknowledging that current market rules cannot keep pace with AI-driven load growth. And yet he also refused to recommend a path forward, leaving the decision to “state regulators and legislatures, to FERC, to consumers.”
The most essential grid infrastructure, he explained, “is not a price curve or a performance obligation — it is legitimacy.” In other words, what’s broken isn’t a parameter inside the capacity market, but rather the capacity market itself, along with the political conditions under which it operates. PJM calls this the “credibility trap”: high prices accurately signal that new investment is needed, but when those prices become politically untenable, government intervenes and investment stalls.
The fix, Mills writes, “requires structural choices, not just parameter adjustments.”
Mills is speaking to a deeper issue with the grid than its ability to respond to shifting market dynamics, which is that hyperscalers and grid operators are built to solve two different kinds of problems. Hyperscalers solve engineering problems with specifiable objectives, known constraints, verifiable outcomes. Engineering problems reward concentrated authority and unilateral decision-making.
Grid operators, on the other hand, solve coordination problems. The information they rely on to do so is dispersed across millions of stakeholders, continuously revised and often contradictory, and operators’ preferences are not so much known as they are revealed through deliberation. FERC’s standard for wholesale rates is not whether those rates are objectively “correct,” but rather whether the market settled on those rates through fair competition. The process does not just determine the answer, it essentially is the answer.
This construction is the category error driving the current AI-grid collision. The electricity grid is not an engineering problem with coordination problems attached. It is a coordination problem with engineering problems embedded in it. Treat it as the former and you lose all the information that gets generated in the process of market-based price discovery. You also lose all the buy-in that occurs when real people are faced with real trade-offs and have to make hard, binding choices.
Mills did lay out three possible structural paths in his May letter:
These pathways are not equivalent — unlike with an engineering problem, there are no cut-and-dried solutions here. There are only trade-offs and questions about who bears their consequences. Path C is likely the better answer, while Path A is more expedient. The gap between them is the work PJM’s constituents have to manage over the coming years. PJM may choose the wrong path, or arrive at the right one too late.
The alternative is not hypothetical. If hyperscalers aren’t willing to wait for PJM customers to decide which path they want to take (and recent history suggests they are not) they will build behind-the-meter generation, sign bespoke deals with regulated utilities, and restart dormant nuclear plants. America would be left with two grids, one for compute, one for everything else. The first will be reliable and expensive. The second will be cheaper, fragile, and stranded with the costs of the system the first walked away from. The market would lose the dispatch signal, the error-correcting price mechanism, and the legitimacy of the system that has reliably powered the Mid-Atlantic for two decades.
Economist Friedrich Hayek described the limits of humans’ planning capabilities better than anyone in his 1974 Nobel Prize lecture, using the metaphor of the craftsman shaping his handiwork versus the gardener cultivating growth. The craftsman thinks they can make a perfect tool but repeatedly runs up against the boundaries of their own knowledge, whereas the gardener learns to manage new information as it arises, tending not to the product itself but rather to the conditions that produce it.
Hyperscalers are not bad actors. They have legitimate interests and the political capital to help shape the grid’s future. But we should resist the Newtonian urge to meet unexpected, swiftly moving demand with equally swift supply. Markets and physical systems both tend toward equilibrium, but the former finds it through deliberation, not collision. Instead of trying to unilaterally craft a better grid, hyperscalers might find a better path if they work with the practitioners who already know how to garden.
On Greenland’s rare earths, Baker Hughes’ geothermal bet, China’s green H2
Current conditions: A sprawling heat dome stretching from the Midwest to the East Coast is raising temperatures for more than 200 million Americans upward of 100 degrees Fahrenheit this week • Three firefighters died battling wildfires along the Colorado-Utah border on Saturday, while winds fanned the flames of the Cottonwood Fire in southwest Utah into the largest blaze in the U.S. right now • Back-to-back tropical storms Mekkhala and Higos battered Japan’s coast over the weekend, leaving at least one dead in a landslide.
For much of the past decade, Japan looked primed for offshore wind development for the same reasons the American industry first took root in the Northeast: It’s coastal, densely populated, and — with its nuclear power stations either shut down or idled — it’s more reliant on fossil fuels that it doesn’t locally produce than ever before. But building turbines off Japan’s shores has proven tricky as project costs ballooned. On Friday, Norway’s Equinor announced its decision to close its offshore wind division in Japan, after failing to win any leases at repeated auctions over the past eight years. “This decision reflects a reassessment of Equinor’s strategic direction, with a strengthened focus on integrated power markets,” the company said in a statement on its Japanese website.
The move comes two years after Denmark’s Orsted exited Japan. Last August, a consortium led by the industrial giant Mitsubishi pulled out of Japan’s first three offshore wind projects citing what Reuters described as concerns of surging costs. Last October, as I told you at the time, the newly elected government of Prime Minister Sanae Takaichi postponed a key procedural step for setting government funding levels for offshore wind projects. Instead, as you may recall, Takaichi has put a heavy focus on restarting the nuclear reactors mothballed after the 2011 Fukushima disaster and even expanding the fleet.

For much of the 20th century, the geopolitical relevance of the world’s largest island stemmed from its central location as a kind of poker table situated right where Washington, Brussels, and Moscow meet. More recently, it’s been about Greenland’s untapped mineral riches. As polar ice recedes, the autonomous Danish territory has opened previously inaccessible deposits of rare earths and copper to prospecting. For Greenland, whose population of fewer than 60,000 is roughly 85% Indigenous, mining has offered an opportunity to diversify its economy beyond just fishing, augmenting an expanding tourism sector with some heavy industry. In 2017, when I visited local political officials in Nuuk, the capital, sustainability-minded liberals pined for an alternative development approach that took advantage of Greenland’s unique and pristine wilderness to, for example, build out a biomedical industry that draws upon research into the survival traits that allow life to thrive in harsh polar environments. At the time, the populists pitching industrialism as a fast track to independence seemed, to me at least, destined to win the argument. But the green techno-optimists may yet get the chance to prove their approach.
Last week, regulators in Nuuk formally rejected an Australian mining company’s bid to renew its exploration license for one of the most advanced rare earths projects in Greenland. The Western Australia-based Energy Transition Minerals had been locked in litigation with the Greenlandic government over whether its project could safely extract rare earths such as neodymium, praseodymium, and terbium for magnets and batteries without producing uranium as a byproduct. A previous government in Greenland had banned uranium mining in 2021, effectively halting ETM’s Kvanefjeld project. But the company had told investors in February that it “remains confident in the merits” of its position in negotiations with Greenland and “resolute in our intention to develop Kvanefjeld responsibly and in accordance with international best practice.” Just last week, the company published data showing that it had identified 10 new rare earth deposits “with uranium levels recorded below regulatory thresholds.” If it factored into negotiations at all, it wasn’t enough to change the outcome. Following the rejection on Friday, the company told Reuters: “Greenland has positioned itself as open for business. This decision creates a different impression.” In a sign of how the political winds may be shifting, the headline on Sunday’s front-page story in Sermitsiaq, one of Greenland’s only national newspapers, warned of the “environmental bombs” coming just from future American military bases on the island.
Of all the ways to build up, shore up, and clean up America’s grid, geothermal energy is easily among the most elegant, narratively speaking. We already quietly operate the world’s largest geothermal power plant. The new generation of companies racing to build new power stations require the very same battle-hardened drilling equipment, technologies, and workers that sustained the fracking boom and turned the U.S. into a top global producer of oil and gas. Many of the best-mapped hot rocks are located out west, where the federal government owns vast tracts of land, meaning the strong bipartisan consensus in support of geothermal energy development can, in fact, translate into faster approvals for projects. It’s a bet that one of the nation’s largest oilfield services providers is now making. Last week, Baker Hughes inked a deal with the geothermal developer Mantle Reach Power to support construction of as much as 500 megawatts of new generating capacity. As part of the deal, Baker Hughes will provide its drilling technologies, in a move the company said would “de-risk and deliver” on the promises of geothermal power. “Geothermal is a clean power solution that is proving to be a vital contributor to advancing sustainable energy development, with incredible potential to enhance U.S. energy security, support digital infrastructure, and ensure energy remains accessible and affordable,” Baker Hughes CEO Lorenzo Simonelli said in a statement.
Meanwhile, federal regulators just approved the environmental review of a new conventional geothermal project. Once complete, Ormat Technologies’ Pearl geothermal project in Nevada’s Esmeralda County will generate up to 60 megawatts of power. It’s just the latest approval of what Think Geo Energy called a series of approvals for Ormat’s proposed expansion in Nevada.
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Even before the Iran War, momentum was gathering in China for a green hydrogen buildout. The “most important low-carbon policy for 2025,” according to the analyst Jian Wu, was China’s decision to start subsidizing green hydrogen-related applications from central government coffers for the first time as Beijing sought to wean off fossil fuel imports and make use of solar and wind farms that had grown so abundant that the country’s grid operators recently phased out key incentives for renewables. Since the war, Beijing has turned its attention to shoring up its domestic fuel supplies, whether by increasing its domestic drilling, chemically-processing coal, or zapping water with enough renewable electricity to cleanly separate out the hydrogen molecules. Now it’s placing a big bet on the latter. China just put out a new five-year plan for the energy sector with a goal to install more than 2 million metric tons of annual capacity to produce green hydrogen by the end of the decade, Hydrogen Insight reported. That would more than double the existing capacity.
Overall, the document raises the target for China to generate half its electricity from non-fossil sources by 2030. But its goals for the wind and solar sectors represent a significant slowdown from the recent pace of development, indicating the government’s interest in diversifying its carbon-free electricity sector.
At present, I see three guarantees in my life: Death, taxes, and the likelihood that another Chinese nuclear plant will make significant enough progress to merit telling you about it. Readers hoping to understand the stakes of America’s incipient nuclear renaissance are wise to keep track of how successfully China’s state-owned reactor developers have been building their own domestically-sourced version of the flagship U.S. reactor design. I can’t keep track of how many times we have covered Chinese reactor milestones. But add this to the list: Last week, World Nuclear News reported, the second of six Hualong One reactors at the Taipingling nuclear power plant in Guangdong province started up, sustaining a chain reaction for the first time. The speed with which China General Nuclear completed the domestically-supplied reactor — the design for which is largely cribbed from the Westinghouse AP1000 — highlights the strategy American atomic energy advocates are increasingly promoting. A nonprofit called the Nuclear Scaling Initiative launched in 2024 to propound the idea of focusing on reactors that can be built identically over and over.
Investors debate the right way to bet on the nuclear revival, and the growing list of startups debuting on the stock market through reverse merger deals that require less scrutiny than traditional initial public offerings provides ample grist for disagreement. But here’s a surefire wrong way: Selling $1.5 million of call option contracts for your employer’s stock on the day of a major announcement that you are playing a pivotal role in overseeing. Yet that’s exactly what the Department of Justice accuses Casey Muggleston, a former engineering manager in charge of relicensing the shuttered Three Mile Island power plant, of doing on the very day his employer, Constellation, announced a landmark deal with Microsoft to reopen the facility to supply its data centers with electricity. If convicted, Muggleston could face a maximum of 25 years in prison, according to ABC27, a TV news station in Harrisburg, Pennsylvania.
There is a heat wave in Europe, the world’s fastest warming continent. And so, as you may have heard, a perennial topic of online climate discourse has returned: Why don’t more Europeans have air conditioning?
I’m partially convinced this is psy op, or at least a figment of how social media organizes attention. I have a hypothesis that various “For You” page algorithms, especially that of the social network X, began to reward content that performed unusually well across national borders a few years ago. Since then, the amount of America vs. Europe content has surged. (Of course, writers have been comparing American and European lifestyles for much longer than that.)
Suffice it to say, though: It’s a fraught topic. I’ve assumed that as extreme heat gets worse as the climate changes, Europeans will simply get on with it and install AC, much as Americans in the Pacific Northwest have done. Yet there are cultural and regulatory obstacles to AC’s growth in Europe.
I’m sure I’ll write about it in the future, but for now I want to get a grip on the facts themselves. And so as a Friday special, I present to you — the facts about European AC, as I understand it:
Thanks so much for reading, and talk soon.