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In aligning with fossil fuel companies, the administration is deepening skepticism of carbon removal.
For as long as people have been talking about building machines that suck carbon dioxide from the atmosphere, the concept has sparked fierce debate. Would such a tool be used the way that scientists envision — alongside aggressive emission cuts? Or would it be co-opted to prolong dependence on fossil fuels?
Suddenly these questions have become less theoretical. Last month, Carbon Engineering, one of the first companies to actually build a “direct air capture” machine, was acquired by Occidental Petroleum, a fossil fuel company that plans to use the technology to market “net-zero oil.” The Biden administration has also selected Occidental as a potential recipient of one of two major grants, worth up to $600 million each, to build a “DAC hub” in South Texas near Corpus Christi. As part of the same announcement, the Department of Energy gave funding to oil and gas companies in California, Alaska, and Alabama for the early planning stages of additional hubs.
“Cutting back on our carbon emissions alone won’t reverse the growing impacts of climate change," Energy Secretary Jennifer Granholm said in a press release for the DAC hub awards. "We also need to remove the CO2 that we’ve already put in the atmosphere,”
She’s right. The UN’s Intergovernmental Panel on Climate Change says pursuing carbon removal is “unavoidable” if the world hopes to limit warming to safer temperatures — but it will only work if we stop burning so much oil and gas. In handing the reins of this new industry to fossil fuel companies, the administration has confused the message, stoking the mistrust of those already skeptical of the technology, and giving carbon removal projects with no fossil fuel connections a steeper hill to climb to earn support.
It hasn’t helped that Occidental’s CEO, Vicki Hollub, has described DAC as a “license to continue to operate.” Shortly after the Biden administration’s announcement, she told NPR that thanks to this technology, “there’s no reason not to produce oil and gas forever.” When I reached out to Occidental for clarification, a spokesperson denied that the company will use the technology to pump more oil than it otherwise would. He pointed me to another statement from Hollub in 2022 where she said producing net-zero oil was about “just meeting demand,” and that as long as there was demand for oil, it was better to meet it with a lower-carbon product.
But the aforementioned events have invited fierce blowback. On Wednesday, 17 climate and environmental justice organizations sent a letter to Secretary Granholm calling on the DOE to revoke its funding offers to fossil fuel companies. “There may be paths forward for equitable, climate-positive DAC, but they do not look like the one we’re on now,” they wrote.
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Climate advocates and community groups are not just concerned about giving fossil fuel companies a license to keep producing. Their objection is tied to where these projects are being deployed. The DAC hubs are almost all being planned in economically distressed areas that have hosted fossil fuel production for decades. The bipartisan infrastructure law, which funded the hubs, requires that at least two meet those characteristics.
This makes some economic and political sense. If you need to build pipelines to transport CO2 or drill into the ground to store it, this is where the knowhow resides. The requirement is also intended as a way to create new jobs and transition workers in places that might otherwise be devastated by the decline of the oil and gas industry. But since fossil fuel companies have a track record of polluting these areas with cancerous chemicals and fighting regulations, locals worry about the risks of putting new technology into their hands.
These fears are not unfounded. There are different types of direct air capture technology, but many require energy or heat to separate and compress the CO2 after it is collected, which could create additional pollution depending on how it is generated. The compressed carbon may then have to be transported, via pipeline, to its final destination. While CO2 pipelines have a good safety record, a highly publicized accident in Mississippi that hospitalized 45 people has fanned fears of ruptures.
Perhaps the biggest worry is around what happens next. Some companies, including Occidental, inject CO2 into depleted oil fields in an effort to squeeze the last drops out. But DOE-funded hubs will not be permitted to do this. Instead, the compressed CO2 will likely be injected into a saline aquifer, a layer of permeable rock thousands of feet underground, which is capped by an impermeable layer that prevents the CO2 from leaking out.
Some geological storage wells have been storing carbon successfully for decades, but there are only a handful of such sites operating around the world. A recent report to Congress detailing U.S. experience with CO2 injection summarized several potential risks to human health associated with it, including drinking water contamination, leaks, effects on soil health, and earthquakes. However, it also noted that CO2 injection wells have more stringent construction, testing, and monitoring regulations than other types.
In Kern County, California, where three DAC hubs have been proposed, all of this invokes deja vu. Juan Flores, an organizer for the Center on Race, Poverty and the Environment, one of the signatories to Wednesday’s letter, told me it reminds people of fracking, which brought increased risk of respiratory problems, cancer, preterm birth, and psychological stress to the area. “They experimented with our communities, they denied the new dangers for many years,” he said. “Now our community members are saying, ‘this again?’”
The DOE hubs program required companies to submit a plan for providing community benefits when they applied for funding. But in Kern County, oil and gas companies have squandered their goodwill, Dan Ress, a staff attorney at the Center told me. For example, the California Resources Corporation, an oil and gas company that won an $11 million DOE grant to do an engineering study for a hub in Kern County, recently supported a multi-million dollar campaign to repeal hard-won regulations banning oil drilling next to homes and schools. “This is the same company saying, oh yeah, we want to be good neighbors and do great community benefits? Absolutely not, get out of here,” said Ress.
The feeling of being the unwitting subjects of an experiment also came up in my conversation with Roishetta Ozane, a community organizer in Lake Charles, Louisiana. That’s where another DAC hub called Project Cypress, which could receive up to $600 million from the DOE, is under development. “We don't want to be guinea pigs for something that's never been tried and tested before on this scale,” Ozane told me.
Ozane is the director of the Vessel Project, a grassroots group supporting the needs of black, indigenous, people of color, and low income people in an industrial city where petrochemical production has dramatically expanded over the past decade. (The group was not a signatory on the letter.) She said Lakes Charles is overburdened with pollution and still recovering from a spate of destructive hurricanes in 2020. “We're saying, hey, you might be right. These DAC hubs might work. But why are you testing it in our community?”
There are no fossil fuel companies involved in Project Cypress. But that does not give Ozane any peace of mind. She worries it would “open the floodgates” for companies to keep releasing toxic emissions into the area, as long as they pay someone to pull carbon out of the air afterward.
Multiple people I spoke with in Louisiana and Texas also brought up a history of local officials giving heavy industry a free pass on pollution and major tax breaks. Why should they believe that the DAC hubs will be any better regulated or bring in much-needed revenue?
But local attitudes along the Gulf Coast are varied and complex. Prior to the hubs announcement, Data for Progress, a polling and research non-profit that spearheaded Wednesday’s letter, held a series of focus groups about DAC in Louisiana and Texas. One key finding, Celina Scott-Buechler, a senior fellow who led the research, told me, was that there was a tension between concerns like Ozane’s, and an awareness that fossil fuel companies historically have been the primary sources of good jobs in these communities.
“I think people make a calculated risk decision,” one focus group participant in Lake Charles said. “They're like, oh, so I could be around these chemicals that could have a long-term effect. I may not see them for the next 20, 30 years, but if it's going to take care of my family and give my family a nice home and a good vehicle to drive, then I'll work tirelessly to provide that for my family. But I may die at 65.”
Another stressed that there was a “big need for jobs” and that “sometimes people's need for employment overshadows whether it's good for the environment or not.”
Patrick Nye, who lives in the Corpus Christi area near where Occidental is building its South Texas hub, embodies this tension. Nye owns an energy company that produces oil and generates wind power, but he also runs an environmental group that’s fighting the local expansion of liquified natural gas export facilities and proposed seawater desalination projects. When I asked about his oil business, he said he didn’t have the heart to let his employees go and puts his profits toward his activism.
Nye is skeptical that direct air capture will work, but he thinks it’s worth trying. “If this works, this may help save the planet,” he said. He also sees a lot of potential opportunities flowing to the local university and its graduates. And he thinks the hub will be far enough away from where people live that if things go wrong, few will be impacted. Occidental is building its hub in a largely undeveloped area about 45 miles south of Corpus Christi on King Ranch, the largest private ranch in the country.
At the same time, he’s worried local officials will just rubber stamp the project without proper study. “King Ranch is really well known, they're very politically positioned,” he said. “They have a lot of clout to get this thing done, and it has to be looked at with a very fine tooth comb.”
In addition to requesting DOE withdraw grants for fossil fuel companies, the letter sent Wednesday makes a pitch for how the agency can roll out the DAC hubs program more equitably. The authors propose that projects in areas with extractive industries be co-created or co-owned by communities, actively work to reduce local pollution, have rigorous data transparency, and that locals should have the right to refuse them. They also want community benefits plans to be legally binding, with consequences if companies fail to comply.
All these requirements might sound unfair to companies who are just trying to tackle climate change and make a better world, Scott-Buechler acknowledged. “The question that I ask is, a better world for whom?”
I asked her what it would look like in practice for a community to co-own a DAC hub, considering these are first-of-a-kind projects that are incredibly expensive and financially risky. Would communities be taking on those risks?
This was something that Data for Progress and other groups were still studying, she said, looking at possibilities like having the project held in public trust, or replicating the solar cooperative model. She recognizes that not all communities will be interested in ownership, but thinks it should be an option.
When I asked the DOE how it defends the choice to support fossil fuel company-led projects, a spokesperson told me the agency is “leveraging these companies' significant expertise in managing large energy infrastructure projects and applying this experience to developing DAC projects that are cost-effective, efficient, equitable, and environmentally responsible.”
She also emphasized that Occidental and Project Cypress have only been selected for “award negotiation” and not “officially” awarded yet. “If projects are awarded, DOE and the awardee will have frequent, meaningful engagement with the impacted local community and impacted workers throughout the lifecycle of the project,” she said.
Meanwhile, the agency has also launched a public process to develop a set of safety, environmental stewardship, accountability, and community engagement guidelines for all carbon management projects that it will encourage project developers to (voluntarily) abide by.
But the Biden administration seems eager to support Occidental in its pursuit of direct air capture and encourage more oil and gas companies to follow its lead. During a carbon capture conference last year, Secretary Granholm applauded Oxy’s CEO Vicki Hollub for investing in carbon removal, saying this reflects “exactly the kind of bold thinking we need more of.” Earlier this year, she told a room of oil and gas executives, “We need the energy sector stepping up … few are better positioned to crack open cost-effective carbon management.”
The debate over whether direct air capture is a moral hazard is likely to rage on long after these projects are up and running. But the money is going out the door now. “This is something that is not just coming anymore, it's here,” said Scott Buechler. “Is there a collective vision for what might be able to come next?”
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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.”
Look more closely at today’s inflation figures and you’ll see it.
Inflation is slowing, but electricity bills are rising. While the below-expectations inflation figure reported by the Bureau of Labor Statistics Wednesday morning — the consumer price index rose by just 0.1% in May, and 2.4% on the year — has been eagerly claimed by the Trump administration as a victory over inflation, a looming increase in electricity costs could complicate that story.
Consumer electricity prices rose 0.9% in May, and are up 4.5% in the past year. And it’s quite likely price increases will accelerate through the summer, thanks to America’s largest electricity market, PJM Interconnection. Significant hikes are expected or are already happening in many PJM states, including Maryland,New Jersey,Delaware, Pennsylvania, and Ohio with some utilities having said they would raise rates as soon as this month.
This has led to scrambling by state governments, with New Jersey announcing hundreds of millions of dollars of relief to alleviate rate increases as high as 20%. Maryland convinced one utility to spread out the increase over a few months.
While the dysfunctions of PJM are distinct and well known — new capacity additions have not matched fossil fuel retirements, leading to skyrocketing payments for those generators that can promise to be on in time of need — the overall supply and demand dynamics of the electricity industry could lead to a broader price squeeze.
“Trump and JD Vance can get off tweets about how there’s no inflation, but I don’t think they’ll feel that way in a week or two,” Skanda Amarnath, executive director of Employ America, told me.
And while the consumer price index is made up of, well, almost everything people buy, electricity price increases can have a broad effect on prices in general. “Everyone relies on energy,” Amarnath said. “Businesses that have higher costs can’t just eat it.” That means higher electricity prices may be translated into higher costs throughout the economy, a phenomenon known as “cost-push inflation.”
Aside from the particular dynamics of any one electricity market, there’s likely to be pressure on electricity prices across the country from the increased demand for energy from computing and factories. “There’s a big supply adjustment that’s going to have to happen, the data center demand dynamic is coming to roost,” Amarnath said.
Jefferies Chief U.S. Economist Thomas Simons said as much in a note to clients Wednesday. “Increased stress on the electrical grid from AI data centers, electric vehicle charging, and obligations to fund infrastructure and greenification projects have forced utilities to increase prices,” he wrote.
Of course, there’s also great uncertainty about the future path of electricity policy — namely, what happens to the Inflation Reduction Act — and what that means for prices.
The research group Energy Innovation has modeled the House reconciliation bill’s impact on the economy and the energy industry. The report finds that the bill “would dramatically slow deployment of new electricity generating capacity at a time of rapidly growing electricity demand.” That would result in higher electricity and energy prices across the board, with increases in household energy spending of around $150 per year in 2030, and more than $260 per year in 2035, due in part to a 6% increase in electricity prices by 2035.
In the near term, there’s likely not much policymakers can do about electricity prices, and therefore utility bills going up. Renewables are almost certainly the fastest way to get new electrons on the grid, but the completion of even existing projects could be thrown into doubt by the House bill’s strict “foreign entity of concern” rules, which try to extricate the renewables industry from its relationship with China.
“We’re running into a set of cost-push dynamics. It’s a hairy problem that no one is really wrapping their heads around,” Amarnath said. “It’s not really mainstream yet. It’s going to be.”
In some relief to American consumers, if not the planet, while it may be more expensive for them to cool their homes, it will be less expensive to get out of them: Gasoline prices fell 2.5% in May, according to the BLS, and are down 12% on the year.
Six months in, federal agencies are still refusing to grant crucial permits to wind developers.
Federal agencies are still refusing to process permit applications for onshore wind energy facilities nearly six months into the Trump administration, putting billions in energy infrastructure investments at risk.
On Trump’s first day in office, he issued two executive orders threatening the wind energy industry – one halting solar and wind approvals for 60 days and another commanding agencies to “not issue new or renewed approvals, rights of way, permits, leases or loans” for all wind projects until the completion of a new governmental review of the entire industry. As we were first to report, the solar pause was lifted in March and multiple solar projects have since been approved by the Bureau of Land Management. In addition, I learned in March that at least some transmission for wind farms sited on private lands may have a shot at getting federal permits, so it was unclear if some arms of the government might let wind projects proceed.
However, I have learned that the wind industry’s worst fears are indeed coming to pass. The Fish and Wildlife Service, which is responsible for approving any activity impacting endangered birds, and the U.S. Army Corps of Engineers, tasked with greenlighting construction in federal wetlands, have simply stopped processing wind project permit applications after Trump’s orders – and the freeze appears immovable, unless something changes.
According to filings submitted to federal court Monday under penalty of perjury by Alliance for Clean Energy New York, at least three wind projects in the Empire State – Terra-Gen’s Prattsburgh Wind, Invenergy’s Canisteo Wind, and Apex’s Heritage Wind – have been unable to get the Army Corps or Fish and Wildlife Service to continue processing their permitting applications. In the filings, ACE NY states that land-based wind projects “cannot simply be put on a shelf for a few years until such time as the federal government may choose to resume permit review and issuance,” because “land leases expire, local permits and agreements expire, and as a result, the project must be terminated.”
While ACE NY’s filings discuss only these projects in New York, they describe the impacts as indicative of the national industry’s experience, and ACE NY’s executive director Marguerite Wells told me it is her understanding “that this is happening nationwide.”
“I can confirm that developers have conveyed to me that [the] Army Corps has stopped processing their applications specifically citing the wind ban,” Wells wrote in an email. “As I have understood it, the initial freeze covered both wind and solar projects, but the freeze was lifted for solar projects and not for wind projects.”
Lots of attention has been paid to Trump’s attacks on offshore wind, because those projects are sited entirely in federal waters. But while wind projects sited on private lands can hypothetically escape a federal review and keep sailing on through to operation, wind turbines are just so large in size that it’s hard to imagine that bird protection laws can’t apply to most of them. And that doesn’t account for wetlands, which seem to be now bedeviling multiple wind developers.
This means there’s an enormous economic risk in a six-month permitting pause, beyond impacts to future energy generation. The ACE NY filings state the impacts to New York alone represent more than $2 billion in capital investments, just in the land-based wind project pipeline, and there’s significant reason to believe other states are also experiencing similar risks. In a legal filing submitted by Democratic states challenging the executive order targeting wind, attorneys general listed at least three wind projects in Arizona – RWE’s Forged Ethic, AES’s West Camp, and Repsol’s Lava Run – as examples that may require approval from the federal government under the Bald and Golden Eagle Protection Act. As I’ve previously written, this is the same law that bird conservation advocates in Wyoming want Trump to use to reject wind proposals in their state, too.
The Fish and Wildlife Service and Army Corps of Engineers declined to comment after this story’s publication due to litigation on the matter. I also reached out to the developers involved in these projects to inquire about their commitments to these projects in light of the permitting pause. We’ll let you know if we hear back from them.