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It’s known as the 50% rule, and Southwest Florida hates it.
After the storm, we rebuild. That’s the mantra repeated by residents, businesses and elected officials after any big storm. Hurricane Milton may have avoided the worst case scenario of a direct hit on the Tampa Bay area, but communities south of Tampa experienced heavy flooding just a couple weeks after being hit by Hurricane Helene.
While the damage is still being assessed in Sarasota County’s barrier islands, homes that require extensive renovations will almost certainly run up against what is known as the 50% rule — or, in Southwest Florida, the “dreaded 50% rule.”
In flood zone-situated communities eligible to receive insurance from the National Flood Insurance Program, any renovations to repair “substantial damage” — defined as repairs whose cost exceeds 50% of the value of the structure (not the land, which can often be quite valuable due to its proximity to the water) — must bring the entire structure “into compliance with current local floodplain management standards.” In practice, this typically means elevating the home above what FEMA defines as the area’s “base flood elevation,” which is the level that a “100-year-flood” would reach, plus some amount determined by the building code.
The rule almost invites conflict. Because just as much as local communities and homeowners want to restore things to the way they were, the federal government doesn’t want to insure structures that are simply going to get destroyed. On Siesta Key, where Milton made landfall, the base flood elevation ranges from 7 feet to 9 feet, meaning that elevating a home to comply with flood codes could be beyond the means — or at least the insurance payouts — of some homeowners.
“You got a 1952 house that’s 1,400 square feet, and you get 4 feet of water,” Jeff Brandes, a former state legislator and president of the Florida Policy Project, told me on Wednesday, explaining how the rule could have played out in Tampa. “That means new kitchens and new bathrooms, all new flooring and baseboards and drywall to 4 or 5 feet.” That kind of claim could easily run to $150,000, which might well surpass the FEMA threshold. “Now all of the sudden you get into the 50% rule that you have the entire house up to current code levels. But then you have to do another half-a-million above what [insurance] paid you.”
Simple probability calculations show that a 100-year flood (which is really a flood elevation that has a 1-in-100 chance of occurring every year) has a more than 25% chance of occurring during the lifetime of a mortgage. If you browse Siesta Key real estate on Zillow, much of it is given a 100% chance of flooding sometime over the course of a 30-year mortgage, according to data analysis by First Street.
Sarasota County as a whole has around 62,000 NFIP policies with some $16.6 billion in total coverage (although more than 80% percent of households have no flood insurance at all). Considering that flood insurance is required in high-risk areas for federally-backed mortgages and for new homeowners insurance policies written by Florida’s state backed property insurer of last resort, Citizens, FEMA is likely to take a close interest in whether communities affected by Milton and Helene are complying with its rules.
If 2022’s Hurricane Ian is any indication, squabbles over the 50% rule are almost certain to emerge — and soon.
Earlier this year, FEMA told Lee County, which includes Fort Myers and Cape Coral, that it was rescinding the discount its residents and a handful of towns within it receive on flood insurance because, the agency claimed, more than 600 homeowners had violated the 50% rule after Hurricane Ian. Following an outcry from local officials and congressional representatives, FEMA restored the discount.
In their efforts to avoid triggering the rule, homeowners are hardly rogue actors. Local governments often actively assist them.
FEMA had initiated a similar procedure in Lee County the year before, threatening to drop homeowners from the flood insurance program for using possibly inaccurate appraisals to avoid the 50% rule before eventually relenting. The Fort Myers News Press reported that the appraisals were provided by the county, which was deliberately “lowering the amount that residents could use to calculate their repairs or rebuilds” to avoid triggering the rule.
Less than a month after Ian swept through Southwest Florida, Cape Coral advised residents to delay and slow down repairs for the same reason, as the rule there applied to money spent on repairs over the course of a year. Some highly exposed coastal communities in Pinellas County have been adjusting their “lookback rules” — the period over which repairs are totaled to see if they hit the 50% rule — to make them shorter so homeowners are less likely to have to make the substantive repairs required.
This followed similar actions by local governments in Charlotte County. As the Punta Gordon Sun put it, “City Council members learned the federal regulation impacts its homeowners — and they decided to do something about it.” In the Sarasota County community of North Port, local officials scrapped a rule that added up repair costs over a five-year period to make it possible for homeowners to rebuild without triggering elevation requirements.
When the 50% rule “works,” it can lead to the communities most affected by big storms being fundamentally changed, both in terms of the structures that are built and who occupies them. The end result of the rebuilding following Helene and Milton — or the next big storm to hit Florida’s Gulf Coast — or the one after that, and so on — may be wealthier homeowners in more resilient homes essentially serving as a flood barrier for everyone else, and picking up more of the bill if the waters rise too high again.
Florida’s Gulf Coast has long been seen as a place where the middle class can afford beachfront property. Elected officials’ resistance to the FEMA rule only goes to show just how important keeping a lid on the cost of living — quite literally, the cost of legally inhabiting a structure — is to the voters and residents they represent.
Still, said Brandes, “There’s the right way to come out of this thing. The wrong way is to build exactly back what you built before.”
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Mining companies have asked for federal support — but this isn’t what most of them had in mind.
It took Donald Trump just over two months to potentially tank his own American mineral supply chain renaissance.
At the time Trump entered office, it looked like the stars could align for an American mining boom. Mining jobs had finally recovered to pre-COVID levels, thanks in part to demand for the metals required to engineer the transition away from fossil fuels (and, paradoxically, continued demand for coal). A lot of the gains in mining stocks were thanks to the Inflation Reduction Act, which offered a huge tax break to mining and metal processing companies and mandated that the consumer EV credit apply only to cars with a certain percentage of domestically-sourced material.
Trump 2.0 was poised to capitalize on that progress and unleash permits for U.S. mines under pared-back environmental regulations. In March, he issued an executive order to boost production of minerals in the U.S. — a maneuver that, combined with trade actions targeting China specifically, could have been the final step to bring about a mining and mineral processing resurgence in the U.S. and wrest some global market control away from China and other countries under its sphere of influence. In 2024, more than half of the mineral commodities consumed by the U.S. were imported from foreign sources, according to the U.S. Geological Survey.
Trump’s new global tariffs, however, sent the broader stock market into freefall, mining stocks very much included. He exempted many metals from the tariffs in their rawest form, but that was all the relief miners got. There were few exceptions for refined metal products or the inputs used for mining and mineral exploration. At the same time, metals prices — including commodities integral to battery production such as copper and lithium — are falling, with producers warning that now may be the high point for prices this year.
Part of this pricing issue is because the market appears to expect lower demand for new products that require those metals, such as EVs. Another part, as U.S. officials have said previously, is that China has been flooding the globe with minerals sold at a loss to win market influence. For this reason, D.C. policy wonks had been lobbying for legislation to address this pricing issue.
Now Trump has piled onto the industry's problems. This period could be especially painful for American mining companies, as it is exceedingly possible that a combination of lower commodity prices and higher costs for machinery and parts shatters whatever tailwinds were buoying many U.S. mining and metals projects. We may not see projects canceled yet, but a sense of extreme anxiety is sweeping the minds of many in the mining sector.
“If you look at the carrot of the pro-domestic mining policy versus the stick of the recessionary impacts from the demand side and the availability of capital impact from the supply side, the carrot is a raindrop and the stick is an ocean,” Emily Hersh, a veteran of the mining industry, told me.
Al Gore III, head of the D.C.-based electric vehicle and battery mineral supply chain association ZETA, said he agreed with Hersh’s assessment: “She’s right. We’ve been waging war against a raindrop for the last year, and now we’re in the ocean.”
Hersh has worked on mining projects across the world and taught me almost everything I know about the mining business, a sector I covered for years as a beat reporter for S&P Global and E&E News. Over the weekend, she explained to me the basic math behind why these tariffs will be bad for U.S. mining: It’ll be more expensive to buy the things abroad that companies need to build a mine, she said, from the drill rigs used in exploration to the parts required for extraction and ore storage. We don’t make a lot of those devices in the U.S., and building factories to do so will now be more expensive, too, making it more difficult to scale up what would be required to avoid higher project costs. Whatever benefits there are from trade pressure to choose U.S. mines for sourcing is outweighed by, well, everything else.
It’s important to remember how integral longstanding U.S. trade partners are to the global mining industry. Canada is one of the world’s largest producers of hardrock minerals, and at least 40% of the world’s mining companies are listed on the Toronto Stock Exchange. Japan — now hit with a 24% tariff — was positioned to be an ally in U.S. efforts to wean off China-linked minerals and signed a minerals trade agreement under Biden. Even the Democratic Republic of Congo, which produces most of the world’s cobalt for batteries, was hit with a 10% tariff, leading Trump officials to try and appease the Congolese government by offering billions of dollars in investment.
Mining capacity is not the only constraint. We don’t process the ore we mine here, either. Take copper, a crucial industrial metal that many companies mine in America but then ship to Mexico or Canada to be refined for use in everything from cars to transmission lines and consumer electronics. This is why news of the tariffs has already led to record shipments of processed copper products into the U.S. as companies try to get ahead of the tariffs.
The final, crucial pain point: Recessions, like low metals prices, are usually horrible for mining projects and the companies developing them.
The 2008 recession was infamous for being the moment when the U.S. lost to China on battery metals; mining companies already hurting under sagging metals prices chose to sell assets and stakes in developers in Africa and elsewhere to Chinese companies, paving the way for the global resource power imbalance Trump likes to bemoan. The 2020 Covid-19 market shock also did little to help mining projects — metals prices went up because mines had to shut down, but demand and investment also decreased. That moment translated into a short-term boon for metals trading, with excess material already floating about in commerce. But little more than that.
“You have an administration here who is trying to torpedo international financial order with a misguided idea that some phoenix is going to magically rise from the ashes,” Hersh said. “That’s not how markets work, and that’s not what history has demonstrated happens in any scenario that parallels what the Trump administration is doing now.”
Ben Steinberg, a D.C. lobbyist who helps run an ad hoc advocacy group of mining and battery material companies, put it to me more succinctly: “These projects take a long time to develop. Capital can be somewhat patient, but we know it is generally impatient. The uncertainty is incredibly destabilizing,” said Steinberg, whose coalition of companies includes ones with mining projects that have offtake agreements with Tesla and other EV manufacturers. “The tariffs aren’t what I think about when I think about more mining in the U.S. I’m thinking of permitting.”
Gore, who also represents Tesla through his trade association, told me the tariffs will mean “everything is going to move a bit slower,” including the “momentum towards onshoring a lot of the supply chain.”
“I think that in general, capitalism works when you are using signals very judiciously — using carrots far more than you use sticks,” he told me.
The National Mining Association is also carefully signaling concern about the tariffs. NMA represents more than just the interests of battery metals — it also includes coal companies and gold miners that are rare beneficiaries of the market’s tailspin. But in a statement provided exclusively to Heatmap, NMA spokesperson Conor Bernstein offered a cautious note about interpreting these restrictionist trade actions as potentially good for mining.
“Targeted tariffs can be a part of an effective policy response,” Bernstein said. “At the same time, this is an incredibly complex time for any company to be operating, and we are working closely with our members to gather information on actual and potential impacts, are engaged with the administration to provide that information, and are committed to working with the administration to rebuild American supply chain security from the mine up.”
Ian Lange, an academic at the Colorado School of Mines, offered a blunt assessment of the tariffs: They’re an opportunity for a small group of domestic producers who have successfully argued to “reshape the supply chain away from their competitors.”
For years, individual mining companies have been seeking tariffs and trade protections on specific minerals they claim are unfairly subsidized and cheaply distributed by China and other nations. These efforts, which rose to prominence in Trump 1.0 Washington over uranium and fertilizers, have become more popular and bipartisan in D.C. as part of a tit-for-tat with China over minerals used in batteries, including graphite.
If there’s any silver lining in this moment, Lange said, it is the fact that this “bunch of people who’ve been complaining get their shot.”
“You wanted this!” Lange exclaimed. “So you better take advantage of it.”
On financial shocks, severe flooding in the South, and data centers
Current conditions: Streets turned into rivers and at least 30 people were killed in the Democratic Republic of Congo after torrential rain • A month’s worth of snow is expected to fall over just two days in Moscow this week • Warm temperatures in Central Florida could break heat records Monday.
Financial markets in Asia and Europe plummeted this morning in response to President Trump’s tariffs. U.S. markets are also expected to tumble, with the S&P 500 approaching a 20% decline into a bear market. On the energy front, the fallout hasn’t spared domestic U.S. battery makers who will need to source affordable construction materials if they want to scale their operations. Bay Area-based lithium-sulfur battery producer Lyten told Heatmap’s Katie Brigham that the company needs to build a lot of infrastructure, and tariffs on building materials like steel, aluminum, cement, and drywall will likely make doing so much more expensive. “The building of physical factories, those materials, the infrastructure to do that, the equipment to do that, a lot of that is coming through international trade,” said Lyten’s CEO Keith Norman. And as Heatmap’s Emily Pontecorvo reported, the tariffs could scramble Trump’s plans to expand liquefied natural gas exports, with rising costs threatening to derail contracts for LNG export terminals. “The tariffs (not to mention the uncertainty about how long they’ll last) could also turn off potential buyers from signing long-term contracts with the U.S.,” Pontecorvo said. “They may begin to look elsewhere, or impose retaliatory tariffs, as China has already done.”
Meanwhile the fate of the Inflation Reduction Act hangs in the balance as Congress works on its joint budget resolution. Republican Rep. Mark Amodei of Nevada told Gabby Birenbaum from The Nevada Independent that preserving the 45X advanced manufacturing production credit and the 30D new clean vehicle tax credit is a red line for him. Birenbaum says Amodei is “the first Republican to take that stance.”
At least 18 people have died in violent storms that began last week and endured through the weekend, bringing tornadoes and severe flooding to states across the Midwest and South. Days of relentless rain caused rivers to overflow their banks in Arkansas, Kentucky, Missouri, Mississippi, Texas, Tennessee, Indiana, Illinois, and Ohio. More than a foot of rain was reported in parts of Kentucky and Tennessee. The storm systems rolled through at a time when the Trump administration has been cutting jobs within the National Oceanic and Atmospheric Administration and the Federal Emergency Management Agency. According toThe Associated Press, the National Weather Service’s forecast offices are currently critically understaffed, making it harder to issue storm warnings and survey damage.
Flooding in Missouri.Scott Olson/Getty Images
The Trump administration is considering closing the Department of Energy’s Office of Clean Energy Demonstrations, Bloombergreported. The OCED was created in 2021 under the Biden administration and is aimed at testing and scaling clean energy technologies including carbon capture, advanced nuclear, long-duration storage, and clean hydrogen. The proposed plan, according to Bloomberg, would see the agency’s staff and funding slashed significantly. Whatever remains will be rolled into the DOE. The administration has already been considering cutting funding for some of the OCED’s seven hydrogen hubs scattered across the country, something lawmakers on both sides of the aisle have pushed back against. Also up for elimination is a Texas direct air capture project run by Occidental Petroleum’s subsidiary 1PointFive that was selected to receive a slice of $1.2 billion from the Bipartisan Infrastructure Law.
Resources for the Future published its annual energy outlook Monday. The analysis collates and compares 13 possible scenarios from seven recent energy outlooks published by various companies and organizations like the International Energy Agency, BloombergNEF, and oil giants BP and OPEC. This year’s report forecasts significant headwinds for the energy transition as nations move to prioritize energy security over emissions reduction, the United States shifts its energy policies dramatically, and a surge in global electricity demand looms.
Across all 13 scenarios RFF examined, fossil fuel energy generation stays flat or declines through 2050, “but the degree of decline and share of generation in 2050 depends on the scale of climate ambition.” Solar and wind power grow substantially to account for up to 74% percent of global generation by 2050 in all scenarios. And while everyone is worried about how AI and data centers will spike electricity demand, the RFF report notes that “data center growth is only a small part of total growth in U.S. electricity needs” through 2050, and says the impact from data centers is assumed to be “modest relative to other sectors.” Thanks to improvements in energy efficiency, global energy demand grows slowly or even declines in all scenarios. The carbon intensity of energy falls, as well, which RFF notes marks “a change from the last several decades.”
But what does this all mean for emissions? The report finds that while emissions are expected to decline over the next 25 years, governments’ current efforts are not going to be enough to keep warming below 2 degrees Celsius by 2100. Just four of the scenarios have us reaching net-zero emissions by 2050. The wide range of emissions projections “highlights the gap between existing efforts and the goals articulated by countries” in their published climate plans.
RFF
Tesla’s shares are falling this morning after Wedbush Securities analyst Dan Ives, described as “one of Wall Street’s biggest fans of Tesla Inc.,” cut his price target for the company by 43% from $550 to $315. In a note to clients on Sunday, Ives indicated that new tariffs and growing backlash against CEO Elon Musk’s role within the Trump administration are both bad for business. “This situation is not sustainable and the brand of Tesla is suffering by the day as a political symbol,” Ives wrote. “Our longstanding bull view of Tesla remains, but there is no denying this is a pivotal moment of truth for Musk to turn things around … or darker days are ahead.” Tesla’s stock is down more than 10% in early trading today. The company’s share price rose on the back of President Trump’s election as it became clear Musk would be one of his key advisors, but that post-election bump has since vaporized. There have been recent rumors that Musk will soon step away from his role leading the Department of Government Efficiency.
The Department of Homeland Security subjected Cameron Hamilton, currently the acting administrator of FEMA, to a lie detector test to figure out whether he leaked information about meetings in which DHS Secretary Kristi Noem discussed curbing FEMA’s abilities to respond to natural disasters. Hamilton passed.
Bay Area battery maker Lyten sources 80% of its components in the U.S. But its ability to scale still depends on trade.
China dominates the lithium-ion battery supply chain at nearly every level, from critical minerals processing and refining to cell manufacturing and battery pack assembly. So now that the nation faces a cumulative 54% tariff rate, one might think domestic battery manufacturers in the United States — especially those exploring lithium-ion alternatives — would be celebrating their good fortune.
But the actual picture is markedly more mixed. Take Bay Area-based lithium-sulfur battery producer Lyten. On the one hand, Lyten is particularly well positioned to take advantage of the administration’s focus on building out U.S. supply chains. The company has been around since 2015, and last year snatched up a shuttered 200-megawatt factory from Northvolt after the Swedish battery giant declared bankruptcy.
Lyten aims to use entirely domestic inputs in its battery — a goal it’s been chasing since well before Wednesday’s tariff announcement. It currently sources “well over 80%” of its core components domestically, which is largely possible because its lithium-sulfur battery chemistry doesn’t require critical minerals such as nickel, manganese, cobalt, or graphite, which are mined globally and almost always refined in China. Sulfur, Lyten’s key cathode material, is cheap and abundant in the U.S. The company has ambitious plans to start producing at the old Northvolt facility this year, and is planning a much larger gigafactory in Reno, Nevada for 2027.
But Lyten’s plans for scale will depend on its ability to source affordable construction materials. The company’s timeline hasn’t changed for now, but Trump’s tariffs have introduced a big new question mark into its future operations. “We're not drawing any conclusions quite yet,” Lyten’s Chief Sustainability Officer Keith Norman told me.
As Norman emphasized, Lyten is fundamentally “a hard tech company that needs to build a lot of infrastructure” in order to scale, and tariffs could make that a much more expensive proposition. “The building of physical factories, those materials, the infrastructure to do that, the equipment to do that, a lot of that is coming through international trade,” Norman told me.
“The reality is the energy transition is a manufacturing transition,” Norman told me. “There’s nothing in the energy transition that doesn’t require pretty significant investments in manufacturing and build out.” Therefore, tariffs that hit construction materials and equipment will put emergent domestic energy companies — climate friendly or not — at risk of a slowdown. “And so I think that’s the real question — are there ways to build a managed tariff strategy that creates that opening for accelerating U.S. manufacturing?” Norman questioned.
Import duties of 25% on steel and aluminum went into effect in March, so while these building materials are exempt from the sweeping tariffs announced on Wednesday, those additional costs are already shaking out through the economy. There were also plenty of other building materials that were not exempt, such as cement and drywall. What’s more, according to the consultancy Off-Highway Research, which provided its data to Construction Briefing, the tariffs are expected to add about $4.2 billion to the cost of imported construction equipment — think things like bulldozers, cranes, and dump trucks. Costs for HVAC systems, plumbing, and electrical equipment are also set to rise.
For his part, Norman is more worried about the impact of Trump’s tariffs on the EV market than the stationary energy storage market. The electric vehicle industry is still trying to figure out how to move beyond early adopters to achieve mass market success, he told me, a process that tariffs could seriously hamper as they raise the price of innumerable EV components. Battery storage, on the other hand, is already seeing “gangbusters growth,” as Norman put it. So while tariffs will almost certainly make energy storage systems — largely dominated by lithium-ion batteries — more expensive, “In general, we expect that market to continue to grow incredibly rapidly, partially on the backs of the fact that power demand is growing rapidly,” he told me.
Lyten sees itself as a part of that rapid growth. In theory, lithium-sulfur batteries could achieve a greater energy density than standard lithium-ion, though problems with conductivity and cycle life remain. So while Lyten ultimately wants to produce batteries for use in electric vehicles and energy storage systems that are cheaper and more efficient than the industry standard, earlier applications could include use in drones, satellites, and two- and three-wheelers, which don’t have as high performance requirements.
Norman thinks he’s set up the company to survive tough times, if not precisely a global trade war. “Bringing a new battery chemistry to market, we told ourselves we need to be able to survive two major market downturns,” Norman said. “And so we’ve designed the company, the cap structure, our funding strategy, all around being ready for things like this.”
Editor’s note: This piece has been updated to correct Norman’s title.