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Energy Innovation has some bad news for House Republicans.
House Republicans are racing to overcome intraparty disagreements and deliver their “one big, beautiful” budget bill to the Senate before the Memorial Day weekend. As currently written, the bill would render the nation’s clean energy tax credits largely inaccessible, severely impairing clean energy development.
We now have a more detailed picture of what’s at stake if this bill or something like it makes it all the way to the president’s desk. The research firm Energy Innovation modeled all of the energy and environment provisions in the version of the bill that passed the House Budget Committee on Sunday night. It found that the proposed changes to oil and gas leasing, greenhouse gas emissions standards, and tax credits, could cost the United States more than $1 trillion in GDP over the next decade compared to a world where these policies remain untouched.
That number is a reflection of the narrow subset of policies the group modeled and does not take into account Trump’s tax cuts. In theory, those could have a positive effect on GDP that offsets some of the loss. But the effects on energy costs and jobs on their own tell a grim story.
By 2030, the average American would spend $120 more per year on transportation and home energy costs than they otherwise would. By 2035, the increase would climb to more than $230. Lower demand for clean technologies like electric vehicles and solar panels would kill more than 700,000 potential jobs across the economy in 2035.
Energy Innovation isn’t the only group warning of dire consequences. The bill “represents a crisis for America’s ability to build the energy infrastructure we need to meet surging demand,” Abigail Ross Hopper, the CEO and president of the Solar Energy Industries Association said in a statement yesterday. The group estimates that the bill would put 287 factories that serve the solar industry at risk of closing or never opening in the first place. Most of those are in red states.
The forecasts stem from key changes the GOP is proposing to make to tax credits that incentivize wind and solar development, domestic manufacturing, and consumer adoption of electric vehicles and energy efficiency upgrades. The bill would end these subsidies earlier than currently planned (though how much earlier is currently in flux), and impose stricter materials sourcing requirements, tighter development timelines, and more rigid project finance rules for the years they remain in effect, making it nearly impossible to use them.
As a result, fewer wind, solar, and energy storage projects would get built. Those that did get built would cost more, meaning that natural gas would set the price in energy markets more frequently. Natural gas would also be more expensive because of higher demand. The Energy Information Administration already expects natural gas costs to rise this year and next, even without changes to tax incentives. Altogether, generating electricity would cost about 50% more in 2035 than it otherwise would, according to Energy Innovation, which would translate to roughly 17% higher bills for consumers.
Budget hawks in the House are now pushing for an even more aggressive phase-out of the green tax credits before they agree to send their legislation to the Senate, and the Republican leadership can afford to lose just three votes on the floor, giving them a narrow window to please everyone. But the earlier phase-out would have little impact on Energy Innovation’s findings, Robbie Orvis, the senior director for modeling and analysis for the group, told me. The existing provisions in the bill that prevent companies from sourcing materials from China would be so difficult to meet that the model assumes the affected credits would be unclaimable beginning next year.
The modeling shows a similar effect in transportation costs. Terminating the tax credit for electric vehicles would lower demand for EVs and increase demand for gasoline, causing prices at the pump to go up. Less demand for EVs would also mean fewer domestic jobs producing them, and fewer jobs producing the components that go into them. Then there’s the overall tightening of purse strings that would come as a result of higher energy costs, which could reduce hiring still further.
Orvis said the estimates for job loss are likely conservative, as the model looks at changes in demand for EVs and other clean technologies but doesn’t do a good job accounting for the changes in supply that would result from early repeal of 45X, the clean manufacturing tax credit.
Notably, energy costs go up in the model despite provisions in the bill that are designed to lower the cost of oil and gas. Those include more frequent lease sales and lower royalty rates for companies that pay to drill on federal lands and waters. But Energy Innovation found that demand-driven price increases more than offset any price declines resulting from these measures.
The tax credit termination also isn’t the only factor here. Energy Innovation included the House’s proposed repeal of the Environmental Protection Agency’s emissions standards for cars and trucks, which amplified the effects. This provision may not make it into the final text, however, as the special rules governing the budget reconciliation process in the Senate prohibit policies that aren’t budgetary in nature. As the nonprofit Environmental Defense Fund put it in a memo to reporters, the regulations were issued to protect public health, and while they do result in costs and benefits for Americans and companies, they do not change the federal budget. “Even if Republican leadership tries to claim any budgetary impacts here, they would be clearly incidental to the main purpose of the proposed legislation,” the group said.
Of course, at least seven Senate Republicans have been vocal about their disapproval of the House’s treatment of the tax credits, so the whole thing may still be subject to change.
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A conversation with Matt Weiner on the Fix Our Forests Act and why the Senate needs to take action — now.
After the Los Angeles County wildfires in January, it seemed like the federal government was finally poised to do something about the decades of flawed forestry practices and land management policies that have turned the West into a tinderbox. On January 23, before the L.A. fires were even fully extinguished, the House of Representatives passed the Fix Our Forests Act on a bipartisan 279–141 vote, queuing up a bill that proponents say would speed and simplify forest and wildfire management projects that have gotten bogged down in a regulatory morass.
Then … not much happened. Though Republican Senators John Curtis of Utah and Tim Sheehy of Montana teamed up with Democrats John Hickenlooper of Colorado and Alex Padilla of California to write their own version of the Fix Our Forests Act for the Senate, the bill stalled after a summer spent focused on the reconciliation bill. Meanwhile, more wildfires made headlines.
Matt Weiner, the founder and CEO of the nonprofit advocacy group Megafire Action, wants to bring some urgency back. This week, the organization launched a six-figure ad campaign in Washington, D.C., aimed at spurring senators to get back to working on wildfire resilience and forestry reform. Though the bill’s approach is divisive — the House version drew initial pushback from more than 100 environmental organizations, including the Sierra Club, Natural Resources Defense Council, and League of Conservation Voters, for opening up large tracts of federal forest to logging, among other concerns — Weiner told me “there’s no huge substantive holdup in the Senate that is keeping it from getting to 60 votes.”
I caught up with Weiner this week to learn more about where things stand with the Fix Our Forests Act and talk through some of the bill’s more controversial regulatory rollbacks. Our conversation has been edited and condensed for clarity.
Catch our readers up: Why the Fix Our Forests Act, and why now?
We’re looking at a generational opportunity to change the way we do land management. This is the most significant change Congress has considered since the Healthy Forest Restoration Act, and maybe even since the original National Forest Act.
The smoke impacts of wildfires are killing more people than the flames. Wildfires are the most significant driver of PM 2.5 emissions growth in the country right now. The clean air community has done a fantastic job of reducing industrial emissions of PM 2.5, which has had real public health impacts, but those gains are in danger of vanishing because of the growth of wildfire smoke exposure.
Then there’s the climate. If you care about carbon emissions, this is a huge opportunity at a time when a lot of other climate issues seem to be on the backburner. The 2020 fire season in California — a particularly bad year — released enough carbon to undo 20 years of the state’s emissions reduction progress. The 2023 Canadian wildfires, if treated as a country, would have been the third-largest emitter in the world that year. And if you start thinking about Alaska and the Boreal burning in the way the West has been burning, it could potentially be game over for the climate. It’s important that people understand that this is an existential climate issue and that we have an opportunity to make progress in a bipartisan way.
You and I have chatted before — we first spoke about the Fix Our Forests Act almost a year ago, now. What’s happened in the past 12 months with the bill?
The bill passed the House right after the Los Angeles fires. The last time we spoke [in October 2024], the bill had passed the House in the previous Congress with a bipartisan margin. But this time, it got a much bigger bipartisan show of support: 64 Democrats and all the Republicans in the House.
The bill saw some changes and improvements to focus on the immediate needs in Los Angeles County [after the January 2025 fires] — things like improving the ability of a city like Los Angeles to gain access to Community Wildfire Defense Grant funding and improvements to the Wildfire Intelligence Center targeted at making sure it plays a role in helping local governments make decisions on where to place assets before a high risk event.
Then the bill went to the Senate, but instead of moving the House bill through, a group of senators came together to write a bipartisan version with some changes. Senator Curtis from Utah was the lead, along with Senators Padilla, Hickenlooper, and Sheehy. Their version included changes to the litigation section from the House bill, which had raised concerns among a lot of environmental organizations, as well as modifications to the permitting section. That earned the bill the support of more environmental organizations than the version from the House — they have the Nature Conservancy, the Environmental Defense Fund, the Audubon Society, and the National Wildlife Federation on board, as well as a lot of local organizations and wildfire groups like the Alliance for Wildfire Resilience.
But then a lot of the oxygen in the Senate was taken up by the reconciliation package. That put a pause on things through the August recess, and now they’re looking to hopefully mark up the bill during the October work period. We’re very optimistic about being able to get floor time. We think there’s a clear path to 60 votes in the Senate for this bill, and if there’s a good, constructive markup, it could be much more than that. There’s no substantive holdup as much as there is the ever-present fear of stasis and losing momentum. That’s why we launched an ad campaign with an eye toward building the urgency back up.
How did the ad campaign come together?
The idea was that this is a bipartisan issue, so where is the support? We didn’t need to launch a big persuasion campaign; we needed to highlight the absurdity of the fact that, eight months after Los Angeles, we still haven’t had any meaningful action from Congress. There is an opportunity before them that would make a big difference in wildfire policy writ large.
I’m interested in your focus on using “state-of-the-art science” and “new and innovative technologies” to address wildfires and forest health. What have you seen in this space that has made you excited?
The bill is about improving the planning and implementation of wildfire policy — especially mitigation work like treatment projects, but also in the built environment. A big cornerstone of that would be the creation of a new Wildfire Intelligence Center, which would use the most advanced technology to understand what our risk profile is on the ground across landscapes and jurisdictions. Right now, there is no one entity in government responsible for taking a comprehensive look at risk across landscapes, what we’re doing on the ground, and how that buys down risk.
At the same time, one of the things we’re negotiating is making sure that the Forest Service and the Department of Interior are positioned to work with some of the companies doing advanced modeling, detection, and tracking work — as opposed to having the government try to build its own clunky system. We’ve modeled it after successful efforts elsewhere in government, such as the Defense Innovation Unit and other Department of Defense and NASA programs that have been great at harnessing private sector innovation for government use. There’s also a new pilot program in the bill, in Section 303, that would create a pathway for the Forest Service to start identifying and piloting new technologies and give them a path to scale across the agency if they find that it helps them do the job better, faster, and cheaper.
The timber industry has collaborated with the Forest Service on fire suppression since the 1920s. In the decades since, “forest management” has at times been used as a euphemism for industry-friendly practices like tree thinning, which many ecologists say would allow invasive species and brush to flourish, and would actually worsen wildfires. How would cutting the red tape around “vegetation management activities” not be a handout to the timber industry?
We all know that the best tool for mitigation is good fire, prescribed fire, beneficial fire, and — where appropriate — managed fire, as well. Unfortunately, because we’ve taken fire out of these landscapes, forested landscapes in particular are so overgrown that you couldn’t introduce good fire even if you wanted to. So mechanical thinning has to be a part of this.
One of the tensions here is that the timber industry wants merchantable timber. They want the big trees, and in a lot of cases, those are the ones we want to keep in the ground with these projects. What we’re focused on is invasive species, overgrown areas, and dead trees from morbidity events like recent droughts so that we can reintroduce good fire at scale. If we all let it burn, like some have proposed, you’d end up with hundreds of thousands of acres of landscape burning at a time, like we saw in the [2021] Caldor fire, where nothing will grow back in a way we recognize for at least decades — and given climate change, maybe not ever.
It’s important to make sure that we don’t go back to the timber wars [of the 1980s and 1990s between environmentalists and loggers in the Pacific Northwest], but at the same time, we need to recognize that the biggest threat to our forests right now is catastrophic fire, not the timber industry. We want to deal with the threat at hand and make sure the pendulum that swung during the timber wars — for very good reason — against the timber industry comes back a little, but doesn’t swing too far in the wrong direction, either. The Senate bill strikes the right balance there.
A number of major environmental groups initially came out in opposition to the Fix Our Forests Act over numerous concerns, including that it erodes Endangered Species Act protections by exempting the Forest Service and BLM from the requirement to adjust land management policies as new information about how projects could affect threatened species arises. What is the other side of this tradeoff? How would limiting the consultation requirement advance the goal of reducing wildfires?
The biggest challenge right now is that, because of all of the regulatory hurdles, it can take upwards of a thousand days to get a project off the ground anywhere in the country. One great example of that is in the Angeles National Forest. They announced a fuel break maintenance strategy in 2020, but they were not able to get the requisite approvals until the start of December 2024. It took four years — and then the last of the permits that were most relevant to Altadena didn’t get approved until March, two months after the fire. There are very real consequences to this kind of delay, both for the environment and for human health and safety, that need to be taken into account.
If you take a step back and look at the bill, the main tool that it uses is not broad NEPA exemptions or writ-large changes in the law. It utilizes categorical exclusions, a method that has been used for energy projects in other areas and is increasingly sought after to advance targeted projects with public benefits.
One great example is the Tahoe categorical exclusion, on which a significant portion of this bill is based. It was a 10,000-acre CE created in 2016, which allowed for work that protected communities and ecosystems and got good fire on the ground. It’s work that directly saved South Lake Tahoe from the Caldor Fire. But one of the challenges right now is that the current level for CE is 3,000 acres, and when we’re talking about landscapes in forests that are hundreds of thousands of miles big and a fireshed that nationwide is 50 million acres, then 3,000 acres is not enough for it to be worth it for the Forest Service and Park Service and DOI officials to go through the CE process — which takes six months and is very rigorous.
But we also wanted to show restraint here for environmental purposes. We wanted to make sure that this was as targeted as it needed to be, and not overly expansive.
On California solar, climate tech’s master plan, and Climeworks’ ‘milestone’ deal
Current conditions: Tropical Storm Gabrielle is intensifying as it travels northwestward through the Atlantic, and may strengthen into a hurricane near Bermuda over the weekend • A trio of tropical storms — Mitag, Ragasa, and Neoguri — is barreling toward East Asia, threatening to build into typhoons as they approach China, the Philippines, South Korea, and Japan • A magnitude 7.8 earthquake struck off Russia’s Pacific coast, triggering a tsunami advisory.
All but one member of New York’s Public Service Commission voted Thursday to endorse a plan from the gas utility National Grid that depends on construction of a controversial natural gas pipeline, the Albany Times-Union reported. The state has yet to approve the pipeline plan. In 2019, then-Governor Andrew Cuomo rejected the Northeast Supply Enhancement project, better known as the Williams Pipeline, on the grounds that it threatened too much environmental damage. Soon after, Cuomo shuttered the nuclear power plant that once supplied a significant portion of New York City’s energy, and the offshore wind projects meant to generate much of its carbon-free electricity stalled out. The only major power project to bring clean electricity into the city, the transmission line designed to connect the five boroughs to the hydroelectric system in Quebec, is underway, but at peak capacity will only supply about half of what the Indian Point nuclear station once produced. As a result, the New York City region on the state’s grid system depends on gas and oil for nearly 90% of its electricity.
The decision drew swift blowback from climate groups such as the Natural Resources Defense Council, which called the pipeline a “climate and affordability boondoggle.” The utility’s “own demand forecasts confirm there is no imminent reliability need — capacity is more than sufficient to meet peak demand well into the 2040s, even under unusually cold temperatures,” Chris Casey, the New York utility regulatory director at NRDC, said in a statement. “The Commission’s decision to signal its support for this fracked gas pipeline very likely contradicts state law, is not in the public interest, and will be vigorously challenged.”
Representative Scott Peters, the Democrat who represents part of San Diego, accused the Department of the Interior’s Bureau of Land Management of halting permitting on solar projects in California. At a press conference Thursday to promote a bipartisan proposal he drafted along with the Colorado Republican Representative Gabe Evans to ease federal energy permitting, Peters said he had just been told that the agency would not approve any more panels. “It’s hard to get a deal unless we resolve that,” Peters said, according to a post on X from Politico reporter Joshua Siegel.
The proposal is a framework for a bill, essentially a blueprint of what members of the House Problem Solvers Caucus feel constitute reasonable compromises. For Republicans, the agreement offers fewer bureaucratic roadblocks to all kinds of new infrastructure, including gas pipelines. For Democrats, it charts a path for building more of the transmission lines that are key to adding more renewables to the grid. “It’s a big step to have our caucus, which is a pretty significant number of Republicans and Democrats, sign on to a pretty detailed set of policy principles,” Peters said. But as Heatmap’s Matthew Zeitlin wrote last month, “unless Democrats trust the Trump administration to actually allow renewables projects to go forward, his proposal could be dead on arrival.”
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On Thursday, a new coalition that includes Bill Gates’ Breakthrough Energy, consulting giant McKinsey, and Stanford University’s Doerr School of Sustainability launched the Climate Tech Atlas. The proposal maps out ways to decarbonize different sectors of the economy, and lists priorities for innovation. The idea is not to eliminate potential solutions, Heatmap’s Katie Brigham reported in her scoop about the project, but rather “to enable the next generation of innovators, entrepreneurs, researchers, policymakers, and investors to really focus on where we felt there was the largest opportunity for exploration and for innovation to impact our path to net zero through the lens of technology,” according to Cooper Rinzler, a key collaborator on the initiative and a partner at the venture capital firm Breakthrough Energy Ventures.
Microsoft has announced “the world’s most powerful AI data center” in southeastern Wisconsin. The project, called Fairwater, “is a seamless cluster of hundreds of thousands of NVIDIA GB200s, connected by enough fiber to circle the Earth 4.5 times,” CEO Satya Nadella wrote in a post on X. “It will deliver 10x the performance of the world’s fastest supercomputer today, enabling AI training and inference workloads at a level never before seen.” He said Microsoft would match “all of the energy that is consumed with renewable sources.”
That power generation could prove more popular than the data center itself. Just 44% of American voters would support or strongly support a data center being built near them, while 42% would oppose or strongly oppose it, according to a Heatmap Pro poll Matthew covered last week. That mere 2% of net support compares to net support of 34% for a gas plant, 19% for a wind farm, 34% for a solar project, and 11% for batteries.
The carbon removal startup Climeworks just signed its largest-ever deal. By 2039, the Switzerland-based company, one of the biggest direct air capture developers in the world, agreed to suck 31,000 tons of CO2 from the atmosphere on behalf of Schneider Electric, the French industrial giant. Schneider said it remains committed to slashing the direct emissions from its operations by 90% in the next 25 years, and that this deal addresses “future neutralization needs while pursuing aggressive emissions reductions, and supporting the scale-up of an industry crucial for achieving net zero.” In a statement, Schneider’s sustainability chief Esther Finidori said that “both carbon removal and carbon reduction are fundamental to achieving our climate goals, as well as those of the planet.” For Climeworks, the deal is a “milestone,” said CEO Christoph Gebald.
The speed of climate change may be throwing the insect world out of whack. But a new study has put offshore oil rigs in the North Sea to work identifying the vital role a migratory insect plays. University of Exeter researchers studied 121 marmalade hoverflies that landed on an oil rig in the Britannia oil field. The rig off the coast of Scotland was far from any vegetation or land, so the pollen found on 92% of hoverflies “shows they can transport pollen over great distances, potentially linking plant populations that are hundreds of kilometers apart,” according to a press release. “By analysing the pollen samples and wind patterns, we estimate that many of the hoverflies had flown from places including the Netherlands, northern Germany and Denmark — over 500 kilometers away,” Toby Doyle, Exeter’s Centre for Ecology and Conservation in Cornwall, said in a statement.
Editor’s note: This story has been updated to reflect the company behind the Fairwater project.
And more on the week’s most important battles around renewable energy.
1. Indianapolis, Indiana – The Sooner state’s top energy official suggested energy developers should sue towns and county regulators over anti-renewable moratoria and restrictive ordinances, according to audio posted online by local politics blog Indy Politics.
2. Laramie County, Wyoming – It’s getting harder to win a permit for a wind project in Wyoming, despite it being home to some of the largest such projects in the country.
3. Ada County, Idaho – Like Wyoming, Idaho is seeing its most populated county locking up land from being available for renewables development.
4. Fairfield County, Ohio – Activists are plotting another appeal to overturn the Ohio Power Siting Board’s decision on a solar farm.
5. Franklin County, Virginia – Constitution Solar is struggling to assuage local residents’ complaints about a proposed project in this county despite doing, well, it appears anything to make them happy.
6. Sumter County, South Carolina – One solar developer is trying for a Hail Mary with South Carolina regulators to circumvent a painful local rejection.