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Two years in, union leaders say Biden’s big climate law is making a difference.
The Inflation Reduction Act is by far the most important climate law ever passed in the U.S. But it also may go down as one of the most important labor laws of recent history. Overnight, jobs installing solar farms that were largely performed by an itinerant, low-wage workforce had the potential to become higher-paid positions occupied by skilled tradespeople — maybe even union jobs.
That’s because in order to qualify for a 30% tax credit on their investment or operating costs, clean energy developers now have to follow two key labor standards. They have to pay construction workers the federally determined prevailing wage for their region, plus hire a designated number of apprentices, who are provided with paid classroom instruction in addition to on-the-job-training.
“I don’t think people have a sense of the scale and the scope of what this law has done and is going to do,” Rick Levy, the president of the Texas AFL-CIO, told me. “From our perspective, putting community well-being and labor standards in the very fabric of this industrial expansion is going to pay dividends for generations.”
On the eve of the IRA’s two-year anniversary, a new report provided exclusively to Heatmap has identified 6,285 utility-scale clean energy projects planned, under construction, or already operating, that are likely candidates for these tax credits. Together, they represent an estimated 3.9 million jobs, according to the Climate Jobs National Resource Center, a nonprofit that supports unions fighting for worker-centered climate action, which compiled the data.
There’s no way to know, at least right now, how many of the projects still in progress will actually get built, or how many have or will adhere to labor standards. Safe harbor provisions in the law also allow developers to claim the full tax credit without adhering to the rules as long as they started construction by the end of January 2023, so the full effect of the provisions will take some time to be realized.
But the report reveals the vast potential for the law to create higher-quality jobs in clean energy all over the country. Based on my reporting, that potential is starting to materialize. Union leaders told me they’re now having conversations with developers who never returned their calls before. And renewable energy developers and tax credit consultants told me it was a no-brainer to meet the labor standards, even though they create substantial administrative burdens. Otherwise, they’ll only be eligible for a 6% credit, leaving a huge amount of money on the table.
Mike Fishman, the executive director of the Climate Jobs National Resource Center, told me that when he first started advocating for high-road climate jobs, he found that many trades workers were afraid of clean energy. “If they had a good job in the fossil fuel industry, then saying, we’re going to reach these goals and shut down all the fossil fuel plants, that was very scary to people.” But since the IRA passed, he’s seen a change in workers’ attitudes about supporting climate action. “It creates a sense that there’s a future for everyone — an economic future, as well as a climate future,” Fishman said.
The IRA’s potential to spur well-paid jobs and training opportunities is actually even larger than the Resource Center’s estimate indicates. The report only covers clean energy generation projects like wind and solar farms, but the law also tied labor standards to tax credits for the construction of clean energy manufacturing plants, EV chargers, carbon capture projects, hydrogen plants, clean fuel factories, and new, energy-efficient buildings.
The standards are likely to affect each of these industries in different ways, but it’s instructive to look at what’s already happening in renewable energy development. To do so, you first have to understand that developers sit near the top of a ladder of companies involved in bringing an energy project into the world. Above them sits investors; below, a series of contractors and subcontractors who manage the project on the ground and hire the workers who ultimately build it.
Before the IRA, everyone along this ladder had an incentive to keep costs as low as possible. At the top, developers are competing for power contracts with utilities. Contractors would try to win bids by quoting the lowest construction costs. Staffing agencies would source temporary workers from all over the country and negotiate wages and benefits on a case by case basis. An investigation into solar work by Vice found that it was “common to have two workers doing the same job for vastly different pay and living stipends.” Some would travel to a new place for a gig and “pile into motel rooms with other workers on the same projects in order to save money.”
The IRA disrupts that incentive structure, creating a new regime whereby the top priority is getting that 30% tax credit. The law also extended the ladder, creating new rungs of accountability thanks to new tax credit transferability rules that allow developers to sell their tax credits to third parties. That means there are a host of other companies looming over developers’ shoulders with a stake in making sure they don’t cheat the rules. Tax credit buyers don’t want to end up in a situation where the IRS audits the developer who sold them the credits, finds that there weren’t enough apprentices on the project, and claws back the money. The risk is serious enough that buyers also purchase insurance for these transactions, adding another layer of oversight.
“The lawyers are scaring everyone about this,” Derek Silverman, the co-founder and chief product officer of Basis Climate, a startup that matches tax credit buyers and sellers, told me. For example, the law contains a loophole for companies to claim the credit without hiring the required number of apprentices as long as they show they made a “good faith effort.” Treasury defines that as having reached out to at least one registered apprenticeship program in the area every year the project is operating. Silverman said he’s seen lawyers challenge companies that are trying to get around the requirement, asking them who they reached out to and berating them if it wasn’t a legitimate effort.
“They’re saying, you have a huge part of your capital stack that’s based off this tax credit,” said Silverman. “It’s not worth the downside of the government questioning through an audit that you didn’t meet these requirements, and then, boom, you owe them $20 million when it would have cost you $100,000 to do the documentation and get that all square.”
The upside is valuable enough that it’s generated a whole new cottage industry in tax credit compliance. Empact Technologies, for example, is a software company that collects and evaluates payroll data from contractors to make sure they are paying the correct wages and have the right number of apprentices. “Then we have to go back and essentially fix all of the mistakes that they made every single week” — like classifying workers incorrectly and paying them the wrong amount, or falling behind on apprenticeship hours — “which every single contractor does. It’s insane,” Charles Dauber, Empact’s founder, told me.
All of this has added much complexity — and cost — to renewable energy development. David Yaros, who co-leads Deloitte’s US Tax Sustainability Practice, told me that the cost of compliance, including hiring companies like Empact and Deloitte to compile all the documentation, could eat into 5% to 20% of the tax benefits.
“This has raised our costs,” Rodrigo Inurreta Acero, a government affairs manager at the international developer EDP Renewables, confirmed, referring specifically to the added cost of consultants rather than the mostly negligible cost of paying prevailing wages. “But, we are very, very happy to comply with this, because the juice is worth the squeeze.”
There’s clear incentives for developers to do everything in their power to meet the labor standards. The key question is whether these two little provisions — prevailing wage and apprenticeships — are strong enough to “build a strong pipeline of highly-skilled workers” and “ensure clean energy jobs are good-paying jobs,” as the Biden administration has said.
The need is definitely there. A census of U.S. solar jobs in 2022 found that 52% of solar installation and project development companies found it “very difficult” to find qualified workers, with electricians and construction workers being among the most difficult positions to fill.
But even if armies of lawyers are scaring companies into making serious efforts to hire apprentices, that doesn’t mean they are actually finding them. “It’s not clear at this stage whether apprenticeship programs are scaling up fast enough to match labor supply to project demand,” Derrick Flakoll, a policy associate at BloombergNEF told me. He pointed to an announcement made by the White House just last month of $244 million in grants to expand the Registered Apprenticeship system throughout the country. “I’d be skeptical that apprenticeship programs have been able to scale up yet,” said Flakoll.
There’s a catch with the wage requirement, too: “Prevailing wage” doesn’t necessarily mean a living wage, and it can vary dramatically from place to place. The rate is determined by surveys sent out to contractors and labor organizations, and is typically higher in jurisdictions with active labor unions. For example, in Falls County, Texas, where the 640 megawatt Roseland Solar project is under construction, prevailing wage for a general laborer is $8.75 an hour. In Sangamon County, Illinois, where the 800 megawatt Black Diamond Solar project is being built, prevailing wage for a laborer is $34.04 an hour plus benefits worth $29.26 an hour.
Nico Ries, the lead organizer for the Green Workers Alliance, which organizes solar and wind workers, told me solar wages seem to have only increased in places with higher union density. That’s because unions are now on a more even playing-field to compete for jobs in those areas, since their typical rates have become the de facto minimum.
To be clear, the prevailing wage and apprenticeship provisions do not require developers to hire union workers to build their projects. And there are plenty of non-union, registered apprenticeships. Ries told me that the temp staffing agencies that have served the solar industry in the past are quickly standing up apprenticeship programs to stay on top of the market under the IRA. The main problem with that, they said, is that unlike union apprentices, these workers have no representation.
“There’s a lot of misinformation,” Ries said. “People think they are joining an apprenticeship and it’s going to be a whole thing, but it’s really just a little training or two, and then they slap a sticker on your hard hat.”
Nonetheless, unions are starting to make inroads in solar in places that have long been hostile to organized labor. Ethan Link, the assistant business manager for the Southeast Laborers’ District Council, which has members in right-to-work states throughout the south, told me that before and after the IRA was like “night and day.” For the first time, solar developers are calling the union directly to talk about projects on the horizon and to figure out how to work with them. As a result, the union is investing in more solar-specific training for its apprenticeship instructors.
“The Inflation Reduction Act is one of the most consequential and, I think, also most innovative ways of inducing the market to have broad based benefits for the community,” Link said. “The way I’ve experienced it, it’s changed the landscape on the ground with these developers within a matter of months, rather than a matter of years.” He said they don’t yet have a lot of workers actually assigned to projects, but “we’re really optimistic about where things sit right now.”
Kent Miller, president of the Wisconsin Laborers’ District Council, told me his union has been able to double its apprenticeship program from around 300 to 400 students a few years ago to closer to 700 to 800 post-IRA. It’s now looking to build another training campus to expand its capacity. Not all of that growth is thanks to renewable energy, he said, but the union now has a significant portion of its membership that just works in utility-scale solar.
Earlier this year, Wisconsin’s four biggest electric utilities pledged to employ local, union labor on all future renewable energy projects. Miller doesn’t think this would have happened without the incentives in the IRA. Though every wind farm in Wisconsin has been built by union labor, the more nascent solar industry was starting to bring in non-union workers from out of state to build projects. The IRA incentives gave Miller’s union leverage in negotiations with the utilities, because future projects were going to need to be able to find registered apprentices. “Unions run the best registered apprenticeship programs,” he said. “It was showing what we could do, what we could bring to the table.”
There is one more small but potentially powerful incentive for developers to work with unions. The Internal Revenue Service has said that if companies sign a project labor agreement — an agreement with one or more unions, made prior to hiring, that establishes wages and benefits — then they are less likely to be audited, and won’t have to pay penalties if they are found to be non-compliant.
To Levy, of the AFL-CIO in Texas, and others in the labor movement, getting workers to support clean energy is essential to tackling climate change. “Unless workers see themselves and their interests reflected in these new energy technologies, there’s never going to be the kind of political support that we need to be able to do the things we need to do to save the planet,” Levy said. The first step to achieve that, he said, is making sure these jobs are “good union jobs.”
The Climate Jobs National Resource Center connected me with Kim Tobias, a union electrician in Maine, as an example of how union jobs can change lives. Tobias used to work in call centers, providing customer service for healthcare software companies, before leaving to join the International Brotherhood of Electrical Workers. She was making $16 an hour in her last call center job after more than 10 years in the field, and was fed up after getting passed over for a promotion. When she started as an electrical apprentice in 2019, she essentially doubled her salary overnight once benefits were taken into account.
Today, in part because of the IRA, but also because of a state law that requires developers to pay prevailing wage on all large renewable projects in Maine, Tobias mainly works on solar projects. The work isn’t always ideal — she told me she once had to commute 75 miles away for a solar job — while she was pregnant, no less. “Then again, a year and a half later, I worked a solar job that was 0.9 miles away from my house. So it’s give and take,” she said.
But Tobias also said she sees potential to create high-quality clean energy jobs beyond solar in Maine, where, she lamented, “people under the age of 30 are leaving in droves.” She noted that an old paper mill in Lincoln, Maine, is being turned into an energy storage site, and the developer has already said it would establish a collective bargaining agreement with the Maine Building and Construction Trades. Illustrating Levy’s point about political support, the union is also now advocating for the construction of a new port to support the offshore wind industry, which would have to be built with union labor under a recent state law.
Even if the IRA’s labor provisions are starting to work, which it seems they are, they contain one significant weakness. The rules only apply to the construction of projects — not to their operations. It’s an improvement to have labor standards for construction jobs. But once they are built, wind and solar farms don't take many people to operate. The federally subsidized clean energy manufacturing plants springing up around the country due to the IRA will create a lot more jobs, but, at least right now, those jobs don’t have to be “good.”
“I think that people need to understand the opportunity here,” said Levy, and make sure that we continue to build on it and not turn back.”
Editor’s note: This story has been updated to clarify the “good faith effort” exception to the apprenticeship provision and that both provisions apply only to construction.
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It took a lot of scrutiny and a lot of patience, but the city council is finally making progress against natural gas infrastructure.
Susan Albright, a city councilor in Newton, Massachusetts, was reviewing the latest batch of requests from the local gas utility in early July when one submission caught her off guard. The company, National Grid, regularly asks the city for permission to tear up stretches of road in order to replace aging gas mains and service lines. But this time, the utility wanted to install a new 46-foot pipeline leading to Newton Crossing, a mixed-use housing development that’s currently under construction.
“I thought, Oh my god,” Albright told me. “Here we are trying to get rid of pipe, and here’s some new pipe that they’re asking for.”
Such “grant of location” requests used to be a rubber stamp exercise for the Public Facilities Committee, of which Albright is the chair. But more recently, they’ve become contentious. Activists have started showing up to public meetings to question the necessity of pipeline work. Could the pipes be repaired instead of replaced? Or even better, retired? Could the houses served by them be electrified?
To get ahead of public outcry about a brand new pipe, Albright sprung into action. She pulled up plans the housing developer had filed with the city and learned that the apartments were intended to be all-electric. The developer had requested a gas connection solely to serve commercial businesses on the ground level. Albright found a contact for the project and picked up the phone.
“Is there any possibility that you could go electric for your commercial?” she recalled asking, explaining the connection between natural gas and climate change, and the city’s goal of weaning off gas. “At first he was very reluctant,” she told me. “But then he called me back and said that he’s willing to try it.” His ability to do so will depend on whether the electric utility can supply enough power. Nonetheless, Albright had successfully pushed a vote on the request to a later date. “We will review that grant of location at our meeting on July 28, and hopefully he will withdraw it, but we don’t know,” she said.
The city committed to transitioning away from natural gas by 2050 as part of its Climate Action Plan, enacted in 2019. Although residents have started to electrify their homes, the city hasn’t been able to slow down investment into the gas system. The story of Newton Crossing illustrates a strategy that has finally begun to move the needle. Councilors and activists have begun doggedly scrutinizing each of National Grid’s requests in hopes of finding alternatives that avoid investing more ratepayer money into a gas system that is — or should be — on a path toward obsolescence.
Progress has not been linear, and almost all of these attempts have so far failed. But the city does seem to have gotten the company’s attention. Earlier, in June, National Grid came to Newton with a different kind of request — an invitation to embark on a collaboration together with the local electric utility, Eversource, to proactively plan the city’s transition away from gas, and in doing so, begin to create a model for the company, the state, and possibly the country.
“I’m so excited to be here today because this is the first of its kind,” Bill Foley, National Grid’s director of strategy and transformation told the Public Facilities Committee while presenting the proposal. “We’ve never sat down with Eversource, National Grid, and another community to talk about how we’re going to broadly electrify a community.”
The subterranean network of natural gas pipes that runs under Massachusetts is old and leaky, with some sections dating back to the late 19th century. Utilities in the Commonwealth have always been required to address dangerous leaks, but in 2014, the state passed a law incentivizing more proactive measures to replace or repair leak-prone pipes. It was a matter of public safety as well as environmental protection — the methane that seeps out can kill tree roots in addition to being a powerful greenhouse gas.
The law created the Gas System Enhancement Program, or GSEP. Each fall, companies would file annual plans to the Department of Public Utilities outlining all the pipeline repair and replacement projects they aimed to complete in the coming year. In return, they’d get quicker approvals from regulators and be able to recover the costs more quickly from ratepayers.
In the years since, utilities have spent billions of dollars replacing thousands of miles of pipelines. Simultaneously, the state has fleshed out its plans to tackle climate change, making it clear that electrifying buildings would be a key component. As a result, the tide of public opinion about the pipeline program shifted. Replacing aging pipes may actually be worse for the climate, many activists now believe, since it means putting major investments in new fossil fuel infrastructure, thereby increasing inertia in the energy system and possibly delaying the transition to carbon-free solutions.
Former mechanical engineer Peter Barrer is one of those activists. Barrer lives in Newton, and has become an expert on the local gas network and the state’s pipeline policies. Using public data filed with state regulators, he calculated that out of the $18 million National Grid spent to address aging pipes under the GSEP program in Newton in 2023, only about $200,000 went to repairs, with the rest going to replacements. (National Grid later disputed the number, reporting that it spent $3 million on repairs that year.)
Barrer is concerned that the GSEP gives the company cover to spend excessively on pipeline replacements, which earn them larger profits than repairs. Other analysts have reached similar conclusions. Last year, the energy research consultancy the Brattle Group submitted testimony to state regulators on behalf of the Massachusetts attorney general’s office arguing that utilities are increasingly using GSEP to make everyday capital improvements. The level of spending “goes far beyond remediating immediate risks to safety caused by gas leaks,” the consultants wrote.
Barrer’s research on GSEP led him to a potential point of leverage with National Grid. When the utility wants to dig up a street, it has to submit a Grant of Location request to Newton’s Public Facilities Committee, which is then subject to a public hearing.
Newton is a progressive city that has long been at the forefront of climate action in the state. It’s one of 10 communities granted permission by the state to ban gas hookups in new buildings. (The Newton Crossing development got its permits before the policy went into effect.) The city council has also passed an ordinance requiring the largest existing buildings to reduce their emissions to net-zero by 2050.
While the Public Facilities Committee doesn’t have the power to deny National Grid’s Grant of Location requests, Albright, the city councilor, told me, the meetings do present an opportunity to engage with the utility. Members and the public can ask questions and delay approvals. Barrer and other activists began using the requests as an opportunity to highlight the paradox of the city approving new gas infrastructure.
One particularly contentious fight began last October over a replacement on Garland Road, a street known for hosting a “Sustainable Street Tour,” during which residents spoke about their experiences greening their homes with solar, insulation, EVs, and heat pumps. “Bells kind of rang in my mind,” Barrer told me. “Here’s a great place to fight National Grid.”
The gas company argued that the Garland Road pipeline, 600 feet of cast iron from the 1920s, was simply too high-risk. “National Grid cannot agree to delay replacement long enough to determine if the Garland Rd customers that still use their gas service for one or more uses are willing to have their gas service disconnected,” Amy Smith, the director of the company’s New England Gas Business Unit, wrote in an email to Albright in January. “In addition, even if all customers on Garland Rd agree to have their gas service cut off, we do not currently have a mechanism to fund the costs of full electrification of each home.” The Committee signed off on the project.
But activists continued to challenge it. A resident of Garland Road, Jon Slote, surveyed his neighbors and found that all were either neutral or supportive of electrification. He also put together a cost comparison and found that the capital cost of electrifying the homes was 18% to 41% lower than that of replacing the pipeline.
National Grid didn’t budge. One of the reasons the block couldn’t be electrified, Smith explained to Barrer in emails that I reviewed, was that this segment of pipe “plays a critical role in providing pressure support for approximately 120 homes in the area. Maintaining minimum pressure is vital for both safety and reliability.”
Barrer told me he’s skeptical that replacing the pipe is the only solution, but acknowledged that the issue is real.
Perhaps Barrer’s biggest grievance, though, is that National Grid frequently makes requests that are not in its regulator-approved plans. Nearly 60% of the money the company spent in 2023 and was able to recover through the expedited GSEP process went to such projects, he found. A related issue: GSEP plans often don’t disclose the full extent of each project. “This is important for municipal planning,” Barrer told me. If the public can’t see in advance which areas the company is planning to work on, he said, “there’s no opportunity for the city to investigate. Maybe there’s streets on there that we can get support for electrification.”
He described the fight over gas pipelines in Newton as “a David and Goliath situation.” Activists want the opportunity to get ahead of these projects and figure out alternatives, he said, but aren’t given enough notice or details. “They have all the cards. They have a monopoly on gas, and they also have a monopoly on information.” He wants the state legislature to help them put up a fairer fight by passing two new bills that would require the utilities to disclose more information, sooner.
Albright, meanwhile, told me she thinks National Grid has acted in good faith. “The people that I’ve been working with, I trust that they’re trying to do the best for the company and for us as customers. I mean, they don’t want these pipes to explode.”
For about a year, Albright said, she has been having conversations with Smith of National Grid about what the city could do to start getting off gas. At the end of 2024, Smith came back with an offer — National Grid would work with Newton on an electrification pilot project. The company has since provided the city with a list of streets to consider for the pilot — mostly dead ends on the outskirts of the gas system, areas where taking out a stretch of pipe won’t affect other customers downstream.
Meanwhile, a lot has changed at the state level. Late last year and continuing into this spring, lawmakers and regulators enacted new policies to reform GSEP and better align it with the Commonwealth’s clean energy plans. That meant focusing on the highest risk pipes, prioritizing repairs instead of replacements, lowering the cap on spending for companies, and enabling them to spend some of the money on alternatives to pipelines, including electrification projects.
Perhaps these changes help explain what led National Grid to approach Newton earlier this summer with its proposal to collaborate. At the Public Facilities Committee’s June 18 meeting, representatives from National Grid and Eversource spent nearly three hours explaining their “integrated energy planning” effort, figuring out how to transition from gas to electricity while containing costs and ensuring reliable service. Now they wanted the chance to begin testing it out in a community.
“The technical stuff is easy,” Foley of National Grid told the Committee. “When it comes to knocking on a door and saying, Hey, how do we get you to electrify? That’s the challenging part. That’s what we’re going to learn.”
The Committee, the mayor, and city staff welcomed the idea. Even Barrer is optimistic. “I think it is unprecedented,” he told me, “and it could be very, very useful.” But he’s also skeptical. Will the company actually share the information advocates like him are looking for to analyze alternatives? And will it work quickly?
“From my perspective, every year that the plan doesn’t turn into action is another half a billion dollars of ratepayer money the National Grid gets to invest.” But, he added, “I’m hopeful. Let’s see what actually develops.”
On Fervo’s megadeal tease, steel’s coal gamble, and Norway’s CO2 milestone
Current conditions: Manila is facing severe flooding amid days of monsoon rains • Of the seven Marshall Islands that the U.S. Drought Monitor tracks, two are currently suffering extreme drought, and another three are under severe drought conditions • Wildfires are blazing in Oregon, where the Cram Fire has already scorched nearly 100,000 acres just 50 miles south of Portland.
OpenAI CEO Sam AltmanKevin Dietsch/Getty Images
Six months after the top executives of OpenAI and Softbank stood shoulder to shoulder at the White House to announce a $500 billion joint venture to build out the infrastructure for artificial intelligence across the United States, the so-called Stargate project has yet to complete a deal for a single data center. The companies promised in January to “immediately” invest $100 billion. But in a sign of the dialed-back ambitions, the project is now targeting the more modest goal of constructing one small data center by the end of this year, likely in Ohio, The Wall Street Journal reported.
That’s bad news for the power companies that have lavished in the projected demand from data centers. Crusoe Energy, a developer of gas- and renewable-powered data centers, boasted earlier this year that it was “pouring concrete at three in the morning” to build out its portions of the Stargate project at “ludicrous speed,” Heatmap’s Katie Brigham reported in March. Over the course of just one month this spring, Morgan Stanley ratcheted up its estimates for capital expenditures in cloud computing this year by a whopping $29 billion, to $392 billion, as Heatmap’s Matthew Zeitlin reported in May. Perhaps that’s another AI hallucination.
Fervo Energy’s breakthrough in harnessing fracking technology to tap into the Earth’s molten heat in far more places than ever before effectively launched the next-generation geothermal industry in the U.S. Now the Houston-headquartered startup is poised to vault “enhanced” geothermal power into a gigawatt-scale electricity source.
In a Monday post on LinkedIn, Fervo CEO Tim Latimer teased a “multi-GW development deal” currently in the works. He promised “more to come on this soon.” He did not respond to my inquiry Monday night. The company already has a deal for a 500-megawatt project called Cape Station in Utah, for which it netted a $206 million investment last month. But a project several times that size would put next-generation geothermal in the big leagues with nuclear power as a potential source of large-scale, baseload power.
Shares of Cleveland-Cliffs soared nearly 13% on Monday afternoon after the steelmaker said President Donald Trump’s tariffs had boosted demand. The company’s second-quarter earnings bested estimates, thanks to cost cutting and record steel shipments. CEO Lourenco Goncalves even suggested the company could sell parts of itself in the wake of Japanese steelmaker Nippon Steel’s megadeal to take over American rival U.S. Steel. He confirmed “active conversations” to sell non-core assets but said “everything else is possible.”
On the call, Goncalves also suggested the administration’s embrace of coal had improved market conditions for the company. As my colleague Matthew Zeitlin reported, the chief executive confirmed that Cleveland-Cliffs would abandon its landmark green steel project because the hydrogen it needed was not available widely enough. Instead, Goncalves said, the company would revamp the project “in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke.”
The chief executive of the largest natural gas company in the U.S. is urging Congress to overhaul energy permitting or risk losing the AI race to China. In an interview with the Financial Times, EQT CEO Toby Rice said, “The threat of not getting infrastructure built has only gotten larger — not only from bad actors getting rich by selling energy that could be replaced with American energy — it’s also the threat of China winning the AI race.” Specifically, he called on lawmakers to end what’s called “judicial review,” a period of six years during which opponents of a project can challenge the federal permits in court.
The U.S. has come to the cusp of easing federal permitting for years. After the passage of the Inflation Reduction Act, Democrats tried to ease permitting rules but faced opposition from progressives and conservationists who deemed any relaxing of regulations that could benefit fossil fuels a nonstarter. Democrats tried to revive the issue last year, but Republicans walked away from the negotiations once the election turned in the GOP’s favor. With the One Big Beautiful Bill revoking many of Democrats’ energy priorities, it’s unclear how much leverage Republicans have to restart talks ahead of next year’s midterm elections.
The world’s first carbon shipping terminal designed to permanently store captured CO2 that would have otherwise gone into the atmosphere just took its first shipment, The Washington Post reported. Located on an island on the edge of the North Sea, Norway’s Northern Lights facility accepted 7,500 metric tons of liquefied CO2 from a Norwegian cement factory. The plant — funded by the government in Oslo and fossil fuel companies — could serve as Europe’s primary carbon dump, and as a model for Asian countries looking to establish their own storage facilities.
China’s exports of clean-energy technologies such as solar panels, batteries and electric vehicles shaved 1% of the global emissions outside China last year, a new Carbon Brief analysis found.
The CEO of Cleveland Cliffs is just the latest U.S. voice to affirm the dirtiest fossil fuel’s unexpectedly bright future.
While the story of coal demand has been largely about rapid industrialization in Asia — especially India and China — the United States under President Trump has been working hard to make itself a main character.
Case in point is in Middletown, Ohio, where a one-time clean steel project may be refashioned as a standard-bearer for an industry-driven U.S. coal revival. The company behind the project, Cleveland-Cliffs, won a Biden-era award of up to $500 million to develop and deploy hydrogen-based technology for iron and steel production. CEO Laurenco Goncalves began casting doubt on that project as long ago as September, when he told Politico that he was struggling to find buyers willing to pay more for low-carbon materials, and that he wasn’t sure the project “even makes sense with the grants.” Earlier this year, he told investors that the company was working with the Department of Energy to “explore changes in scope to better align with the administration’s energy priorities.”
During an earnings call Monday morning, Goncalves said the company had scrapped the project not because of the DOE, but rather because it was unable to get sufficient hydrogen for use as fuel.
“The very first thing: It’s clear by now that we will not have availability of hydrogen. So there is no point in pursuing something that we know for sure that’s not going to happen,” Goncalves said. “We informed the DOE that we would not be pursuing that project.”
Instead, the company has had “a very good conversation” with the DOE “on revamping that project in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke,” Goncalves said. (Where have we heard that kind of language before?) “We are vertically integrated, and we use American iron ore and American coal and American natural gas as feedstock, all produced right here in the United States of America, employing American workers,” he added.
The evidence for coal’s stubborn persistence globally has been mounting for years. In 2021, the International Energy Agency forecast that by 2024, annual coal demand would hit an all-time high of just over 8,000 megatons. In 2024, it reported that coal demand in 2023 was already at 8,690 megatons, a new record; it also pushed out its prediction for a demand plateau to 2027, at which point it predicted annual demand would be 8,870 megatons.
The IEA largely chalked up the results to the world’s energy needs, writing that “the power sector has been the main driver of coal demand growth, with electricity generation from coal set to reach an all-time high of 10 700 terawatt-hours (TWh) in 2024.”
More recent analyses confirm that power demand, especially in Asia, could prop up global coal demand possibly for decades.
“Coal-fired power could be a bigger part of the energy mix for longer than expected, scuppering efforts to meet climate change goals,” a pair of Wood Mackenzie analysts, David Brown and Anthony Knutson, wrote in a report last week, echoing the IEA’s findings. China alone is responsible for almost three-quarters of global coal consumption, according to Wood Mackenzie. “New realities for energy markets in recent years have become more, not less, supportive of coal-fired power,” Brown and Knutson write.
The analysts put peak global coal demand a year earlier than the IEA, at 2026. But they also noted that “coal demand has consistently proven more resilient than expected.”
It’s possible that these fast-growing Asian nations could, for reasons of energy security or economy, decide to keep younger coal plants active for decades while extending the life of older plants to keep costs down. In this scenario, much of the world largely transitions away from using coal for power generation, but thanks to persistent Asian demand, global coal demand peaks as late as 2030. That could mean an extra 2 billion tons of greenhouse gas emissions compared to a base case scenario.
The U.S. federal government, meanwhile, has taken on a role as both a coal-friendly analyst and an active promoter of every facet of the industry.
A couple of weeks ago, a Department of Energy report declared that “absent intervention, it is impossible” for the U.S. to power the growth of the artificial intelligence industry “while maintaining a reliable power grid and keeping energy costs low for our citizens.” That energy-poor status quo, the DOE argued, was due in part to scheduled retirements of coal-fired generation.
The DOE has been doing its part to keep that generation online, using its emergency authorities to keep some coal plants open. It has joined President Trump in becoming a kind of all-purpose pitch man for the industry. Over the weekend, the Department’s X account posted an image of Secretary of Energy Chris Wright with a shovel, copied and pasted in front of an open-pit mine, with the words “MINE, BABY, MINE.”
On the supply side, congressional Republicans tucked into the One Big Beautiful Bill Act a tax credit specifically for domestic metallurgical coal production, which could be worth hundreds of millions of dollars a year.
Some of the largest end users of U.S.-mined metallurgical coal are outside the U.S., including the countries driving worldwide coal demand. India imported over 3 million tons of U.S. metallurgical coal in the first three months of 2025, with China just under a million, according to U.S. Energy Information Administration data.
The tie-up between Nippon Steel and U.S. Steel authorized in June, meanwhile, grants a “golden share” of the American company to the U.S. government, in part to ensure increased investment and capacity. That deal also explicitly provides for at least $1 billion of investment into U.S. Steel’s existing blast furnace operation, Mon Valley Works, in Western Pennsylvania. The investments “ensure Mon Valley Works operates for decades to come,” the company said in an announcement.
That means more coal: Mon Valley Works is the “largest coke manufacturing facility in the United States,” according to U.S. Steel, producing 4.3 million tons of the coal product both for its own operations and for sale to other steelmakers.
In an interview with Japanese media, Nippon Steel’s chief executive Eiji Hashimoto said that the newly expanded company will likely build a new steel mill in the U.S., as part of its goal to catch up in steel production with its Chinese rival China Baowu Steel Group Corp, while also using more of its existing capacity to increase production, hoping to eventually more than double its output by the middle of next decade.
(For what it’s worth, Japan is also a major importer of metallurgical coal from the United States, taking in just over a million tons in the first three months of 2025.)
While the future of coal will be determined in Asia, the U.S. steel industry is happy to work with the Trump administration and the coal industry to keep things burning.
“They see the value in blast furnaces just as we at Cleveland Cliffs do,” Cleveland-Cliffs’ Goncalves said of the U.S. industry’s new Japanese partners.