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The Owyhee River watershed is among the country’s largest areas of pristine wilderness. It’s also prime for green development.

On a stormy May evening in 1882, approximately 10 gigawatts of electricity split from the sky above southeastern Oregon and struck a cattleman named Hiram Leslie as he approached his camp on the Owyhee River.
Leslie’s horse died instantly; Leslie did not. Legend has it the pioneer survived for six days after the lightning strike — his brain pulsing and visible through his cleaved-open skull — only to finally expire in his bed back in the boomtown of Silver City, Idaho. Dugout Gulch, an 8-mile canyon near the ranchers’ camp that contains some of the most jaw-dropping scenery in all of Oregon state, was renamed in Leslie’s honor. One can’t help but wonder, though, whether the decision to rechristen also came from some nervous sense of deference to the land.
Today, Silver City is a ghost town, and Leslie’s grisly demise is relegated to a single sentence on a Bureau of Land Management sign lining the way down to a boat ramp that passing F-150s don’t bother braking to read. But the tremendous power and possibility of the Owyhee watershed has never been less in dispute — or, perhaps, more in jeopardy.
The Owyhee (pronounced “oh-why-hee,” an old spelling of “Hawaii” in honor of more doomed explorers) is a 7 million-acre ecoregion that runs through Oregon’s southeasternmost county, Malheur, though it spreads as far east as Idaho and as far south as Nevada. On Google Maps, it looks like a big blank space; the core of the Canyonlands is crossed by just three paved roads. In fact, it’s the largest undeveloped region left in the Lower 48. On a resource management map, the area reveals itself to be a complicated patchwork of BLM, tribal, state, Forest Service, and privately owned lands, as well as a smattering of quasi-protected “Wilderness Study Areas” and “Land with Wilderness Characteristics” that exist at the whims of Congress. The region contains many of the materials and geographic features necessary for the clean energy transition, making one of the most pristine regions in the state also potentially one of its most productive.
But it can’t be both.
In person, it’s easy to see why the area has excited developers. Towering river canyons inspire dreams of pumped storage hydropower. There has been talk of constructing a second geothermal plant in the area, and uranium mining has intermittently returned to the conversation. Gold and silver claims stud the hillsides, a testament to the presence of metals that, amongst other things, are used for making electric vehicle circuit boards and solar panels. Draw a line through the region’s gentler northern sagelands and you’ve plotted the proposed, much-needed Boardman-to-Hemingway transmission route to bring hydropower from Washington state to Boise, one of the fastest-growing cities in the nation. And just outside the Owyhee watershed, to the west, is the upper edge of the McDermitt Caldera, a shockingly remote volcanic depression where there is said to be enough concentrated lithium to build 40 million electric vehicles.
Even Leslie Gulch, with its weekend crowds from Boise and recent Instagram Reels virality, is “quietly open to mining,” Ryan Houston, the Bend-based executive director of the Oregon Natural Desert Association, told me when I met him in the Canyonlands last month.

Amid all this frenzy, Oregon Senators Ron Wyden and Jeff Merkley, local Shoshone-Paiute tribal leaders, and a large coalition of regional and national conservation groups are working to close off 1.1 million acres of the most ecologically important land to the development nipping at its edges. Their hope is that Congress will designate four “units” in Malheur County, including the upper and lower Owyhee, as a single federally protected wilderness area — a pipe dream, given the partisan dysfunction of the current House of Representatives. The more realistic alternative is for President Biden to swoop in with the Antiquities Act and make it a new national monument.
Such an action would be in keeping with Biden’s 30x30 executive order to conserve 30% of U.S. land and water by 2030. It could also be perceived as clipping the wings of the kinds of clean energy projects his administration has proudly touted and funded.
Potential land-use conflicts like these are part of why conservation goals and the current green building movement are often portrayed as incompatible, or at least in tension. But “conservation and clean energy build-out aren’t necessarily opposing forces,” Veronica Ung-Kono, an attorney and clean energy transmission policy specialist at the National Wilderness Federation, told me. “They’re just forces that have to figure out how to interact with each other in a way that makes sense.”
No one is more aware of this than the campaigners I spoke with in Oregon. “For us as an organization, something we’re pushing ourselves on is, ‘How do we say yes to where solar and wind should be?’ Rather than just, ‘No, not there, not there, not there,’” Houston, the organizer at ONDA, which is helping to manage the monument campaign, said by way of example. Later, he told me that by setting aside 1.1 million acres for an Owyhee Monument, the conservationists essentially say that the remaining 75% of the local BLM district is open for all other possible uses.
“We’re not closing off vast swaths of the high desert to renewable energy,” he said. “What we’re doing is protecting the best of the best, so we can focus on other types of development — like renewable energy or off-road-vehicle play areas — in places where it’s most appropriate.”
To better understand the land-use issues in Malheur County, I traveled to Boise last month to attend what’s called a lek, when sage grouse gather to perform their mating rituals. The visit was organized by the NWF, which is supporting the monument push with ONDA. On the appointed day, I left my airport hotel at 3:30 a.m., crossed the state line on a two-lane highway during what I later learned was the height of mule deer migration season, and followed a poorly marked gravel road literally off the map on my phone (which, for good measure, had no reception).
It was so dark in the Owyhee that I felt more like I was rattling across the bottom of the ocean than an actual terrestrial landscape. I repeatedly mistook the full moon for oncoming headlights whenever it briefly appeared from behind the hills, and at random intervals, my car would drop into shallow streams I didn’t see coming until I was already in them. As I approached Succor Creek Campground, the designated meeting spot, I became aware that I was being hemmed in by canyon walls — perceptible only as a blackness even blacker than that of the night sky. When I finally spotted the headlamp of Aaron Kindle, NWF’s director of sporting advocacy, my overriding sense of the Owyhee Canyonlands was that they were bumpy.
Needless to say, I had absolutely no idea at the time that I had driven directly beneath what might one day become the Boardman-to-Hemingway transmission line.
The B2H, as it’s known, would be a nearly 300-mile, 500-kilovolt interstate line to send hydroelectric power generated in Washington State down to Boise. The project has become a textbook example of the permitting woes facing transmission projects in America, however. “By the time we build this, B2H is not only going to be old enough to vote, it’s going to be old enough to go to a bar and have a drink,” Adam Richins, the senior vice president and chief operating officer of Idaho Power, the electric utility that serves southern Idaho and eastern Oregon, told me.
Richins likes to joke, but the B2H’s halting progress makes him weary. More than 18 years of environmental reviews, permitting revisions, archeological and cultural studies, siting headaches, and landowner protests have plagued the planning and implementation of the transmission line, which Idaho Power owns jointly with another northwest utility, PacifiCorp. (Set to break ground this fall, B2H recently stalled again due to a scandal involving an affiliated consulting firm’s work on an unrelated project.) Originally conceived as a way to help Idaho Power meet its clean-energy goals during the summer and winter peaks that follow the region’s agricultural calendar, “I will say now that if we don’t get some of these transmission lines permitted on time, it’s possible we’re going to have to look at other resources such as natural gas,” Richins said.
Though some early plans for the B2H would have seen it cut straight through the boundaries of a future Owyhee monument, the current proposal keeps the transmission path safely outside the existing Wilderness Study Areas that surround Lake Owyhee, the reservoir at the center of what could become the “Lower Owyhee Unit.” (Somewhat confusingly, the Owyhee River flows north into the Snake River, meaning its “upper” watershed is actually to the south.)
That’s not a coincidence. The monument proposal almost entirely consists of parcels pre-designated as Lands with Wilderness Characteristics and Wilderness Study Areas, both of which are managed by the BLM and exist in a kind of limbo until Congress decides what to do with them. “If you’re a developer of solar, wind, pump storage, whatever, you’re not going to put your project in an area that’s in a quasi-protected status because that makes it extremely hard to develop,” Houston said. In other words, it’s not that the monument boundaries were drawn to avoid projects like the B2H; they were drawn to “protect the most important areas, and the most important areas have been in this quasi-slash-temporary protected status for a long time.”
Still, the transmission lines wouldn’t be entirely out of sight. The planned B2H route crosses close to the scenic northern mouth of the Owyhee Canyon before it makes its southeast turn toward Succor Creek and the Idaho border, where I’d driven across its path. More to the point, any future monument designation would mean that if permitting reform actually happens and America begins a transmission-building boom, power lines connecting the various substations of the Northwest would have to go around it, requiring diversions of 50 miles or more. Richins told me that as far as Idaho Power goes, though, “I haven’t seen anything [in the monument proposal] that has made me overly concerned.”
So far, Biden’s team hasn’t given any indication of its thinking about an Owyhee Monument, even as it has picked up the pace on conservation efforts elsewhere. Eight other national monument campaigns are also competing for attention from a friendly administration that is by no means guaranteed to remain in office next year; these include efforts to conserve California’s Chuckwalla, which would create a contiguous wildlife corridor between Joshua Tree National Park and the Kofa National Wildlife Refuge, and Colorado’s Dolores Canyons, which have both ecological and Indigenous cultural importance. “We have shared with [the administration] our binder of support and all of our petition signatures — we’ve got like 50,000 petition signatures, and hundreds and hundreds of letters — and they have said, ‘Thank you, the Owyhee is on our radar, we’ve known about it for a long time, we are tracking it, we are following it,’” said Houston.
There were rumors in the conservation community before Biden expanded two California monuments just a couple of weeks ago, meaning Owyhee organizers might get a tip-off if or when the administration makes up its mind. But November draws closer every day, and the grapevine has stayed silent. Still, after previously thwarted attempts to protect the Owyhee in 2016, 2019, and 2022, organizers think they’ve negotiated a workable compromise: The monument proposal as it currently stands is less than half the size of an earlier, more contiguous 2.5-million-acre proposal Houston and other conservationists preferred. But it also means that much more land is available for green development.
Even some of the more controversial renewable energy projects in the area have been able to move forward. On the lone stretch of shoreline on Lake Owyhee that doesn’t fall within the monument proposal, Utah-based developers are exploring the construction of a pumped storage hydropower facility. Proponents say the technology is a solution for the intermittency concerns of solar and wind since the facilities pump water from a lower reservoir to a higher one during off-peak hours, then release the water to spin turbines and generate electricity during times of high demand — effectively, a kind of massive hydroelectric battery.
Pumped storage projects require very particular geographic conditions, namely steep slopes of 1,000 feet or more, to give the water enough gravitational potential energy to work. “You have to choose your sites carefully — there are bad places to propose doing pumped storage and there are great places,” Matthew Shapiro, the CEO of rPlus Hydro, the company behind the exploration project, told me.
Lake Owyhee, with its high plateaus, is one of 11 promising sites across the country rPlus Hydro has picked out. “We were looking at a site with about 1,600 feet of vertical drop and a very large existing lower reservoir, meaning we would only have to build an upper,” Shapiro said. The proximity to the existing Midpoint-Hemingway-Summer Line and the future Boardman-Hemingway line is also appealing since it would mean rPlus Hydro would only have to build a short transmission line from the site.
There are environmental concerns about pumped storage, including its possible effect on trout below the Owyhee Dam (which, despite being a Hoover Dam prototype when it was built in 1932, does not produce hydroelectricity but instead stores water for the local irrigation district). While there might be petitions, protests, and siting issues yet, rPlus Hydro’s pumped storage project will “do whatever it does entirely independent” of the Owyhee monument protection efforts, Houston said.
Other strange alliances abound. The local ranching community, for one, is largely on board with the congressional proposal to protect Owyhee — a minor miracle given that this corner of Oregon is also home to the wildlife refuge that was infamously occupied for 41 days by the Bundy brothers in 2016. Both that and the current monument proposal intentionally exclude any lands that would have overflowed into the more combative neighboring jurisdiction, where conservation efforts might have ignited a national-headline-making backlash.
“We don’t want the ranchers to be so pissed off that the first thing they do is go to the Trump administration” to appeal for a reversal, Houston said. The Owyhee monument is designed, in other words, to fly under the radar, lest it become another political tennis ball ricocheting between presidents like Bears Ears.
It’s designed to fly under the radar when it comes to clean energy projects, too. Houston and others were adamant that they don’t oppose the projects encircling the core conservation area — climate change, after all, is one of the biggest threats to the Owyhee, which is one of the fastest warming places in the entire county. Still, it was clear in conversations that the proposals are also spurring some of their urgency. “It’s about protecting what you have left,” is how Kindle, the NWF advocate I met at the Succor Creek Campground, put it to me.
More to the point, Houston told me that the lithium mining abutting what would become the Owyhee Monument’s westernmost unit, Oregon Canyon Mountains, is “a reminder of what can happen” if conservationists don’t act fast enough.
“You can see he is missing like four tail feathers. That one must be a fighter — and got his ass kicked.” Skyler Vold, an Oregon Department of Fish and Wildlife employee with the delightful title of “sage-grouse conservation coordinator,” stepped aside from the scope so I could check out the avian incarnation of Rocky Balboa.
The light was finally coming up over the Owyhee, but it was still so cold that my toes were starting to numb in my boots. That wasn’t what had my attention, though: At one point, Vold counted nearly two dozen sage grouse, all thumping away in the low point between two hills where they’d gathered for the lek. Kindle also spotted a lone elk on a faraway hillside, and we later heard the call of a sandhill crane, but the funny little birds with their spiky agave-leaf tails had us all enraptured.
No single creature better encapsulates the land-use fights in the West than the sage grouse. In 2018, the Trump administration stripped the birds of protections in order to open 9 million acres of the McDermitt Caldera to drilling and mining — mainly for lithium. While the Biden administration is considering new protections for sage grouse, of which there are only about 800,000 left and for whom the caldera is prime habitat, it has also dumped money into building up a domestic lithium supply chain. Sourcing lithium at home, however, will likely require access to McDermitt’s deposits.
Much of the caldera is located in Nevada, but the top rim bumps up into Oregon. It’s in this northernmost crescent that the Australian company Jindalee is considering opening its lithium mine. While the team told me it is still many years (and many environmental reviews) away from actually breaking ground, Jindalee’s executives also stressed that they see themselves as a critical player in America’s clean energy future if or when they do so.
“There’s a huge elephant in the room, which is: Where’s this lithium supply going to come from?” Ian Rodger, the Jindalee Lithium CEO, told me. The answer so far has been mainly from China, where lithium is “processed under really different social and environmental standards,” he said. “Our aspiration for the [Oregon] project is to develop it in the most responsible way.”
Simon Jowitt, an economic geologist at the University of Nevada, Reno, told me Rodger’s argument has a lot of merit. Social and environmental conditions are indeed “a lot better here than they would be in other countries,” he said, meaning that if we don’t extract the metals and minerals we’re going to use anyway locally, “then what we’re doing is we’re shipping problems away elsewhere.” There is ongoing discussion and division in the local Paiute and Shoshone Tribe about the economic and environmental pros and cons of mining near their community, as well.
The fact remains, however, that “as a human race, we need these metals and minerals if we want to do something meaningful about climate change mitigation,” Jowitt added. That requires stomaching a potentially sizeable physical footprint, especially in the case of lithium mining.
“If we are all going to go to electric vehicles by 2050,” Jowitt said, then that’s great — but policymakers and the public also “need to realize that there’s a mineral cost of this.”
Conservationists are quick to point out that mining laws in the U.S. — which have barely changed since Hiriam Leslie’s time — are stacked so in favor of the claimants that there is often no chance to get a word in edgewise. “Mining sure as heck trumps a funny chicken that goes ‘womp womp,’” is how Houston put it — a fair description of the sage grouse mating ritual. In the strange game of land-use rock-paper-scissors, mining also trumps cattle, which is why some local ranchers have approached the Protect the Owyhee organizers to unite against the miners. (There are slight differences in protections depending on whether the Owyhee is made a wilderness area by Congress or a monument by Biden; the latter option can’t be as prescriptive about flexible grazing operations for ranchers, which is why, on the whole, the ranching community strongly prefers a legislative route.)
Most of the would-be monument is outside the McDermitt Caldera, but the fear isn’t so much that any one transmission project or hydro facility or lithium mine would “ruin” the Owyhee. “Everyone says, ‘Well, why do you have to protect it? Is there a threat?’” Houston said. “There are potential threats; people have been talking about different things like interstate highways or transmission or new mines. If we wait until those threats are real, then we’ve got a conflict, and then everyone’s going to say, ‘Well, why didn’t you protect it before?’”
Ironically, some fear that a formal monument designation will draw attention from the crowds that are loving to death other popular parks across the West. Standing in Leslie Gulch, where the red blades of rhyolite rock strongly resemble plates on the back of an enormous Stegosaurus, I sympathized with the impulse to gatekeep the landscape; driving from one remarkable site to the next, we’d barely seen another car all day. That’s changing regardless of whether the Owyhee is signposted as a destination in name or not: Chris Geroro, a local fly fisher who’s been guiding on the Owyhee River for 16 years, said he’s gone from “being the only person on the river to being one of the people on the river.”
The landscape certainly leaves an impression. “You go over this hill and then all of a sudden, boom! You’re in this amazing canyon,” he told me, describing the reaction of his out-of-town clients when they visit. “I just watch their jaws drop and the surprise of ‘Where did this come from? This is an hour outside of Boise?’” Those people then go home and post pictures, and more people understandably want to visit. A monument could help address the currently mostly unmanaged recreation.
But if Biden declines to move forward on protecting the Owyhee and an indifferent or actively hostile administration takes office in January, then the Oregon Natural Desert Association will have to switch strategies. Houston told me his team is already considering alternative approaches like pursuing a wilderness designation through the legislative branch. If, in a worst-case scenario, Trump decides to go after the land in the Owyhee, ONDA is prepared to go to court.
As we were leaving Leslie Gulch, Houston told me that he studied to be an evolutionary biologist. “What evolutionary biology is all about is understanding how species evolve based on what they have at that moment. They go forward with what they’ve got,” he said. “That’s what we’re doing in conservation — we’re going forward with what we’ve got.”
When it finally came time for me to return to Boise, I retraced the route I’d taken that morning into Succor Creek. The light was fading, but there was still enough for me to make out the hoodoo rock towers and the rolling sagebrush hills that I’d missed in the dark on my way into the canyon. To my surprise, enormous high-tension transmission towers also came into view; I’d driven beneath them hours before without even realizing it. Now, the silver power lines — future companions of the B2H — looked gossamer in the setting sun.
I parked to take a photo, and when I got out of the car, I felt a staticky tingle, like how a storm might excite the hairs on your arm. It was probably just a Placebo effect of standing under transmission lines and having spent the day thinking about electricity. But at that moment, I would have believed it was the passing ghost of an old cattleman glaring in my direction or perhaps the presence of something yet to come, something buzzing with potential, slung over my head.
I returned to my car and continued on to the highway. Soon, houses and small towns started to reappear, and I followed their lights through the dark back to Boise.
Editor’s note: This story has been updated to clarify which version of the proposed federal protections for Owyhee the local ranching community approves.
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A new working paper from a trio of eminent economists tallies the effects of warming — particularly extreme weather — on Americans’ budgets.
Attempts to quantify the costs of climate change often end up as philosophical exercises in forecasting and quantifying the future. Such projects involve (at least) two difficult tasks: establishing what is the current climate “pathway” we’re on, which means projecting hard-to-predict phenomena such as future policy actions and potential climate system feedbacks; and then deciding how to value the wellbeing of those people who will be born in the decades — or centuries — to come versus those who are alive today.
But what about the climate impacts we’re paying for right now? That’s the question explored in a working paper by former Treasury Department officials Kimberley Clausing, an economist at the University of California, Los Angeles, and Catherine Wolfram, an economist at the Massachusetts Institute of Technology, along with Wolfram’s MIT colleague Christopher Knittel.
“We wanted to do the accounting exercise and put it all together,” Wolfram told me. Their method: Simply add up the existing harms of climate change, and boom, there’s your answer.
This approach stands in contrast to the more well-worn modeling and forecasting projects that make up much of the climate harms literature. “Projections about the future are important to make future-oriented policy,” Clausing told me. “But one of the things that’s kind of surprising and interesting to us that I don’t think has been fairly accounted for is how much climate change is already affecting household budgets.”
The paper is meant to intervene in current debates in climate and progressive policy circles over affordability — namely whether policy to address climate change should be put on the back (induction?) burner in light of concerns about how restrictions on fossil fuels or mandates for renewable energy can increase consumer costs, especially utility bills.
“What really motivated the paper, to be honest, is that we noticed that a lot of observers have made statements about climate policy action where they’re like, We’d love to do this, that, or the other thing, but it’s hard to do because the action would fall more heavily on the poor.”
The paper began its life in the fall as part of the semi-annual Brookings Papers on Economic Activity conference before being released this week as a working paper by the National Bureau of Economic Research this week.
Their research has not yet been peer reviewed, but the authors found that even using what they describe as a “narrow accounting” method — looking only at climate impacts from heat and extreme weather on household budgets and mortality — there were “sizable costs to U.S. households from recent climate change patterns.” Those started at $400 per year and went as high as $900 depending on how extreme weather were attributed to climate change, adding up to an aggregate cost of about $50 billion to $110 billion nationwide.
The direct effects of high temperatures may be easier to forecast, but the most extensive damage of climate change, in the United States, at least, runs downstream from high temperatures: storms, floods, and especially wildfires. Clausing and the authors attribute this to the fact that the United States has already made huge investments in adapting to heat in the form of air conditioning. Adaptations for natural disasters — flood walls, moving homes and businesses out of flood plains, universal indoor air purification, building codes for fire prevention — are farther behind.
Looking specifically at cost increases due to health effects from climate change, wildfires are the primary cost center.
“Wildfires have two impacts,” Wolfram told me. “One is the destruction that they cause — we see that in property insurance. The other thing, and that is probably the most surprising to us, is how bad the wildfire smoke has become.”
Those same wildfires, of course, feed into spiraling insurance costs, especially in the West.
Insurance costs top the list of household costs the authors attribute to climate change more broadly, making up more than half of the total. Citing research on homeowners insurance by University of Pennsylvania and University of Wisconsin researchers Benjamin Keys and Philip Mulder, the authors found that “average nominal premiums rose by 33% between 2020 and 2023, with disaster-prone areas experiencing particularly steep increases.”
One frequent argument against climate mitigation policies is that they cost the poor disproportionately; for example, a tax on gasoline has a bigger proportional effect on low-income drivers because a greater portion of their income is spent on fueling their car. But “if you don’t do anything, that has a disproportionate burden on the poor,” Clausing told me. That’s because the costs of dealing with climate change — higher insurance premiums, higher health insurance premiums, higher electric bills for more air conditioning — weigh more heavily on people with lower incomes, she and her co-authors found.
“Poor people may have a harder time and be more likely to be displaced by disasters,” Clausing told me.
The paper’s authors emphasized that their results show the need for climate adaptation as well as emissions-reducing policy, but also that forward-looking adaptation can’t happen if there’s insufficient information. Insufficient information appears to be exactly what some people want. Disputes over climate information have a well known political valence, with federal agencies under the current administration reducing their efforts to collect and publish climate data.
But the private sector has its own reasons not to be completely fulsome with climate-related risk data.
The New York Times reported this weekend, for instance, that the online real estate marketplace Zillow has removed climate risk scores from “more than one million home sale listings,” following complaints from real estate agents.“They’re doing people a disservice,” Clausing told me when I asked her about Zillow’s action.
“Of course, if my home’s on a floodplain, I’m not happy that this information is available to everyone on Zillow,” Clausing said. But the alternative is, “if my home’s in a floodplain, just pretending that that’s the same as if it were in a very safe place.” Which is fine, but it won’t stop your insurance bill from rising.
Current conditions: A cluster of storms from Sri Lanka to Southeast Asia triggered floods that have killed more than 900 so far • A snowstorm stretching 1,200 miles across the northern United States blanketed parts of Iowa, Illinois, and South Dakota with the white stuff • In China, 31 weather stations broke records for heat on Sunday.
The in-house market monitor at the PJM Interconnection filed a complaint last week to the Federal Energy Regulatory Commission urging the agency to ban the nation’s largest grid operator from connecting any new data centers that the system can’t reliably serve. The warning from the PJM ombudsman comes as the grid operator is considering proposals to require blackouts during periods when there’s not enough electricity to meet data centers’ needs. The grid operator’s membership voted last month on a way forward, but no potential solution garnered enough votes to succeed, Heatmap’s Matthew Zeitlin wrote. “That result is not consistent with the basic responsibility of PJM to maintain a reliable grid and is therefore not just and reasonable,” Monitoring Analytics said, according to Utility Dive.
The push comes as residential electricity prices continue climbing. Rates for American households spiked by an average of 7.4% in September compared to the same month in 2024, according to new data from the Energy Information Administration.

The Environmental Protection Agency made some big news on Wednesday, just before much of the U.S. took off for Thanksgiving: It’s delaying a rule that would have required oil and gas companies to start reducing how much methane, a potent greenhouse gas, is released from their operations into the atmosphere. The regulation would have required oil and gas companies to start reducing how much methane, a potent greenhouse gas, is released from their operations into the atmosphere. Drillers were supposed to start tracking emissions this year. But the Trump administration is instead giving companies until January 2027 as it considers repealing the measure altogether.
The New York Power Authority, the nation’s second largest government-owned utility after the federal Tennessee Valley Authority, is staffing up in preparation for its push to build at least a gigawatt of new nuclear power generation. On Monday morning, NYPA named Todd Josifovski as its new senior vice president of nuclear energy development, tasking the veteran atomic power executive with charting the strategic direction and development of new reactor projects. Josifovski previously hailed from Ontario Power Generation, the state-owned utility in the eponymous Canadian province, which is building what is likely to be North America’s first small modular reactor project. (As Matthew wrote when NYPA first announced its plans for a new nuclear plant, the approach mirrors Ontario’s there.) NYPA is also adding Christopher Hanson, a former member of the Nuclear Regulatory Commission whom President Donald Trump abruptly fired from the federal agency this summer, as a senior consultant in charge of guiding federal financing and permitting.
The push comes as New York’s statewide grid reaches “an inflection point” as surging demand, an aging fleet, and a lack of dispatchable power puts the system at risk, according to the latest reliability report. “The margin for error is extremely narrow, and most plausible futures point to significant reliability shortfalls within the next ten years,” the report concluded. “Depending on demand growth and retirement patterns, the system may need several thousand megawatts of new dispatchable generation over that timeframe.”
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Zillow, the country’s largest real estate site, removed a feature from more than a million listings that showed the risks from extreme weather, The New York Times reported. The website had started including climate risk scores last year, using data from the risk-modeling company First Street. But real estate agents complained that the ratings hurt sales, and homeowners protested that there was no way to challenge the scores. Following a complaint from the California Regional Multiple Listing Service, which operates a private database of brokers and agents, Zillow stopped displaying the scores.
The European Commission unveiled a new plan to replace fossil fuels in Europe’s economy with trees. By adopting the so-called Bioeconomy Strategy, released Thursday, the continent aims to remove fossil fuels in products Politico listed as “plastics, building materials, chemicals, and fibers” with organic materials that regrow, such as trees and crops. Doing so, the bloc argued, will help to preserve Europe’s “strategic autonomy” by making the continent less dependent on imported fuels.
Canada, meanwhile, is plowing ahead with its plans to strengthen itself against the U.S. by turning into an energy superpower. Already, the Trans Mountain pipeline is earning the federal coffers nearly $1.3 billion, based on my back-of-the-napkin conversion of the Canadian loonies cited in this Globe and Mail story to U.S. dollars. Now Prime Minister Mark Carney’s government is pitching a new pipeline from Alberta to the West Coast for export to Asia, as the Financial Times reported.
Swapping bunker fuel-burning engines for nuclear propulsion units in container ships could shave up to $68 million off annual shipping expenses, a new report found. If small modular reactors designed to power a cargo vessel are commercialized within four years as expected, the shipping companies could eliminate $50 million in fuel costs each year and about $18 million in carbon penalties. That’s according to data from Lloyd’s Register and LucidCatalyst report for the Singaporean maritime services company Seaspan Corporation.
If it turns out to be a bubble, billions of dollars of energy assets will be on the line.
The data center investment boom has already transformed the American economy. It is now poised to transform the American energy system.
Hyperscalers — including tech giants such as Microsoft and Meta, as well as leaders in artificial intelligence like OpenAI and CoreWeave — are investing eyewatering amounts of capital into developing new energy resources to feed their power-hungry data infrastructure. Those data centers are already straining the existing energy grid, prompting widespread political anxiety over an energy supply crisis and a ratepayer affordability shock. Nothing in recent memory has thrown policymakers’ decades-long underinvestment in the health of our energy grid into such stark relief. The commercial potential of next-generation energy technologies such as advanced nuclear, batteries, and grid-enhancing applications now hinge on the speed and scale of the AI buildout.
But what happens if the AI boom buffers and data center investment collapses? It is not idle speculation to say that the AI boom rests on unstable financial foundations. Worse, however, is the fact that as of this year, the tech sector’s breakneck investment into data centers is the only tailwind to U.S. economic growth. If there is a market correction, there is no other growth sector that could pick up the slack.
Not only would a sudden reversal in investor sentiment make stranded assets of the data centers themselves, which will lose value as their lease revenue disappears, it also threatens to strand all the energy projects and efficiency innovations that data center demand might have called forth.
If the AI boom does not deliver, we need a backup plan for energy policy.
An analysis of the capital structure of the AI boom suggests that policymakers should be more concerned about the financial fundamentals of data centers and their tenants — the tech companies that are buoying the economy. My recent report for the Center for Public Enterprise, Bubble or Nothing, maps out how the various market actors in the AI sector interact, connecting the market structure of the AI inference sector to the economics of Nvidia’s graphics processing units, the chips known as GPUs that power AI software, to the data center real estate debt market. Spelling out the core financial relationships illuminates where the vulnerabilities lie.

First and foremost: The business model remains unprofitable. The leading AI companies ― mostly the leading tech companies, as well as some AI-specific firms such as OpenAI and Anthropic ― are all competing with each other to dominate the market for AI inference services such as large language models. None of them is returning a profit on its investments. Back-of-the-envelope math suggests that Meta, Google, Microsoft, and Amazon invested over $560 billion into AI technology and data centers through 2024 and 2025, and have reported revenues of just $35 billion.
To be sure, many new technology companies remain unprofitable for years ― including now-ubiquitous firms like Uber and Amazon. Profits are not the AI sector’s immediate goal; the sector’s high valuations reflect investors’ assumptions about future earnings potential. But while the losses pile up, the market leaders are all vying to maximize the market share of their virtually identical services ― a prisoner’s dilemma of sorts that forces down prices even as the cost of providing inference services continues to rise. Rising costs, suppressed revenues, and fuzzy measurements of real user demand are, when combined, a toxic cocktail and a reflection of the sector’s inherent uncertainty.
Second: AI companies have a capital investment problem. These are not pure software companies; to provide their inference services, AI companies must all invest in or find ways to access GPUs. In mature industries, capital assets have predictable valuations that their owners can borrow against and use as collateral to invest further in their businesses. Not here: The market value of a GPU is incredibly uncertain and, at least currently, remains suppressed due to the sector’s competitive market structure, the physical deterioration of GPUs at high utilization rates, the unclear trajectory of demand, and the value destruction that comes from Nvidia’s now-yearly release of new high-end GPU models.
The tech industry’s rush to invest in new GPUs means existing GPUs lose market value much faster. Some companies, particularly the vulnerable and debt-saddled “neocloud” companies that buy GPUs to rent their compute capacity to retail and hyperscaler consumers, are taking out tens of billions of dollars of loans to buy new GPUs backed by the value of their older GPU stock; the danger of this strategy is obvious. Others including OpenAI and xAI, having realized that GPUs are not safe to hold on one’s balance sheet, are instead renting them from Oracle and Nvidia, respectively.
To paper over the valuation uncertainty of the GPUs they do own, all the hyperscalers have changed their accounting standards for GPU valuations over the past few years to minimize their annual reported depreciation expenses. Some financial analysts don’t buy it: Last year, Barclays analysts judged GPU depreciation as risky enough to merit marking down the earnings estimates of Google (in this case its parent company, Alphabet), Microsoft, and Meta as much as 10%, arguing that consensus modeling was severely underestimating the earnings write-offs required.
Under these market dynamics, the booming demand for high-end chips looks less like a reflection of healthy growth for the tech sector and more like a scramble for high-value collateral to maintain market position among a set of firms with limited product differentiation. If high demand projections for AI technologies come true, collateral ostensibly depreciates at a manageable pace as older GPUs retain their marketable value over their useful life — but otherwise, this combination of structurally compressed profits and rapidly depreciating collateral is evidence of a snake eating its own tail.
All of these hyperscalers are tenants within data centers. Their lack of cash flow or good collateral should have their landlords worried about “tenant churn,” given the risk that many data center tenants will have to undertake multiple cycles of expensive capital expenditure on GPUs and network infrastructure within a single lease term. Data center developers take out construction (or “mini-perm”) loans of four to six years and refinance them into longer-term permanent loans, which can then be packaged into asset-backed and commercial mortgage-backed securities to sell to a wider pool of institutional investors and banks. The threat of broken leases and tenant vacancies threatens the long-term solvency of the leading data center developers ― companies like Equinix and Digital Realty ― as well as the livelihoods of the construction contractors and electricians they hire to build their facilities and manage their energy resources.
Much ink has already been spilled on how the hyperscalers are “roundabouting” each other, or engaging in circular financing: They are making billions of dollars of long-term purchase commitments, equity investments, and project co-development agreements with one another. OpenAI, Oracle, CoreWeave, and Nvidia are at the center of this web. Nvidia has invested $100 billion in OpenAI, to be repaid over time through OpenAI’s lease of Nvidia GPUs. Oracle is spending $40 billion on Nvidia GPUs to power a data center it has leased for 15 years to support OpenAI, for which OpenAI is paying Oracle $300 billion over the next five years. OpenAI is paying CoreWeave over the next five years to rent its Nvidia GPUs; the contract is valued at $11.9 billion, and OpenAI has committed to spending at least $4 billion through April 2029. OpenAI already has a $350 million equity stake in CoreWeave. Nvidia has committed to buying CoreWeave’s unsold cloud computing capacity by 2032 for $6.3 billion, after it already took a 7% stake in CoreWeave when the latter went public. If you’re feeling dizzy, count yourself lucky: These deals represent only a fraction of the available examples of circular financing.
These companies are all betting on each others’ growth; their growth projections and purchase commitments are all dependent on their peers’ growth projections and purchase commitments. Optimistically, this roundabouting represents a kind of “risk mutualism,” which, at least for now, ends up supporting greater capital expenditures. Pessimistically, roundabouting is a way for these companies to pay each other for goods and services in any way except cash — shares, warrants, purchase commitments, token reservations, backstop commitments, and accounts receivable, but not U.S. dollars. The second any one of these companies decides it wants cash rather than a commitment is when the music stops. Chances are, that company needs cash to pay a commitment of its own, likely involving a lender.
Lenders are the final piece of the puzzle. Contrary to the notion that cash-rich hyperscalers can finance their own data center buildout, there has been a record volume of debt issuance this year from companies such as Oracle and CoreWeave, as well as private credit giants like Blue Owl and Apollo, which are lending into the boom. The debt may not go directly onto hyperscalers’ balance sheets, but their purchase commitments are the collateral against which data center developers, neocloud companies like CoreWeave, and private credit firms raise capital. While debt is not inherently something to shy away from ― it’s how infrastructure gets built ― it’s worth raising eyebrows at the role private credit firms are playing at the center of this revenue-free investment boom. They are exposed to GPU financing and to data center financing, although not the GPU producers themselves. They have capped upside and unlimited downside. If they stop lending, the rest of the sector’s risks look a lot more risky.

A market correction starts when any one of the AI companies can’t scrounge up the cash to meet its liabilities and can no longer keep borrowing money to delay paying for its leases and its debts. A sudden stop in lending to any of these companies would be a big deal ― it would force AI companies to sell their assets, particularly GPUs, into a potentially adverse market in order to meet refinancing deadlines. A fire sale of GPUs hurts not just the long-term earnings potential of the AI companies themselves, but also producers such as Nvidia and AMD, since even they would be selling their GPUs into a soft market.
For the tech industry, the likely outcome of a market correction is consolidation. Any widespread defaults among AI-related businesses and special purpose vehicles will leave capital assets like GPUs and energy technologies like supercapacitors stranded, losing their market value in the absence of demand ― the perfect targets for a rollup. Indeed, it stands to reason that the tech giants’ dominance over the cloud and web services sectors, not to mention advertising, will allow them to continue leading the market. They can regain monopolistic control over the remaining consumer demand in the AI services sector; their access to more certain cash flows eases their leverage constraints over the longer term as the economy recovers.
A market correction, then, is hardly the end of the tech industry ― but it still leaves a lot of data center investments stranded. What does that mean for the energy buildout that data centers are directly and indirectly financing?
A market correction would likely compel vertically integrated utilities to cancel plans to develop new combined-cycle gas turbines and expensive clean firm resources such as nuclear energy. Developers on wholesale markets have it worse: It’s not clear how new and expensive firm resources compete if demand shrinks. Grid managers would have to call up more expensive units less frequently. Doing so would constrain the revenue-generating potential of those generators relative to the resources that can meet marginal load more cheaply — namely solar, storage, peaker gas, and demand-response systems. Combined-cycle gas turbines co-located with data centers might be stranded; at the very least, they wouldn’t be used very often. (Peaker gas plants, used to manage load fluctuation, might still get built over the medium term.) And the flight to quality and flexibility would consign coal power back to its own ash heaps. Ultimately, a market correction does not change the broader trend toward electrification.
A market correction that stabilizes the data center investment trajectory would make it easier for utilities to conduct integrated resource planning. But it would not necessarily simplify grid planners’ ability to plan their interconnection queues — phantom projects dropping out of the queue requires grid planners to redo all their studies. Regardless of the health of the investment boom, we still need to reform our grid interconnection processes.
The biggest risk is that ratepayers will be on the hook for assets that sit underutilized in the absence of tech companies’ large load requirements, especially those served by utilities that might be building power in advance of committed contracts with large load customers like data center developers. The energy assets they build might remain useful for grid stability and could still participate in capacity markets. But generation assets built close to data center sites to serve those sites cheaply might not be able to provision the broader energy grid cost-efficiently due to higher grid transport costs incurred when serving more distant sources of load.
These energy projects need not be albatrosses.
Many of these data centers being planned are in the process of securing permits and grid interconnection rights. Those interconnection rights are scarce and valuable; if a data center gets stranded, policymakers should consider purchasing those rights and incentivizing new businesses or manufacturing industries to build on that land and take advantage of those rights. Doing so would provide offtake for nearby energy assets and avoid displacing their costs onto other ratepayers. That being said, new users of that land may not be able to pay anywhere near as much as hyperscalers could for interconnection or for power. Policymakers seeking to capture value from stranded interconnection points must ensure that new projects pencil out at a lower price point.
Policymakers should also consider backstopping the development of critical and innovative energy projects and the firms contracted to build them. I mean this in the most expansive way possible: Policymakers should not just backstop the completion of the solar and storage assets built to serve new load, but also provide exigent purchase guarantees to the firms that are prototyping the flow batteries, supercapacitors, cooling systems, and uninterruptible power systems that data center developers are increasingly interested in. Without these interventions, a market correction would otherwise destroy the value of many of those projects and the earnings potential of their developers, to say nothing of arresting progress on incredibly promising and commercializable technologies.
Policymakers can capture long-term value for the taxpayer by making investments in these distressed projects and developers. This is already what the New York Power Authority has done by taking ownership and backstopping the development of over 7 gigawatts of energy projects ― most of which were at risk of being abandoned by a private sponsor.
The market might not immediately welcome risky bets like these. It is unclear, for instance, what industries could use the interconnection or energy provided to a stranded gigawatt-scale data center. Some of the more promising options ― take aluminum or green steel ― do not have a viable domestic market. Policy uncertainty, tariffs, and tax credit changes in the One Big Beautiful Bill Act have all suppressed the growth of clean manufacturing and metals refining industries like these. The rest of the economy is also deteriorating. The fact that the data center boom is threatened by, at its core, a lack of consumer demand and the resulting unstable investment pathways is itself an ironic miniature of the U.S. economy as a whole.
As analysts at Employ America put it, “The losses in a [tech sector] bust will simply be too large and swift to be neatly offset by an imminent and symmetric boom elsewhere. Even as housing and consumer durables ultimately did well following the bust of the 90s tech boom, there was a one- to two-year lag, as it took time for long-term rates to fall and investors to shift their focus.” This is the issue with having only one growth sector in the economy. And without a more holistic industrial policy, we cannot spur any others.
Questions like these ― questions about what comes next ― suggest that the messy details of data center project finance should not be the sole purview of investors. After all, our exposure to the sector only grows more concentrated by the day. More precisely mapping out how capital flows through the sector should help financial policymakers and industrial policy thinkers understand the risks of a market correction. Political leaders should be prepared to tackle the downside distributional challenges raised by the instability of this data center boom ― challenges to consumer wealth, public budgets, and our energy system.
This sparkling sector is no replacement for industrial policy and macroeconomic investment conditions that create broad-based sources of demand growth and prosperity. But in their absence, policymakers can still treat the challenge of a market correction as an opportunity to think ahead about the nation’s industrial future.