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Any household savings will barely make a dent in the added costs from Trump’s many tariffs.

Donald Trump’s tariffs — the “fentanyl” levies on Canada, China, and Mexico, the “reciprocal” tariffs on nearly every country (and some uninhabited islands), and the global 10% tariff — will almost certainly cause consumer goods on average to get more expensive. The Yale Budget Lab estimates that in combination, the tariffs Trump has announced so far in his second term will cause prices to rise 2.3%, reducing purchasing power by $3,800 per year per household.
But there’s one very important consumer good that seems due to decline in price.
Trump administration officials — including the president himself — have touted cheaper oil to suggest that the economic response to the tariffs hasn’t been all bad. On Sunday, Secretary of the Treasury Scott Bessent told NBC, “Oil prices went down almost 15% in two days, which impacts working Americans much more than the stock market does.”
Trump picked up this line on Truth Social Monday morning. “Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION,” he wrote. He then spent the day posting quotes from Fox Business commentators echoing that idea, first Maria Bartiromo (“Rates are plummeting, oil prices are plummeting, deregulation is happening. President Trump is not going to bend”) then Charles Payne (“What we’re not talking about is, oil was $76, now it’s $65. Gasoline prices are going to plummet”).
But according to Neil Dutta, head of economic research at Renaissance Macro Research, pointing to falling oil prices as a stimulus is just another example of the “4D chess” theory, under which some market participants attribute motives to Trump’s trade policy beyond his stated goal of reducing trade deficits to as near zero (or surplus!) as possible.
Instead, oil markets are primarily “responding to the recession risk that comes from the tariff and the trade war,” Dutta told me. “That is the main story.” In short, oil markets see less global trade and less global production, and therefore falling demand for oil. The effect on household consumption, he said, was a “second order effect.”
It is true that falling oil prices will help “stabilize consumption,” Dutta told me (although they could also devastate America’s own oil industry). “It helps. It’ll provide some lift to real income growth for consumers, because they’re not spending as much on gasoline.” But “to fully offset the trade war effects, you basically need to get oil down to zero.”
That’s confirmed by some simple and extremely back of the envelope math. In 2023, households on average consumed about 700 gallons of gasoline per year, based on Energy Information Administration calculations that the average gasoline price in 2023 was $3.52, while the Bureau of Labor Statistics put average household gasoline expenditures at about $2,450.
Let’s generously assume that due to the tariffs and Trump’s regulatory and diplomatic efforts, gas prices drop from the $3.26 they were at on Monday, according to AAA, to $2.60, the average price in 2019. (GasBuddy petroleum analyst Patrick De Haan wrote Monday that the tariffs combined with OPEC+ production hikes could lead gas prices “to fall below $3 per gallon.”)
Let’s also assume that this drop in gas prices does not cause people to drive more or buy less fuel-efficient vehicles. In that case, those same 700 gallons cost the average American $1,820, which would generate annual savings of $630 on average per household. If we went to the lowest price since the Russian invasion of Ukraine, about $3 per gallon, total consumption of 700 gallons would cost a household about $2,100, saving $350 per household per year.
That being said, $1,820 is a pretty low level for annual gasoline consumption. In 2021, as the economy was recovering from the Covid recession and before gas prices popped, annual gasoline expenditures only got as low as $1,948; in 2020 — when oil prices dropped to literally negative dollars per barrel and gas prices got down to $1.85 a gallon — annual expenditures were just over $1,500.
In any case, if you remember the opening paragraphs of this story, even the most generous estimated savings would go nowhere near surmounting the overall rise in prices forecast by the Yale Budget Lab. $630 is less than $3,800! (JPMorgan has forecast a more mild increase in prices of 1% to 1.5%, but agrees that prices will likely rise and purchasing power will decline.)
But maybe look at it this way: You might be able to drive a little more than you expected to, even as your costs elsewhere are going up. Just please be careful! You don’t want to get into a bad accident and have to replace your car: New car prices are expected to rise by several thousand dollars due to Trump’s tariffs.
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Hurricane Melissa made landfall over Cuba with winds raging up to 120 miles per hour | If the Category 5 storm veers westward as it heads north, Melissa will bring roiling seas to Atlantic Canada; if it veers eastward, it will bring rain to the United Kingdom | Heavy snowfall in Tibet forced Chinese authorities to shut down access to Mount Everest.
 
China’s commerce ministry promised to suspend its latest export restrictions on rare earths for at least a year as part of a trade truce President Donald Trump brokered with President Xi Jinping. Under rules Beijing issued on October 8, Chinese companies were required to obtain the ministry’s permission before exporting equipment to process ore and technology for mining and refining rare earths, magnets made from the metals, and components for electric vehicle battery manufacturing. That doesn’t mean Beijing is dialing back all its restrictions on rare earths, over which China controls roughly 90% of the world’s refining capacity. “Importantly, China’s commerce ministry today made no mention of suspending its April 4 regulations, which require export licenses for seven kinds of rare earths and magnets made from them,” The New York Times’ Beijing bureau chief, Keith Bradsher, wrote Thursday morning. “The April rules continue to disrupt production at the many factories in the United States and Europe that need Chinese materials.”
That’s bad news for Western rare earth companies whose stocks have been on a tear since China announced the latest export controls. But it’s good news for clean-energy companies who need access to the minerals — and not their only cause for optimism this morning. The Federal Reserve cut its benchmark interest rate by a quarter of a percentage point, bringing the cost of borrowing down to its lowest level in three years. The move came amid a flurry of economic uncertainty from the United States’ ongoing trade conflicts, accusations from the Trump administration’s over jobs and inflation reports, and the ongoing government shutdown. For the first time since 2019, two Fed officials dissented over the rate cut decision — one who wanted a larger, half-point cut, and the other who called for holding steady at the current level. The political upheaval aside, any cut is good news for renewable energy developers. As Heatmap’s Matthew Zeitlin wrote after last month’s quarter-point cut, the move may “provide some relief to renewables developers and investors, who are especially sensitive to financing costs.” But it still “may not be enough” to erase the challenges from higher tariffs.
On Wednesday, General Motors pinkslipped more than 3,400 workers who build electric vehicles and batteries as the company “rapidly adjusts to new policy under President Donald Trump and sluggish interest among U.S. buyers,” The Detroit News reported. The automaker’s Detroit-area all-electric assembly plant, called Factory Zero, will be the hardest hit, with 1,200 cuts.
GM had emerged this year as the best-selling electric vehicle maker in the country, with record sales in the most recent quarter. By eliminating the $7,500 federal tax credit for electric vehicles last month as part of his One Big Beautiful Bill Act, however, Trump cost GM “1.6 billion,” as Andrew Moseman wrote last week in Heatmap.
Just over a week ago, as I wrote here, Rhode Island Senator Sheldon Whitehouse warned that his vote on the bipartisan permitting reform ideas he helped put forward depended on the Trump administration easing up on what we’ve frequently called in this newsletter the “total war on wind.” Secretary of the Interior Doug Burgum balked at the idea. And yet, talks seem to be progressing. On Wednesday, E&E News reported that Whitehouse, the top Democrat on the Environment and Public Works Committee and a longstanding climate hawk, said talks were "pretty constant right now” and that the Senate planned to release a framework by the end of the year. He added that “there’s good faith on all four corners, referring to Environment and Public Works Chair Shelley Moore Capito, a West Virginia Republican, Energy and Natural Resources Chair Mike Lee, a Utah Republican, and ranking member Martin Heinrich, a New Mexico Democrat. “I don’t think we necessarily have to be down to legislative language, but it has to be clear enough to where we’re going so our colleagues have a chance to look at it and kick the tires and see what their concerns are.”
Kentucky is reeling from the looming halt to federal food stamps. Now the Trump administration wants to let the nation’s biggest grid operator charge Kentuckians to keep aging fossil fuel stations open in other states? No way, say one of the state’s biggest utilities and its attorney general. As Utility Dive reported, East Kentucky Power Cooperative, which serves nearly a quarter of the state’s ratepayers, and Attorney General Russell Coleman are challenging the PJM Interconnection’s plan to make utilities across its system pay for the Department of Energy’s emergency orders to keep coal-, oil-, and gas-fired power plants set to close this year open past their expiry dates. Much like the coal plant the agency ordered to stay open in Michigan, the Energy Department recently directed utilities in the PJM service area to keep two gas- and oil-fired units online near Philadelphia and a 400-megawatt oil-fired plant going near Baltimore. In August, the Federal Energy Regulatory Commission rejected East Kentucky Power Cooperative’s arguments against having to pay for PJM’s overall costs. But now the utility and the attorney general, a Republican, are fighting back against the latest filings.
Elsewhere in the PJM territory, chip giant Nvidia is investing in a data center built to smooth out power use as demand for artificial intelligence surges. The project, announced in Axios, is “the first commercial rollout of software that adjusts energy draw in real time.” Nvidia is set to deploy grid-regulating software by the startup Emerald AI at a server farm under construction in Virginia. Once completed, the facility will be “the first built to a new industry-wide certification on flexible power.”
The Los Angeles Department of Water and Power board voted unanimously to approve a contentious plan for an $800 million conversion of two units at the Scattergood Generating Station. The 3 to 0 decision to sign off on the plant’s environmental impact report clears the way for the city’s largest gas-fired plant to burn both natural gas and hydrogen. While the regulators said the plan was in line with the city’s goal of running on 100% renewables by 2035, since green hydrogen is made with clean electricity, opponents told the Los Angeles Times that the project would prolong the use of fossil fuels in the city and contribute to local pollution from nitrogen oxides.
If successful, the conversion will be one of the country’s biggest experiments in swapping gas for hydrogen. On Long Island in New York, utility giant National Grid announced a plan in August to install the world’s first linear generator that will run entirely on green hydrogen. Yet the efforts come as the Trump administration has eliminated federal funding for two of the seven regional hydrogen hubs set up under the bipartisan Infrastructure Investment and Jobs Act that were specifically designed to commercialize green hydrogen. And now, as Heatmap’s Emily Pontecorvo wrote, a list of rumored cuts that could come once the government shutdown ends puts the other five hubs on the chopping block.
Artificial intelligence is starting to decode the language of whales. Now biologist David Gruber of the Cetacean Translation Initiative, who has spent decades trying to understand marine life, said that the work his research outfit is doing to detect patterns in whale songs could “dramatically strengthen legal protections for nonhuman life,” Inside Climate News reported. Already, Gruber’s work has uncovered a sperm whale “alphabet,” finding that click patterns shift with conversational context, and discovered that whales even have dialects with pods from different parts of the ocean “vocalizing as differently as a New Yorker and a Texan.”
The former FERC chair explains why Chris Wright is likely to succeed where Rick Perry failed.
Neil Chatterjee thinks it’s going to go better this time.
Eight years ago, Chatterjee was the chairman of the Federal Energy Regulatory Commission, and Trump was the president. When Trump’s then-Secretary of Energy, Rick Perry, asked the commission to ensure that generators able to store fuel on site — which in the U.S. largely means coal and nuclear — get extra payments for doing so, thus keeping struggling power plants in business, it rejected the proposal by a unanimous vote.
“There’s no doubt my 2017 experience — that was politically driven,” Chatterjee told me, though he did concede that Perry was “right to be concerned about retiring generation at the time.” The Perry plan had been heavily influenced by the coal industry, he told me, and the regulatory structure of “compensating plants for having the attribute of on-site fuel … it was just a bit of a stretch.”
Now there’s a new Trump administration, with a new Secretary of Energy and a new FERC — and on Thursday, Energy Secretary Chris Wright asked the commission to do something else. He put forward what’s known as an advance notice of proposed rulemaking, directing FERC to come up with ways to help to make sure the grid can deal with another large-scale transition.
“They’re just apples and oranges,” Chatterjee said of the two requests. “This is a much more elegant, much more thoughtful exercise.”
Wright’s letter lays out the challenge of integrating large loads — i.e. data centers — onto the grid, arguing that they “must be able to connect to the transmission system in a timely, orderly, and non-discriminatory manner.” Doing so, he said, will “require unprecedented and extraordinary quantities of electricity and substantial investment in the Nation’s interstate transmission system.”
The overall thrust of the proposal is to make things easier and faster, including suggesting that interconnection studies for large loads that have their own generation or are flexible could be finished in just 60 days — which, if successful, could take a process that can last for years and get it done in less than a season.
The notice suggests a number of reforms for FERC to consider, including faster interconnection for “large loads that agree to be curtailable and hybrid facilities that agree to be curtailable and dispatchable” — touching on what has been the hottest subject in energy policy this year.
Tyler Norris, a Duke University researcher who has been one of the leading promoters of load flexibility, called Wright’s notice a “BFD” — that is, big effing deal — in a brief email to Heatmap.
Norris elaborated further on X. The proposal “appears to have done the near-impossible — generate overwhelming bipartisan enthusiasm — in what may be the most positive cross-sector response we’ve seen yet to DOE action under Secretary Wright,” he wrote.
Wright’s proposal suggests that both new data centers and new sources of power should be studied together for interconnection. While this sounds like it would be adding complexity, it may actually be simplifying the process. “Such an approach will allow for efficient siting of loads and generating facilities and thereby minimize the need for costly network upgrades,” the proposal says, reflecting the twinned desire to get more data centers on line faster while shielding electricity consumers from higher costs.
Another of Wright’s suggestions, however, might face more opposition. He argues that “load and hybrid facilities should be responsible for 100% of the network upgrades that they are assigned through the interconnection studies.”
This is designed to address the possibility — already being realized in parts of the country — that the network infrastructure required to bring data centers online could lead to higher costs for all electricity customers served by a given utility as it spreads out those costs to its rate base. The risk, however, is that utilities won’t like it. That’s because in most of the country, utilities earn a regulated rate of return on their investment in grid upgrades (by way of customer bill payments, of course), creating an incentive for them to continue to spend.
Those dynamics may be changing. Utilities once enjoyed primacy in Washington on electricity policy, especially among Republicans, but have seen their status slip of late in favor of a new force: big tech companies with big data centers.
“The hyperscalers have the influence to counteract the utilities here,” Chatterjee told me. “And that’s a new dynamic, historically — when it came to FERC, when it came to DOE, when it came to, quite frankly, Congress. People are sensitive to their utilities.”
Wright’s proposal, Chatterjee said, is trying to balance several different considerations the White House faces.
“This is the most vexing issue before the commission right now. And the reality is, it’s not clean politically within FERC, within DOE, even within the White House. There are differences of opinion on how best to thread this needle,” he told me, pointing to divides between those who want to drive AI development as fast as possible and those who are concerned about electricity prices.
By contrast, the Perry proposal to FERC was widely recognized as being primarily about supporting the coal (and to some extent nuclear) industry.
“I really think what DOE has put forward here is kind of an elegant solution that touches on everything,” Chatterjee said. “It’s not preferring particular sources of generation. It’s for flexibility — flexibility is having its moment.”
The proposal has already won some plaudits from the technology industry. In a letter to the White House, OpenAI Chief Global Affairs Officer Christopher Lehane wrote that the company “welcomed the news last week that DOE recommended to FERC that it assert jurisdiction and create standardized rules for large load interconnections.” He also noted that OpenAI’s data centers “are designed to be curtailable — reducing their draw or even returning power during peak demand, helping to protect reliability and avoid higher costs for consumers.”
The DOE gave FERC an April 2026 deadline for final action on the proposed rulemaking, and FERC said Monday night that comments would be due by November 14.
Chatterjee said he expects FERC to eventually issue rules based on the proposal on a unanimous and bipartisan basis.
“I think the initial thought was, Oh, here goes the Trump administration again, leaning on FERC. This is actually a thoughtful exercise that I think most people in the energy space recognize is necessary to be done.”
On global emissions, Bill Gates on Chinese nuclear, and a geothermal breakthrough
Current conditions: Hurricane Melissa made landfall over Jamaica as one of the strongest Category 5 storms on record before barreling north toward Cuba • A cold front will send temperatures plunging as far as 15 degrees below average across the mid-Atlantic and the Northeast • The Colombian Andes are bracing for flooding amid up to 8 inches of rain forecast for Wednesday.
 
The Trump administration’s all-of-government approach to thwarting construction of offshore wind turbines has included the Department of the Interior de-designating federal waters to turbine development and the Department of Transportation yanking funding, in addition to various steps taken by other agencies. Now the Department of Health and Human Services is taking its swing at the industry. On Tuesday, Bloomberg reported that Secretary of Health and Human Services Robert F. Kennedy, Jr. directed the Centers for Disease Control and Prevention to open an investigation into the potential harms offshore wind farms pose. In late summer, the agency instructed the CDC’s National Institute for Occupational Safety and Health to prepare research about wind farms’ impact on fishing businesses. The effort included Kennedy personally meeting with NIOSH director Josh Howard, in the course of which he gave Howard — a career physician and lawyer who previously oversaw federal efforts on September 11 victims’ health — specific experts to contact, according to the newswire report. The U.S. Surgeon General’s office has also been involved in the initiative.
It’s part of what Heatmap’s Jael Holzman called “Trump’s total war on wind,” an assault that started on President Donald Trump’s first day back in office. Earlier this month, oil major Shell’s top executive in the United States warned that the precedents the administration was setting risked being weaponized against fossil fuel companies once Trump exited power.
In the first real decline ever forecast by the United Nations, global emissions are now expected to fall by 10% below 1990 levels by 2035, according to a report issued Tuesday. But the world remains far off from the 60% reduction goal scientists say is necessary to keep warming below 1.5 degrees Celsius, the target leaders committed to when they signed the Paris Agreement a decade ago. “Humanity is now clearly bending the emissions curve downwards for the first time, although still not nearly fast enough,” Simon Stiell, executive secretary at the UN Framework Convention on Climate Change, told Bloomberg on Tuesday. “We have a serious need for more speed.”
The latest assessment comes as the U.S. is withdrawing from the Paris climate negotiations and other countries are paring back spending on decarbonization ahead of the UN climate talks in Belem, Brazil, next month.
On Tuesday, Bill Gates released a provocative new treatise on climate change in which he laid out what he sees as necessary ahead of November’s climate summit. Before that, on Friday afternoon, the billionaire philanthropist gathered with half a dozen journalists in a conference room in Manhattan to discuss his latest ideas over lunch. Heatmap’s Robinson Meyer, who was in attendance, has a good breakdown of some of what Gates discussed. I also attended the lunch and wanted to highlight another point Gates made: The West is losing the race for new nuclear power. When it comes to fission, China is building more reactors than anyone else, and helped perfect the Westinghouse AP1000 before its successful construction in the U.S. Gates’ own reactor developer, TerraPower, had plans to build its debut plant in China prior to the souring in relations between Washington and Beijing nearly a decade ago. When it comes to fusion, he said, there’s no topping how much funding China has directed toward the technology.
“The amount of money they’re putting into fusion is more than the rest of the world put together, times two,” Gates told us. “There is a substantial amount of Chinese capital going into that, and in fission, they built the most reactors.”
Chemical giant Honeywell has announced a new technology that converts agricultural and forestry waste into ready-to-use renewable fuels that can directly replace the carbon-intensive fuel used by large ships and airplanes. The so-called “Biocrude Upgrading” processing hardware can be provided in modular form and equipped to ships at a moment when global regulators are seeking to slash the roughly 3% of planet-heating emissions that come from cargo vessels. “The maritime industry has a real need for renewable fuels that are immediately available and cost effective,” Ken West, Honeywell’s energy and sustainability solutions president, said in a statement. The news comes nearly two weeks after Trump “torpedoed” — as Heatmap’s Katie Brigham put it — efforts at the International Maritime Organization to slash emissions from regulated ships.
The geothermal startup Eavor said Tuesday that its breakthroughs in drilling had slashed the time it takes to drill its wells underground. The Canadian company said that the results of two years of drilling at its flagship project in Geretsried, Germany, showed its efforts to dig to hotter and deeper locations are working. “Much like wind and solar have come down the cost curve, much like unconventional shale [oil and gas] have come down the cost curve, we now have a technical proof-point that we’ve done that in Europe,” Jeanine Vany, a cofounder and executive vice president of corporate affairs at Eavor, told Canary Media’s Maria Gallucci.
The breakup of the ancient supercontinent 1.5 billion years ago transformed the Earth’s surface environments and laid the groundwork for the emergence of complex life. That’s according to new research by Australian scientists at the University of Sydney and the University of Adelaide. The findings challenge what has long been called the “boring billion,” a time when biological and geological changes effectively stalled. The plate tectonics that reshaped the planet triggered conditions that supported oxygen-rich oceans and fostered the appearance of the first eukaryotes, the ancestors of all complex life. “Our work reveals that deep Earth processes, specifically the breakup of the ancient supercontinent Nuna, set off a chain of events that reduced volcanic carbon dioxide emissions and expanded the shallow marine habitats where early eukaryotes evolved,” Dietmar Müller, a University of Sydney professor and the study’s lead author, said in a press release.