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On affordable EVs, the future of NOAA, and tropical birds
Current conditions: Several wildfires are burning near parts of North Carolina that were devastated by Hurricane Helene • Public transportation in Bangkok is free this week as authorities try to reduce toxic smog • There is ice on the surface of the Potomac River near Reagan National Airport, where recovery operations are underway following a tragic plane crash last night.
Tesla reported disappointing Q4 results for 2024 yesterday, with revenue and earnings per share both missing analysts expectations. Revenue came in at $25.71 billion, down 8% compared to the same period in 2023. Earnings per share were $0.73, compared to projections of $0.77. Gross profit margin fell to 13.6% year-over-year, less than the 16.2% forecast. Tesla’s stock dipped on the news, but rebounded after CEO Elon Musk tried to make some reassurances during the earnings call. He said Tesla planned to launch a driverless ride-hailing service in Austin, Texas, in June, and expects to begin producing the Cybercab robotaxi fleet in 2026. He talked up the Optimus humanoid robot and the company’s AI and robotics investments. And he said the company plans to start producing “more affordable models” of its EVs in the first half of 2025. (Worth noting that the Cybertruck was not mentioned once on the call.)
If Musk was at all concerned about the fact that his company saw annual sales drop last year for the first time in more than a decade, he didn’t show it, predicting that the next few years will be “epic” for the company. “I see a path for Tesla being the most valuable company in the world, by far, not even close,” he said. “There is a path where Tesla is worth more than the next top five companies combined.”
The pep talk helped boost shares in pre-market trading. Some analysts were raving. “Tesla investors are fuelled by optimism around Full Self-Driving and the upcoming affordable model, two key catalysts that could drive Tesla’s next leg of growth,” said Hargreaves Lansdown’s Matt Britzman. Others were less optimistic. “While the long-term narrative remains, the fourth-quarter was a ‘back to earth’ moment for Tesla stock, which has increasingly been disconnected from fundamentals,” cautioned Barclays analyst Dan Levy.
Lee Zeldin was confirmed yesterday as the new administrator of the Environmental Protection Agency. He has promised to “restore U.S. energy dominance” and “increase productivity of the EPA.” One of his first jobs, though, will be reviewing the 2009 endangerment finding, a landmark ruling that confirmed greenhouse gases are a danger to public health and gave the EPA authority to regulate those gases. President Trump signed an executive order on January 20 giving the EPA 30 days to examine the “legality and continuing applicability” of this finding. Zeldin has also been told to review the social cost of carbon, which is “the cost of the damages created by one extra ton of carbon dioxide emissions.” Trump’s executive order recommended the metric be eliminated altogether.
Meanwhile, Trump’s Commerce secretary nominee Howard Lutnick had his confirmation hearings yesterday. The questioning from senators touched on the future of the National Oceanic and Atmospheric Administration, the agency that provides national weather forecasting and climate monitoring. Lutnick said he was not in favor of dismantling NOAA, nor would he want to see it moved from the Commerce Department into the Interior Department. The Project 2025 roadmap from the Heritage Foundation proposed dismantling NOAA.
The futures of two large proposed fossil fuel projects in the North Sea have been cast into doubt after a Scottish court ruled that they should never have been approved in the first place. Equinor’s Rosebank project would harness oil from the UK’s largest untapped oilfield. Shell’s Jackdaw project would extract natural gas, which Shell claims would heat 1.4 million homes. Activists from Greenpeace and other groups challenged the projects’ approvals after an earlier ruling from the Supreme Court said that such projects must assess and disclose the downstream (Scope 3) emissions impact of burning the fossil fuels they produce, which neither Rosebank’s nor Jackdaw’s developers did. If they want to go ahead with the projects, Shell and Equinor will have to try to get them approved by the government again, this time with all the environmental impacts taken into consideration.
Researchers think they’ve solved a mystery about what’s causing bird populations in untouched areas of the rainforest to decline. Any guesses? Surprise! It’s climate change. In a new study published in the journal Science Advances, the team analyzed bird populations over nearly 30 years and found that more intense dry seasons in the Amazon “significantly” reduced the survival rates for almost all bird species they studied. In fact, they think just 1 degree Celsius of warming reduces the average survival of the tropical birds by 63%. “These findings are especially alarming because they reflect demographic patterns of tropical birds within pristine rainforest, a biome thought to be resilient to the adverse effects of climate change,” the researchers wrote.
Nearly two-thirds of Americans (64%) want to see the government increase fuel-economy standards so that vehicles continue to get more fuel-efficient.
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The Loan Programs Office is good for more than just nuclear funding.
That China has a whip hand over the rare earths mining and refining industry is one of the few things Washington can agree on.
That’s why Alex Jacquez, who worked on industrial policy for Joe Biden’s National Economic Council, found it “astounding”when he read in the Washington Post this week that the White House was trying to figure out on the fly what to do about China restricting exports of rare earth metals in response to President Trump’s massive tariffs on the country’s imports.
Rare earth metals have a wide variety of applications, including for magnets in medical technology, defense, and energy productssuch as wind turbines and electric motors.
Jacquez told me there has been “years of work, including by the first Trump administration, that has pointed to this exact case as the worst-case scenario that could happen in an escalation with China.” It stands to reason, then, that experienced policymakers in the Trump administration might have been mindful of forestalling this when developing their tariff plan. But apparently not.
“The lines of attack here are numerous,” Jacquez said. “The fact that the National Economic Council and others are apparently just thinking about this for the first time is pretty shocking.”
And that’s not the only thing the Trump administration is doing that could hamper American access to rare earths and critical minerals.
Though China still effectively controls the global pipeline for most critical minerals (a broader category that includes rare earths as well as more commonly known metals and minerals such as lithium and cobalt), the U.S. has been at work for at least the past five years developing its own domestic supply chain. Much of that work has fallen to the Department of Energy, whose Loan Programs Office has funded mining and processing facilities, and whose Office of Manufacturing and Energy Supply Chains hasfunded and overseen demonstration projects for rare earths and critical minerals mining and refining.
The LPO is in line for dramatic cuts, as Heatmap has reported. So, too, are other departments working on rare earths, including the Office of Manufacturing and Energy Supply Chains. In its zeal to slash the federal government, the Trump administration may have to start from scratch in its efforts to build up a rare earths supply chain.
The Department of Energy did not reply to a request for comment.
This vulnerability to China has been well known in Washington for years, including by the first Trump administration.
“Our dependence on one country, the People's Republic of China (China), for multiple critical minerals is particularly concerning,” then-President Trump said in a 2020 executive order declaring a “national emergency” to deal with “our Nation's undue reliance on critical minerals.” At around the same time, the Loan Programs Office issued guidance “stating a preference for projects related to critical mineral” for applicants for the office’s funding, noting that “80 percent of its rare earth elements directly from China.” Using the Defense Production Act, the Trump administration also issued a grant to the company operating America's sole rare earth mine, MP Materials, to help fund a processing facility at the site of its California mine.
The Biden administration’s work on rare earths and critical minerals was almost entirely consistent with its predecessor’s, just at a greater scale and more focused on energy. About a month after taking office, President Bidenissued an executive order calling for, among other things, a Defense Department report “identifying risks in the supply chain for critical minerals and other identified strategic materials, including rare earth elements.”
Then as part of the Inflation Reduction Act in 2022, the Biden administration increased funding for LPO, which supported a number of critical minerals projects. It also funneled more money into MP Materials — including a $35 million contract from the Department of Defense in 2022 for the California project. In 2024, it awarded the company a competitive tax credit worth $58.5 million to help finance construction of its neodymium-iron-boron magnet factory in Texas. That facilitybegan commercial operation earlier this year.
The finished magnets will be bought by General Motors for its electric vehicles. But even operating at full capacity, it won’t be able to do much to replace China’s production. The MP Metals facility is projected to produce 1,000 tons of the magnets per year.China produced 138,000 tons of NdFeB magnets in 2018.
The Trump administration is not averse to direct financial support for mining and minerals projects, but they seem to want to do it a different way. Secretary of the Interior Doug Burgum has proposed using a sovereign wealth fund to invest in critical mineral mines. There is one big problem with that plan, however: the U.S. doesn’t have one (for the moment, at least).
“LPO can invest in mining projects now,” Jacquez told me. “Cutting 60% of their staff and the experts who work on this is not going to give certainty to the business community if they’re looking to invest in a mine that needs some government backstop.”
And while the fate of the Inflation Reduction Act remains very much in doubt, the subsidies it provided for electric vehicles, solar, and wind, along with domestic content requirements have been a major source of demand for critical minerals mining and refining projects in the United States.
“It’s not something we’re going to solve overnight,” Jacquez said. “But in the midst of a maximalist trade with China, it is something we will have to deal with on an overnight basis, unless and until there’s some kind of de-escalation or agreement.”
A conversation with VDE Americas CEO Brian Grenko.
This week’s Q&A is about hail. Last week, we explained how and why hail storm damage in Texas may have helped galvanize opposition to renewable energy there. So I decided to reach out to Brian Grenko, CEO of renewables engineering advisory firm VDE Americas, to talk about how developers can make sure their projects are not only resistant to hail but also prevent that sort of pushback.
The following conversation has been lightly edited for clarity.
Hiya Brian. So why’d you get into the hail issue?
Obviously solar panels are made with glass that can allow the sunlight to come through. People have to remember that when you install a project, you’re financing it for 35 to 40 years. While the odds of you getting significant hail in California or Arizona are low, it happens a lot throughout the country. And if you think about some of these large projects, they may be in the middle of nowhere, but they are taking hundreds if not thousands of acres of land in some cases. So the chances of them encountering large hail over that lifespan is pretty significant.
We partnered with one of the country’s foremost experts on hail and developed a really interesting technology that can digest radar data and tell folks if they’re developing a project what the [likelihood] will be if there’s significant hail.
Solar panels can withstand one-inch hail – a golfball size – but once you get over two inches, that’s when hail starts breaking solar panels. So it’s important to understand, first and foremost, if you’re developing a project, you need to know the frequency of those events. Once you know that, you need to start thinking about how to design a system to mitigate that risk.
The government agencies that look over land use, how do they handle this particular issue? Are there regulations in place to deal with hail risk?
The regulatory aspects still to consider are about land use. There are authorities with jurisdiction at the federal, state, and local level. Usually, it starts with the local level and with a use permit – a conditional use permit. The developer goes in front of the township or the city or the county, whoever has jurisdiction of wherever the property is going to go. That’s where it gets political.
To answer your question about hail, I don’t know if any of the [authority having jurisdictions] really care about hail. There are folks out there that don’t like solar because it’s an eyesore. I respect that – I don’t agree with that, per se, but I understand and appreciate it. There’s folks with an agenda that just don’t want solar.
So okay, how can developers approach hail risk in a way that makes communities more comfortable?
The bad news is that solar panels use a lot of glass. They take up a lot of land. If you have hail dropping from the sky, that’s a risk.
The good news is that you can design a system to be resilient to that. Even in places like Texas, where you get large hail, preparing can mean the difference between a project that is destroyed and a project that isn’t. We did a case study about a project in the East Texas area called Fighting Jays that had catastrophic damage. We’re very familiar with the area, we work with a lot of clients, and we found three other projects within a five-mile radius that all had minimal damage. That simple decision [to be ready for when storms hit] can make the complete difference.
And more of the week’s big fights around renewable energy.
1. Long Island, New York – We saw the face of the resistance to the war on renewable energy in the Big Apple this week, as protestors rallied in support of offshore wind for a change.
2. Elsewhere on Long Island – The city of Glen Cove is on the verge of being the next New York City-area community with a battery storage ban, discussing this week whether to ban BESS for at least one year amid fire fears.
3. Garrett County, Maryland – Fight readers tell me they’d like to hear a piece of good news for once, so here’s this: A 300-megawatt solar project proposed by REV Solar in rural Maryland appears to be moving forward without a hitch.
4. Stark County, Ohio – The Ohio Public Siting Board rejected Samsung C&T’s Stark Solar project, citing “consistent opposition to the project from each of the local government entities and their impacted constituents.”
5. Ingham County, Michigan – GOP lawmakers in the Michigan State Capitol are advancing legislation to undo the state’s permitting primacy law, which allows developers to evade municipalities that deny projects on unreasonable grounds. It’s unlikely the legislation will become law.
6. Churchill County, Nevada – Commissioners have upheld the special use permit for the Redwood Materials battery storage project we told you about last week.