AM Briefing
Lots More Drilling
On a permitting bill shocker, spiking gas bills, and China’s nuclear progress
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On a permitting bill shocker, spiking gas bills, and China’s nuclear progress
It was approved by the House Natural Resources Committee on Thursday by a vote of 25 to 18.
On Turkey’s COP31 win, data center dangers, and Michigan’s anti-nuclear hail mary
Members of the nation’s largest grid couldn’t agree on a recommendation for how to deal with the surge of incoming demand.
California energy companies are asking for permission to take in more revenue. Consumer advocates are having none of it.
Rob and Jesse talk data center finance with the Center for Public Enterprise’s Advait Arun.
The boom in artificial intelligence has become entangled with the clean energy industry over the past 18 months. Tech companies are willing to pay a lot for electricity — especially reliable zero-carbon electricity — and utilities and energy companies have been scrambling to keep up.
But is that boom more like a bubble? And if so, what does that mean for the long-term viability of AI companies and data center developers, and for the long-term health of decarbonization?
On this week’s Shift Key, we’re talking to Advait Arun, a senior associate for capital markets at the Center for Public Enterprise, about his new report on the market dynamics at play in the data center buildout. What kind of bets are these AI companies making? How likely are they to pay off? And if they don’t, who stands to lose big? Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
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Here is an excerpt from our conversation:
Robinson Meyer: Advait, you’ve done a — we’ve done a great job of kind of dancing around maybe the biggest question of the report — and I would say you do a very good job of playing coy about it in the report, where the report’s titled “Bubble or Nothing.” You actually don’t come out and say whether you think this is a bubble or not.
And of course, it’s kind of a weird bubble, too, because there hasn’t been a moment where these leaps in equity valuations for the hyperscalers has happened where people haven’t been like, Boy, it looks kind of bubbly. And if you remember back to the 20-teens too, people were worried about a tech bubble then, too. And it turned out that it wasn’t a tech bubble, it was just a rapidly growing and healthy part of the economy. And so what I wanted to ask you, Advait, was, number one, did you walk away from this and from your conversations with investors and creditors, policymakers, thinking it was a bubble? And number two, is this unusual that we have a bubble and we can’t stop talking about how bubbly it looks? Or is this a new type of bubble where there’s a bubble happening and we all know it’s a bubble?
Advait Arun: Ooh. I will not personally say whether or not I think this is a bubble. I do think, though, that the fact that so much of our attention is centralized around it, it testifies to a new way of the real media’s relationship with the economy — and not even the media just in general, but the fact that the federal government is interested in this being the next industry of the future. The fact that I think we haven’t had too much else to talk about in economic news due to the dominance of the hyperscalers and Mag Seven in the market, the fact that they’re the collateral for improvements in the energy system, and even some people are blaming them for the affordability crisis. I think it’s very easy to get into a headspace where we’re all paying rapt attention to the day-to-day stock movements of these companies. I don’t know what it was like, necessarily, to be following the news and the dot-com bubble, but I do certainly think that the amount that we’ve all been talking about it at the same time is very striking to me.
I think it’s important, as well, to recognize that bubbles have psychological motivations, more so than just pure economic motivations. Of course, from the perspective of a policymaker and someone who’s done credit analysis for stuff, I obviously look at these firms and look at their lack of revenue and think, This is dangerous. This could be getting over their skis. But a lot of companies have gone through this point and made it out. That’s not to say that these companies will or won’t, but the fact that so much of the market moves in response to the leading tech companies, there’s a degree of asset centrality and crowding, and extremely high relative values relative to historical values. It makes me think that there’s something to watch out for, anchored by the fact that a lot of the people leading this investment boom, whether it’s the federal government seeking to promote it or whether it’s the leaders of these companies, the CEOs envisioning some kind of vastly different future for the economy. There’s a psychology to it — I think Keynes would call it ‘animal spirits’ — that’s pushing this investment boom the way that it’s going.
Mentioned:
Advait’s report: Bubble or Nothing: Data Center Project Finance
Previously on Shift Key: A Skeptic’s Take on AI and Energy Growth
Jesse’s upshift; Rob’s downshift.
This episode of Shift Key is sponsored by …
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Uplight is a clean energy technology company that helps energy providers unlock grid capacity by activating energy customers and their connected devices to generate, shift, and save energy. The Uplight Demand Stack — which integrates energy efficiency, electrification, rates, and flexibility programs — improves grid resilience, reduces costs, and accelerates decarbonization for energy providers and their customers. Learn more at uplight.com/heatmap.
Music for Shift Key is by Adam Kromelow.
On EPA’s wetland protections, worsening blackouts, and a solar bright spot
Current conditions: Severe thunderstorms will bring winds of up to 85 miles per hour to parts of the Texarkana region • A cold front in Southeast Asia is stirring waves up to three meters high along the shores of Vietnam • Parts of Libya are roasting in temperatures as high as 95 degrees Fahrenheit.
David Richardson, the acting head of the Federal Emergency Management Agency, resigned Monday after just six months on the job. Richardson had no experience in managing natural disasters, and Axios reported, he “faced sharp criticism for being unavailable” amid the extreme floods that left 130 dead in Central Texas in July. A month earlier, Richardson raised eyebrows when he held a meeting in which he told staff he was unaware the U.S. had a hurricane season. He was, however, a “loyalist” to Homeland Security Secretary Kristi Noem, CNN reported.
With hurricane season wrapping up this month, President Donald Trump was preparing to fire Richardson in the lead up to an overhaul of the agency, whose resources for carrying out disaster relief he wants to divvy up among the states. When FEMA staffers criticized the move in an open letter over the summer, the agency suspended 40 employees who signed with their names, as I wrote in the newsletter at the time.
The Environmental Protection Agency proposed stripping federal protections from millions of acres of wetlands and streams. The New York Times cast the stakes of the rollback as “potentially threatening sources of clean drinking water for millions of Americans” while delivering “a victory for a range of business interests that have lobbied to scale back the Clean Water Act of 1972, including farmers, home builders, real estate developers, oil drillers and petrochemical manufacturers.” At an event announcing the rulemaking, EPA Administrator Lee Zeldin recognized that the proposal “is going to be met with a lot of relief from farmers, ranchers, and other landowners and governments.” Under the Clean Water Act, companies and individuals need to obtain permits from the EPA before releasing pollutants into the nation’s waterways, and permits from the U.S. Army Corps of Engineers before discharging any dredged or fill material such as sand, silt, or construction debris. Yet just eliminating the federal oversight doesn’t necessarily free developers and farmers of permitting challenges since that jurisdiction simply goes to the state.

Americans are spending greater lengths of time in the dark amid mounting power outages, according to a new survey by the data analytics giant J.D. Power. The report, released last month but highlighted Monday in Utility Dive, cited “increased frequency and severity of extreme weather events” as the cause. The average length of the longest blackout of the year increased in all regions since 2022, from 8.1 hours to 12.8 by the midpoint of 2025. Ratepayers in the South reported the longest outages, averaging 18.2 hours, followed by the West, at 12.4 hours. While the duration of outages is worsening, the number of Americans experiencing them isn’t, J.D. Power’s director of utilities intelligence, Mark Spalinger, told Utility Dive. The percentage of ratepayers experiencing “perfect power” without any interruptions is gradually rising, he said, but disasters like storms and fires “are becoming so much more extreme that it creates these longer outage events that utilities are now having to deal with.”
The problem is particularly bad in the summertime. As Heatmap’s Matthew Zeitlin explained back in June, “the demands on the grid are growing at the same time the resources powering it are changing. Between broad-based electrification, manufacturing additions, and especially data center construction, electricity load growth is forecast to grow several percent a year through at least the end of the decade. At the same time, aging plants reliant on oil, gas, and coal are being retired (although planned retirements are slowing down), while new resources, largely solar and batteries, are often stuck in long interconnection queues — and, when they do come online, offer unique challenges to grid operators when demand is high.”

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You win some, you lose some. Earlier this month, solar developer Pine Gate Renewables blamed the Trump administration’s policies in its bankruptcy filing. Now a major solar manufacturer is crediting its expansion plans to the president. Arizona-based First Solar said last week it plans to open a new panel factory in South Carolina. The $330 million factory will create 600 new jobs, E&E News reported, if it comes online in the second half of next year as planned. First Solar said the investment is the result of Trump’s One Big Beautiful Bill Act. “The passage of the One Big Beautiful Bill Act and the Administration’s trade policies boosted demand for American energy technology, requiring a timely, agile response that allows us to meet the moment,” First Solar CEO Mark Widmar said in a statement. “We expect that this new facility will enable us to serve the U.S. market with technology that is compliant with the Act’s stringent provisions, within timelines that align with our customers’ objectives.”
If you want to review what actually goes into making a solar panel, it’s worth checking out Matthew’s explainer from the Climate 101 series.
French oil and gas giant TotalEnergies said Monday it would make a $6 billion investment into power plants across Europe, expanding what The Wall Street Journal called “a strategy that has set it apart from rivals focused on pumping more fossil fuels.” To start, the company agreed to buy 50% of a portfolio of assets owned by Energeticky a Prumyslovy Holding, the investment fund controlled by the Czech billionaire Daniel Kretinsky. While few question the rising value of power generation amid a surge in electricity demand from the data centers supporting artificial intelligence software, analysts and investors “question whether investment in power generation — particularly renewables — will be as lucrative as oil and gas.” Rivals Shell and BP, for example, recently axed their renewables businesses to double down on fossil fuels.
The world has successfully stored as much carbon dioxide as 81,044,946 gasoline-powered cars would emit in a year. The first-ever audit of all major carbon storage projects in the U.S., China, Brazil, Australia, and the Middle East found over 383 million tons of carbon dioxide stored since 1996. “The central message from our report is that CCS works, demonstrating a proven capability and accelerating momentum for geologic storage of CO2,” Samuel Krevor, a professor of subsurface carbon storage at Imperial College London’s Department of Earth Science and Engineering, said in a press release.