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A double whammy of presidential policies — more OPEC output and historic trade levies — are sending fossil stocks tumbling.
President Donald Trump campaigned on a promise to “drill, baby, drill” and help the American oil and natural gas industry. Executives loved it — the industry gave more than $75 million to Trump’s campaign and its affiliated groups.
Now the trade is blowing up in their faces. This week, the president accomplished two of his biggest goals — and the result has slammed the oil industry and imperiled its near-term future. The U.S. oil and gas industry has now stopped growing — and may even lurch into a recession — and there’s no sign yet that Trump or any of the oilmen surrounding the president have noticed.
The double whammy began on Wednesday, when Trump announced eye-watering tariffs on dozens of countries and trading blocs around the world. The tariffs amount to the largest tax hike on Americans since 1968, according to J.P. Morgan, and they have triggered a meltdown in global markets.
Those tariffs would have been bad enough. But early Thursday morning, the oil cartel OPEC+ announced that it would boost oil production by 411,000 barrels a day next month — far more than expected — which will essentially compress three months of supply increases into one.
This is bad news for U.S. producers, who compete with OPEC’s oil on global markets. But what’s astonishing is that Trump had been the leading voice calling for OPEC+ to boost its supply. Since January, Trump has hectored the cartel to “bring down the price of oil” in order to ease inflation and end the Ukraine war. Now they’re doing so, and it could not come at a worse possible time for the American oil and gas industry.
Since Wednesday, the West Texas crude oil benchmark has fallen by roughly 14%. A barrel of oil now trades at about $62. That is well below the $65 level that oil producers need in order to turn a profit drilling new wells nationwide, according to the most recent Dallas Fed survey of energy companies. It’s so low that it could essentially prohibit any new drilling activity in the United States for the time being.
These two policies have essentially frozen the U.S. oil industry for now, according to Rory Johnston, a longtime oil analyst and the author of the Commodity Context newsletter.
“You’re probably seeing more pauses of initial investment intention than the initial Covid shock. It’s really bamboozling,” Johnston told me. “Everything else is really, really starting to grind to a halt, and you’re not seeing anyone jumping over themselves to ‘drill, baby, drill,’ despite the White House’s claims.”
The week has seen brutal sell-offs for major oil companies and the smaller independents. As of Friday afternoon, shares of Diamondback Energy, a Texas-based oil exploration firm, had lost 20% of their value since Monday. The Dallas-based Matador Resources lost 22% in the same time. The oilfield services giant Halliburton is down 20% on the week and 50% in the past 12 months. Nabors, another oilfield service provider, is down 30% in just the past five days.
The traditional major oil companies have held up only somewhat better. Exxon’s shares are down more than 10%, bleeding at least $55 billion in market value, since the president’s tariff announcement. Occidental Petroleum is down 15% on the week while Chevron is down 13%.
At current prices, new oil drilling could even shut down in the Permian Basin near Midland, Texas — the cheapest part of the country to extract. Oil companies need crude to trade above $61 in order to turn a profit drilling there, according to the Fed survey.
Natural gas prices have also fallen. The benchmark for U.S. gas prices, called Henry Hub, has lost 6% so far in trading on Friday.
Why? There are a few big drivers. Although oil and natural gas imports are technically exempt from President Trump’s most recent tariffs, they haven’t been spared from the macroeconomic fallout. If the tariffs lead to a global downturn, which J.P. Morgan analysts now believe is more likely than not, then oil demand will fall.
Worse for the industry is that Trump’s tariffs are hitting the parts of the world where oil demand is projected to grow in the near term. He has slammed six Southeast Asian countries with very high levies, including a 46% tariff on Vietnam and a blistering 49% tariff on Cambodia.
Those tariffs could slow or reverse those economies’ growth, dinging their hunger for oil. As of last year, Southeast Asia was projected to make up more than 25% of energy demand growth over the next decade, with oil demand alone projected to grow by 28%.
“The macro concern is that if these tariffs stay where they are, this is in a global recession, if not a depression-making place,” Johnson added. “And given that the highest tariff rates are on Asia in particular, and that’s where all growing oil demand is, it’s not good for oil.”
And that’s not all. The tariffs mean that the American oil industry is already paying higher costs for key industrial inputs needed to drill more wells. Drilling for oil and gas takes plenty of physical equipment — steel pipe, motors, condensers, valves, and more — and a large share of those goods come from overseas. Since Trump imposed a 25% tariff on steel and aluminum last month, drillers have watched the price of tubular steel pipe rise by roughly 30%, Johnston said.
“I think the tariffs have this demand hit, but there’s also this supply challenge. Particularly here in the U.S., the cost of doing anything or getting more investment is just skyrocketing,” Rachel Ziemba, a macroeconomic analyst and an adjunct senior fellow at the Center for a New American Security, told me.
“From a U.S. production standpoint, there’s this view that we weren’t going to see the same additional supplies out of the U.S. that President Trump and his team have been hoping for,” she said.
These three factors explain much of the current pandemonium. But Trump’s trade policies are also wreaking havoc in oil markets simply by making the global economy weaker. By slowing global trade, Trump will reduce demand for oil — regardless of any other effect that the tariffs might have.
“Oil is so integral to the global economy. You can try to carve oil out, and you can try to carve direct inputs for production out, but if you have these other tariffs that impact trade flows — well, trade means oil. You’re gonna impact shipping — that’s oil as well,” Arnab Datta, the managing director of policy implementation at Employ America, a nonpartisan think tank, told me.
The natural gas industry could also eventually pay for the tariff chaos. The countries and trading blocs most likely to import liquified natural gas — including the European Union, China, and the Southeast Asian countries — have also been hit hardest by the president’s trade levies. Natural gas companies have yet to announce a single new supply contract so far this year, Ziemba said.
It’s possible that the president eventually tries to secure a long-term LNG purchase agreement with countries as a way to wind down the tariffs, she added. During the first Trump administration, China agreed to buy a fixed amount of soybeans from the United States, although it ultimately made none of the promised $200 billion in export purchases.
So far, oil executives have praised the president or stayed silent, even as their shares have collapsed. But when given an opportunity to speak anonymously, they have slammed the administration’s policies.
“The administration's chaos is a disaster for the commodity markets. ‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal,” one executive told the Dallas Fed last month, before the most recent round of trade levies were announced. “I have never felt more uncertainty about our business in my entire 40-plus-year career,” said another.
One struggle for the fossil fuel industry — and for the broader market — is that the federal government has now lost credibility with global investors that it won’t pursue a reckless tariff policy in the future, Datta added.
“There’s no confidence they won’t change again,” he said. “How do we get out of this chaotic environment? I don’t think we can.”
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Current conditions: The remnants of Tropical Storm Chantal will bring heavy rain and potential flash floods to the Carolinas, southeastern Virginia, and southern Delaware through Monday night • Two people are dead and 300 injured after Typhoon Danas hit Taiwan • Life-threatening rainfall is expected to last through Monday in Central Texas.
Jim Vondruska/Getty Images
The flash floods in Central Texas are expected to become one of the deadliest such events in the past 100 years, with authorities updating the death toll to 82 people on Sunday night. Another 41 people are still missing after the storms, which began Thursday night and raised the Guadalupe River some 26 feet in less than an hour, providing little chance for holiday weekend campers and RVers to escape.
Although it’s far too soon to definitively attribute the disaster to climate change, a warmer atmosphere is capable of holding more moisture and producing heavy bursts of life-threatening rainfall. Disasters like the one in Texas are one of the “hardest things to predict that’s becoming worse faster than almost anything else in a warming climate, and it’s at a moment where we’re defunding the ability of meteorologists and emergency managers to coordinate,” Daniel Swain of the University of California Agriculture and Natural Resources told the Los Angeles Times. Meteorologists who spoke to Wired argued that the National Weather Service “accurately predicted the risk of flooding in Texas and could not have foreseen the extreme severity of the storm” ahead of the event, while The New York Times noted that staffing shortages at the agency following President Trump’s layoffs potentially resulted in “the loss of experienced people who would typically have helped communicate with local authorities in the hours after flash flood warnings were issued overnight.”
President Trump announced this weekend that his administration plans to send up to 15 letters on Monday to important trade partners detailing their tariff rates. Though Trump didn’t specify which countries would receive such letters or what the rates could be, he said the tariffs would go into effect on August 1 — an extension from the administration’s 90-day pause through July 9 — and range “from maybe 60% or 70% tariffs to 10% and 20% tariffs.” Treasury Secretary Scott Bessent added on CNN on Sunday that the administration would subsequently send an additional round of letters to 100 less significant trade partners, warning them that “if you don’t move things along” with trade negotiations, “then on August 1, you will boomerang back to your April 2 tariff level.” Trump’s proposed tariffs have already rattled industries as diverse as steel and aluminum, oil, plastics, agriculture, and bicycles, as we’ve covered extensively here at Heatmap. Trump’s weekend announcement also sent jitters through global markets on Monday morning.
President Trump’s gutting of the Inflation Reduction Act with the signing of the budget reconciliation bill last week will add an extra 7 billion tons of emissions to the atmosphere by 2030, a new analysis by Climate Brief has found. The rollback on renewable energy credits and policy means that “U.S. emissions are now set to drop to just 3% below current levels by 2030 — effectively flatlining — rather than falling 40% as required to hit the now-defunct [Paris Agreement] target,” Carbon Brief notes. As a result, the U.S. will be about 2 billion tons short of its emissions goal by 2030, adding an emissions equivalent of “roughly the annual output of Indonesia, the world’s sixth-largest emitter.”
To reach its conclusions, Carbon Brief utilized modeling by Princeton University’s REPEAT Project, which examined how the current obstacles facing U.S. wind and solar energy will impact U.S. emissions targets, as well as the likely slowdown in electric vehicle sales and energy efficiency upgrades due to the removal of subsidies. “Under this new set of U.S. policies, emissions are only expected to be 20% lower than 2005 levels by 2030,” Carbon Brief writes.
Engineering giant SKF announced late last week that it had set a new world record for tidal turbine reliability, with its systems in northern Scotland having operated continuously for over six years at 1.5 megawatts “without the need for unplanned or disruptive maintenance.” The news represents a significant milestone for the technology since “harsh conditions, high maintenance, and technical challenges” have traditionally made tidal systems difficult to implement in the real world, Interesting Engineering notes. The pilot program, MayGen, is operated by SAE Renewables and aims, as its next step, to begin deploying 3-megawatt powertrains for 30 turbines across Scotland, France, and Japan starting next year.
Satellites monitoring the Southern Ocean have detected for the first time a collapse and reversal of a major current in the Atlantic Meridional Overturning Circulation. “This is an unprecedented observation and a potential game-changer,” said physicist Marilena Oltmanns, the lead author of a paper on the finding, adding that the changes could “alter the Southern Ocean’s capacity to sequester heat and carbon.”
A breakthrough in satellite ocean observation technology enabled scientists to recognize that, since 2016, the Southern Ocean has become saltier, even as Antarctic sea ice has melted at a rate comparable to the loss of Greenland’s ice. The two factors have altered the Southern Ocean’s properties like “we’ve never seen before,” Antonio Turiel, a co-author of the study, explained. “While the world is debating the potential collapse of the AMOC in the North Atlantic, we’re seeing that the Southern Ocean is drastically changing, as sea ice coverage declines and the upper ocean is becoming saltier,” he went on. “This could have unprecedented global climate impacts.” Read more about the oceanic feedback loop and its potential global consequences at Science Daily, here.
The French public research university Sciences Po will open the Paris Climate School in September 2026, making it the first school in Europe to offer a “degree in humanities and social sciences dedicated to ecological transition.” The first cohort will comprise 100 master’s students in an English-language program. “Faced with the ecological emergency, it is essential to train a new generation of leaders who can think and act differently,” said Laurence Tubiana, the dean of the Paris Climate School.
A fifth of U.S. counties now restrict renewables development, according to exclusive data gathered by Heatmap Pro.
A solar farm 40 minutes south of Columbus, Ohio.
A grid-scale battery near the coast of Nassau County, Long Island.
A sprawling wind farm — capable of generating enough electricity to power 100,000 homes — at the northern edge of Nebraska.
These projects — and hundreds of others — will never get built in the United States. They were blocked and ultimately killed by a regulatory sea-change that has reshaped how local governments consider and approve energy projects. One by one, counties and municipalities across the country are passing laws that heavily curtail the construction of new renewable power plants.
These laws are slowing the energy transition and raising costs for utility ratepayers. And the problem is getting worse.
The development of new wind and solar power plants is now heavily restricted or outright banned in about one in five counties across the country, according to a new and extensive survey of public records and local ordinances conducted by Heatmap News.
“That’s a lot,” Nicholas Bagley, a professor at the University of Michigan Law School, told us. Bagley said the “rash of new land use restrictions” owes partly to the increasing politicization of renewable energy.
Across the country, separate rules restrict renewables construction in 605 counties. In some cases, the rules greatly constrain where renewables can be built, such as by requiring that wind turbines must be placed miles from homes, or that solar farms may not take up more than 1% of a county’s agricultural land. In hundreds of other cases, the rules simply forbid new wind or solar construction at all.
Even in the liberal Northeast, where climate concern is high and municipalities broadly control the land use process, the number of restrictions is rising. At least 59 townships and municipalities have curtailed or outright banned new wind and solar farms across the Northeast, according to Heatmap’s survey.
Even though America has built new wind and solar projects for decades, the number of counties restricting renewable development has nearly doubled since 2022.
When the various state, county, and municipality-level ordinances are combined, roughly 17% of the total land mass of the continental United States has been marked as off limits to renewables construction.
These figures have not been previously reported. Over the past 12 months, our energy intelligence platform Heatmap Pro has conducted what it believes to be the most comprehensive survey of county and municipality-level renewables restrictions in the United States. In part, that research included surveys of existing databases of local news and county laws, including those prepared by the Sabin Center for Climate Change Law at Columbia University.
But our research team has also called thousands of counties, many of whose laws were not in existing public databases, and we have updated our data in real time as counties passed ordinances and opposed projects progress (or not) through the zoning process. This data is normally available to companies and individuals who subscribe to Heatmap Pro. In this story, we are making a high-level summary of this data available to the public for the first time.
Restrictions have proliferated in all regions of the country.
Forty counties in Virginia alone now have an anti-renewable law on the books, effectively halting solar development in large portions of the state, even as the region experiences blistering electricity load growth.
These anti-solar laws have even begun to slow down energy development across the sunny Southwest. Counties in Nevada and Arizona have rejected new solar development in the same parts of the state that have already seen a high number of solar projects, our data show. Since President Trump took office in January, the effect of these local rules have become more acute — while solar developers could previously avoid the rules by proposing projects on federal land, a permitting slowdown at the Bureau of Land Management is now styming solar projects of all types in the region, as our colleague Jael Holzman has reported.
In the Northeast and on the West Coast, where Democrats control most state governments, towns and counties are still successfully fighting and cancelling dozens of new energy projects. Battery electricity storage systems, or BESS projects, now draw particular ire. The high-profile case of the battery fire in Moss Landing, California, in January has led to a surge of local opposition to BESS projects, our data shows. So far in 2025, residents have cited the Moss Landing case when fighting at least six different BESS projects nationwide.
That’s what happened with Jupiter Power, the battery project proposed in Nassau County, Long Island. The 275-megawatt project was first proposed in 2022 for the Town of Oyster Bay, New York. It would have replaced a petroleum terminal and improved the resilience of the local power grid.
But opposed residents began attending public meetings to agitate about perceived fire and environmental risks, and in spring 2024 successfully lobbied the town to pass a six-month moratorium on battery storage systems. The developer of the battery storage system, Jupiter Power, announced it would withdraw after the town passed two consecutive extensions to the moratorium and residents continued agitating for tighter restrictions.
That pattern — a town passes a temporary moratorium that it repeatedly extends — is how many projects now die in the United States.
The Nebraska wind project, North Fork Wind, was effectively shuttered when Knox County passed a permanent wind-energy ban. And the solar project south of Columbus, Ohio? It died when the Ohio Power Siting Board ruled that “that any benefits to the local community are outweighed by public opposition” to the project, which would have generated 70 megawatts, enough to power about 9,000 homes.
The developers of both of these projects are now waging lengthy and expensive legal appeals to save them; neither has won yet. Even in cases where the developer ultimately prevails against a local law, opposition can waste years and raise the final cost of a project by millions of dollars.
Our Heatmap Pro platform models opposition history alongside demographic, employment, voting, and exclusive polling data to quantify the risk a project will face in every county in the country, allowing developers to avoid places where they are likely to be unsuccessful and strategize for those where they have a chance.
Access to the full project- and county-level data and associated risk assessments is available via Heatmap Pro.
And more on the week’s biggest conflicts around renewable energy projects.
1. Jackson County, Kansas – A judge has rejected a Hail Mary lawsuit to kill a single solar farm over it benefiting from the Inflation Reduction Act, siding with arguments from a somewhat unexpected source — the Trump administration’s Justice Department — which argued that projects qualifying for tax credits do not require federal environmental reviews.
2. Portage County, Wisconsin – The largest solar project in the Badger State is now one step closer to construction after settling with environmentalists concerned about impacts to the Greater Prairie Chicken, an imperiled bird species beloved in wildlife conservation circles.
3. Imperial County, California – The board of directors for the agriculture-saturated Imperial Irrigation District in southern California has approved a resolution opposing solar projects on farmland.
4. New England – Offshore wind opponents are starting to win big in state negotiations with developers, as officials once committed to the energy sources delay final decisions on maintaining contracts.
5. Barren County, Kentucky – Remember the National Park fighting the solar farm? We may see a resolution to that conflict later this month.
6. Washington County, Arkansas – It seems that RES’ efforts to build a wind farm here are leading the county to face calls for a blanket moratorium.
7. Westchester County, New York – Yet another resort town in New York may be saying “no” to battery storage over fire risks.