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The U.S. and Israel’s war of choice has already destroyed many things, including the president’s domestic energy strategy.

President Trump’s war in Iran is not popular. More than half of Americans disapprove of the conflict, according to Nate Silver, while fewer than 40% approve it — a 17-point deficit that has dragged down the president’s overall approval rating with it. The major polling averages now show the president’s approval in the high 30s, compared to 42% at the beginning of the year.
America’s interpreting class has, I think, absorbed this truth about the war. What has attracted less attention, perhaps, is that the war has left Trump’s energy policy dead in the water.
The Trump administration is not over: He will remain president for the next two years and nine months, and I expect many of his officials’ ideas — including their ambitious nuclear energy buildout — to move forward. But Trump’s ambitious plans to remake the country’s energy system — and the bargain that he made with the American people and the world — have been defeated by reality.
Trump’s energy policy was premised on a simple idea: If Americans gave the fossil fuel industry whatever it wants, then they would enjoy cheap and boundless energy — and especially cheap gasoline. Beginning on day one, his administration struck down air and water pollution rules, canceled energy efficiency standards, and waged bureaucratic war on any state government or rival industry that dared to withhold market share from oil or gas. It aimed to make the market for fossil fuels as large as possible, essentially locking in compulsory demand for oil, natural gas, and coal across the economy.
In return, the unshackled energy industry was supposed to bless Americans with unlimited cheap electricity and gasoline. Trump described this bargain with characteristic blunt eloquence. He would end Biden’s “war on energy,” he promised crowds before the 2024 election: “We will frack, frack, frack, and drill, baby, drill.” In return, he said, “I will cut your energy prices in half within 12 months.”
Trump has manifestly failed to cut energy prices at all. Instead, his war of choice in Iran has sent gas prices surging, rising more than a dollar in a month. Americans are operating fewer drilling rigs today than they were a year ago.
Meanwhile, the country and the world are spiraling into the worst energy crisis in years. Yet Trump’s policy is not doomed because of these broken promises or high prices. The entire premise and justification of Trump’s strategy is now moot — and the administration is likely to spend the better part of its remaining time in office picking up the pieces.
The plan has failed. What is striking, however, is that I’m not sure Trump’s energy team has realized it yet.
To understand the Trump approach, look first to the power sector. The president began his administration by repealing a slew of energy efficiency rules for household appliances — a surefire way to drive up long-term electricity demand. He embraced the artificial intelligence boom, appointing techno-libertarians such as the venture capitalist David Sacks to senior administration positions and revelling in the surge in energy demand.
Higher electricity demand, to be clear, can be a good thing; demand from data centers could help build grid resiliency over the long term. But the Trump administration has instead fought efforts to meet the coming surge in demand with additional generation capacity from renewables. Even as the supply chain for new utility-scale natural gas plants has become clogged and backed up, the president’s agencies waged an all-out bureaucratic war on new wind, solar, and battery projects, condemning hundreds of new power plants to regulatory purgatory. They have even tried to keep companies from building wind farms on private land. In other words, the Trump administration kept America from diversifying its energy sources, doubling down on fossil fuels while preparing to upend the global fossil fuel supply chain.
Trump’s transportation policies followed the same logic. Most Americans know Trump and the Republican leadership have tried to crush the American electric vehicle sector, yanking consumer-side incentives and creating a new EV rust belt. But Republicans have also fatally weakened long-standing rules meant to improve the efficiency of gasoline-burning cars and trucks. Back during the mid-2000s oil shock, Congress revived the Corporate Average Fuel Economy rules, which in the years since have helped to improve the U.S. vehicle fleet’s fuel efficiency even as cars got larger and heavier. But last year, congressional Republicans set the penalties for violating those rules at zero dollars, essentially wiping them from the books. At the same time, the Trump administration has tried to terminate a similar EPA program for regulating car and truck gas mileage. It also shut down the emissions credit-swapping mechanisms that helped support new American EV companies such as Tesla, Rivian, and Lucid.
Combined, these policies have reduced the American economy’s ability to withstand an oil shock. And yet many of the president’s most important messengers appear not to have realized this. In late March, I attended the CERAWeek by S&P Global conference in Houston, the so-called “Super Bowl of energy” that brings together 11,000 professionals from across the oil, gas, utilities, and clean energy sectors. Interior Secretary Doug Burgum and Energy Secretary Chris Wright spoke to the group, but the administration’s most memorable spokesperson by far was Lee Zeldin, the New York Republican who leads the Environmental Protection Agency.
The conference was an odd one. The Iran War had ruined every oil executive’s talking points, which had seemingly been prepared by an unseen phalanx of communications staff early in Q1, so a curious and unspeakable unease permeated the proceedings. Despite the many emergency panels devoted to the topic, few seriously wanted to address the closure of the Strait of Hormuz; nobody knew what to say about the biggest convulsion in the oil trade since the 1970s. Was gas about to go to $7 per gallon? Was the oil and gas industry about to transform forever? The best most executives could manage was say that they were working overtime to keep Persian Gulf employees safe.
CERAWeek sprawls across Houston’s 24-story Hilton Americas hotel and a neighboring convention center. At its spiritual and literal center is a huge, dark ballroom, where hundreds of attendees watched as Daniel Yergin — the author of the comprehensive oil history The Prize and de facto dean of energy analysts — chatted amicably with energy CEOs and government officials on a lit central stage. Yergin’s interview style could not be described as grueling, but it revealed how attendees were thinking and feeling, and their comfort on stage.
It fell to Zeldin, who spoke uncomfortably with Yergin on on Wednesday, to reveal the perishing of the president’s energy policy. Unlike Burgum, a former governor, Zeldin lacks a certain political subtlety; unlike Wright, a former fracking executive, Zeldin never gained a working knowledge of the oil and gas industry. His greatest qualification for the EPA job seemed to be a visceral hatred of offshore wind projects near his Long Island home — and although as a congressman Zeldin could boast a somewhat moderate environmental record, he has since reformed himself, denouncing the “Green New Scam” and “the climate change religion” in his new role. It has worked: He is reportedly on the short list to replace Pam Bondi as attorney general.
The risks of this flexibility were on display, however, when Zeldin chose to defend Trump’s policies to Yergin on the basis of affordability. By cutting pollution rules for cars and trucks — and repealing the regulatory finding that let the EPA regulate heat-trapping tailpipe pollution at all — the EPA was making life cheaper for regular Americans, Zeldin claimed.
Americans “want government to heed and apply pragmatism and common sense to help achieve the American dream, to make life more affordable,” Zeldin said. “Anyone who cares about affordability — anyone who cares about being able to have access to heat your home and to fuel your car — people who right now, are choosing between heating their homes or filling their refrigerator or getting their prescription drugs — these Americans put President Trump back in office in November of 2024, and they deserve a vote,” he said.
Someone should tell those voters that Trump’s Iran war is likely to drive up costs of gasoline and food and prescription drugs. But it is all the more painful because Zeldin did not appear to understand his own agency’s conclusions. The problem is that Zeldin’s rollback — and the rest of the Trump administration’s war on EVs — will not actually make gasoline cheaper at all. According to the EPA’s own analysis, the rollback will instead make gasoline more expensive because it will increase the amount of gasoline that people have to use to do the same amount of driving. The rollback is, instead, supposed to make cars cheaper because it will reduce the amount of emissions-lowering technology that automakers must install in each vehicle.
Especially now, the rollback is unlikely to save Americans money. As Zeldin was forced to concede at a Politico-hosted event a day earlier, the EPA rollback only brings economic benefits to the American people if you assume oil prices will stay unreasonably low — on the order of $47 a barrel, or about $2 a gallon for gas. “I don’t think anyone is making believe that the fluctuation that’s taking place over the last few weeks is indicative of where the price of oil is going to be months from now, or years from now,” Zeldin said when asked about the discrepancy. But $47 oil is so low, so unbelievable, that it would spell economic doom for most American oil drillers.
Yergin did not make this apocalyptic scenario clear on stage, but he didn’t need to: I did not get the sense that Zeldin particularly captivated the energy executives in the audience, either. When Yergin asked him to give an example of the kind of regulations that the EPA is cutting, Zeldin cited the agency’s accelerated effort to clear hazardous material after the Los Angeles wildfires, then meandered into a multi-minute denunciation of the mainstream media that ended with his thoughts on how to properly construct a news diet in 2026.
“People would ask me, like, ‘What's the best place to go to get caught up on the news?’” Zeldin said. (Yergin, the winner of the 1992 Pulitzer Prize for general nonfiction, had not asked.) “Honestly, my best answer is, if you have the time to be able to read five different sources and to form your own independent judgment, because unfortunately, right now, there’s some of these outlets — you go to one outlet and you’re not getting the full story.”
“So we'll get back to the environment now,” Yergin replied. Laughter filled the ballroom.
It is not only the domestic aspect of Trump’s energy policy that has suffered a setback. It is the foreign policy, too. Trump, Wright, and Burgum have argued to Americans (with varying levels of sophistication) that America’s economic future lies in selling fossil fuels to the world, and that countries with more aggressive decarbonization strategies will eventually turn away from electric technologies and back toward the affordability and reliability of oil and gas. (Even before his time in government, Wright framed America’s fossil fuel exports in humanitarian terms, casting them as a form of “energy freedom” provided to developing states.) Zeldin could not help himself at CERAWeek from mentioning that the Strait of Hormuz’s closure had made Asian countries even more interested in America’s energy exports.
Yet the Iran debacle, too, has undercut this policy of fossil exporterism. It has convinced Asian and European countries that oil and liquified natural gas are too volatile to enthrone in the transport and power sector when alternatives are available. And it has forced them to abruptly rethink several kinds of fossil-exposed risks at once: the geographic risk of Persian Gulf-supplied energy and the political risk of American-supplied energy. That’s roughly a quarter of global oil capacity — and half of LNG export capacity.
The Iran War and the resulting Hormuz closure are testing the compact at the heart of America’s security relationship with East Asia — that the United States will guarantee freedom of navigation, and with it a secure supply of seaborne energy, to its allies and partners. No wonder that in the days and weeks since that pact’s termination, we have seen more East Asian countries immediately shift their energy policies to more closely resemble China’s, which designed its own energy system precisely to survive the lack of these American guarantees. In the months to come, we will see these countries do exactly what Trump officials said they would not do — build more solar and batteries, and buy more Chinese-made electric vehicles. They will probably burn more coal, too. And many of them will deepen their trade relationships with China, whose homegrown electric automakers are already seeing surging demand for new vehicles. Donald Trump may hate decarbonization, but few have done more than him to make it attractive.
Not that the war has shown that an energy transition is inevitable — or immediately possible. Like the Ukraine invasion, it has revealed the world’s reliance on other essential molecules derived from hydrocarbons, such as plastics, medications, and fertilizer. The existence and persistence of these molecules is, of course, known to would-be decarbonizers and economic planners. But most countries — other than China — have not invested in ways to pursue them at home or with lower emissions. (The United States made a number of plays to diversify its feedstocks for those industries during the Biden administration, but Trump largely gutted those efforts.) China, meanwhile, has invested in both low-emissions industrial processes and, more ominously, a new fleet of coal-to-chemical facilities seemingly designed to bolster the country’s energy security. These facilities, which have boosted China’s heat-trapping pollution in recent years, now seem less like a preparation for future military adventurism and more like a prudent investment.
So even as the crisis has undercut Trump’s hazy vision of a cheap, carboniferous, American-led world, it will not exactly redound to the benefit of clean energy. Perhaps Trump’s energy officials can savor that irony as they descend into political irrelevance.
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Current conditions: Tropical Depression Two strengthened into Tropical Storm Bertha yesterday, recycling the name of the 1996 Atlantic hurricane season’s first major storm • Floods from the monsoon season killed at least four people in Vietnam and left as many missing • Lightning in Utah sparked the state’s latest wildfire, the Meeks Fire, near the Strawberry Reservoir.
President Donald Trump’s on-again, off-again feud with America’s northern neighbor is, as of Monday, back on again. The White House imposed 50% tariffs on most Canadian goods, accusing the nation’s geographically nearest ally and closest cultural bedfellow of unfairly discriminating against American automotives, alcohol, and dairy products. The move threatens to unleash what the Associated Press called “a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return” to office.
In its announcement, the Trump administration said the new tariffs would “apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement,” referring to the Trump-negotiated North American free trade agreement, which the U.S. opted this month not to renew. This struck my colleague Robinson Meyer as ominous. “If the White House now thinks it can levy taxes despite that pact,” he wrote in yesterday’s Heatmap Daily newsletter, “then the risks for Ford, General Motors, and their suppliers have increased.”
Perhaps the only thing growing faster than voters’ antipathy toward data centers is the market’s desire for more of them. Demand for data centers is ballooning at such a rapid clip that BloombergNEF just raised its total forecast for 2035 by a jaw-dropping 83%. The latest data outlining the best-case scenario from the energy consultancy, released Tuesday morning, shows the total installed capacity of U.S. data centers reaching 194 gigawatts in the next nine years. The surge reflects how quickly new server farms are flowing into the project pipeline. In a bid to hedge against the continued expansion, BNEF created a new scenario based on the implied power demand of forecast shipments of microchips for AI computers up to 2033. This scenario implies an even greater need for power: 229 gigawatts of demand from data centers in just the next seven years. And that doesn’t count the continued growth of demand from data centers carrying out non-AI functions, such as traditional cloud computing workloads. This comes as the latest Heatmap Pro polling shows that seven in 10 Americans now oppose data centers in their backyard, a marked shift from last September, when the same survey showed voters evenly split in support and opposition.
That ballooning demand is already showing up in power markets. Of the $16.4 billion in charges from PJM Interconnection’s most recent capacity auction, $6.3 billion — some 38% — stems from data centers. That’s what Joseph Bowring, president of PJM’s independent market monitor Monitoring Analytics, told Utility Dive last week. In the last four base capacity auctions the nation’s largest grid operator held, 46% of capacity charges were driven by data centers. “PJM is continuing to act like it’s business as usual,” Bowring told the trade publication Friday. “You have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.”

On a logical level, it’s a simple supply and demand problem. The supply of electricity is not growing as quickly as demand, all while the Trump administration eliminates subsidies that once buoyed investments in new supply. As a result, corporate electricity deals look poised to increase in price. But not for every generating source. New estimates from LevelTen, a marketplace for power purchase agreements, found that solar PPAs were 5% cheaper in the second quarter of this year compared to the first quarter. In a piece by my colleague Matthew Zeitlin, LevelTen attributed the decline to an especially steep drop in prices in California’s electricity market. Excluding CAISO, solar PPA prices nationwide dropped slightly less than 2%. While hyperscalers are still buying solar, LevelTen found that commercial and industrial buyers are pulling back, creating a “continued softening in the market’s buy-side.” “We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told Matthew.
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Ah, Germany. The land of the Autobahn. Diesel-powered industry. The purring engines of BMWs, Porsches, and Mercedes-Benzes. The nation’s automotive might makes its latest milestone particularly important: Electric vehicles just outsold gas and diesel cars for the first time. New data from the Federal Motor Transport Authority shows that Germans registered 84,057 new electric vehicles in June, a more than 78% year-over-year increase. Traditional hybrids, meanwhile, saw 83,315 registrations, followed by gasoline-powered cars with 60,796, diesel with 33,862, and plug-in hybrids with 32,212. “The automotive history books will need a new page sooner rather than later, after electric cars outsold every other fuel type in Germany for the first time,” InsideEVs reporter Iulian Dnistran wrote. “It’s a huge shift in Europe’s biggest car market, which has traditionally been associated with diesel-powered cars that could travel hundreds of miles at highway speeds without breaking a sweat.” The Tesla Model Y was by far the best-selling EV in Germany, with nearly twice as many registrations as the No. 2 vehicle, the Volkswagen ID.3.
Putting on my Mesopotamian metal merchant hat again: Copper prices are back up. The price of the metal needed for virtually all electrical infrastructure rose 1.3% to just under $14,000 per metric ton, according to Mining.com. The price ultimately hovered at the red metal’s record set in early June. The spike stems from data showing rising tightness in the Chinese market, namely a hike in the premium buyers will pay in Shanghai for shipments of the metal. The price hiked further after a series of storms halted production in Chile for a few days.
While the West dithers on hydrogen, China is making huge strides. It already may be too late to catch up to Beijing on manufacturing the key machinery needed to produce the zero-carbon fuel. The latest data point, via Hydrogen Insight: China just shipped its largest electrolyzer order yet to Europe, via Romania.
A new report from LevelTen Energy shows that advance purchase prices are down for solar but up for wind.
The renewables market is in a state of flux. On the one hand, the tax credits that were a key pillar of wind and solar project financing have started to expire, while the race to be up and running in time to claim those that remain is on.
At the same time the renewables industry is getting whacked by federal tax policy, it’s also getting a shot in the arm from hyperscalers and data center developers, many of whom are hungry for power that can be deployed quickly to the grid and complies with their clean energy pledges.
“There’s a massive onslaught of demand, not enough supply to meet that demand and then Trump’s administration effort to slow down certain types of supply,” Jon Powers, the president of solar and storage developer CleanCapital, told me, describing how data center buyers are snapping up whatever power they can.
So what does this mean for pricing in the market? LevelTen, a marketplace for power purchase agreements, looked at the data and, in a report released Tuesday, found that solar PPAs were almost 5% cheaper in the second quarter of this year compared to the first quarter.
LevelTen attributed this decline in part to an especially steep drop in prices in CAISO, the California electricity market; excluding CAISO, solar PPA prices dropped slightly less than 2%. And while those hyperscalers are still buying, LevelTen found, other commercial and industrial customers are pulling back — what the analysts described as a “continued softening in the market’s buy-side.”
“We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told me.
To explain California specifically, Wolf said that the market there tends to be more volatile than in the rest of the country due to the expense and regulatory hurdles to development. With fewer new projects coming online, especially as compared to a larger, more light-touch market like Texas, individual project pricing can swing average prices more.
The tax credit cliff is “creating this very competitive atmosphere, where buyers are feeling like — in order to safe harbor their equipment, to keep on the development timelines that they have — they need to get a PPA in place,” Wolf said. “They’re looking competitively for a buyer. That’s driving some pricing down.” The same holds for renewables developers, who have wanted to get a PPA in place as quickly as possible, giving leverage to buyers who can demand lower prices.
The other factor driving down prices LevelTen identified was potential revisions to standards issued by the Greenhouse Gas Protocol, which are currently the subject of a long and fraught overhaul process.
“We have many buyers who are fully leaning in and want to contract now,” Wolf said. “And we have buyers who are in a kind of a ’wait and see’ — they want to better understand what that’s going to be, so there’s not a risk that they might have to unwind something.”
As for wind, PPA prices have actually risen, according to LevelTen’s data — up 5.5% on the quarter and 17.5% on the year. “We’re also seeing wind just being less competitive than solar,” Wolf added.
The report attributed this to tariffs, gas prices pushing up delivery costs, and the “ongoing federal permitting bottleneck that has largely ground new-build wind development to a standstill.” That means specifically the Department of Defense’s efforts to hold up wind projects on potentially spurious national security grounds.
This has meant a “fast-dwindling pipeline of viable wind assets,” LevelTen’s report says, “and price premiums for fully permitted projects available for offtake.”
In short, the best news for individual wind developers may be bad news for the industry — and the climate — as a whole.
Cement, plywood, and some electronic equipment will face 50% levies. But the real cost is much higher.
Here we go again. The United States will impose new 50% tariffs on a slew of imports from Canada, the White House announced on Monday afternoon. The trade levies — which will hit more than 500 categories of goods, from anoraks, beer, and curtains, to yarn, wool, and whey protein — will take effect in 30 days.
The new tariffs don’t seem to be wildfire-related. President Trump threatened to impose new tariffs last week after smoke from Canadian wildfires drifted south over the northern U.S. border, but administration officials have claimed to CNN that these new levies were already in motion by then.
Even so, a few aspects of the announcement stand out. Most important, at least from a generalist perspective, is the legal mechanism that President Trump is using to apply them: Section 338 of the Smoot-Hawley Tariff Act. This passage, which has never been used by a previous president to levy tariffs, allows the United States to tax trade from countries that the president says have “discriminated against” U.S. commerce.
Significant, too, is the fact the White House asserts this new kind of tariff could apply to any kind of product — even those that would normally be covered by the North American free trade pact, the U.S.-Mexico-Canada Agreement. So far, the “Big Three” automakers — whose supply chains cross the Mexican or Canadian borders half a dozen times before a car is finally assembled — have avoided major tariff danger because auto parts and other inputs fall under the USMCA’s auspices. If the White House now thinks it can levy taxes despite that pact, then the risks for Ford, General Motors, and their suppliers have increased.
Energy and critical minerals are exempt from the new tariffs, so Canadian crude oil, gasoline, diesel, natural gas, and electricity will presumably keep flowing into the United States. (That explicit carve-out might be ominous in its own right, because energy had been protected by USMCA so far, too.) By omitting energy, Trump and his officials may be calculating they can avoid major inflationary hazards from this round of tariffs.
Who knows. In any case, to my eye, these tariffs do seem like they could aggravate construction costs and possibly contribute to wider U.S. inflation. There’s already some evidence that data centers are driving a new wave of inflation, for instance, by hiking construction input and labor costs. Yet data centers use a lot of cement — and cement will now face a 50% tariff under the new regime. So too will plywood, plaster, and paperboard, as well as industrial cooling equipment, chemicals, and some circuit boards.
I could keep listing the potential economic costs here — I could point out that overall inflation risk is rising or that average U.S. gas prices rose to $4 a gallon today on the Iran war news — but I think it’s important to look at least one step beyond the hits to commerce alone.
I mentioned earlier that these tariffs are meant to punish “discrimination.” In this case, some of the “discrimination” appears to be what some Canadian provinces did to retaliate against the president’s earlier tariffs. The state-owned liquor stores in Quebec and Ontario, for instance, stopped buying U.S.-made booze after Trump slapped 25% tariffs on Canada in March 2025; those boycotts are mentioned by name in today’s proclamation. Canada, you see, is not supposed to respond to Trump’s tariffs. It is just supposed to take it — just like it’s supposed to take the constant stream of falsehoods, abuse, belittling, and invasion threat.
Over the past few years, politicians and pundits have learned to respond to Trump’s policies by appealing to U.S. self-interest — by explaining how the president’s policies are making Americans poorer. It is a sensible strategy for a morally denuded era. A recent statement from Senate Minority Leader Chuck Schumer about Canada, for example, criticized the president for hurting “our closest ally and partner … right when summer tourism season is arriving.” I get the move here — and I think, in some sense, Schumer is trying to avoid polarizing Trump’s treatment of Canada along partisan lines — but Canadians are more than their tourism dollars.
For the past several years, Trump has threatened to strip Canada of its sovereignty and its dignity. He has treated what was once a deep and secure relationship as something to be bartered and mined and dissipated. It is a mucilaginous approach to statecraft, and as recent reporting has made clear, its long-term costs will exceed any simple accounting. We Americans have been robbed of an honorable friendship. Some losses cannot be counted in dollars.