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The president says he want to bring back nuclear — but he’s preparing to eviscerate an office crucial to making that happen.
In the past few days, I’ve started to wonder whether much of the Trump administration’s energy agenda is dead, and Trump officials just don’t realize it yet.
Trump dreamed of a new U.S. mining bonanza. But his tariffs are slowing economic activity and raising equipment costs, silencing that boom.
Trump called for the American oil industry to “drill, baby, drill.” But his trade agenda — plus his demand that OPEC increase its oil production — is smothering the Texas oil patch. The president’s trade war on China is also backfiring on America’s oil and gas producers, who export huge amounts of plastic feedstocks to that country.
Now Trump’s plan to revive nuclear energy is in peril, too — and the culprit, again, is the president’s own policies.
The Trump administration is planning to hollow out a Department of Energy office that has been central to financing almost every new U.S. nuclear project this century. That could kill the federal government’s ability to act as a financial backstop for new nuclear projects, which has been critical to the success of every recent American nuclear project.
It’s not clear that Trump officials realize what they’re doing yet — or that they care. (Secretary of Energy Chris Wright has been out of the country for much of the relevant period.) And while a coalition of centrist, conservative, and pro-nuclear groups is sounding the alarm, I’m not sure Trump officials are going to realize what they’re doing with enough time to stop it.
For decades now, reviving nuclear energy has been a big aim of Republican energy policy. Republican lawmakers passed nuclear-friendly bills in Congress, and Republican presidents tried to advance pro-nuclear policies.
Nuclear was central to the Trump 2024 campaign, too. Many Trump-aligned figures — including Elon Musk and Vice President JD Vance — suggested that the United States should significantly expand its nuclear fleet. (Vance mentioned nuclear during his appearance on Joe Rogan’s influential podcast and in the vice presidential debate.)
Then, on his first day in office, President Trump signed an executive order seeking to loosen rules holding back nuclear energy. The Department of Energy, in turn, has lifted up the revival of nuclear energy as one of its goals for Trump’s second term.
“America’s nuclear energy renaissance starts now,” Wright declared in late March, when he announced new funding for small modular reactors.
Bringing back nuclear power is the explicit goal. But when it comes to energy policy, announcing an aim is not the same as getting it done. Just ask the Biden administration, which struggled to build EV chargers despite $7.5 billion in funding.
It will take a lot of work to execute a project as big and complex as building new nuclear reactors across the United States, and simply wanting to do it will not make it happen.
That’s what the Trump administration may not understand.
The United States has started only four new nuclear projects this century. All but one of those efforts have received — or are now in the process of applying for — a federal loan guarantee by the Loan Programs Office, the Energy Department’s in-house bank.
The Loan Programs Office, or LPO, provides long-term financing to major American clean energy and industrial projects. The LPO is a small office — just a few hundred people — but it was a vital tool of the Biden administration’s clean-energy industrial strategy. The first Trump administration also used it to boost nuclear energy. (It’s helped Trump allies, too: Back in 2010, it made an early loan to build Tesla’s factory in Fremont, California.)
The LPO has been the key guarantor for every new U.S. nuclear project this century, save one:
The only new nuclear project this century the LPO did not support is the new reactor at Watts Bar Nuclear Plant in Tennessee, which opened in 2016. But that project had the federal government’s backing through a different avenue: The facility is owned by the Tennessee Valley Authority, a federally owned power utility.
Despite that track record, commissars at the Department of Government Efficiency are now trying to gut LPO. The Musk-led efficiency team is seeking to slash more than half of the office’s staff, Heatmap News reported last week.
Seemingly seeking to ease those cuts, Energy Department officials have sought to winnow down the office’s headcount on their own. Energy Department officials have encouraged as many LPO employees as possible to accept an early resignation program under which federal employees can resign this month and get paid through September.
About half of Loan Programs Office employees have asked to resign from their positions, according to one person who wasn’t authorized to speak about the matter publicly. The Department of Energy told Heatmap News last week that it could reject some employees’ early resignation requests.
On Monday, a coalition of centrist, conservative, and pro-nuclear groups wrote a letter to Energy Secretary Wright urging him to “ensure LPO remains fully equipped to carry out its mission.”
The letter says that the LPO could lose so much of its staff — many of whom have special technical or scientific training — that it can no longer support development of new nuclear reactors, fossil power plants, or mineral projects.
“The office’s ability to underwrite and monitor large-scale energy projects depends on specialized technical staff and institutional capacity. Without them, the federal government risks slowing or stalling the diverse mix of energy projects that serve national priorities,” the letter says.
The letter’s signatories include the Nuclear Energy Institute, the nuclear industry’s main trade group. Other signatories include American Compass, a Trump-aligned industrial policy group; Oklo, a nuclear energy company; and the American Conservation Coalition, a conservative environmental group.
The letter is the strongest warning yet that the Trump administration could be blowing its nuclear agenda. In doing so, the administration will lose a rare window of opportunity to make progress on nuclear energy.
Americans are looking more favorably on nuclear energy. Earlier this month, a new Gallup poll found that the U.S. public’s support for nuclear energy has hit 61% — just one percentage point short of its all-time high.That has come as Democratic politicians — especially in swing states — have become more supportive of nuclear energy. As I wrote last year, Democratic candidates at the Senate and presidential level proposed pro-nuclear policies in the last election that until recently would have been unthinkable. At the same time, Republicans have maintained their support of nuclear energy.
Nuclear energy occupies a curious position in American politics. Think about it for a second. The country’s 54 commercially operating nuclear power plants are its largest source of zero-carbon electricity, generating more power than all of America’s wind and solar farms, combined. Second, nuclear power requires a large workforce of college-educated professionals, and those workers are unionized at much higher rates than the private workforce. Finally, nuclear power has never succeeded anywhere — not in the United States, not in France or Japan, and not in Russia or China — without huge amounts of public subsidy.
We are talking about a type of energy that is climate-friendly, that helps build a college-educated and unionized workforce, and that basically always requires government support. Yet nuclear energy has historically been beloved by Republicans and hated by Democrats.
I’m not convinced that will be the case for long — one of the two major parties might turn on nuclear energy in the next few years, driven either by political polarization or by the exigencies of events. (The American public’s support of nuclear power reached its all-time high in 2010, on the eve of the Fukushima disaster.)
Now might be the best window to build nuclear energy in this generation. Democrats in Congress — and the Trump administration — both say they want to do it. But the Trump administration is blowing it.
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Rob talks to Peter Brannen, author of the new book The Story of CO2 Is the Story of Everything.
How did life first form on Earth? What does entropy have to do with the origins of mammalian life — or the creation of the modern economy? And what chemical process do people, insects, Volkswagens, and coal power plants all share?
On this week’s episode of Shift Key, Rob chats with Peter Brannen, the author of a new history of the planet, The Story of CO2 Is the Story of Everything. The book weaves together a single narrative from the Big Bang to the Permian explosion to the oil-devouring economy of today by means of a single common thread: CO2, the same molecule now threatening our continued flourishing.
Brannen is a contributing writer at The Atlantic and the author of The Ends of the World, a history of mass extinctions on Earth. He is an affiliate at the Institute of Arctic and Alpine Research at the University of Colorado, Boulder. 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. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: Why do we have a surplus of oxygen in the air in the first place? It was, for me, also something I did not understand at all before I read the book.
Peter Brannen: So there’s this common trope that two out of the next three breaths you have is from phytoplankton the ocean, or a quarter of it is from the Amazon alive today. And there’s a sense in which that’s true because oxygen and CO2 are being exchanged very quickly in the biosphere. But there is something like 800 times more oxygen in the air than can be produced by the entire biosphere. And all of the oxygen that’s produced by the rainforest, say — the rainforest is a living system where everything else is consuming that organic matter and feeding off of it. And it’s kind of a wash — just as much oxygen is created by the trees as is consumed by the bugs and fungi and jaguars and all the things that are living in the rainforest that are feeding off those plants and respiring that plant matter back to things like CO2 and water. So on a net scale it’s a wash.
So that gets you a planet with close to zero oxygen, and instead we have this absurd abundance of this thing that wants to react with everything. And the only way you can do that is if, say, you imagine a tree and when it dies, rather than being decomposed by fungi and beetles and on and on, that tree suddenly gets buried in sediment and falls into the crust and becomes part of the rock record, and the oxygen it made in life is not used in its own destruction. And by shielding that tree in the earth, you leave this surplus of oxygen in the air. And over all of Earth history, as a vanishingly small amount of this organic matter, things like plants and algae, do make it into the rock record, they leave an equivalent gift of oxygen in the air as a surplus.
We are more familiar with plant matter in the crust where it’s economically exploitable — we call those fossil fuels. So in a weird way, the fact that me and you can breathe — I don’t think a lot of people attribute that to the fact that there’s fossil fuels in the ground. Luckily most, you know, quote-unquote fossil fuels are very diffuse in mudstones, and they’re not economically exploitable. And we’re never going to run out of oxygen by burning fossil fuels because, you know, we worry about CO2 going up in parts per million and oxygens in whole percent. So, you know, it is true that for every molecule of CO2 we burn we’re bringing down oxygen by an equivalent amount, it’s just not that concerning.
But yeah, there is this astounding way of reframing, of looking at the world where the plant surface is breathable only because of what’s happened in the rocks beneath it.
Mentioned:
Peter’s book, The Story of CO2 Is the Story of Everything
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.
Is the “turbine crisis” coming to an end? Or at least the end of the beginning?
One of the few bright spots for renewables this year has been that their main competitor for energy generation, natural gas, has been in a manufacturing crunch. An inability (or unwillingness) to ramp up production of turbines, the core component of a gas-fired power plant, to meet rising energy demand is cited regularly by industry executives and financiers to explain why renewables are the best solution to quickly getting power. And it’s reflected in the data; planned additions to the grid are overwhelmingly solar and storage.
But now there might be more turbines coming. Mitsubishi Heavy Industry chief executive Eisaku Ito told Bloomberg over the weekend that it aims to double its capacity to build gas turbines over the next two years.
The industry is essentially an oligopoly of three suppliers: Mitsubishi, GE Vernova, and Siemens Energy. Due to the high level of capital investment necessary to build turbines, there’s little chance of the triumvirate expanding. This means it’s a seller’s market. Developers describe having to be vetted by their suppliers for a product that might get delivered in five years, instead of suppliers fiercely competing for new business. That means for the turbine crisis to be truly reversed, executives (and investors) at Mitsubishi’s two competitors will have to be convinced that large-scale capacity expansions are worth it.
Something that might help them reach that conclusion is if capacity expansion plans are met with a higher stock price. In another ominous development for the renewable energy industry, Mitsubishi’s stock price went up in response to the news. Renewable developers have enough problems on their hands without having to worry about a gas turbine industry that could supply more and more megawatts over the medium term.
Gas turbine manufacturers have been trying to navigate the tension of fulfilling orders for new gas turbines and avoiding costly investments in new capacity that might not actually be utilized should the AI boom peter out, let alone if public policy makes it much more difficult to build new fossil-powered generation.
Up until now, manufacturers — and their investors — have seemed content with heavy demand and constrained supply. Going into the weekend, the stock prices of the gas turbine industry powerhouses GE Vernova, Siemens, and Mitsubishi Heavy Industry had risen 86%, 79%, and 69% so far this year.
But Mitsubishi Heavy Industry’s stock bump on Tuesday indicates that investors are not completely averse to capacity expansion. Yet at the same time, executives across the industry are careful to portray themselves as thoughtful and prudent stewards of capital.
Ito emphasized that the planned capacity expansion would not mean reckless investments, telling Bloomberg “the goal is to be as lean as possible” and that there would be work on the efficiency of the production process to address spiraling costs of turbine manufacturing.
“The executives seem keen to stress that this expansion will be lean and efficient,” Advait Arun, a climate and infrastructure analyst at the Center for Public Enterprise and the author of a much-cited Heatmap article on the turbine shortage, told me. “There’s a tension between getting over their skis by expanding overmuch while also killing the goose that’s laying their golden egg by not expanding.”
The pressure to build is immense — but so is the industry’s hard-won reticence about expansion.
Gas turbine orders are likely to hit a new record this year, according to S&P Global Commodities Insights, and the industry might be unwilling to go further.
“Past boom-and-bust cycles have made the industry cautious in its investments, and turbine demand in the early 2030s is uncertain,” S&P analysts wrote.
Siemens Energy chief executive Christian Bruch had told Morgan Stanley analysts in a note released Tuesday that the company had “no intention” of increasing capacity beyond working to expand the facilities it already has. He also said the company’s constraints are its own supply chain issues, namely the blades and vanes used in the turbines
And GE Vernova has been practically bragging about how far back they have reservations for turbines. “Our pipeline of activity for gas demand is only growing, but it is growing at even more healthy levels for 2029 deliveries, 2030, 2031,” the company’s chief executive Scott Strazik said on an earnings call in July.
And Wall Street has been happy to see developers get in line for whatever turbines can be made from the industry’s existing facilities. But what happens when the pressure to build doesn’t come from customers but from competitors?
A federal appeals court on Tuesday cleared the way for the Trump administration to kill former President Biden’s $20 billion green bank program, which would have provided low-cost loans for solar installations, building efficiency upgrades, and other local efforts to reduce greenhouse gas emissions.
The three-judge panel overturned a lower court’s injunction temporarily requiring the Environmental Protection Agency to resume payments, and ruled that most of the plaintiffs’ claims were contract disputes and belonged in the Court of Federal Claims. If the case now moves to the Court of Federal Claims, the plaintiffs would only be able to sue for damages and any possibility of reinstating the grants would be gone. But they could also petition to appeal the decision.
Congress created the grants, known as the Greenhouse Gas Reduction Fund, as part of the Inflation Reduction Act in 2022. It authorized Biden’s EPA to award $20 billion to a handful of nonprofits that would then offer financing to individuals and organizations for emission-reduction projects, mostly geared toward low-income or otherwise disadvantaged communities. The agency fully obligated the funds last August to eight nonprofits that would “create a national financing network for clean energy and climate solutions across the country.”
Then Trump took office and ordered his agency heads to pause and review all funding for Inflation Reduction Act programs. EPA Secretary Lee Zeldin targeted the Greenhouse Gas Reduction Program for termination, making a big show of a covert recording of a former agency employee comparing Biden’s efforts to get climate money out the door after the election to “throwing gold bars off the edge” of the Titanic. Nevermind that this particular program had been fully obligated prior to the election, and recipients had already started to announce investments as early as October.
The nonprofit awardees sued the Trump administration, and the District Court for the District of Columbia issued a temporary injunction on the EPA’s grant terminations in mid-April, mandating that the funds continue to be paid out while the case proceeded. The EPA appealed that injunction, leading to today’s ruling.
In her opinion for the majority, appeals court Judge Neomi Rao, a Trump appointee, dismissed the nonprofits’ claims that the EPA’s grant terminations were arbitrary and capricious, in violation of the Administrative Procedures Act. She wrote that the dispute was “essentially contractual” and therefore did not belong in the district court to begin with. The nonprofits had also alleged that the EPA violated the constitution's separation of powers in attempting to cancel the grant agreements, as Congress had given explicit direction to the agency to award the funds by September 2024. While Judge Rao allowed that the district court had jurisdiction over this particular claim, she ruled that it was “unlikely to succeed” on the merits.
This decision, if it stands, means the case is basically over, David Super, an administrative law expert at Georgetown Law, told me. The plaintiffs could ask to have it transferred to the Court of Federal Claims if they wish to pursue monetary damages, but that’s likely a losing proposition since Judge Rao — unusually, according to Super — went on to opine that the plaintiffs would have no case there, either.
The plaintiffs could, however, ask for a rehearing by the full D.C. circuit. “Given that this is a very important case, both legally and practically, I think they would have a good chance of getting reheard,” Super said.
There was one other important point in the decision. While this case has been playing out, Congress rescinded any “unobligated” funding — money that hasn’t yet been spent or contracted out — from the Greenhouse Gas Reduction Fund as part of Trump’s tax and spending law. The Congressional Budget Office estimated that the remaining balance in the fund was just $19 million, essentially the cost of program administration. But the Trump administration has argued in the ongoing court case that the law rescinded the full $20 billion. Judge Rao disagreed, writing that the law “did not render this appeal moot.”
This is the latest in a series of wins for the Trump administration over the termination of grant funding. Last week, the D.C. district court dismissed a challenge brought by nonprofits over the termination of the Environmental and Climate Justice Block Grants, another Inflation Reduction Act program, on the grounds that it belonged in the Court of Federal Claims. The Supreme Court also issued a similar opinion in August regarding grant funding from the National Institutes of Health that was terminated on the grounds of a shift in agency priorities.
The evaporation of $20 billion in clean energy funding is no small loss, but Super said the consequences could also be much more systemic, threatening the viability of federal grantmaking as a tool to stimulate private capital. “If these commitments are utterly unenforceable, then no one's going to do business with the federal government,” he said.