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For decades now analysts of various stripes have been predicting the end of America’s reign as the dominant world power. Some thought the war on terror, in which the U.S. spent on the order of $6 trillion turning half the Middle East into a Stygian wasteland, would crack it. Others thought the financial crisis of 2008 would sour the world on America-centered financial capitalism.
Yet nothing of the sort happened. America is simply so rich that it absorbed the burden of 20 years of war without even raising taxes. There was and is simply no alternative to the U.S. dollar for settling international transactions. The 2008 crash caused a run towards dollars, not away from them, and the U.S. Federal Reserve became the lender of last resort for half the planet — a role it replayed during the initial panic of the pandemic.
And under the Biden administration, American preeminence seemed to have gotten another lease on life. Thanks to his stimulus and industrial policy, the U.S. economy has recovered much faster than any other rich nation. The European Union is stagnating, struggling to escape from its lack of a coherent fiscal system and its decision to depend heavily on imported Russian fossil gas. China’s growth model has crashed into the middle income trap, as it struggles to pivot from an investment-driven model to a consumption-driven one.
That all changes with the second election of Donald Trump to the presidency. Him winning again, this time even the popular vote, has thrown radical uncertainty into America’s international standing — particularly when it comes to climate change and the green economy. It’s a golden opportunity for China, if it cares to seize it.
It has been obvious for years now that renewable energy and green industry are going to be the growth engines of the world economy for the rest of this century at least. Every fossil fuel power plant must be replaced with some combination of wind, solar, batteries, geothermal, or nuclear, and every power grid must be overhauled and upgraded to deal with the intermittency of renewables. All carbon-based industry and agriculture must be modified or replaced with electric-powered versions, requiring a lot more generation capacity.
It will be a transformation on par in significance with the original Industrial Revolution, requiring trillions in investment per year. Indeed, it is already happening around the world and, given the price trends of renewable energy, it is practically inevitable at this point.
China already has manifold advantages in this area. It is already the workshop of the world, accounting for almost a third of global manufacturing. It produces more than half of the world’s steel and two-thirds of its aluminum. It is also far ahead of anyone else in most green industry. It produces 80% of global solar panels, 80% of lithium-ion batteries, about 60% of wind turbines, and 58% of EVs. It also has installed more solar and wind, both onshore and offshore, than any other country by far.
Frankly, China was already positioned to more or less dominate the green energy and industry space. But under Biden, America has belatedly attempted to stand up a competing green manufacturing base, and it is working. Solar and battery investment is skyrocketing, as is manufacturing.
Trump has promised to flush all that down the toilet. He has promised to repeal the Inflation Reduction Act, the keystone Biden climate law, and gut the entire environmental protection apparatus. It’s an open question whether or not he will go that far, but if markets are any judge, the stocks of many American renewable and green industry companies plunged on the news of his victory. If Republicans win the House (which is not yet counted at time of writing), then I suspect at least a partial repeal of Biden’s climate achievements. That is basically what Trump did during his last term.
It might not even take that much. As Robinson Meyer outlines, Trump already strangled an incipient transition to EVs among U.S. automakers during his first term simply with some regulatory adjustments. The ongoing transition has been rocky for some companies, particularly Ford, and it would not take much to tip them back towards traditional cars.
If that happens then China will not have even a potential peer competitor — it will own more or less the whole green economy going forward. European, Japanese, and Korean companies might carve out a modest niche, but Africa, Latin America, and much of Asia will by and large be decarbonized and powered by Chinese products.
China has an even bigger opportunity when it comes to diplomacy. The keystone of American dominance is its alliance system. Its relationships through NATO and with New Zealand, Australia, Taiwan, Vietnam, Japan, and so on provides a public good of security in which those countries feel less need to spend hugely on defense, in return to submitting to U.S. control of global financial pipelines and other international institutions.
Electing a madman as president back in 2016 led many to question whether America was not too politically rotten to be trusted as world hegemon, and sure enough Trump, with his arrogant, erratic, and supremely transactional diplomacy, deeply alienated much of the EU, the most important ally. Biden successfully patched up the relationship, but a second Trump election could be the final straw. One election could be a fluke, but two is a pattern, and in any case Trump has suggested he might unilaterally tear up NATO. Frankly you’d be a fool to trust American diplomatic promises of any kind from now on, and a huge military buildup among jittery American allies is all but certain. As French President Emanuel Macron recently said at an EU summit, “We cannot delegate our security to the Americans forever.”
This in turn threatens international financial pipelines, either owned or regulated by the U.S. government, like Fedwire, CHIPS, Nacha, and SWIFT, that the U.S. uses for power projection. Sanctions against Russia, for instance, rely on other nations complying with American rules and surveillance on these systems.
Many, many countries are not going to be happy about the prospect of Donald Trump being able to set the rules and conditions on their international transactions. It will be a ripe opportunity for China to step in with an alternative system, and thereby knock out another pillar of American global power.
Let me emphasize that none of this is going to happen automatically. China, with its opaque and autocratic regime, has many serious domestic problems. As noted above, its domestic economy is struggling to rebalance towards consumption, and its population is rapidly aging. That said, the government recently announced a major stimulus package, which should boost consumption to some degree.
If China wanted to replace the dollar as reserve currency, it would have to give up capital controls and currency management, which would require even more wrenching reforms. Similarly, if it wants a lot of uptake on an alternative payments system, it would be well advised to not give in to its usual habit of totalitarian police state surveillance.
But the opportunity still remains. America has been one of the luckiest countries in world history — blessed in its geographic position, resource base, and with a 160-year record of not suffering major wars on its territory. But with sufficient stupidity, even the largest advantages can be canceled out. Electing one of the worst people in the country to the presidency, again, might just do it.
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On Neil Jacobs’ confirmation hearing, OBBBA costs, and Saudi Aramco
Current conditions: Temperatures are climbing toward 100 degrees Fahrenheit in central and eastern Texas, complicating recovery efforts after the floods • More than 10,000 people have been evacuated in southwestern China due to flooding from the remnants of Typhoon Danas • Mebane, North Carolina, has less than two days of drinking water left after its water treatment plant sustained damage from Tropical Storm Chantal.
Neil Jacobs, President Trump’s nominee to head the National Oceanic and Atmospheric Administration, fielded questions from the Senate Commerce, Science, and Transportation Committee on Wednesday about how to prevent future catastrophes like the Texas floods, Politico reports. “If confirmed, I want to ensure that staffing weather service offices is a top priority,” Jacobs said, even as the administration has cut more than 2,000 staff positions this year. Jacobs also told senators that he supports the president’s 2026 budget, which would further cut $2.2 billion from NOAA, including funding for the maintenance of weather models that accurately forecast the Texas storms. During the hearing, Jacobs acknowledged that humans have an “influence” on the climate, and said he’d direct NOAA to embrace “new technologies” and partner with industry “to advance global observing systems.”
Jacobs previously served as the acting NOAA administrator from 2019 through the end of Trump’s first term, and is perhaps best remembered for his role in the “Sharpiegate” press conference, in which he modified a map of Hurricane Dorian’s storm track to match Trump’s mistaken claim that it would hit southern Alabama. The NOAA Science Council subsequently investigated Jacobs and found he had violated the organization’s scientific integrity policy.
The Republican budget reconciliation bill could increase household energy costs by $170 per year by 2035 and $353 per year by 2040, according to a new analysis by Evergreen Action, a climate policy group. “Biden-era provisions, now cut by the GOP spending plan, were making it more affordable for families to install solar panels to lower utility bills,” the report found. The law also cut building energy efficiency credits that had helped Americans reduce their bills by an estimated $1,250 per year. Instead, the One Big Beautiful Bill Act will increase wholesale electricity prices almost 75% by 2035, as well as eliminate 760,000 jobs by the end of the decade. Separately, an analysis by the nonpartisan think tank Center for American Progress found that the OBBBA could increase average electricity costs by $110 per household as soon as next year, and up to $200 annually in some states.
EIA
Saudi Arabia’s state-owned oil company Saudi Aramco is in talks with Commonwealth LNG in Louisiana to buy liquified natural gas, Reuters reports. The discussion is reportedly for 2 million tons per year of the facility’s 9.4 million-ton annual export capacity, which would help “cement Aramco’s push into the global LNG market as it accelerates efforts to diversify beyond crude oil exports” and be the “strongest signal yet that Aramco intends to take a material position in the U.S. LNG sector,” OilPrice.com notes. LNG demand is expected to grow 50% globally by 2030, but as my colleague Emily Pontecorvo has reported, President Trump’s tariffs could make it harder for LNG projects still in early development, like Commonwealth, to succeed. “For the moment, U.S. LNG is still interesting,” Anne-Sophie Corbeau, a research scholar focused on natural gas at Columbia University’s Center on Global Energy Policy, told Emily. “But if costs increase too much, maybe people will start to wonder.”
Ford confirmed this week that its $3 billion electric vehicle battery plant in Michigan will still qualify for federal tax credits due to eleventh-hour tweaks to the bill’s language, The New York Times reports. Though Ford had said it would build its factory regardless of what happened to the credits, the company’s executive chairman had previously called them “crucial” to the construction of the facility and the employment of the 1,700 people expected to work there. Ford’s battery plant is located in Michigan’s Calhoun County, which Trump won by a margin of 56%. The last-minute tweaks to save the credits to the benefit of Ford “suggest that at least some Republican lawmakers were aware that cuts in the bill would strike their constituents the hardest,” the Times writes.
Italy and Spain are on track to shutter their last remaining mainland coal power plants in the next several months, marking “a major milestone in Europe’s transition to a predominantly renewables-based power system by 2035,” Beyond Fossil Fuels reported Wednesday. To date, 15 European countries now have coal-free grids following Ireland’s move away from coal in 2025.
Italy is set to complete its transition from coal by the end of the summer with the closure of its last two plants, in keeping with the government’s 2017 phase-out target of 2025. Two coal plants in Sardinia will remain operational until 2028 due to complications with an undersea grid connection cable. In Spain, the nation’s largest coal plant will be entirely converted to fossil gas by the end of the year, while two smaller plants are also on track to shut down in the immediate future. Once they do, Spain’s only coal-power plant will be in the Balearic Islands, with an expected phase-out date of 2030.
“Climate change makes this a battle with a ratchet. There are some things you just can’t come back from. The ratchet has clicked, and there is no return. So it is urgent — it is time for us all to wake up and fight.” — Senator Sheldon Whitehouse of Rhode Island in his 300th climate speech on the Senate floor Wednesday night.
Some of the Loan Programs Office’s signature programs are hollowed-out shells.
With a stroke of President Trump’s Sharpie, the One Big Beautiful Bill Act is now law, stripping the Department of Energy’s Loan Programs Office of much of its lending power. The law rescinds unobligated credit subsidies for a number of the office’s key programs, including portions of the $3.6 billion allocated to the Loan Guarantee Program, $5 billion for the Energy Infrastructure Reinvestment Program, $3 billion for the Advanced Technology Vehicle Manufacturing Program, and $75 million for the Tribal Energy Loan Guarantee Program.
Just three years ago, the Inflation Reduction Act supercharged LPO, originally established in 2005 to help stand up innovative new clean energy technologies that weren’t yet considered bankable for the private sector, expanding its lending authority to roughly $400 billion. While OBBBA leaves much of the office’s theoretical lending authority intact, eliminating credit subsidies means that it no longer really has the tools to make use of those dollars.
Credit subsidies represent the expected cost to the government of providing a loan or a loan guarantee — including the possibility of a default — and thus how much money Congress must set aside to cover these potential losses. So by axing these subsidies, Congress is effectively limiting the amount of lending that the LPO can undertake, given that many third-party lenders would be reluctant to finance riskier, more novel, or larger projects in the absence of federal credit support.
“The LPO is statutorily allowed to take loans on its books to finance these projects in these categories, but it has no credit subsidy by which to take the risk required to do so,” Advait Arun, senior associate of energy finance at the Center for Public Enterprise and a Heatmap contributor, told me.
The particular programs that have been eliminated support new and improved energy technologies, clean energy infrastructure, fuel efficient vehicles, and help native communities access energy project financing. The long-running Loan Guarantee Program and the advanced vehicles program in particular are behind some of the best known LPO efforts, supporting companies such as Tesla, Ford, and NextEra Energy, and projects such as Georgia’s Vogtle nuclear reactors, the Thacker Pass lithium mine, and Shepherd’s Flat, one of the world’s largest wind farms.
The Loan Guarantees Program is “the big Kahuna,” Arun told me. “This is the longest-standing program of the LPO. So to see this defunded is like, you’re decapitating the LPO’s crown jewel.”
The program only has about $11 million left over in credit subsidies, consisting of funding that it received prior to the IRA’s appropriations. That won’t be enough to make any meaningful loans, Arun said, and is more likely to be used to “keep a skeleton crew online” for any remaining administrative tasks.
Then there’s the Energy Infrastructure Reinvestment Program, which the IRA stood up with a whopping $250 billion in lending authority to transition and transform existing fossil fuel infrastructure for clean energy purposes. Now, OBBBA has axed the program’s remaining $5 billion in credit subsidies and replaced it with $1 billion in new subsidies for projects that “retool, repower, repurpose, or replace” existing energy infrastructure, with a focus on expanding capacity and output as opposed to decarbonizing the economy. It also refashioned the program as the predictably-named “Energy Dominance Financing” initiative.
The new-old program — which the law extended through 2028 — no longer requires LPO-funded infrastructure to reduce or sequester emissions, broadening the office’s lending authority to include support for fossil fuel and critical minerals projects. It also adds language encouraging the LPO to “support or enable the provision of known or forecastable electric supply,” which Arun fears is a “backend way of penalizing the addition of renewable energy” on previously developed land.
“Under the Trump administration’s direction, [the LPO] can use that term, ‘known and forecastable,’ to actually just say, well, guess what? Renewables are not known or forecastable because they are intermittent due to the weather,” Arun told me. So while government and private industry were once excited about, say, turning sites originally developed for coal mining or coal ash disposal into solar and battery facilities, those days are probably over.
Carbon capture in particular stands to suffer from this reprogramming, Arun said, explaining that while the Biden LPO saw potential in adding carbon capture to natural gas and coal plants, its current incarnation will no longer allocate funding in any meaningful amount “because reducing emissions is no longer part of the LPO’s mandate.” Some policymakers and clean energy developers had also hoped that excess renewable energy would make it economically feasible to power the production of hydrogen fuel with renewable energy. But with this law — and really each passing day under Trump — a mass buildout of solar and wind seems less and less likely, making it doubtful that green hydrogen will move down the cost curve.
As bleak as this looks, it’s better than it could have been. There was no guarantee that Trump would keep the LPO around at all. Even in this denuded state, the office can still fund the expansion of existing nuclear projects, and perhaps even the buildout of transmission lines or battery projects on brownfield sites, Arun said, depending on how LPO’s leadership ends up interpreting what it means to “increase the capacity output of operating infrastructure.”
But in many ways, what happened with the LPO looks like another instance of the Trump administration picking winners and losers: Yes to clean, firm energy and fossil fuels, no to solar, wind, and electric vehicles.
Take the Advanced Technology Vehicle Manufacturing Program, for example. OBBBA nixed both its credit subsidies and its tens of billions of dollars in lending authority. That’s hardly a surprise, given that the Bush administration created the program in 2007 explicitly to support the domestic development and manufacture of fuel-efficient vehicles and components. But it means that unlike the LPO programs for which lending authority still stands, even if Congress wanted to, it could not redesign the advanced vehicles program to serve a more Trump-aligned purpose. Safer, I suppose, to cut off any opening for funding EVs and hybrids.
The latest LPO rescissions add to the growing list of reasons the private sector has to be wary of the consistently inconsistent landscape for federal funding, Arun told me. He worries that slashing the LPO’s authority at the same time as there’s so much uncertainty around tax credit eligibility will lead some companies to forgo federal funding opportunities altogether.
“We’ll see if private developers even want to play around with the LPO,” Arun told me, “given the uncertainty around the rest of the federal landscape here.”
Electric vehicle batteries are more efficient at lower speeds — which, with electricity prices rising, could make us finally slow down.
The contours of a 30-year-old TV commercial linger in my head. The spot, whose production value matched that of local access programming, aired on the Armed Forces Network in the 1990s when the Air Force had stationed my father overseas. In the lo-fi video, two identical military green vehicles are given the same amount of fuel and the same course to drive. The truck traveling 10 miles per hour faster takes the lead, then sputters to a stop when it runs out of gas. The slower one eventually zips by, a mechanical tortoise triumphant over the hare. The message was clear: slow down and save energy.
That a car uses a lot more energy to go fast is nothing new. Anyone who remembers the 55 miles per hour national speed limit of the 1970s and 80s put in place to counter oil shortages knows this logic all too well. But in the time of electric vehicles, when driving too fast slashes a car’s range and burns through increasingly expensive electricity, the speed penalty is front and center again. And maybe that’s not a bad thing.
You certainly can notice the cost of lead-footedness in a gasoline-powered car. It’s simpler today, when lots of vehicles have digital displays that show the miles per gallon you’re getting, than in the old days when you had to do the math yourself. An EV puts the hard efficiency math right in front of you. Battery life is often displayed in terms of estimated miles of range remaining, and those miles evaporate before your eyes if you climb a mountain or accelerate like a drag racer.
This is no academic concern, like trying to boost one’s fuel efficiency through hypermiling techniques such as gentle acceleration, downhill coasting, and killing the AC. In six years of owning a Tesla Model 3, I’ve pushed its range limits trying to reach far-flung national parks and other destinations where fast chargers are scarce. I’ve found myself in numerous situations where I’ve set the cruise control at exactly the speed limit or slightly below to make sure the car would reach the one and only charging depot in the vicinity. For particularly close calls, I’ve puttered white-knuckled with one eye on Tesla’s in-car energy app — and felt my stomach drop when I found myself underperforming its expectations.
Fortunately, slow works. Three years ago I managed a comfortable round-trip from what was then the closest Tesla Supercharger to Crater Lake National Park by driving there down a 55-mile-per-hour two-lane highway; at freeway speed, my little battery probably wouldn’t have made it. Today, my fully charged Model 3 might make it something like 130 to 140 miles at interstate speed, depending on elevation. Go a little slower and it comes close to matching the 200 miles of supposed range.
Fear is the speed-killer, sure. The chance of being stranded with a dead battery is enough for any driver to be scared straight into observing the posted limit. But having all that data at the ready had already started to affect my driving habits even when there was no danger of stranding myself. It’s hard to watch the range drop when you slam the accelerator without thinking of the Interstellar meme about how much this little maneuver is going to cost us. With the price of electricity at the fast charger rising, I’m much more conscious of wasting a few kilowatt-hours by being in a hurry.
The difference is stunningly clear in the kind of controlled range tests that car sites and EV influencers have been conducting. For example, the State of Charge YouTube channel recently drove the Cadillac Escalade IQ, the fully electric version of the status SUV that is officially rated at 465 miles of range. Driven at exactly 70 miles per hour until it ran out of juice, the big EV exceeded that estimate by traveling 481 miles. With the speedometer held at 60 miles per hour, however, the vehicle went 607 miles — more than 100 miles more.
Granted, the Caddy’s comically large 205 kilowatt-hour battery — more than three times as big as the one in my little Tesla — does the lion’s share of the work in allowing it to go so very many miles. A peek into State of Charge’s data, though, makes it clear what 10 miles per hour can do. Dropping from 70 miles per hour to 60 caused the car’s miles per kilowatt-hour figure to rise from 2.1 to 2.6 or 2.7.
That’s not to say EV ownership turns every driver into an energy-obsessed hypermiler. One blessing of the huge batteries that go into Cadillac EVs and Rivians is freeing their drivers from some of the mental burden of range calculations. With driving ranges reaching well above 300 miles, you’re going to make it to the next plug even if you drive like a maniac.
Even so, the increased awareness of the cost of electricity might make some of us reconsider the casual speeding we all do just to take a few minutes off the trip. That’s a good thing for public safety: Big EV batteries make these vehicles heavier than other cars, on average, and thus potentially more dangerous in auto accidents. And slowing down will be especially relevant as electricity prices outpace inflation. Consumer electricity prices are up nearly 5% over last year and are poised to get worse: The budget reconciliation bill signed by President Trump last week won’t help, as one projection sees it leading to an increase in annual energy bills of up to $290 by 2035.
To be honest, the biggest problem of slowing down a little isn’t really the extra time it takes to get someplace. It’s trying to conserve in a world where 5 to 10 miles per hour over the speed limit is the expectation. I once had to cross 140 miles of wind-swept New Mexico expanse from Albuquerque to Gallup on a single charge, a task that required driving 55 miles per hour in a 65 zone of the interstate, holding on tight as semi trucks flew past me in revved aggravation. We made it. But if you really want to make your electrons go farther, then be prepared to become the target of road rage by the hasty and the aggrieved.