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Robinson Meyer:
[1:25] Hi, I’m Robinson Meyer, the founding executive editor of Heatmap News, and you are listening to Shift Key, Heatmap’s weekly podcast about decarbonization and the shift away from fossil fuels. It is Monday, February 16. This is a semi-emergency episode of Shift Key. And on this show, we are talking about what else is the endangerment finding from the EPA. So at the tail end of last week, the Trump administration repealed the endangerment finding. That is the scientific determination made by the Environmental Protection Agency, the EPA, that carbon dioxide and other greenhouse gases endanger human health and the natural world. It’s a big deal. This is the most aggressive attack on American climate law that I think has come out of the Trump administration so far. It is certainly the most aggressive attack on U.S. climate regulation that President Trump has ever attempted. This is more aggressive, I think, on climate change than anything they did this term or the past term from 2016 to 2020. If this were to become law and be upheld by the Supreme Court, then it would essentially undo the EPA’s ability to regulate greenhouse gases under the Clean Air Act at all and leave future Democratic presidents with a much, much smaller playbook to regulate climate change.
Robinson Meyer:
[2:37] I should say, it took the Trump administration a very long time to tell us how they were actually going to do this. So on Thursday around noon, President Trump went out with Lee Zeldin, the EPA administrator, and said, we’re repealing the endangerment finding. He called climate change a giant scam. He talked about how this was this giant deregulatory action. It then took like 24 hours for the EPA to actually post legal documents saying how they were going to repeal the endangerment finding. They have now done so. And it is now, just to let you into our digital recording studio. We are recording this the very tail end of Friday, because we have finally had time to look at the documents, metabolize them, and be joined by a great legal
Robinson Meyer:
[3:17] expert who’s going to help us understand them. Joining me on this week’s show is Jody Freeman, former, future, and present shift key guest. She’s also the Archibald Cox Professor of Law at Harvard Law School and the Director of the Energy and Environmental Law Program there. And she has worked on these issues directly for a long time. She was Counselor for Energy and Climate Change in the Obama White House from 2009 to 2010. And while in the White House, she was the architect of President Barack Obama’s agreement with the U.S. Auto industry to double fuel economy standards and to regulate greenhouse gases under the Clean Air Act. So this has been an issue, as you’ll hear, near and dear to her heart for a long time. And it’s always fun to talk about this stuff with her. Jody Freeman, welcome to Shift Key.
Jody Freeman:
[4:01] Great to be with you, as always.
Robinson Meyer:
[4:03] So, Jody, you worked on these issues, in fact, this exact set of legal questions in the Obama White House more than a decade ago when these decisions were made that set us up for the Clean Air Act regulating greenhouse gases.
Robinson Meyer:
[4:18] Before we get into this discussion, what do you think is the headline here? How should we think about the announcement that the Trump administration and President Trump just made?
Jody Freeman:
[4:27] So first of all, you’re right. These issues are near and dear to my heart, I have to say. I guess I’d summarize it as they’re going for the juggler, they’re swinging for the fences, any other metaphor like that. They’re going big, trying to essentially knock out the ability of the Environmental Protection agency to regulate greenhouse gases. And, you know, why does this matter? The Clean Air Act has been the main driver, the main legal vehicle for trying to control emissions of these pollutants in our economy. And it’s been the legal authority to regulate transportation sector emissions, which are the issue here in this rule, but also power plant emissions and methane emissions from oil and gas. And it’s also been the basis for our pledges to the international community. So to knock out the Clean Air Act is really consequential and serious, and they are bent on doing it.
Robinson Meyer:
[5:23] Can you lean in a bit on what the Clean Air Act has done? Because the Obama administration, right when it came in, did quite innovative regulatory work using the Clean Air I think the history, even if you closely follow these issues, the history of using the Clean Air Act to regulate climate change has been one legal battle after another. It’s been in and out of the courts. It seems like there’s always fighting about something. The Supreme Court’s always curtailing or hearing arguments that then don’t actually matter because the administration changes. How has the Clean Air Act actually reduced greenhouse gas emissions since 2009?
Jody Freeman:
[6:07] Well, that’s a big question. And it’s a very important question because you’re right. The headline of the Clean Air Act is one battle after the other. But you might also say that’s because it’s such a consequential law. I mean, it’s a major statute to protect American public health. That’s really what this law was passed to do in 1970 and to allow the EPA to regulate harmful pollution. And the only part of what you said in your description there that I might take a little bit of issue with is that it was innovative to address greenhouse gases. I’m not so sure. I think it follows in the pattern of what the Clean Air Act was set up to do.
Jody Freeman:
[6:47] There was an open question, are greenhouse gases a pollutant under the law? Do they fit the definition of what Congress meant when they
Jody Freeman:
[6:57] Defined that term pollutant, that was the open question back in the George W. Bush administration. And it was decided in Massachusetts v. EPA, the famous Supreme Court case that yes, greenhouse gases are pollutants regulable under the act. And that meant they would be treated like other pollution. And so back in the Obama administration, we took the EPA decision seriously and said, okay, now what are the legal steps we have to follow if greenhouse gases are pollutants? And the other question in Mass v. EPA was, could the Bush administration at that time refuse to make a finding that this pollution endangers the public health and welfare for the reasons that it set out? It didn’t want to do that because it knew that making an endangerment finding, that’s what it’s called, would lead to a requirement that they set standards. And they didn’t want to do it. So when the Obama administration came in, we said, well, we do need to make this finding. The science supports it. Greenhouse gases do harm public health or welfare of Americans, not just others, not just globally. And if we make that finding, we’re obligated to set standards first for cars and trucks. And that’s what we did. And the idea is just to control pollution from the cars, just like you would any other pollution from the cars, which makes them cleaner over time.
Jody Freeman:
[8:14] And I think the law, you know, Rob, you asked about what it’s done. I think this law has proven very effective at cleaning up harmful pollution from cars, trucks, and other transportation sources. And I think it’s helped to drive the power sector, you know, power plants toward a decarbonization agenda as well. I actually think it’s been very successful as a lever here to advance cleaner production, cleaner vehicles,
Jody Freeman:
[8:45] Cleaner systems for producing electricity, I think it’s been a major component of what has made the U.S. start to clean up its act, for lack of a better word, in terms of GHG emissions. It was never meant to be the only instrument. You know, the Clean Air Act is one statute. It’s a powerful statute. I think it’s been a hugely successful statute overall in terms of public health generally. You know, there are studies that show that while Clean Air Act regulations can be very expensive, the expenses, the costs are dwarfed by the benefits to the public. And so that’s really important to cite because this is part of why it’s one battle after another. They’re really important rules. They affect really powerful industries. They sue all the time and always have historically going back to the 1970s. There’s nothing new about that. Any major air rule is going to be litigated. And so it is in fact trench warfare, you know, and it has been for decades, I think climate change introduced a new level of contentiousness. There are folks who lost the battle over Massachusetts v. EPA who never thought greenhouse gases ought to be regulated under this law, essentially have never given up. And the truth is, I think they’re largely behind this proposal. They’re now in the Trump administration. And their argument is, they’re not explicitly calling to overturn Massachusetts v. EPA, but the arguments really are a rehash of the losing arguments.
Robinson Meyer:
[10:14] And to some degree, like a number of other Trump regulatory decisions, including what they’ve attempted actually successfully at this point or nearly successfully at this point with independent agencies, what they’ve attempted in some parts of labor law, they’ve basically taken an extremely aggressive regulatory action, acting as if they’ve won a landmark Supreme Court case, and then turned to the Supreme Court and said, don’t you want to give us this landmark ruling that will allow us to actually go do this? Like, it’s an invitation to the Supreme Court to deliver them a landmark ruling, even though the Supreme Court had not yet done so.
Jody Freeman:
[10:51] Yeah, how you put that is so right and so interesting. The idea is they can read their audience. They know they’ve got a new Supreme Court composed of different kinds of justices than back in 2007 when the Mass v. EPA case was decided. They know that all the justices that voted in the majority in that case to say greenhouse gases or pollutants and to say if you make the endangerment finding has to be based on science, they’re gone. And they know they’ve got three justices from the dissent, including the chief, that they are targeting. And they think they have a sympathetic audience and maybe can attract a couple more votes. And what they’re arguing now is a version of or cousins to the kinds of arguments they made in that case that didn’t win at the time, but they think they can win now.
Jody Freeman:
[11:36] And there’s some nuance to what they’re saying. They’re saying two main things.
Robinson Meyer:
[11:39] I was going to say, so let’s get into it. What are they arguing in the legal brief? Because, and before we even get into it, we should say, the president announced that they were repealing the endangerment finding at like 1:30 p.m. on Thursday, and they did not actually release the documents to do it until about 24 hours later. So we’ve only had, at the time we record this, just the end of the day on Friday, we’ve only had these documents for a few hours. But what is their legal argument that they’re making?
Jody Freeman:
[12:05] Just to say, this is a huge package. This is, you know, hundreds of pages, but here’s a super simple summary. There’s a section of the Clean Air Act that says that EPA has to set emission standards for vehicles, cars and trucks to control their pollutants. If those pollutants contribute to air pollution that endangers health or welfare. So there’s two parts of that. First, you decide, is there air pollution that endangers public health or welfare? That would be greenhouse gases in the atmosphere that create global warming that cause harms. That would be the air pollution that endangers health or welfare. And then the first question you ask is, do emissions from our cars and trucks contribute to that? And in 2009, EPA said yes. And the scientific record supports both of those. And now the EPA is saying that’s wrong for two main reasons. First, the quote-unquote air pollution that endangers public health or welfare, well, that’s global pollution. And we can only regulate local or regional pollution that creates direct harms. So we don’t have the authority to regulate that air pollution. Now, that argument seems to conflict directly with Mass v. EPA that said greenhouse gases are pollutants, but it never technically addressed what air pollution was.
Jody Freeman:
[13:28] It said GHGs are pollutants, but it didn’t say it’s air pollution that endangers health or welfare. See my point? So there’s this subtle linguistic difference here, and they’re all over that. And their argument is really a rehash of saying this law is really just about local pollution. And if the court were to go for that argument, they’d be saying, right, EPA can’t regulate anything other than local pollutants. And so essentially that would overturn Mass v. EPA. Okay. The second part of their argument is, and it’s separate. So they all sort of, they want them to stand alone.
Robinson Meyer:
[14:05] They’re saying- And they kind of have set this up so that they could say, well, if you don’t like this argument, you could go for this argument and it would also.
Jody Freeman:
[14:11] Prove- It’s a box of chocolates and the Supreme Court can take whatever chocolate they like. So the idea is Well, even if, you know, we can regulate global pollution that creates an endangerment, we don’t contribute to it. Car and truck emissions don’t contribute to it. They’re just such an infinitesimally, fractionally small share of global emissions. They don’t make a dent. That’s not a contribution. You know, for something to be a contribution, their argument is it has to be enough that if you were to reduce our contribution, it would make a difference and it won’t. Their argument is it doesn’t matter that nothing we do can make a dent in global climate change and the harms the flow from it and so it’s futile they say it’s futile to do it and they jump ahead to setting standards which is not part of this analysis but they sort of merge the next step which would be setting the standards into their analysis when they say and you know doing it would be hugely costly for the American consumer and have all these problems and so they actually lumped two parts of their legal obligation together to help them out.
Jody Freeman:
[15:18] And while at the same time, splintering another part of the analysis to help them out by saying, you know, the way we’re looking at contribution is we look at each category and class of motor vehicle. We shouldn’t consider all the cars and trucks, all the new cars and trucks. We should slice and dice them. Because when we slice and dice them,
Jody Freeman:
[15:37] you see that the share of emissions is so, so nothing. It’s so little so they sort of divide things up when it suits them when it helps them and they merge stuff when it helps them and the collection of arguments is one way or another supreme court we’re either too small a share of this to matter and it’s futile or we don’t even have the authority in the first place to deal with this problem and we would like you very much to shut us down so that no future administration can do this if they want to
Robinson Meyer:
[16:06] And if the future administration is really the way we should think about the ultimate legal consequences of this, of this derogatory action and the Supreme Court case that could potentially result, because to be clear, this, the Trump administration is not going to come out with some kind of future rule on tailpipe pollution or power plant pollution before 2028. This is all about taking away regulatory authority from a future likely Democratic president, right?
Jody Freeman:
[16:33] Right. That’s a key insight because we all know that we’re not going to see any climate regulation out of this administration and we’re going to see the opposite, right? They’re trying to stymie renewable energy. They’re trying to revive coal. They’re going in the exact opposite direction. But that’s what I mean when I say swing for the fences or going for broke. They’re really trying to stop the future administrations from using the Clean Air Act without having Congress amend the law. You know, they’re trying to set it up. So you need a congressional amendment to authorize this regulation. It’s really important to note the Supreme Court has never shown any interest in upsetting the endangerment finding. That’s considered to be the basic scientific finding that undergirds all greenhouse gas rules in the Clean Air Act. And while they’ve narrowed the EPA’s authority to set standards in certain situations or to set it using a certain method that the EPA preferred, like EPA was using a method for power plants that the court rejected and said, you can’t set up a rule that shifts generation from dirty sources to clean sources and so on. The Supreme Court has rejected certain approaches EPA has taken, but they’ve never in all these cases since Mass v. EPA been interested, it would seem, in upsetting the endangerment finding. So it’s odd, right, that they would do so now, but the EPA now thinks they might have a sympathetic audience.
Robinson Meyer:
[17:49] I remember talking to Trump officials during the first Trump administration and the feeling, I mean, this was an earlier class of Trump oil and gas official. But I think their feeling at the time was like touching the endangerment finding, that’s going to be a mess. Like we don’t need to do that and we don’t want to do that because that’s going to really get us into hot water if we were to lose.
Jody Freeman:
[18:12] Can I say one thing about that,
Robinson Meyer:
[18:13] Though? Yeah, please. Yeah.
Jody Freeman:
[18:14] Because what you’re saying is really important. It gets to why they dropped one of their arguments. You’re exactly right. I think historically people have said the science is so solid on greenhouse gas causing global warming and the harms that flow from it are only getting clearer and worse that nobody would want to take issue with the science. But what they’ve done here is say, well, we thought we’d attack the science. Our proposal attacked the science, but we’re dropping all that. And this final rule rests on interpreting the law in the ways I described to say, well, it all turns on what a contribution is and it’s too small. It all turns on the meaning of air pollution and it should be local. And they affirmatively say science has nothing to do with that. We’re not interested in the science. Now, of course, they’re wrong about that. Science does have something to do with that. In fact, the National Academy study that came out in August that updated climate science concluded very clearly that the severity of climate impacts gets worse with every additional ton. So small shares do matter, but they’re trying to say the scientists have nothing to do. This is all legal interpretation.
Robinson Meyer:
[19:19] It’s so funny because we were just about to talk about this, where one key argument that we thought they were going to use because they used it in the proposal, they’ve completely dropped out of this document. And that is this argument about climate science, where the Department of Energy kind of got together this set of, I think they’re often referred to as contrarian. They are the most out there kind of ideological set of seven or eight climate scientists who take some distinction with the official lot, with I think what scientific consensus is, where they say, well, actually, if you look at this particular record, we should be thinking about differently. If you look at this particular statistic, that actually pokes this tiny hole in the way that people like to word these conclusions. And once you poke that tiny hole, we really can’t say whether the climate is changing at all. Now, I do think, I did not originate this line of thinking, but I think it’s a true one. If you read between the lines of this DOE contrarian science report that they put out last year, you actually can still make an affirmative case for the endangerment finding because they are unable, they have to cite existing science and they are unable to knock it all down. And from the existing science they leave standing, I think you can go and say, oh, that sounds like carbon dioxide is a big problem. Maybe not as big of a problem as other people think, but still a big problem we should do something about and someone that’s dangerous. But they’ve totally dropped it.
Jody Freeman:
[20:45] There are so many problems with this. So first of all, it was, like you say, a handful, I think it was five. Now, these scientists and one I think is an economist, they were published in peer-reviewed journals, but they were considered to be far outside the mainstream and their claims have been debunked in the past already. So they were already known to be, as you say, the contrarians. But the problem is DOE handpicked these people. They didn’t create a balanced review process. In fact, they canceled the government’s normal multi-agency review process. So it already looked really suspicious. And then they came out with this report that was just, I mean, just so completely misleading and cherry picked and so on. Now, a federal court has held that the process DOE used violates federal law. So that’s number one. So that’s a problem. And then they scattered, like they disbanded and ran away.
Robinson Meyer:
[21:30] Yeah, rather than try to defend it, they were just like, actually, this is all over. We’re done with this.
Jody Freeman:
[21:34] So it’s not a shocker that EPA concluded that to rely heavily on this would just invite judicial overturning, right? Or at least the eyebrows would go up in the courts and make them look like they were so off base. And it might sort of lead to more skepticism about the rest of their arguments, right? So it makes some sense that they dropped it. The other feature I have to give a lot of credit to the scientific community.
Jody Freeman:
[21:56] You know, filed comments on this proposal and just knocked all of the claims in the report out of the box and made clear how much evidence not only there was in 2009 for the endangerment finding, but much more now. And they made this very clear. And the National Academies of Science report was excellent on this. So they did their job. They reflected the state of the science and EPA has dropped any frontal attack on the science underlying the endangerment finding. Now, it’s funny. My reaction to that is like twofold. One, like, yay science, right? Go science. But two is, okay, well, now the proposal seems a little less crazy, right?
Jody Freeman:
[22:38] Or the rule seems a little less crazy. But I still think they had to fight back on this sort of abuse of the scientific record. And now it is the statutory arguments based on the meaning of these words in the law. And they think that they can get the Supreme Court to bite on their interpretation. And they’re throwing all of these recent decisions that the Supreme Court made into the argument to say, look what you’ve done here. Look what you’ve done there. You’ve said that agencies need explicit authority to do big things. Well, this is a really big thing. And they characterize regulating transportation sector emissions as forcing a transition to EVs. And so to characterize it as this transition unheralded, you know, and they need explicit authority, they’re trying to get the court to bite.
Jody Freeman:
[23:28] And, you know, they might succeed, but I still think some of these arguments are a real stretch.
Robinson Meyer:
[25:09] One thing I would call out about this is that while they’ve taken the climate denialism out of the legal argument, they cannot actually take it out of the political argument. And even yesterday, as the president was announcing this action, which I would add, they described strictly in deregulatory terms. In fact, they seemed eager to describe it not as an environmental action, not as something that had anything to do with air and water, not even as a place where they were. They mentioned the Green News scam, quote unquote, a few times. But mostly this was about, oh, this is the biggest deregulatory action in American history. It’s all about deregulation, not about like something about the environment, you know, or something about like we’re pushing back on those radicals. It was ideological in tone. But even in this case, the president couldn’t help himself but describe climate change as I think the term he used is a giant scam. You know, like even though they’ve taken, surgically removed the climate denialism from the legal argument, it has remained in the carapace that surrounds the actual.
Jody Freeman:
[26:12] And I understand what they say publicly is, you know, deeply ideological sounding and all about climate is a hoax and all that stuff. But I think we make a mistake … You know, we all get upset about the extent to which the administration will not admit physics is a reality, you know, and science is real and so on. But, you know, we shouldn’t get distracted into jumping up and down about that.
Jody Freeman:
[26:34] We should worry about their legal arguments here and take them seriously.
Robinson Meyer:
[26:38] How much does this whole argument rely on the major questions doctrine, which is this recent Supreme Court idea or doctrine that if the government, seemingly usually democratic administrations want to do something ambitious under a law that’s already on the books. They’re not allowed to.
Jody Freeman:
[26:58] Well, they need express authorization.
Robinson Meyer:
[26:59] They need express authorization from Congress.
Jody Freeman:
[27:01] And that’s a bit of a trick because many statutes, including the Clean Air Act, broadly delegate authority to agencies, especially when those agencies have to address public health concerns or safety concerns where there’s changing technology over time. The statutes are drawn broadly by Congress specifically to leave room for the agencies to adjust to new developments over time. But the court has now said broad authority isn’t clear enough. You need pointed express authority, and we don’t really know what will qualify, right? It would mean Congress has to be prescient and say, one day there will be something called global climate change, and you should address that too, right? So that is sort of an aspect of this that makes it really hard for Congress to ever anticipate that conditions will change and give authorities power. When you ask how big a deal is this doctrine playing, I think that they could win without it. They don’t need to succeed. It would be a knockout blow to say, look, whatever you think about climate change and whatever you think about cars contributing to it, the bottom line is this agency, meaning us, they’re saying that about themselves. This would be such a big deal to do that we want the Congress to tell us again that we should do it very clearly. That’s a knockout blow. That says, send this back to Congress. It invites the court to really say, we don’t need to get into the details. We just think that’s true. And we’re going to stop the agency there.
Robinson Meyer:
[28:28] I think one line that’s worth pulling out that came out in some of your earlier comments that I just want to spell out for listeners is like the power plant, you know, the Clean Air Act, can be used on any number of polluting facilities or polluting technologies. But the two that are responsible for the most emissions and the two that there’s been the most regulation about are cars and trucks, moving vehicles, and power plants. And what happened first, what Mass v. EPA is about, is whether California or the EPA could regulate greenhouse gas emissions from cars. And regulating greenhouse gas emissions from cars has actually been relatively straightforward. Forward and the automakers have accepted it, it’s then taking that and apply taking the fact that you can regulate greenhouse gas emissions and applying it to power plants that has been the thing that’s bumped in and out of the courts for the, you know, 15 years.
Jody Freeman:
[29:21] Well, I agree with you that regulating car and truck emissions is really very straightforward. And on top of it all, it doesn’t really meet the test for being a, quote, major question, because this is something EPA has done since the 1970s. They set standards for auto manufacturers that they have limits on how much pollution per mile the cars can produce. And that’s just very well understood. And it definitely forces internal combustion engines to get cleaner over time. And it has driven some additional plug-in hybrids and battery electric vehicles. But this idea that it’s forcing an abandonment of the internal combustion engine and everybody has to drive an EV is false. And even the EPA’s most ambitious car and truck standards issued under the Biden administration had a very significant share of internal combustion engines still. Nobody is forced to drive anything they don’t want to drive.
Robinson Meyer:
[30:11] I just want to say that very clearly. That’s right, though. I do think that the Biden administration, or at least there’s some political messaging that like they didn’t help themselves there, where these things initially come out. They want to describe, they want, and the Biden administration wants to show to environmental groups and environmentalists how far it’s going.
Jody Freeman:
[30:28] This is the tension. You have a Supreme Court that says, major questions, watch out. You shouldn’t do transformative stuff without express authority. You have politicians standing up to say, look how transformative we are. And not a great media strategy if it’s going to come back to bite you in court.
Robinson Meyer:
[30:45] Well, and ultimately what this may require is environmental groups that can translate for politicians. So politicians can say, we’re actually doing completely boring and uninteresting stuff with the power sector and with cars. You don’t need to worry about it at all. It’s not going to change your life. And then environmental groups can be, they’re actually really going to reduce emissions a lot.
Jody Freeman:
[31:03] The other thing I just want to mention is that in this rule, EPA is making a lot of this case called Loper, Loper Bright, which overturned the very famous Chevron doctrine. And all that means, I mean, people may have been following this. I think you probably have talked about it on your show.
Jody Freeman:
[31:18] All that new case Loper means is that courts will interpret statutes, and there’s no deference to agencies when the language is ambiguous, okay? When the language is ambiguous, the courts will decide. But sometimes the language will give the matter to the agency. Sometimes the matter will delegate the discretion to the agency, and that instance is happening here because this section of the law says in the administrator’s judgment, you know, does the pollutant contribute to air pollution and so on. So they’re trying to suggest that this Loper case changes everything and somehow it should lead them to rethink what they did in Massachusetts v. EPA. But that is completely wrong because, bear with me here, in Mass v. EPA, the court expressly cited the prior cases that raised this major questions idea. And they rejected that argument and said, no, this statute’s clear. This statute means one thing. And the one thing is pollutants include greenhouse gases. So this sort of thing about Loper Bright and rejecting Chevron, it’s sort of beside the point because the court has said the law is already clear.
Robinson Meyer:
[32:37] And I would say that in the course of reporting the story, I’ve actually been surprised by how clear the law is, how clearly the law does seem to apply to greenhouse gases. There’s this term of art that’s in the law, which is welfare that I think we summarize in our story is like the natural world. But when you look at the law, the law is like, this is about soils. This is about water. This is about vegetation. This is about animal life. This is about human property. This, it’s about the climate. Like, the law is quite clear.
Jody Freeman:
[33:05] Your wellbeing and economics.
Robinson Meyer:
[33:07] Yeah. And welfare is meant that this other term that, you know, does a certain pollutant endanger human health or welfare, that welfare should be taken extremely expansively.
Jody Freeman:
[33:18] The bottom line here is, you know, there are folks who are deeply committed
Jody Freeman:
[33:23] to the idea that this law should never have been used to do anything about climate change. It was a misapplication, and they’re back fighting that fight. I don’t agree with that. I think the statute is perfectly capable of being legitimately used to address climate change because I do think greenhouse gases fit the definition of pollution. If you want to fight about how stringent the standard should be, that’s something to have a discussion about. But the Act also addresses that. When EPA sets the standards for cars and trucks, when it sets the standards for power plants, they have to consider cost. They have to consider technological feasibility. They have to consider lead time when it comes to cars and trucks. In other words, Congress thought about making sure the agency couldn’t do extreme things without considering the implications. So I do think this is a rather well thought through statute and its application, at least to cars and trucks. The issue we’re talking about, as you said, is pretty straightforward.
Robinson Meyer:
[34:18] Let’s say that the repeal is upheld, that the Supreme Court says that actually, yes, the Clean Air Act doesn’t apply to greenhouse gases. Does that have unintended upside for state or local governments? Because one thing that started to some climate activists or climate groups have started to say is like, look, states and local governments have wanted to pass laws penalizing oil and gas companies or finding some kind.
Robinson Meyer:
[34:43] Of responsibility for oil among oil and gas companies for climate change. The argument that oil and gas companies, fossil fuel companies have made in court is like, look, we’re actually not responsible in these kind of common law terms or under this part of the law, because the Clean Air Act regulates greenhouse gases. And therefore, we have legal immunity at the state and local level and from civil law claims, because this is actually a federal issue. And as long as the EPA is regulating greenhouse gas, we can’t be found liable for that. If the Supreme Court were to go in and say, okay, actually, clean air doesn’t apply to greenhouse gases, does that create this legal opening? Or can the Supreme Court just as easily close that opening the moment they create it?
Jody Freeman:
[35:25] This is a hard question because those lawsuits that have proceeded to some extent, the sort of nuisance cases seeking damages or some other remedy because of power plants or oil and gas companies’ contributions to emissions, they have largely failed because of a causation problem proving the linkage between those emissions and the impact that’s a hard thing to do in tort law right the chain of causation the other reason you cited is also real which is we have another supreme court decision that says when congress delegates greenhouse gas regulation dpa under the clean air act plaintiffs can’t come into federal courts and plead nuisance cases. Those cases are precluded. The federal court common law claims are precluded by the Clean Air Act, which gave the matter to the EPA.
Jody Freeman:
[36:16] You’re saying, well, if the court says it doesn’t belong with the EPA, maybe they can come back into federal court and file these nuisance claims again. I have no doubt that a decision that holds, if it were to happen, that the Clean Air Act doesn’t cover greenhouse gases would unleash a chaotic barrage of litigation. But I’m not sure all of that succeeds, partly because there are complicated landing spots where the court could wind up saying something as thread the needle-ish as, well, EPA still has authority to regulate greenhouse gases as pollutants. That’s true. But in this instance, it doesn’t reach the contribution threshold that would be required. It’s not a significant enough contribution so EPA can choose not to regulate because it’s too small a share of the global problem. And that leaves us in this no man’s land of
Jody Freeman:
[37:08] EPA still owns the regulatory issue, but it does nothing about the regulatory issue. And somebody might argue, well, too bad, you’re still precluded, right, from bringing federal common law claims. So I don’t know how that will all play out, but I can guarantee you that certainly there will be follow-up litigation, you know.
Robinson Meyer:
[37:27] Would that, I guess, would that apply? There’s another kind of local climate action we’ve seen lately, these climate superfund laws where a state says, if you sold oil and gas in our state a certain amount, you have to pay into a fund that will then use for climate adaptation. I mean, does, would that kind of...
Jody Freeman:
[37:45] Those are already being attacked by the administration, right? Which argues that they’re unconstitutional and that will play out. I guess I’m not a fan of us pursuing a strategy of exclusively litigation. I think we have to have a strategy of what does new legislation look like, whether or not this case winds up coming down in favor of the Trump administration or they lose. Because let’s face it, the Clean Air Act is a magnificent instrument and very
Jody Freeman:
[38:16] useful for controlling pollution that harms Americans, including greenhouse gas pollution. But it was never meant to do everything on its own. It was never meant to get us everywhere we need to get to address climate change and the harms that flow from it, both mitigation and adaptation. It was never meant to be the only tool that would help us accomplish an energy transition. So it’s time, regardless of this rule rescinding the endangerment finding, regardless of what happens to it, for us to think about new approaches. So that means new legislation when we get an administration and a Congress that wants to do something about this issue, new state level initiatives, new ideas about how to get capital into the market to support renewables and alternatives. And so we have to rethink the whole package of policy approaches. That’s my message, that the Clean Air Act cannot bear the weight that people want to put on it.
Robinson Meyer:
[39:10] And it does seem like if the Supreme Court were to rule that the EPA does get to regulate greenhouse gases, but it can’t do anything about them. That’s like the apotheosis of where they’ve been trying to get for the past 15 years. They’ll finally have done it. They’ll finally have figured out how to.
Jody Freeman:
[39:25] I hope it doesn’t come to that.
Robinson Meyer:
[39:26] The perfect John Roberts decision.
Jody Freeman:
[39:28] And I also want to just defend the Clean Air Act as this law, you know, this historic law, because even if you, if as you pointed out, the power plant standards never got implemented. Right. Like in the Obama administration, they created the clean power plan to try to transition these power plants to cleaner energy. And the court struck it down. Right. Now, this took a long time before they reached it and struck it down. It had never been implemented. And you could say, well, that was a total failure.
Robinson Meyer:
[39:53] They didn’t really strike it down until they put it on the back burner. And then Biden won. And they were like, actually, we’d like to rule on this. We don’t think it’s legal. Yeah.
Jody Freeman:
[40:00] But the point of all this is to say you can make an argument. Well, look, this act hasn’t panned out. Right. We never got these power plant standards anyway. I would just disagree with this. Number one, we’ve had two to three generations of vehicle standards that have helped drive cleaner cars, okay, already saving many, many millions of metric tons of pollution, but also reducing costs for consumers who don’t have to spend as much for gas at the pump, like FYI. So they’ve been very successful with car standards to date. They also, even the so-called failed clean power plan, that process helped to spur a decarbonization conversation among utilities and in the states that helped them plan for the future and was really consistent with the market going in the direction of cheaper renewable energy, solar, wind, et cetera. So I still think the process around the clean power plan was really productive and helpful. And I would give a lot of credit to the Clean Air Act here. Likewise, with methane leaking from oil and gas facilities regulating that getting the oil and gas companies in a conversation about cleaning up their own leaks a valuable product so Even if when we move forward, we’re going to need a new suite of tools, I think we have to give a lot of credit to how the Clean Air Act performed in the first generation of climate regulation.
Robinson Meyer:
[41:20] I’m looking forward to talking about those new tools and what could happen. But for now, we’re going to have to leave it there. Jody Freeman, thank you so much for joining us on Shift Key. Thanks so much for listening. That will do it for our show this week. You can follow me on, as always, on X at @robinsonmeyer or Bluesky or LinkedIn at my name. If you enjoyed Shift Key, leave us a review on your favorite podcast app or send this episode to one of your friends, your most clean, air-act, concerned friend. We’ll be back later this week with a new episode of Shift Key. And until then, Shift Key is a production of Heatmap News. Our editors are Jillian Goodman and Nico Lauricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music is by Adam Kromelow. Thank you so much for listening and see you soon.
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On ‘draconian’ water cuts, Tesla’s China business, and Italian nuclear
Current conditions: Slow-moving storms are set to pour rain on the American Northeast, drenching New York City • Temperatures in Phoenix are to top 113 degrees Fahrenheit for the next two days before the heat dome starts to ease • Across China, 11 weather stations broke their August hottest records.

Washington State officials ordered thousands to evacuate parts of Spokane over the weekend as “home after home caught fire and exploded into flames along with trees” as winds of up to 45 miles per hour fanned a “wall of flames,” according to The Spokesman-Review. Governor Bob Ferguson activated the National Guard to battle against what the newspaper called one of Spokane’s worst natural disasters in history. Major Gen. Gent Welsh, the adjutant general in charge of Washington’s Air and National Guard forces, said the fire conditions eclipsed anything he’d seen in his 38-year career. “When the sun sets and the sun rises, we are going to be in shock,” Welsh said at a news conference. By Sunday, more than 640 homes had been reduced to charred ash. Tom Clemo, the incident commander leading the firefighting effort, said it would take days to assess just how many properties were lost. “Probably the largest, most destructive fire in Washington’s history occurred yesterday afternoon,” he told the paper. The Pacific Northwest has been primed for a big fire since at least last year, as my colleague Jeva Lange, a native daughter of the region, wrote last year.
The Trump administration’s final plan to relieve the drought-parched Colorado River over the next decade puts Arizona first in line to slash its use of the freshwater. The proposal, finalized on Friday, departs from the decades-long rules that traditionally governed how the water was divided between states, according to E&E News. Instead, the Department of the Interior is set to issue smaller plans every two years to decide how the water supply is distributed. “This framework provides the flexibility to respond to changing hydrologic conditions while preserving the opportunity for the Basin States to continue working toward durable, consensus-based solutions,” Secretary of the Interior Doug Burgum said in a statement. But Arizona Governor Katie Hobbs, a Democrat, said the plan is filled with “unacceptable options that include the federal government forcing Arizona to take the majority of draconian water cuts.”
When Tesla entered the Chinese market, billionaire CEO Elon Musk designed the division to be easily separated from the U.S. business in case of geopolitical tensions. Now The Wall Street Journal is reporting that Musk is exploring a sale of the unit to clear the way for a merger between his electric auto giant and SpaceX, his rocket and satellite enterprise. “Obviously we can’t talk about, you know, combining companies and that kind of thing on earnings calls,” Musk told investors last week. “It [has] got to be done with the appropriate process.” On X, Musk — who has routinely beefed with the nation’s leading financial newspaper — called the story “fake news.” But the timing is notable. As Heatmap contributor Andrew Moseman wrote last month, China — along with Europe — has been fueling a resurgence in Tesla’s sales.
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American Electric Power has outbid a data center developer to buy a coal plant in West Virginia, the Financial Times reported last week. The utility inked a deal to buy the Longview coal plant located along the state’s northern border with Pennsylvania. The name of the data center company was not included in the story, but sources told the reporter Martha Muir it was a “household name” and a “competitive bidding process.” As I told you in June, the Trump administration is betting $850 million on a coal revival. But my colleague Matthew Zeitlin explained last year what the bigger problem is: Even the plants that get funding to stay open keep breaking down.
Base Power, one of the nation’s largest developers of residential battery storage, is raising money on a $13 billion valuation, The Wall Street Journal reported Monday. Co-founded by CEO Zach Dell, son of computer magnate Michael Dell, the three-year-old company’s model is to deploy tens of thousands of batteries at homes and tap those units to balance out the grid. “We have so much to do and so much room to grow, and we’re very early in the scope of the opportunity,” Dell said.
A mining company says it’s found America’s largest deposit of tungsten, a key metal needed for ammunition and weapons production. But NASA is blocking development of the resource in eastern Nevada. The problem, the Financial Times reported, is that “a third of the company’s claim covers a unique region used to track signals beamed to Earth by satellites in space,” cautioning that mining could disrupt the operations.
Rob talks with two senior Democrats about the future of energy in the U.S.
The Democratic Party’s climate and energy policy is at a difficult moment. Over the past year and a half, the Trump administration has attacked solar and wind energy, started an inflationary war, and repealed key parts of the Inflation Reduction Act. And about a year and a half from now, Democrats will pick a presidential candidate and pitch their energy and climate policies to voters again.
How are key Democrats feeling at this moment? Rob recently had a chance to sit down with two of the party’s most important energy policy makers — Senator Martin Heinrich of New Mexico, the ranking Democrat on the Senate Energy and Natural Resource Committee, and former Energy Secretary and Michigan Governor Jennifer Granholm — for an in-person conversation in Washington, D.C.
On this episode of Shift Key, Rob chats with Senator Heinrich and Secretary Granholm, about fuel prices, the state of permitting discussions, AI data centers, and what each learned from writing — and implementing — the Inflation Reduction Act.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Robinson Meyer:
This episode of ShiftKey is brought to you by Heatmap Pro. You already rely on Heatmap for daily reporting and commentary on the energy transition. That's why you listen to this show. Well, Heatmap Pro brings all of our research, reporting, and insights down to the local level. It's a software platform that tracks all local opposition to clean energy projects and data centers. It forecasts community sentiment, and it guides data-driven engagement campaigns. Go to heatmap.news slash pro to book a demo and see the premier intelligence platform for project permitting and community engagement. That's heatmap.news slash pro.
Robinson Meyer:
Hello, it's Friday, July 31st, and gas prices are still above $4 a gallon on average across the United States. That's about where they were a week ago when I had a very interesting conversation, which you'll hear on this show. But first, I want to kind of set the stage. So we are, I wouldn't say we're halfway through the Trump administration, the second Trump administration. We're close to halfway. And of course, the midterms are kind of spiritually halfway.
And I think folks right now are looking back and looking forward. They are trying to figure out what went wrong during the Biden administration, what we've learned from the Trump administration that could be carried into energy policymaking and climate policymaking in the future.
And I think they're also trying to figure out what the next stage of energy and climate policymaking will look like, especially in a world where electricity demand is increasing and where some of the biggest companies in the economy are trying to build artificial intelligence data centers. And so on that front, I had a very interesting conversation last week with two folks who have both been on ShiftKey before, but who I was able to bring together in a very cool way. Senator Martin Heinrich is the ranking Democratic member of the Senate Energy and Natural Resources Committee, which, as you know from last episode, is on one of the key committees negotiating permitting reform. Secretary Jennifer Granholm is the former Secretary of Energy, of course, and also the former governor of Michigan. Last week, they were both in D.C. on Capitol Hill. At the same time, I was able to sit down with them. We covered this looking back, looking forward topic, as well as permitting reform, fuel prices, and AI data centers. It was a fun conversation, and I don't know that it requires much more preamble than I've already given it.
I'm Robinson Meyer, the founding executive editor of Heatmap News, and it's all coming up on ShiftKey.
Well, Senator Heinrich, former Secretary Granholm, great to be here with you.
Secretary Granholm:
Likewise
Senator Martin Heinrich:
Great to be here.
Robinson Meyer:
I want to start, you know, yesterday, the Defense Secretary, as it were, announced that the cost of the Iran war is $37 billion, and we've already seen fuel prices go up. I know you wanted to start the conversation by talking about the huge spikes in energy costs that your constituents have seen, and I just wanted to ask at the beginning, you know, what are you hearing here? Because it does seem to me that at this point, I mean, there was an initial spike after the war, went back down, and now they're steadily climbing up again. And so, you know, obviously New Mexico is also a producing state, but what are you hearing?
Senator Martin Heinrich:
Just that people are feeling the pinch on energy prices. Everywhere. And so it's across all forms of energy. And this is an administration who has chosen to take actions that have negatively impacted prices in so many different sectors. So, you know, what they're doing in the electricity sector by not permitting all this new generation that is just waiting to be connected to the grid, that's raising electricity prices. You have the war in Iran, which has constrained international oil and gas supplies, and that is raising both natural gas, gasoline, and also diesel costs. And that diesel cost is really important because the reality is once you run up the cost of diesel, then you see that every place that things move. You see it immediately in the grocery store because it costs more to move food from one part of the country to the other. You see it in building supply prices. What they're doing, making old coal plants that are ready to shut down, stay on the grid, that actually costs money. And those costs are being passed on to consumers in those places. And so no matter where you look in the energy map, what they're doing is increasing costs. And I hear about that at the grocery store, at the gas station, wherever I go really, it's like energy prices are going up across the board.
Robinson Meyer:
Secretary Granholm, I'm curious, you know, at this point, we've had about a year and a half of watching the new Department of Energy in action. And I wonder what stood out to you about how it, we're going to do some retrospective in a bit, but I want to start by asking what has stood out to you about how it's operating? One, what you don't like, and maybe one thing you like, if there's anything.
Secretary Granholm:
Well, I will say, you know, there was a big diaspora of the team, incredibly smart team that had to leave or that chose to leave because of some of the things you're describing. I will say I'm going to give you a silver lining on some of this, because I really do think that the actions of this administration have unintentionally caused a rush to clean energy and other solutions. So the OBBB, One big, beautiful bill, didn't take away the tax credits for batteries.
So it used to be, you know, solar plus storage, solar plus storage. Now it's solar plus storage. And, you know, it's great that those tax credits still exist and you're seeing developers really take advantage of it. Putting a cliff on when the solar tax credits and the wind tax credits expired, obviously caused a rush for developers to build out. So the amount of gigawatts that are being added to the grid, I mean, it's so ironic. At the end of 2024, when we added almost 60 gigawatts of clean power to the grid and batteries, we thought that was going to be the top because of what the administration was doing. But the unintended consequences of all of this action is that this year is going to be over 80 gigawatts added to the grid of clean power and batteries. Amazing.
So I'm glad that some of that foundation still exists and that the private sector completely understands the importance of this move. And I will say because of the war, it only accelerates the move toward non-fossil fuel, non-people of local powers, energy sovereignty, and that means clean power.
Senator Martin Heinrich:
And we've seen other economies accelerate those shifts, seeing what's going on in the Strait of Hormuz, and in some cases, in China's case, really anticipating it, moving large portions of their economy from molecules to electricity.
Robinson Meyer:
Do you have any theories? I'm injecting this, but do you have any theories for why? I feel like after the Strait of Hormuz closed... There were doomsday predictions about where oil would go, and obviously oil prices increased significantly, but they didn't hit $150 or $200 a barrel. Do you have any theories or hypotheses about why that is?
Senator Martin Heinrich:
It's a couple of things. There's more buffer in the system than we used to have. China built up big reserves ahead of time. There are the commercial reserves. There's the Strategic Petroleum Reserve. We haven't exhausted those buffers. So that really has worked to mitigate. You know, prices are bad. They're just not as bad as some of the predictions. We're not at the bottom, though, because the straits closed again. And those commercial reserves are now, after a little bump when the MOU happened, was announced, they're ticking back down. And there is a point at which the system stops working like it's designed to work. You need a certain amount of oil in the system. And we're getting closer to that than I think any of us would want to be. And then you're one hurricane away from really bad prices.
Robinson Meyer:
So obviously one way to lower prices or one potential way to lower prices over the long term is permitting reform. I know you're in negotiations right now about a deal here. So can you give us an update on where that stands?
Senator Martin Heinrich:
I don't want to get in the weeds on it because the negotiations are actually very active right now. But I do think there's a path there. And I think both Republican and Democratic leaders in the relevant committees want to get to yes on permitting. I think the biggest wild card is actually and challenge is the White House because the White House continues to do things that sort of poison the well. They did that with Historic Preservation Act, new regulations this week. They've done that with stop work orders on offshore wind, with the Department of Defense stopping the process, processing very straightforward onshore wind permitting projects with winded solar on public lands. I mean, time and time again, they have entered this debate in ways that have not been healthy and haven't been helpful for getting a product across the line. So we're working hard. We're trying to negotiate a middle ground, but I worry about the impact of the White House.
Secretary Granholm:
I will say, though, that the utter frustration about waiting for Congress, you know, present company accepted, to get permitting reform done suggests that there may be another path. And, you know, I know that there is an effort on the part of hyperscalers or AI companies to look at how can AI do this instead of waiting for Congress. So, for example, I think you probably covered this, the effort that Google has through tapestry at PJM, the notion that you should be able to take the interconnection cue and move it more quickly because you can do concurrent studies, etc., rather than all these consecutive wait in line, blah, blah, blah. And if you can do that. There, or if you can do it with permitting and respect the intent of NEPA or the National Historic Preservation Act and use AI to get some of this done and accelerate, then you might end up leapfrogging over Congress, which doesn't mean that you shouldn't be doing it. But I just worry that...
Senator Martin Heinrich:
I do think the interconnection cues are a perfect place to apply machine learning, AI, advanced modeling. And we had all five FERC commissioners in front of us today on the Energy and Natural Resources Committee. And one of the commissioners walked through an example where they were able to do, historically what had been an over 600-day analysis of adding this generation to the grid became a 10-day process. And so we should absolutely do all that. I still think we're going to need to reform permitting and be able to get to yes or no faster and make sure that those permits flow.
Secretary Granholm:
Your mouth to God's ears.
Robinson Meyer:
I do wonder with the AI acceleration of permitting, it seems like there's a lot of places to speed things up. It also seems like it's only so long until... We are already used to these massive dockets and huge studies for a lot of energy projects or infrastructure projects. It does seem like AI only increases the ability to expand those dockets and make every study bigger and allow more people to file more documents that then have to be reviewed. It just seems like a both ways thing.
Secretary Granholm:
It could be, but hopefully at least you can truncate the amount of time that it should not take 10 years for a transmission. Or 17. Or 17 frame in your case. But yeah, it's insane.
Senator Martin Heinrich:
There's only so much capital in that world and so many competent developers. And so I think it will generate additional demand. But the advantage of being able to do modeling quickly is really, it seems like a very unlinear advantage. I think we're going to see a lot of juice for the squeeze from that.
Secretary Granholm:
I love what you have introduced though, the Connect and Manage Act. Can I ask him this question. I don't mean to take your, you probably had that on your list, but I mean, describe what that is because it's so smart to be able to jump the, jump the queue essentially, if you agree to certain conditions.
Senator Martin Heinrich:
Yeah. So, I mean, we've, we've always been modeling based on what's the worst case scenario. What's the worst hour of the worst month when, you know, when in the middle of July, everybody's coming home and turning on their air conditioning at the same time. There are vast stretches of time when the grid just has a lot more capacity on it. And so what our bill says is if you will commit to curtail power when the grid is full, you can just plug into the grid and we'll let you sell power whenever the grid still has excess capacity. But you're going to have to dial it down when it doesn't have that capacity. And so that's something that we've seen work in ERCOT and I think has huge potential for getting a lot more generation on the grid quickly if we apply that nationally.
Robinson Meyer:
Do you anticipate a law like that or some kind of policy like that being in a permitting reform deal this year or is that a future policy you'd like to see?
Senator Martin Heinrich:
I mean, we'll have the conversation. We're rolling this out, obviously, late in the game. And I'm a big believer in get what you can done in any given Congress. Don't wait for the next Congress and think it's all going to be perfect. It never is around here. So we'll get everything we can done in this Congress. That's my position. And if that's not part of the mix, then of course we're going to... Permitting reform is not going to go away.
Robinson Meyer:
And then one more on this, just because I have a news responsibility, which is what would a timeline look like? I once heard the timeline was you'd want to see text by August recess, but that's pretty soon.
Senator Martin Heinrich:
And we're, we're very thick in the negotiations right now. And whether or not we could land something before August, I, you know, I'm not going to speculate, but my goal has always been just to get something out of this Congress. I don't care when that happens, but I'd like to get a product out of this Congress.
Robinson Meyer:
Secretary Granholm, I wonder what watching now 18 months of the Trump administration, you think, you know, we should have done this differently during the Biden administration, or there's an issue here that I would have handled differently, or now that I see what's happened and how they've approached governing.
Secretary Granholm:
Yeah, it's such a, it's a great question because I think every one of the cabinet officials looks at what has happened in the Trump administration and says, man, I should have broken more eggs, not more laws, but I should have really insisted on much more quicker, all of the negotiations that took forever on getting the treasury guidelines and all of that. We should have, I mean, like a cannonball should have shot through. And I think that's a good lesson that will be taken away for the next administration.
Robinson Meyer:
And why didn't it happen?
Secretary Granholm:
Because there's process, because there's lawyers, because, you know, I mean, it just, There was a sense that this is the way you do things, et cetera.
Senator Martin Heinrich:
And we accepted it.
Secretary Granholm:
Yeah, we all accepted it.
Senator Martin Heinrich:
And we shouldn't have.
We should have built programs that don't take two years of analysis. And that is definitely the lesson that I took from the rapid...the things that were fairly straightforward, like the tax credits, were able to move quickly. But there were whole programs like the Green Bank that got stood up just in time to be turned off.
Robinson Meyer:
Is that a drafting failure or an implementation failure?
Secretary Granholm:
I mean, to be fair, there's a lot in implementation, but there are a lot of rules around all of this that have certain timelines, et cetera. So I think taking a look at all of that, I mean, Democrats have been very, we're going to follow the rules and we're not going to bust, you know, we're not going to break norms. And I think this administration has broken a lot of norms and shown that you can get stuff done more quickly. Now, I don't like what they've gotten done quickly, but nonetheless, I think it's a lesson for us about challenging the status quo.
Robinson Meyer:
I want to just observe a kind of interesting dynamic here, which is that I think as Trump has taken steps that have driven up energy costs, I think we all agree, it's making costs higher than they would be otherwise. Certainly the Iran war, likely the permitting obstacles that they've put up to wind and solar tariffs. He has driven up. I think his administration has driven up energy costs. And we hear a lot from Democrats about how that's bad. It does seem a little bit to me like there's a bit of an effort to play both sides because I think when right now Trump is doing things that are driving up costs and costs are going up and Democrats get in office and they have a lot of different goals for the energy system and some are procedural and some are about environmental goals and that tends to slow things down. People take a long time to approve, say, oil and gas permits. And so do you think that watching the Trump administration, the Democrats are now ready to embrace or looking at, let's say, an affordability first or affordability only agenda where it's like, we'll take clean, we'll take fossil, we'll take whatever, as long as costs are low?
Senator Martin Heinrich:
I think what Democrats should always keep in their minds is that you cannot, create and manage the energy transition on the backs of consumers. They already have their plates full. They're doing everything they can to make our economy work. We can't ask them to do more, especially in this environment. That doesn't mean we quit managing that transition. It just means we can't ask consumers to pay for it.
Secretary Granholm:
But if we're to be honest, the cheapest energy is clean energy. And so if you want to go cheap, then let abundant clean energy be prolific and deployed throughout the land and it will bring rates down.
Robinson Meyer:
Let me just push back a little and say, I think watching, let's say, the Trump administration revoke permits and block permits and block construction for wind and solar, it does put you in mind of the Keystone XL pipeline, which was not necessarily an affordability project, but which Democrats did block. Now, there were good climate reasons to block it.
Senator Martin Heinrich:
But it was also an export project. And the reality is exports raise costs. They just do. Like we have... You can export a certain amount of natural gas, and that can be okay. But when you hit a certain threshold, you're going to start to see natural gas prices increase. And that's why we built into those exports the fact that the Secretary of Energy is supposed to sign off on a project-by-project basis. It wasn't meant to be infinite. Because if you do make it infinite, eventually exports, by virtue of those exports, you're actually going to raise domestic prices for both consumers and for manufacturers. And they've taken the opposite approach, which is let's export as much as we can. At a certain point, you see that have an impact on the costs and on the jobs that those manufacturers create, right?
Secretary Granholm:
Right. I mean, the studies that have been shown, I mean, it's the question of supply and demand, right? If in fact the capacity fills everything that's been authorized, you will have doubled the amount of exports of natural gas. And of course, even though we have such an abundant supply of natural gas in this country, that is going to put upward pressure on prices.
Senator Martin Heinrich:
It connects us to the international price market. And we've seen this before in places like Australia. We don't want to be connected to that because those prices are much higher. There's more advantage in having moderate prices here that can really incentivize good jobs in things like manufacturing.
Robinson Meyer:
Secretary Granholm, I wonder, we've seen this explosion, I feel like just dated almost to when the Biden-Trump transition happened in AI data centers and in electricity demand. I know you're working, you're thinking about these issues right now. So I guess take us to the end of your time in government versus what's happened since then. And was this scale of demand forecast?
Secretary Granholm:
No, no. I mean, you guys noted that Bloomberg New Energy Finance increased their projection, their forecast for how much gigawatts are going to be necessary to feed the beast by 2035. And just from December of last year, of 2025 to now, it has increased by 80%. I mean, it's voracious, the appetite for power. So it is really quite astonishing. Now, will all of that come to fruition? Will the chips be more efficient? Are these going to be sited because of the NIMBY issues? All of those are legitimate questions. But if the demand projections are accurate, it is going to require a massive amount of buildout of power.
Robinson Meyer:
What's the right way to make sure as much of that power is as green as possible? Because I think right now it's going to be met by gas.
Secretary Granholm:
Maybe or maybe not. I mean, is that the smart way to go when, you know, it's mind blowing to me a little bit that there's all this assumption that it's all going to be natural gas when, first of all, you have to have the infrastructure for natural gas or you have to build it out. It takes a lot of time to build out that infrastructure. Secondly, the wait for natural gas turbines, as everybody knows, is years. So the timeframe of getting natural gas turbines and a natural gas plant is long, whereas the timeframe for getting solar and batteries you can get within months, say, rather than years. So, you know, I don't necessarily buy the fact... I mean, maybe natural gas ends up being a backup power. Maybe the, you know, Bloom Energy, et cetera, ends up being your backup source. Even that, when you look at the technology associated with long-duration energy storage and how that is really coming to bear, I mean, there's, you know, example after example of that. Or, you know, geothermal, enhanced geothermal, or, you know, I mean, there's any number of solutions that end up being clean and don't incur the wrath of citizens as much as fossil fuel solutions.
Senator Martin Heinrich:
It's worth considering, too, that if we do see the level, the scale of natural gas generation that some people are proposing, it will markedly increase the cost of gas for other uses. So if your house electricity is generated by natural gas, those prices are going to go up. If you heat your house with natural gas directly, those prices are going to go up. If you're a manufacturer and you're using gas, those prices are going to go up. So it is in our interest to find cheaper, cleaner sources of power to power as much of this transition as we possibly can.
Robinson Meyer:
How do you balance making... The big investments that I think the power system needs or the energy system needs to meet future energy demand, which is going to come from data centers or electrification or manufacturing. I think even if you curtain off data centers and be like, this is a bad energy use, we're going to need a lot more energy in the future to do a lot of things we want to do. How do you balance like the long-term need to make big investments in the energy system or the power system to meet future demand versus the need to keep costs low in the short term? Because right now, the way we pay for future big investments is to raise costs today.
Secretary Granholm:
Right, right. You rate base it. Yeah. But what if these data centers that come on are required to pay for those infrastructure upgrades, which, you know, everybody's talking about. The president has a pledge that he's having people sign. Gretchen Whitmer in Michigan has a pledge. I mean, everybody's talking about, in fact, you guys just, you guys, meaning Congress just passed out of the, you know, E&C committee, a rate payer pledge, you know, great. Let's get a pledge that the hyperscalers pay for the upgrades, that they bring clean power, that they have responsible, if not replenishment water use, using advanced technologies to be able to do that.
You know, maybe you take down some of the opposition, but maybe you also make the grid stronger as well. Maybe these data centers become grid assets because they are supplying power back to the grid, or they have created additional battery usage to make the grid more reliable, or they inject power when the grid is at maximum capacity. But more than that, those are kind of table stakes for data centers, I think. What if they brought more than that even? What if, you know, in community benefit agreements, what is the stake that the community has? What do they give to the community? And to me, this is where the most interesting part of this conversation could happen. Not only should they pay for all those upgrades, but maybe they also pay for distributed energy resources, for home solar and storage, for maybe they pay help to subsidize EV batteries, EV vehicles and use the batteries to create a virtual power plant for a portion of their capacity needs to get that flexibility. Now the community has a stake. They get something. They get a battery in their home or they get a heat pump or whatever. And they, you know, I mean, it's interesting. Voltus has done this with the PJM market. They're going to bid 100 megawatts of distributed capacity into the PJM capacity auction. How great is that?
Because they're going to cobble together enough to create a virtual power plant. Why aren't we looking at that? Why aren't we looking at using the grid more efficiently with the resources we have? And what Voltus is doing is taking existing assets and cobbling them together to create a virtual power plant. But what if you created, what if the hyperscalers paid for new stuff in a community that they're coming into? So I think there's a real opportunity here.
Senator Martin Heinrich:
I think given the premium that a lot of these developers have been willing to pay, that you can reduce price pressure on consumers and you can invest in more infrastructure.
Robinson Meyer:
What should this look like in policy? Because I think there's a lot of good ideas. There's a lot of goals. Obviously, the Trump administration has advanced their ratepayer protection pledge, which is kind of all of this stuff, but without emphasizing clean as much or at all. There's still a ton of demand to build data centers, which the policy to... Focus that demand look like and what goals should Democrats bring to the process of regulating and shaping the data center buildup?
Secretary Granholm:
There may be a sort of floor that the federal government puts into place and then states take it to the next level. So maybe the ratepayer protection pledge, maybe the table stakes, as I call it, are happening at the federal level and they're required to meet those. And I think many of the responsible tech companies are willing to do that. And then the states go and follow behind. Maybe they require buffer zones. Maybe they require community consultation. And they have a menu of options that a hyperscaler might be able to bring to make not just a community home, but make a community better than when the hyperscaler got here. Politically, this is hard because there's such an aversion and people can't imagine that this is enforceable and that you trust them, that they're going to be transparent, that transparency issue is a real big deal. If I were running for office right now, I'd say, no data centers in my state unless you do these five things. And if those five things are done, then we'll have a conversation.
Robinson Meyer:
What did you think of, sorry, say your five things. Say your five.
Secretary Granholm:
Which is what Gretchen Whitmer did in Michigan. And she's asking the legislature to codify that or the Public Service Commission in Michigan to do that. That's what needs to happen.
Robinson Meyer:
I interrupted you. You should say the five things.
Secretary Granholm:
Well, so making sure that you don't socialize the cost to the rate base, bring your own clean energy. You have a long-term commitment, so there's an exit fee if you go early. You have responsible water use. You are flexible. You agree to flexibility within the system just as a starter. But you must enter into a community benefit agreement. And that community benefit agreement has to be in consultation with the community in question. And it might include jobs. It might include job training and apprenticeships. And there's a whole menu of things that might be possible that I think hyperscalers would be willing to look at.
Robinson Meyer:
Are you worried, if you were to do this, that all those... A lot of data center developers look at that. They go, thank you. That's tough. We're going to take this to Texas and just build it.
Secretary Granholm:
Well, could be. Plop it down there. But honestly, local communities, no matter where they are, I mean, there's been over 100 moratoria passed. Yeah. Local communities in red states and in blue states.
Senator Martin Heinrich:
The fishworks are coming out in Texas.
Secretary Granholm:
Too. This is my message to these local folks. You have leverage. You have leverage right now.
Senator Martin Heinrich:
You've got to be transparent, and you've got to bring real value, which is what the secretary is talking about, to the community from day one.
Secretary Granholm:
Raise the bar. Raise the bar for all of them, because there's some data center companies who might not be eager to do this. But if you raise the bar as a community and insist on it, you know, I mean, maybe they'll go to a place, another place. But maybe, just maybe, that other place is going to be insistent on using its leverage as well.
Robinson Meyer:
Last question. So... The IRA. It was a big bill. And they both played a major role in implementation or writing or passage. It tried to electrify a lot of the economy. And obviously, it did a lot of good. Maybe it wasn't going to meet its targets, had everything remained in the case. It's impossible to know what would have happened with the Harris administration. It was trying to electrify more of the economy and create this big surge of electricity. Now we have the data center boom. Huge demand for electricity And a ton of electricity infrastructure is getting built out now on the back of the demand boom. What are the lessons from the IRA that we should take? I mean, you both experienced the IRA. You both experienced, I would say, the IRA era of governance. So what should we learn from that and apply to the data center boom?
Secretary Granholm:
I would say, well, to the data center?
Robinson Meyer:
Or to the next few years, yeah.
Secretary Granholm:
I would like to see a revising of the Inflation Reduction Act. I mean, a rebirth of the pieces that were carved out. So tax credits for solar and for wind, et cetera. I'd like to see an investment tax credit for the grid as well. But I think the lesson in terms of implementation was pretty clear that we just didn't do a good job of selling it. You know, I mean, it took too long. We did a lot of ground breaks, but we didn't do a lot of ribbon cuttings, meaning people weren't hired yet for all of these announcements that were made. And so people didn't feel it on the ground. And so they didn't attribute it to the administration from a political point of view or certainly to the Inflation Reduction Act, which people, everyday citizens, have no idea what that was. So doing a much better job in getting the word out about why is this factory opening up in my area? Why am I hearing about a job fair over here? And connecting those dots, I think, was one of the big errors.
Senator Martin Heinrich:
Speed number one. And then doing a better job of telling the story. I think that's where we lost the narrative is we had a great story to tell. I really focused, and it was an election year for me, so I focused heavily on the specific factories that were making, solar and wind components for these big projects in New Mexico, and I tied it to big construction projects like the Sun Z generation and transmission line. I don't think we did that nationally as effectively as we could have.
Robinson Meyer:
Do you think it needs a big, I don't know, charismatic idea at the center next time, national grid or big underground, we're going to underground all the lines or something, or it would just have selling it a bit better?
Secretary Granholm:
Well, I think, I mean, when I tell people that there were 950 factories that came or announced they were coming or expanding in the United States just to build clean energy stuff as a result of the Inflation Reduction Act, people are like, 950 factories coming? I mean, there was a good story there. There really was. And I was on the main cable networks, but I didn't go on all of the side, you know, and most people aren't getting their news from main cable. So we have to think better strategically about how we communicate, where we communicate, use social media a lot more to be able to get the word out.
Senator Martin Heinrich:
We should have been on your podcast.
Robinson Meyer:
You should have been on my podcast.
Secretary Granholm:
I was at the end.
After it was all over.
Robinson Meyer:
After it was all over. Shoot, if I had been on earlier. I think that would have been the difference maker. You know, if there's one thing I know about the Shift Key listener is that they are a swing voter in exurban Pennsylvania. We're going to have to leave it there, but thank you so much for joining us. Thanks so much for doing this. Thank you.
And that will do it for this episode of Shift Key. We'll be back next week at the usual time with a new episode that I'm excited about. Until then, Shift Key is a production of Heatmap News. Our editors are Jillian Goodman and Nico Lauricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music's by Adam kromelow. Thanks so much for listening. We'll see you next week.
Rob talks with two senior Democrats about the future of energy in the U.S.
The Democratic Party’s climate and energy policy is at a difficult moment. Over the past year and a half, the Trump administration has attacked solar and wind energy, started an inflationary war, and repealed key parts of the Inflation Reduction Act. And about a year and a half from now, Democrats will pick a presidential candidate and pitch their energy and climate policies to voters again.
How are key Democrats feeling at this moment? Rob recently had a chance to sit down with two of the party’s most important energy policy makers — Senator Martin Heinrich of New Mexico, the ranking Democrat on the Senate Energy and Natural Resource Committee, and former Energy Secretary and Michigan Governor Jennifer Granholm — for an in-person conversation in Washington, D.C.
On this episode of Shift Key, Rob chats with Senator Heinrich and Secretary Granholm, about fuel prices, the state of permitting discussions, AI data centers, and what each learned from writing — and implementing — the Inflation Reduction Act.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from their conversation:
Robinson Meyer: Secretary Granholm, I wonder what watching now 18 months of the Trump administration, you think, you know, we should have done this differently during the Biden administration, or there's an issue here that I would have handled differently, or now that I see what's happened and how they've approached governing.
Secretary Granholm: Yeah, it's such a, it's a great question because I think every one of the cabinet officials looks at what has happened in the Trump administration and says, man, I should have broken more eggs, not more laws, but I should have really insisted on much more quicker, all of the negotiations that took forever on getting the treasury guidelines and all of that. We should have, I mean, like a cannonball should have shot through. And I think that's a good lesson that will be taken away for the next administration.
Robinson Meyer: And why didn't it happen?
Secretary Granholm: Because there's process, because there's lawyers, because, you know, I mean, it just, There was a sense that this is the way you do things, et cetera.
Senator Martin Heinrich: And we accepted it.
Secretary Granholm: Yeah, we all accepted it.
Senator Martin Heinrich: And we shouldn't have.
We should have built programs that don't take two years of analysis. And that is definitely the lesson that I took from the rapid...the things that were fairly straightforward, like the tax credits, were able to move quickly. But there were whole programs like the Green Bank that got stood up just in time to be turned off.
Robinson Meyer: Is that a drafting failure or an implementation failure?
Secretary Granholm: I mean, to be fair, there's a lot in implementation, but there are a lot of rules around all of this that have certain timelines, et cetera. So I think taking a look at all of that, I mean, Democrats have been very, we're going to follow the rules and we're not going to bust, you know, we're not going to break norms. And I think this administration has broken a lot of norms and shown that you can get stuff done more quickly. Now, I don't like what they've gotten done quickly, but nonetheless, I think it's a lesson for us about challenging the status quo.
You can find a full transcript of the episode here.
Mentioned:
Previously on Shift Key: What Senator Martin Heinrich Needs to See in a Permitting Deal
Previously on Shift Key: Energy Secretary Jennifer Granholm on What Comes After Biden’s Climate Agenda
Previously on Heatmap: 3 Takeaways From Our SunZia Investigation
Music for Shift Key is by Adam Kromelow.