You’re out of free articles.
This Halloween, get 20% off using code ADVANCED
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:

This transcript has been automatically generated.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Robinson Meyer:
[0:46] Hello, it’s Monday, May 11. And some of you may remember a few years ago, we had a little law called the Inflation Reduction Act. It was quite a big deal. Some may have even called it America’s first comprehensive climate law. Imagine that. Well, as many of you know, it was partially repealed last year as part of President Trump’s big tax and spending bill, the One Big Beautiful Bill Act. The IRA’s solar and wind tax credits, for instance, which were initially set to stay on the books into the 2030s, were junked. So were tax credits to help people buy electric vehicles, which would have come in handy right now. Other policies such as tax credits to build new grid scale battery storage or nuclear energy or enhanced geothermal were preserved and so were other subsidies such as those that would help automakers produce batteries in electric cars.
Robinson Meyer:
[1:30] Now, I could keep listing the effects of these laws all day, but the point is we actually don’t know yet what the Trump law will ultimately do to the energy system. It was passed less than a year ago. And in fact, solar and wind developers still have until July of this year to begin construction on projects if they want to qualify for the old Inflation Reduction Act tax credits. But we are starting to get a sense of what its ultimate effects may be. And on that front, a new paper came out this week in Nature Review’s Clean Technology that is quite interesting. It’s an assessment of how the IRA and the One Big Beautiful Bill Act could shake out together what their combined effects on the U.S. Energy mix and on U.S. carbon emissions could be. Joining me today are two of the co-authors of that paper. John Bistline is the head of science at the Climate Tech Startup Watershed, but he was for many years an analyst or leader at the Energy Systems and Climate Analysis Group at the Electric Power Research Institute, or EPRI.
Robinson Meyer:
[2:23] Ryna Cui is an associate research professor at the University of Maryland School of Public Policy and research director for the university’s Center for Global Sustainability. On this show, we talk about what modelers got right and wrong about the IRA, whether emissions will still decline even though OBBBA was passed, and how the two laws kind of shake out together. I’m Robinson Meyer, the founding executive editor of Heatmap News, and it’s all coming up on Shift Key.
Robinson Meyer:
[2:49] John and Ryna, welcome to Shift Key.
John Bistline:
[2:51] Great. Thanks for having us, Rob. Excited to be here.
Ryna Cui:
Thank you for having us.
Robinson Meyer:
[2:56] It’s a very cool paper. It just came out. And I feel like it’s beginning to answer the question that has been in a lot of people’s heads since the One Big Beautiful Bill Act passed last year, which is we got the Inflation Reduction Act. It was supposed to do amazing things. It was supposed to be on the books for a long time until 2032 or 2035. Some tax credits, of course, extending well past that. And then the One Big Beautiful Bill Act came along. It repealed a lot of the green energy tax credits, but not all of them. And trying to understand where that puts us, what has come out in the wash, was it all for naught, has been at least part of where my brain was. And so I was so excited to see this paper because it gives us the beginning
Robinson Meyer:
[3:38] of some answers about where we might wind up. What did the IRA actually do? And how much of the IRA’s life have we seen since it passed? In other words, you know, is there still some oomph left in this law, and we’re still trying to understand that? Or have we mostly seen the story at this point?
John Bistline:
[3:58] Yeah, I would say that there’s a couple things to highlight from our study. And one is that whenever you look at historical investments to date, it does seem that IRA already brought striking investments to U.S. clean energy. This tended to amplify pre-existing trends rather than being a complete paradigm shift by itself. But we show that clean energy investment was something like $729 billion in the three years after IRA passed. And that’s roughly double what it was in the three years prior.
Robinson Meyer:
[4:31] That’s everything. That’s solar, wind, batteries, but also like EV manufacturing capacity as well and battery manufacturing, right?
John Bistline:
[4:40] That’s right. Yeah, it was led by battery manufacturing, electric vehicle sales on the retail side, as well as solar and battery storage on the electric grid. And we see that IRAB was roughly expected to double the rate of electric sector capacity additions over the next decade as well. But we also see at the same time that the One Big Beautiful Bill Act, or OBBBA, as I sometimes call it, the impact there is large. But the clean energy transition isn’t stopping because of that. We see that even with many of those IRA tax credits being modified, investment is still projected to be near the upper end of the historical range, especially given the competitiveness of some of the technologies like solar, batteries, alongside rising electricity demand.
Robinson Meyer:
[5:29] So what does this mean for our understanding of emissions, because one of the many things the IRA was supposed to do, but I think one of the things that it got the most credit for, and that ultimately got some people who were maybe wavering about the law to get to yes, is it was supposed to really drag down the path of U.S. emissions, I think, as far as 33% or 35% below where they would be otherwise. It’s now been partially repealed, and without getting too much into it, basically, as we’ve talked about before, the solar and wind and some of the clean energy tax credits are going to terminate as soon as this year or next year. And then tax credits for energy storage for nuclear will remain on the books for longer. And it’s a more complicated story as we get into EVs.
Robinson Meyer:
[6:13] But it’s now been partially terminated. Like, do we have a sense for where U.S. Emissions will wind up? Will they be lower thanks to passing IRA, then they would have been in a world where we didn’t get IRA, even though we now also have OBBBA.
John Bistline:
[6:29] Yeah, I think one of the big stories from this paper in aggregating the modeling work that a range of different teams have been doing is that IRA was roughly expected to double emissions reductions over the next decade. I think the exact numbers is that, you know, across the economy, greenhouse gas emissions would be something like 40% to 50% below 2005 by 2035 with IRA in place. But without it, given the changes in OBBBA, something closer to 25% to 35% lower than 2005.
John Bistline:
[7:05] Just as context, we’re at about 20% below 2005 right now. So with OBBBA, emissions are still projected to decline, just not as steeply as with IRA in place.
Ryna Cui:
Yeah, I will add there, and we are also one of the modeling teams that’s doing the emission pathway trajectories. And I totally agree on John’s points there. Definitely IRA and other actually federal action on the climate policy front. It’s an important, very important contributor to the emission reduction trajectory in the U.S.. And I do think the context about declining technology costs and also stronger market forces, it’s going to make it even more effective. It’s not like we have era going to replace the other enabling factors. So I do think with the now the context is all the enabling market forces are more favorable to the transition. On top of that, with the policy incentive, we’ll see deeper reduction. Of course, with a series of rollbacks, we’re going to slow down that trajectory. But I also want to mention there’s also beyond federal action, there are other level of governments are still engaging and there are potentials to continue those trends.
Robinson Meyer:
[8:27] That’s so interesting, because that gets at, I think, what is the natural follow up to this, which is that, look, IRA was supposed to lower emissions. I mean, we spent a lot of money to lower emissions with IRA. And we also spent a lot of money to do lots of other goals in IRA, build up manufacturing capacity, build out clean energy, reduce conventional and climate pollution. But now we’ve passed OBBBA, it took a lot of that money and it spent it largely elsewhere, largely on tax cuts, primarily for wealthy Americans. And yet emissions are going down Anyway, how much of maybe the IRA emissions reductions were going to happen anyway? And given that we kind of expect emissions to decline through 2035, no matter what, what did we lose by repealing IRA?
John Bistline:
[9:15] Yeah, I would say in terms of the numbers for emissions reductions, roughly half of the reductions you would expect under IRA, we still expect under OBBBA. And that includes with higher projections for electricity demand from things like data centers, manufacturing. That’s something that’s materially changed since we first looked at IRA in 2022. But I think when we look at some of the other missed opportunities here are partially under the development of some of these new and nascent technologies. And that’s a lens that I think, Rob, you alluded to, is that IRA was looking at not just reducing emissions, helping with affordability, but it was also looking at developing these more emerging technologies that would be really important for deeper emissions reductions, whether that’s carbon capture or clean hydrogen, advanced nuclear. And some of the IRA credits for those technologies have continued under OBBBA. But importantly, there’s two things that are sort of missing there. One is that many of those credits have shorter lifetimes now, especially with clean hydrogen. And given the long lead times to scale some of these emerging technologies, there’s a little less support for the demonstration there. But it is encouraging to see that, you know, the credits for geothermal, advanced nuclear are still on the books. And we do see, you know, a lot of project movement on that side.
Ryna Cui:
[10:44] I don’t think the gap that IRA repeal left here can be easily filled with any other sources. It’s still very critical, very important components of an all-of-society approach to deliver the U.S. climate goal. So I do think the gap is still there and is very strong. And also, I think it’s hard to separate what IRA does versus the other federal action, including strict regulatory action and also other climate leadership. I think all of that all add up to what the U.S. climate goal can be delivered. So I do think there’s IRA itself, but also other federal action may also impacting what the authority that subnational have. There’s like a lot of budgetary implication of what state now can do and also other non-federal, not just state. But I think there’s a kind of a package of impact that’s probably beyond what IRA itself is doing.
Robinson Meyer:
[11:46] One of the things I really liked about the paper was that it did a good job of specifying all the contingent aspects of IRA in that this is a law that exists because partially of the Byrd rule in the Senate, because of the kind of legislation that the Senate can advance because of the filibuster rule. It exists partially based on this idea that the EPA was going to follow through and regulate on these technologies. I mean, there was a lot of different policies that were supposed to come together to create a pretty strong climate policy regime that then, of course, have been dismantled by the Trump administration. So there’s this remarkable chart, or really there’s two maps in the paper. We’ll put, of course, the paper in the show notes. I realize we keep talking about it. There’s this remarkable set of maps in the paper and they show where manufacturing went and they also show where new electricity generation capacity went and I wonder if both, could you describe like what regions did the best under IRA? And then maybe who stands to lose the most from OBBBA to the extent that we know?
John Bistline:
[12:53] Sure. Yeah, I would say that in terms of manufacturing investment, that’s one of the places where we’ve seen the largest changes since IRA was passed. And so the emerging battery belt in the Southeast and partially in the Midwest, those are ones that we’ve seen a lot of investment. That investment is continuing. I think one interesting story there is that there’s potentially a story of oversupply relative to domestic electric vehicle demand. And that does raise questions about how that capacity might be repurposed. That’s another interesting conversation by itself. But when we look at investments in the energy supply side, Those are spread out throughout the country. I like to compare periodically Texas and California, but beyond those, there are places like Utah that even though it’s kind of a smaller state, the energy storage investment there has been significant. So I think those are areas that OBBBA has sort of kept the incentives largely untouched with the exception of foreign entity of concern restrictions.
John Bistline:
[14:01] I think some of the areas that are maybe hardest hits are ones where maybe the solar and wind resources aren’t as strong and aren’t attracting the type of investment that some of these, you know, well-resourced regions are like Texas. So I think places in the Midwest, maybe that you would expect greater investments in wind under IRA, you know, those are ones that you would see, you know, soften investment, at least in the near term. But yeah, I don’t know, Ryna, if you want to talk about the intersection with state policies here, I think matter a lot too.
Ryna Cui:
Yeah, I think what from what John described is actually the trend we observe are driven by different probably motivation. It’s a combination of like a policy, but also natural resources, market forces, the cost perspective. And for Texas, and it’s very interesting comparison between California and Texas, just given, you know, the electricity demand growth, what’s the cheapest and convenient way to meet that growing demand? It’s been proved to be solar plus storage in Texas. And with the permitting root air, I think it make it successful. And it’s nothing much relevant to climate motivation. And of course, there are very strong policy incentives and state level action in California that being a climate leader forwarding states. So I think when we look at the trend, it actually now have a broader framing we can utilize to think about what the transition will deliver and is actually coming together with climate benefits.
Robinson Meyer:
[15:39] What do we still not know about OBBBA? So this law only passed last summer. It’s been on the books for less than 12 months. We haven’t even hit the first deadline for when wind and solar projects that still want to use the IRA credits have to formally begin construction. Obviously, I would imagine there’s so many unknowns about this law and you try to constrain them a bit in this paper, but what are your biggest questions about how the new Trump tax law will play out in the world of energy and manufacturing.
John Bistline:
[16:08] For me, I think one of the most interesting stories is how OBBBA intersects with these other trends that I would say have been emerging in a couple of years. The biggest one, of course, has been data centers. Every energy conversation is implicitly a data center one as well. And I think there, the honest answer is you can both be optimistic and pessimistic about how data centers may intersect with changing tax credit landscape. I would say on the pessimistic side, the scale of what’s coming is pretty significant. I was part of EPRI’s powering intelligence report that looked at how data centers may become something like nine to 17% of total electricity demand in the U.S. by 2030 compared to about four or 5% today. And so if that scaling happens largely with new gas-fired resources or existing coal plants, that could materially increase emissions.
John Bistline:
[17:03] But I also think there’s an optimistic scenario there as well. So the same capital that’s flowing into AI infrastructure is also potentially a very large pool of private investment that could be assembled for clean electricity deployment. That’s both deploying more solar and battery storage and wind, but also if AI companies are willing to pay a premium for that speed to power, that potentially could help to accelerate advanced nuclear, geothermal, long duration storage, those types of technologies that really need large committed buyers. So I think that that’s one of the big unknowns for me is how that will play out along with, of course, these geopolitical shocks that are really upending markets.
Robinson Meyer:
[17:51] Ryna, what are your biggest questions going forward, I think, about OBBBA or about any of this?
Ryna Cui:
[17:56] Yeah, I do think we now exist in an interesting period of time, both on the positive side, there’s a lot of progress on technology. And also in globally, there’s not just in the U.S., but globally, all the technologies are getting to a point, they are very competitive across the board. At the same time, I think there’s other uncertainties related to trade, but also the energy crisis, make another clear and loud point about this dependence on fossil fuel, make it really just long-term and secure. So I do think there are broader and multiple drivers now, we can talk about the transition we’re looking for. And it’s related to energy affordability, related to better economy, better health, better jobs. So I think there’s just a kind of a very rich narrative and also a lot of opportunities we can tackle this issue. And it’s probably very limited to do with climate in the first place. But of course, the climate outcome out of that is critical as well. Yeah, so I do think it’s a critical moment we’re living, and it’s hard to really predict where that goes. And I think also the business community, the private sector also exists in a global market in many ways, and it’s hard to isolate the U.S. versus the rest.
Robinson Meyer:
[19:20] I feel like one question that actually emerges from my reading of this paper is like, solar and wind were going to do great in an IRA world. Solar and storage are going to do great in our world. And I think there’s a question facing Democrats, frankly, and just policymakers as they think about the next few years, which is, should they try to reinstate IRA? Or should they try to, let’s say they have a discrete amount of money. Now, some people would contest that assumption, but let’s just assume that they’re going to be working with a discrete amount of money. In fact, what they should do with that discrete amount of money is repair the policies in IRA that have been completely disassembled, which is industrial decarb, which is technologies that are much further away on the cost curve and much further away in kind of deployment curve. And we should say, actually, the U.S. should focus on developing some level of expertise and development and deployment expertise with these more experimental or further away technologies, because solar and wind and storage are just going to romp kind of no matter what. And how the U.S. can most contribute to the project of global decarbonization and also remain competitive and build up new industries is by supporting these frontier technologies.
Robinson Meyer:
[20:42] Is that, I don’t know, you guys know the data better. Am I totally off base or should, you know, is there a reward for Democrats or for future policymakers just go in and repair these subsidies basically as they were?
John Bistline:
[20:57] Yeah, I think that’s a great question, Rob. And I agree with your premise that right now, a lot of companies and a lot of state policymakers, they’re all thinking about, you know, solar and batteries being attractive in today’s environment and moving forward. But support for some of these more costly or less developed options, whether that’s industrial decarbonization or thinking about the next wave of carbon removal, those are more challenging. I obviously don’t have a crystal ball, but I know modeling teams are trying to understand the different policy levers that would be available on the federal side, whether that’s budget reconciliation friendly or something more ambitious. Just as an example, I think one of the big questions is how climate policy and technology policy will intersect with these really salient interests about fiscal costs of policy and affordability. And I think one design space that I’ve been exploring with Catherine Wolfram and others on is thinking about things like energy or industry-only carbon fees that might be paired with revenues that could lower energy bills, especially residential ones. I think the insight there is that, you know, you can design a carbon price that maybe doesn’t touch household energy bills by partially exempting residential electricity, maybe natural gas for heating, but then using revenues to reduce spills.
John Bistline:
[22:24] And of course, you know, there are tradeoffs to navigate as with any policy where maybe if you have a bottom up approach that would target specific industrial facilities that may generate less fiscal revenue than a kind of top down approach. But that’s something that the political economy may look really different. And I think that the CBAM, the carbon border adjustment angle, is also important to think through as well. Here, a domestic carbon fee potentially could shield relatively clean U.S. Industrial facilities, especially from an EU border carbon adjustment.
John Bistline:
[22:59] So that’s more of a competitiveness argument. But I don’t know how to, you know, whether this is one conversation that would reframe the conversation in a way that OBBBA’s critics and supporters, you know, may engage with more.
Ryna Cui:
Yeah, I also think it’s a very interesting question. And you are probably right. I think I agree in terms of the policy focus of, you know, the new administration. And I do think the gap, it is very heavily in the industrial sector. It does require more policy incentives or policy different type of instrument to do more there. In terms of electricity sector, I also wonder the technology on solar story itself, it’s pretty competitive now, but the supporting infrastructure may still require a lot of advancement there, both on technology, but also large investment on build-out. So that could be an area where it requires some focus. Another possibility or kind of an important area I see is on methane emissions, especially from the energy supply sector, which the waste sector methane could be more local restriction. But I think on energy methane, that’s the most effective and the only lever probably to limit the overshoot of 1.5, both the duration and kind of the level for global outcomes. So I do think the methane also cost effective in the near term. So those are good opportunity and we can see more immediate effect.
Robinson Meyer:
[24:32] There was one line in the paper that caught my eye, which is that, you know, I think when we look forward at what OVA is going to do to U.S. residential electricity prices or energy prices, it’s going to raise them, but I will say the numbers are a little small. It’s like 50 to $150, I think, or $168 or something by 2035, which is significant. But maybe I think in terms of costs, we’re presenting to voters about the various impacts of the Trump administration might seem to come out in the wash a little bit. There’s a line in the paper that says, but some regions could see energy costs rise by as much as $500. What regions are those? To the extent that we know where we’ll see the worst energy impacts of OBBBA in terms of just their household bills.
John Bistline:
[25:26] You’re right, Rob, that in surveying the different studies, there is a range nationally that goes from something like $50 to several $100. And that’s by 2035, right? So that’s not a change right away. But you’re also right that some states in the country, especially we’ve seen a lot of Southern states, potentially having, you know, larger increases with the removal of IRA. But I think there’s a lot of uncertainty there, right? Both because that was a kind of difference between a world with IRA credits and a world without them, it may be that a world without them is still increasing due to things like grid modernization or changing fuel prices. I know that’s a sort of big lever that can influence affordability, both on the electric side and non-electric side. But yeah, again, I think there’s a lot of uncertainty about exactly where those affordability increases might be biggest. And the fact that it takes so long for those to materialize probably means that they extend beyond an election cycle. And yeah, it probably leads to a lot of confusion, especially as people are seeing pain at the pump and other impacts today.
Ryna Cui:
Yeah, I don’t have the answer to that.
Robinson Meyer:
[26:44] Part of the IRA story was that we had these models, including by esteemed Shift Key guest co-host Jesse Jenkins, that were quite important to how we understood what these policies would do. Because IRA just by itself is a whole set of tax credits and incentives and grant programs. And there’s a methane fee in there. It’s all these disparate policies. And what pulled them together was a story we could tell with the models, which showed that they were going to reduce emissions over the long term. It’s now been several years. Of course, the law was repealed, which doesn’t help. But like, what did those models get right about IRA? And what did they get wrong? What happened in reality that maybe we didn’t anticipate when we were looking forward in the law?
John Bistline:
[27:29] Maybe taking a step back from a high level perspective, models were important, both as I was being developed and then understanding some of the implementation. And I think one of the interesting dynamics is that this is kind of like the Beach Boys song Kokomo, which is a song about a place that doesn’t exist. But the vision of it was apparently so compelling that there were actually two places that were named after it. The models that preceded IRA functioned a little bit like that. We were describing this clean energy future that hadn’t happened yet, but that description itself became part of what made it happen in part by giving investors and policymakers this coherent or hopefully coherent view of what to build toward. And looking at things that we got wrong, I think is really instructive here. Models were too bullish, I would say, on wind deployments, including ours at EPRI, where I was previously, the regen model.
John Bistline:
[28:31] And declining investment in wind is driven by a couple of things. I mean, one is just that solar outcompeted wind on cost. So that steeper learning curve for solar was anticipated, but not fully anticipated. There were supply chain issues and interest rate increases and permitting delays. Those are all things that over time we incorporated in our modeling and made it better. But we definitely overestimated the ability of wind to scale quickly based on the incentives. And at the same time, we were probably a bit too bearish on battery storage. It’s really been amazing to see how the battery industry has gone from a rounding error to such a big player. I think one of the stats that I really like is that the U.S. built more energy storage in 2025 than it had cumulatively through 2023. So that was one that I think we were a bit too pessimistic.
Robinson Meyer:
[29:29] That’s the kind of sad that people say about Chinese manufacturing. You never hear it about American manufacturing. That’s crazy.
John Bistline:
[29:35] Yeah. Yeah. So I think that was a really important story as well. I think that that overall picture of how electric sector investments have increased is one area that we did get right. I remember when IRA was passed in 2022, there were something like 32 gigawatts of clean energy deployed. And now when you look at the Energy Information Administration data, it looks like in 2026, we may have close to 80 gigawatts this year. And I remember when models said, oh, well, maybe 60 to 100 gigawatts might be a range with these new incentives, a lot of people said that was wildly unrealistic. So it’s good to see that aspect of our analysis come to pass.
Ryna Cui:
Yeah, that’s also an interesting question. I think as a modeler, we kind of always got that as a first question, like what your model can tell us. Also, it’s kind of as John described, all models are probably wrong in one way or the other, but there’s also very valuable insights that we can produce and generate. One thing I just want to add is it’s a very useful exercise for the community to do multi-model analysis, which we bring different models that have different structure and probably different coverage of the economy and different design of the mechanism.
John Bistline:
[30:57] And then we kind of compare our results and already can identify outliers, for example, and help us to improve through those exercises. And also together, when we can generate robust insights, it’s also very useful for policymakers to understand under different probably assumptions about, you know, future, we still get a very consistent, bigger picture analysis or results out of that. So I think I want to say it’s one approach. The community is managing that. Also, I think the models are different in terms of their both temporal resolution. A lot of us are doing the long term or mid to long term analysis. So definitely the very near term fluctuation of, you know, from day to day or month to month, it’s not being captured for sure. And, you know, the extreme events like the war, the crisis, we can never kind of include that in our model.
John Bistline:
[31:55] But I think those are some examples that need careful interpretation.
Robinson Meyer:
[31:59] I’d say that’s why I always thought that we wouldn’t even be able to assess these IRA models because it was repealed so quickly that it’s hard to know, which I think is part of the story, but it’s also, it does sound like they actually told us really useful things.
John Bistline:
[32:12] Yeah, I completely agree. I think there are a lot of lessons learned that we can take moving forward from this experience. And as Ryna mentioned, these multi-model studies are great because they’re like wisdom of crowd effect, where we do know more collectively than each team maybe knows individually. And whenever we came together to produce this first paper on the Inflation Reduction Act shortly after it passed, it wasn’t just to bring models together to help to inform conversations about what IRA could mean, but it was also for us to get together as a modeling community and share our insights, share data, especially given how complex IRA was. Many hundreds of pages initially, lots of treasury guidance that was also hundreds of pages. So I think that was a good example of the analysis community coming together to really inform decisions that people were making.
Robinson Meyer:
[33:06] You described a few things that got wrong, John. Modelers projected too much wind, and they projected too few batteries. It seems to me that you could kind of backtrack those to two key assumptions. The first was that we thought we were going to get permitting reform with the IRA. And permitting reform is very important for transmission development. And transmission development is what unlocks wind, because as soon as 2020 or 2021, we kind of knew that we were tapping out the ability of the existing transmission network to where there were good wind resources. And so we were going to need more power lines. And I think this is still the case. We need more power lines to go to where there’s better wind resources because right now where there’s good wind and good power lines we’ve already built wind farms but then the other one is of course data centers we didn’t know if we were going to get the data center boom in august 2022 when the IRA passed and data centers have driven part of the huge battery build out like how many of these errors just basically go back to we thought we were going to get permitting reform and we didn’t get it and we didn’t think we were going get a data center built out, like a massive secular surge in electricity demand. And in fact, we did.
John Bistline:
[34:13] Yeah, I completely agree with you, Rob, that those were two of the big blind spots that we didn’t know in 2022. Permitting reform is something that is really challenging to model explicitly. And I think many models at the time did assume that many of these real world frictions, whether that’s local ordinances or the ability to site and permit transmission projects and interconnection queue issues, that many of those would be accelerated. And we have seen some progress on that front, but clearly that was a good place to start, but a bad one to finish. And especially as we think about the data center build out, the coming wave of electrification, all of those things mean that strengthening the grid is really critical. And so, yeah, I would say that this is an area that you know, we as an analysis community are thinking toward. And, you know, it’s encouraging to see bipartisan interest here in permitting, not for one reason alone, but because of all of the drivers that you alluded to.
Ryna Cui:
Nothing to add there, but it’s more like we keep tracking the latest update, latest plan, and try to incorporate, improve our assumption. I think that’s always a needed exercise, especially in this moment.
Robinson Meyer:
[35:33] We’ll keep tracking these developments as they keep happening.
Robinson Meyer:
[35:37] And I look forward to the next paper on this. John and Ryna, thank you so much for joining us on Shift Key.
Ryna Cui:
[35:42] Thank you for having us. It’s a great pleasure.
John Bistline:
Yeah, I really enjoyed this. These are exactly the types of questions I think the field needs to be asking right now.
Robinson Meyer:
[35:55] And that will do it for today’s episode of Shift Key, but we will be back later this week with a new episode, so stick around for that, I guess. 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. Thanks so much for listening. See you real soon.
This Halloween, get 20% off using code ADVANCED
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
And more of the week’s top fights around development.
1. Richland Parish, Louisiana – Gird your loins for the coming fight over the Meta Hyperion data center’s gas pipeline.
2. Spartanburg County, South Carolina – I have one last data center race to tell you to watch on Tuesday: South Carolina’s 4th, on the northern rim of the state.
3. Goodhue County, Minnesota – Google reached a settlement with an environmental group suing to stop its data center in the small southern Minnesota town of Pine Island, resulting in what local press are saying will be the Land of 10,000 Lakes first state-level environmental review of a data center project.
4. Trumbull County, Ohio – Ohio looks like it just got a tad friendlier for data center opponents.
Talking with Kevin Gundersen, the head of public affairs for Digital Realty.
This week’s conversation is with Kevin Gundersen, head of public affairs for data center developer Digital Realty. On Wednesday, Digital Realty released a fascinating poll as part of Infrastructure for America, a pro-data center organization that also includes Compass, Vantage Data Centers, and QTS. The poll pushed back on the idea that we’re currently in the middle of a “data center election”; instead, it found most voters are not expected to choose their national elected officials based on a politician’s stance on data centers.
I reached out to folks involved in the poll's release, and they put me in touch with Gundersen, whom I’ve met before and consider to be a straight shooter. He accepted my invitation to do a candid hot-seat chat about the findings, his thoughts on all the data center attack ads, and whether his industry’s actually recovering any ground with the American people.
The following conversation was lightly edited for clarity.
So first off: Is this the “data center election”?
No. I think there are communities across this country that are learning about data centers and whose opinions are being formed by all sorts of things. I’ve also sat in communities that want data centers, that understand the benefits they provide, and I think there are loud voices on all ends of the spectrum saying things about data centers that frankly aren’t true. That’s unfortunate.
Now, that doesn’t dismiss people’s real concerns about data centers in communities that have never had them before or states that haven’t had them before. So it’s the industry’s job to have those conversations honestly and openly.
This is a new thing for the industry. If you look at the history of the data center industry, it was really confined to Northern Virginia, Santa Clara [California], and urban areas like New York City or Chicago where there are large customer bases and data needs. For the most part, people didn’t really pay attention to data centers.
This is now a historic build-out, so there’s an education going on. Data centers have become a physical manifestation of people’s fears about AI, and that’s something we need to manage as an industry. How we do that is to create organizations like IFA. Our company has been doing this for 25 years. We have 300 data centers around the world. For us, this is how we’ve always been doing this, but there’s no question our industry needs to be doing a better job as to why data centers benefit communities.
I think there’s a disconnect between what I see on the ground locally and the national narrative around the election. Every issue in America is nationalized. But if you look at some polls, this isn’t in the top five issues people are thinking about day to day.
It makes sense a data center developer would make this case. It’s your right to do so. But can you help me better understand the evidence, when we’re seeing so much television advertising attacking candidates for previous data center support?
The basis for me saying it is, I’ve sat in communities where people want data centers and been in parts of America that haven’t had revenue sources for decades. Now they have an opportunity for a data center in their city, county, state, and I think sometimes where there’s a disconnect is the national narrative around AI.
It’s hard to stop ChatGPT. But someone can use the data center as their target, so to speak. It’s the physical manifestation of their opposition to AI.
The biggest evidence is, there are a lot of communities that [have] welcomed data centers in the last 30 years. Not just the last couple of years. Santa Clara, California, is one of the nicest places in the country, and they have so many data centers. The history of people supporting data centers has been the norm, and the opposition is a relatively new thing in and of itself.
What about the electoral impacts? Have you personally not seen any? Either against your industry or for them?
We haven’t seen any of our developments’ electoral impacts on the local level yet. We could have this conversation next week after the election, but not yet. I honestly think I could answer that question better then.
But do I think data centers in most of America are the number one thing on people’s minds? No. Not when you talk to them outside the chatroom on Facebook when you can present dialogue and facts. There are communities that will decide they don’t want data centers. That’s fine. Some communities have made that decision. There are others who want them.
I’m not looking at next week. These developments are going to go on regardless of the election because there’s a huge demand for digital infrastructure, and a lot of communities do want these developments.
What do you see as the role of your polling when it comes to convincing the American public or the news media that this isn’t an election being decided by data centers?
IFA was created to tell stories about data centers and the benefits we provide to communities. These are real stories from real people and real companies. They’re mom-and-pop food trucks, electricians, real people all around the country. IFA is geared toward telling the story, a very positive story that is getting lost in the national debate.
When I think about the ads I see every day, the negative ads about data centers, these are real jobs. People making money wearing hard hats. I actually think it's unfortunate because I see people’s lives being lifted by data center development, and then they turn on their TV to see attacks on their industry.
The biggest companies in the world right now are taking their money and investing in the United States, creating a blue-collar jobs boom, and for some reason our politics make it something people want to oppose.
I think after the election there’ll be some kind of level set on both sides of the aisle because I think people were caught by surprise about some of the early polls on the AI issue that came out earlier this year. The industry wasn’t quick enough to talk about the benefits. But I think there are a lot of governors who’ve been balanced since they came into office about data center development, where they haven’t pushed moratoriums because they realize there are benefits from data centers.
The AI issue is great on the campaign trail, but separating AI from data centers and the investments they bring to a community is important. Data centers provide digital infrastructure. The demand for that is only going up.
Why should a skeptic of this industry believe this information from a developer?
I mean, have they talked to the IBEW? Have they talked to the unions? There are a lot of constituencies out there that see the benefits of data centers. Don’t take my word for it. Go to a community and talk to people.
There’s going to be people who don’t want a data center in their community, but if we do it openly, transparently, and tell the story of who we are — we’ve been around for 25 years! There’s all sorts of information out there about our company. And we’re going to keep talking to communities.
Why should they believe us? We don’t have anything to hide, and we’ll bring benefits to their community. That might sound like a cliché answer, but it’s the case.
What do you think the outcome will be from so many attack ads about data centers?
I think it's unfortunate, and I think it's bad for the country because elected officials right now are spending tens of millions of dollars in political ads telling people data centers are bad when in fact they bring huge benefits to communities.
We’re going to have to spend lots of time and energy and resources to make up for that. Perhaps we should’ve been doing this sooner. I’m sure we’d all in this industry loved to have gotten our story out before the campaign cycle took hold. We can’t go back and change the past.
I always say, we have the truth and physics on our side. What I mean by that is, we’ve got a great story, these developments have tons of benefits, and the demand is only going up. People have two phones. They have connected devices in their homes. Flat-screen TVs and Oura rings and Ring cameras. When you think about the digital products and services you use every day, it’s massive.
We’re going to have to tell our story. I do think a lot of elected officials at all levels of government want us to go do that. When I sit behind closed doors with folks, they know the benefits. People of both parties.
Can a key section of BAAJA be saved from unintended consequences?
Any bipartisan bill to update the nation’s permitting laws was always going to be a compromise, with advantages for the oil and gas industry as well as clean energy. Proponents of the Senate’s latest attempt at permitting reform have painted it as a delicate balance, a hard-won opportunity, and an all-or-nothing deal.
What, then, to make of drafting errors, or unintended consequences?
In the weeks since senators released the text of the Bipartisan American Affordability and Jobs Act, lawyers have been doing what lawyers often do, which is scour the bill for loopholes and ambiguous language. Many have raised concerns about the risks of one section in particular titled “Project Certainty” that’s designed to prevent presidents from discriminating against projects they dislike, such as by throttling projects that are already under construction, or outright refusing to permit certain types of energy — both of which Trump has tried to do to wind farms.
The red flags range from what were clearly accidental oversights, like that the bill would exempt projects that have obtained all their permits from complying with future regulations, to much more nitpicky, hypothetical issues, like that it might enable a company to orchestrate a permitting delay in order to win a big payout in court.
The question now in front of Senate negotiators before they put the whole package to a vote on November 9 is which of these issues are possible, or even desirable, to address in an amendment without destabilizing the whole package.
“I think there are legitimate legal readings of the bill that are not what was intended, and I think those are where you can make technical fixes,” Nat Keohane, the president of the Center for Climate and Energy Solutions, which supports the bill, told me. “I think there’s some of it that was worked out as part of the broader package that was negotiated over months. And so, which things fall into which bin? That’s up to the authors.”
It’s no secret that getting politics out of permitting was table stakes for the bill’s Democratic authors, Senator Sheldon Whitehouse of Rhode Island and Senator Martin Heinrich of New Mexico. Neither responded to questions about whether they were aware of critics’ concerns about these provisions or open to revising the language, although many sources I spoke to for this story told me they were aware of efforts underway on the Hill to make corrections to this section.
Heinrich’s office instead forwarded my inquiry to the American Council on Renewable Energy. In an interview, ACORE’s CEO Ray Long argued that some of the concerns lawyers have raised are valid, and tweaks and technical corrections are “fine” — but only if they don’t hold back the bill from a vote this year. He stressed that between the bipartisan permitting bill debated by the previous Congress and BAAJA, the Hill has been working on this issue for four years. “I think we should stop trying to make this bill perfect,” he said. “Consider it for what it is, which is a well-intentioned bill on both sides to get to a compromise that addresses a whole range of things and move forward with that.”
The “Project Certainty” section of the bill has two key components that critics are concerned about. The first is a set of provisions meant to prevent an administration from yanking permits or otherwise messing with projects that have all of their approvals, such as when the Trump administration revoked the Lava Ridge wind farm’s right-of-way, or when it issued stop-work orders on five offshore wind farms that were under construction.
The main issue here is that the text is written very broadly. It doesn’t just say that agencies can’t revoke permits; it says they can’t take any action “to interfere with or prevent the construction or operation at full capacity of a project” that has secured all of its federal approvals.
“That ‘operation at full capacity’ language seems to prevent any future action that could require existing facilities to modernize their technology or take steps to reduce their pollution,” Liz Zeleda, the federal regulatory director at the Southern Environmental Law Center, told me.
Of all the issues critics of the bill have raised, this one seems to have pretty unanimous support for a correction. “Nobody, I think, wanted to negotiate some kind of regulatory freeze here, and it’s a pretty clear technical fix,” Jane Flegal, a senior fellow at the Searchlight Institute, told me. “I have confidence that the negotiators will fix it.”
Then there are concerns that the bill would render any permits or authorizations issued by the Trump administration irrevocable, even if they were issued illegally. John Podesta, Biden’s former senior climate advisor, recently raised that possibility during a fireside chat at the University of Colorado Boulder. “They’re going to have a permit gorge like you’ve never seen, not really caring about whether they’re going through the legal steps to do it, and under this bill that’s not going to be reversed,” he said. His comments quickly ignited a fierce debate on social media over whether this was an accurate reading of the text.
The bill does list several exceptions that would allow agencies to revoke permits or authorizations, such as under a court order, or when the developer has violated the terms of the permit or another applicable law, or if the developer obtained the permit under false pretenses, or if revoking the permit is necessary to prevent imminent harms that were not identified in the original review process. Notably, “when the government’s authorization violates the law” is not on the list.
Nonetheless, a harmed party would still be able to make the case that Trump violated the Administrative Procedure Act in issuing a permit and get a court to vacate it, Ben Schifman, a senior technology fellow at the Institute for Progress and former Department of Justice lawyer, told me. The only edge case where that would not be true, as far as he can tell, is if the sole legal infraction in the permitting process was a violation of the National Environmental Policy Act or the National Historic Preservation Act, and no other applicable law. In that situation, the bill would, in fact, restrict the court from vacating the permit. However, a case like that is unusual, he said. “I will tell you, in all of my 10 years of practicing this kind of law at DOJ, it was very rare, and I’m struggling to think if there was even a single case that literally only brought one claim that was a NEPA claim.”
On the other hand, Sambhav Sankar, the senior vice president of programs at Earthjustice, argues that this interpretation assumes groups like his have the means to challenge all of the potentially illegal permitting decisions Trump makes. “We don’t have anywhere near the resources required,” he wrote in a blog post about Podesta’s comments, “and this legislation is explicitly aimed at making our challenges much harder to bring.” It’s not like the next administration will be able to sue itself to get a court order to vacate permits, he noted.
When I asked Schifman about this, he suggested the agency might be able to sue the permit holder, but admitted this was an ambiguity in the bill and “a good candidate for a few-word technical amendment.”
The second component of the “Project Certainty” title that’s raising alarm is a series of provisions meant to prevent unfair delays or denials for projects trying to obtain permits. The Trump administration, for example, has subjected wind and solar projects applying for permits to heightened reviews at the Interior Department, and simply stopped providing Department of Defense clearances to wind farms altogether.
The bill sets up a new legal pathway for project developers to sue the government for delaying or denying permits if they can demonstrate they are being targeted as part of a larger “pattern of disparate treatment.” To bring such a case, the developer would have to show its specific project type — a wind farm, for example — has seen a “substantial increase” in delays or denials compared to the previous five years. It may, but doesn’t have to, also produce supporting evidence, such as statements made by federal officials demonstrating a bias.
The choice of five years is the first thing that caught lawyers’ attention. Shortly after the bill came out, Matthew Littleton, a former deputy assistant attorney general at the U.S. Department of Justice’s Environment and Natural Resources Division, argued on LinkedIn that this baseline would be unlikely to help clean energy projects in the near term, since once the law goes into effect, the preceding five years will be dominated by Trump administration obstruction.
If you’re optimistic that the next administration will be less hostile to renewable energy, that’s only a short-term problem. But by that same token, imagine a Democrat takes the White House in 2029, and for entirely legal reasons, their administration rejects more natural gas plant permits than Trump did. Perhaps the previous Environmental Protection Agency didn’t account for some newly significant risk. Under BAAJA, developers would have grounds to sue the government for exhibiting a “pattern of disparate treatment.”
While the choice of five years has been debated, a lot of the risks with this provision actually stem from the bill’s limits on what the government can do to defend its actions. While the text gestures at “improper” denials, “unreasonable” delays, and a show of government intent, it doesn’t actually require the plaintiff to prove any of those things to win a case. It specifically limits the court’s review to three things: the evidence produced by the project sponsor; the administrative record for the particular project in question (i.e. the permit application and agency response); and raw, statistical data from the government showing the number of projects of the same type that received approvals over the past year compared to the previous five, as well as the number that received denials or got delayed.
Per Littleton’s interpretation, the developer need not prove the agency acted in bad faith, and the court can’t even take into account a potentially well-reasoned explanation by the government for why the data display a certain pattern. Schifman mostly agreed with this, but noted that it’s possible the administrative record would contain evidence about why the disparity occurred.
It’s possible that technical fixes to this section requiring “credible evidence of intentional targeting” for claims and that courts review the entire evidentiary record, as the Natural Resources Defense Council has suggested, could go a long way toward addressing this issue. Scholars at Columbia University’s Center on Global Energy Policy have recommended limiting these claims to delays, which are tied to clear timing benchmarks, and removing the provision for denials. “Courts can already overturn unlawful denials, so the denial provision adds little protection while creating most of the risk,” they wrote.
But there are other complications.
The bill specifies that if a developer wins a “disparate treatment” case, the government has to fork over 50% to 100% of the project’s total costs, in addition to any attorney fees and monetary damages resulting from the permitting delay or denial.
Justin Pidot, a law professor at the University of Arizona who served as General Counsel to Biden’s Council on Environmental Quality, told me that this could have the effect of “putting handcuffs on the government,” in that agencies will be under pressure to make decisions that avoid a legal challenge. That is, of course, the point of the provision, but to Pidot, it impinges too much on agency discretion. The Columbia scholars raised this concern as well, writing, “Facing that risk, agencies may approve projects they would otherwise reject, potentially including projects they consider unsafe.”
At the same time, the prospect of such a big payout may tempt developers to test agencies’ limits. “It just creates all sorts of perverse incentives,” Pidot said. “In that world, a project sponsor would be wise to try to figure out how to get the government to delay approving their projects so that they could bring this lawsuit.”
What’s more, the project sponsor is only allowed to keep its winnings if it actually completes the project, but nothing in BAAJA requires the government to approve a permit in these cases. A court might order an agency to make a decision on a delayed permit or reconsider an application it rejected, but the administration could just go on delaying or denying the project until the developer runs out of financing and can’t hold on any longer.
“As far as I can tell, if you have to abandon the project before you can build it, you don't get anything,” Littleton said. “I'm just sort of flummoxed by the way this is set up.”
While everyone I spoke to seemed to agree that the project certainty title in the bill could use some redlining, there was a split between those who believed small “technical fixes” would do the trick and those who were skeptical the provisions would be successful without an overhaul.
The Environmental Protection Network, a group of former EPA staffers, recently published a number of suggested technical changes to improve the section on revoking existing permits. They called for adding several more exceptions for when an agency can revoke or amend a permit, such as when the action is “authorized by Federal law and brought by the Federal department or agency alleging a violation of Federal law.” The challenge with adding more exceptions is that it will give the government more wiggle room to justify revoking permits — a slippery slope.
EPN also suggested adding a clause specifying that “nothing in this title affects the applicability of any requirement under” the Clean Water Act, the Clean Air Act, and the like, and protecting taxpayers “from potentially hundreds of billions of dollars” in fines paid out to litigants by limiting the financial remedies to “actual damages and court costs.”
The NRDC suggested changing the five-year baseline in the disparate treatment section, and eliminating the “disproportionate” stipulated financial awards, although it did not specify how. The Columbia scholars urged Congress to consider tying the financial awards “more closely to a developer’s actual losses while keeping enough of a penalty to deter deliberate abuse.”
While these kinds of changes may “curb some of the worst excesses” of the project certainty provisions, Littleton told me, that’s not his preferred outcome. “Ultimately, I think they need to be rethought in order to accomplish their purpose.”
Long, of ACORE, held that concerns about project certainty “aren’t a reason to hold up all the work that’s been done so far,” and suggested that Congress could pass a corrections bill down the line should they turn out to be real problems.
One funny thing about this “project certainty” part of the permitting bill is that critics and proponents both seem to accept that there is no foolproof way to stop a president who is truly hell-bent on messing with an industry from doing so. The question is, is it worth trying?