Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Podcast

The Rivian R2 Couldn’t Have Come at a Better Time

Jesse is back to catch up with Rob about Iran, gas prices, data centers, and more.

A Rivian R2.
Heatmap Illustration/Rivian

Last week saw what is likely the biggest U.S. electric vehicle launch of the year: the Rivian R2, which will go on sale this spring. It’s absurdly well-timed, given surging gasoline prices. But can it carve out enough of a niche to compete?

On this episode of Shift Key, Rob is joined by Jesse Jenkins in his new role as occasional guest cohost. Rob and Jesse discuss the Rivian R2, what the Strait of Hormuz closure could mean for global energy markets, and why the power grid is failing the data center test.

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.

You can also add the show’s RSS feed to your podcast app to follow us directly.

Here is an excerpt from their conversation:

Robinson Meyer: I think it’s worth noting here that this is actually a key part of the decarbonization story that I think is often overlooked, which is that this supply shock to oil and gas globally is going to result in much higher profits for fossil fuel companies. And if we have, say, a global recession or a global decline in growth because of an energy crisis, basically what we’re going to see is that, like, every other sector of the economy is flat or shrinking, and fossil fuels are enormously profitable. And already this year fossil fuel companies are up a lot, and renewable companies — even though we would expect, say, higher energy prices to ultimately be good for demand destruction and ultimately be good for, say, global renewable installation — renewable firms are flat globally, and fossil fuels are way up. And that’s because it’s actually the profitability profile of fossil fuels that makes them so attractive in a portfolio, not whether they are profitable in any one year.

Jesse Jenkins: Yeah, actually, I just saw a recent chart from S&P that showed the sort of cleantech booms and busts in terms of market indexes for S&P’s Global Clean Energy Transition Index versus the Dow Jones U.S. Oil and Gas Index. And actually, it’s up more this year than the Oil and Gas Index. But that’s because it collapsed after Trump was elected, and the low is hit right around the launch of the Liberation Day tariffs. But it has recovered faster and is now back up above oil, which has been relatively flat.

I think that’s the lag effect of all the projects that were started under the Biden administration push and are still coming to market, especially in the power sector as demand grows. But these sort of cycles of boom and bust are really interesting. One of the things that I think is worth pointing out on the oil side is — so you might say, okay, oil prices spikes lead to big windfall profits that then encourages greater production of oil and gas and more investment in new exploration. And that may be possible. I do expect that’ll probably have an impact on LNG export terminal financing, because those are still ... there were many permitted proposals that were still sort of on the bubble. And if they look at this and say, hey, well, this is the kind of payday we might expect if there’s some other crisis in the future, let’s move forward.

But if you look at what happened when Russia invaded Ukraine and kicked off another one of these cycles of global fossil prices, the oil and gas companies largely did not use that windfall to reinvest in new exploration and capital budgets. They dividend'ed and stock buyback'ed their way through all of that money, basically. I think that’s an interesting dynamic to keep track of here. It’s like, maybe this is a big windfall for investors, but will it actually lead to greater fossil fuel lock-in? That’ll only happen if it actually leads to capital investment in more long-lived assets in oil fields and pipelines and export terminals and things like that. And that’s not a guarantee because there isn’t — at least last time this happened, the companies were not feeling all that positive about their long-term growth prospects. And they were kind of happy, or at least their investors were happy to receive short-term cash instead of reinvestment in long-term growth.

And so that’s something I’ll be watching, is to see whether that same dynamic plays out this time around — if this is just leads to a surge in cash payouts, dividends, or stock buybacks, or whether it actually leads to greater investment in fossil infrastructur,e the latter being much more concerning from a climate perspective.

You can find a full transcript of the episode here.

Mentioned:

Rivian’s Make-or-Break EV Now Has a Price, Range, and Release Date

Previously on Shift Key: Why the Iran War Is a Warning for Natural Gas

Jesse’s report with Camus and Encord: Flexible Data Centers: A Faster, More Affordable Path to Power

This episode of Shift Key is sponsored by …

Accelerate your clean energy career with Yale’s online certificate programs. Explore the 10-month Financing and Deploying Clean Energy program or the 5-month Clean and Equitable Energy Development program. Use referral code HeatMap26 and get your application in by the priority deadline for $500 off tuition to one of Yale’s online certificate programs in clean energy. Learn more at cbey.yale.edu/online-learning-opportunities.

Music for Shift Key is by Adam Kromelow.

Yellow

You’re out of free articles.

Subscribe to access Heatmap’s expert analysis of climate change, clean energy, and sustainability. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Daily Briefing

What Worries Me Most About This Wildfire Smoke

We didn’t know days like this could happen. Then we learned how bad they really are.

Wildfire smoke.
Heatmap Illustration/NOAA

When I woke up this morning in Chicago, the Air Quality Index was in the 300s, and I could barely see the top of the skyscraper across the street. The weather app on my phone featured a little image of a man wearing a World War I-style full-face gas mask. That’s fun, I thought. I didn’t know it could do that.

I went downstairs. Old photographs of the city were hanging in the hotel lobby — girls playing in bathing suits next to the lake — and I realized that the haze shrouding the old Lakeshore Drive condos was in fact haze, smoke, particulate matter, and not a lens artifact. It really used to be that smoky all the time, back before the Clean Air Act. Then I glanced up and saw that the haze out the window was far worse than the century-old pollution in the picture.

Keep reading...Show less
Blue
Sparks

Microsoft Sustainability Chief Hounded by Protestors at Seattle Climate Week

“Microsoft, you can’t hide, we can see your dirty side!”

Melanie Nakagawa.
Heatmap Illustration/Getty Images, Katie Brigham

Protestors interrupted one of the final sessions of PNW Climate Week — a conference that brings together climate leaders across Washington, Oregon, and British Columbia — objecting to Microsoft’s rising carbon emissions from data centers and partnerships with oil and gas companies. The company’s Chief Sustainability Officer Melanie Nakagawa was having a one on one conversation with GeekWire climate reporter Lisa Stiffler at Seattle’s City Hall when protestors carrying signs reading “Microsoft’s AI pollutes” and other slogans began shouting from the audience.

I was there, having just moderated the prior panel on how to finance Washington’s clean energy ambitions. Early on there were some rumblings in the crowd from up front. “Climate leaders don’t build gas pipelines in Moses Lake,” was the first objection I heard clearly. It came shortly after Nakagawa kicked off the conversation by highlighting Microsoft’s partnership with sustainable aviation fuel startup Twelve, which recently opened its first commercial-scale SAF plant in Moses Lake, Washington. The tech giant has supported the project through a strategic investment from its Climate Innovation Fund, as well as an offtake agreement for the fuel that will help offset its emissions from employee travel.

Keep reading...Show less
Adaptation

The East Coast’s New Forever Problem

Smoke is back. Again. It’s time to make a plan.

East coast smoke.
Heatmap Illustration/Getty Images

Heat kills more Americans than any other extreme weather event in the United States. But wildfire smoke — while not strictly “weather” — appears to kill even more. Current excess death estimates put American heat mortality at about 10,000 people per year, or possibly as high as 12,000. Recent studies on wildfire PM 2.5 exposure suggest a mortality of double that: 24,000 all-cause deaths every year.

Needless to say, wildfire smoke is definitely not something you want to inhale if you can avoid it. (And really, you should try to.) But for the 115 million Americans in the Great Lakes and Northeast regions of the country who’ve been exposed to hazardous air from the fires in Ontario and Minnesota this week, there’s a chance that the damage is already done. According to a wildfire smoke mortality estimation tool from Cornell University’s School of Public Health and the Northeast Regional Climate Center, the total mortality for this smoke event could already be as high as 424 people so far, including nearly 100 in Michigan and more than 50 in both New York and Wisconsin.

Keep reading...Show less