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It’s not just what they say over the next few weeks — it’s when they say it.
When the Senate returns from recess next week, it will have Trump’s “One Big, Beautiful Bill” to contend with. There’s no doubt the chamber will try to make changes to the omnibus plan to extend and expand Trump’s tax cuts that passed the House last week. The president even told reporters over the weekend that senators should “make the changes they want to make,” and that some of the changes “maybe are something I’d agree with, to be honest.”
Whether those changes include salvaging the nation’s clean energy tax credits will likely depend on a small group of Republican senators who have criticized the House’s near-total gutting of the subsidies and how much they are willing to fight to undo it.
The bill that passed the House would outright eliminate consumer tax credits for electric vehicles, rooftop solar, and both energy efficiency renovations and new energy-efficient homes. It would also kill the clean hydrogen tax credit at the end of this year and give most zero-carbon power plants, including wind, solar, and geothermal, an end-of-year deadline to start construction, among many other damaging provisions.
To date, at least eight Senate Republicans have spoken out against at least some of these changes, but none of them have tied their vote to the issue. The pressure to stick with your party is “enormous” when your vote is the difference between a bill’s success or failure, Josh Freed, the senior vice president for climate and energy at Third Way, told me. “As we saw in the House, the biggest question is whether any Republican Senator, when push comes to shove, has any willingness to try to stop this bill in order to defend energy tax credits.”
Pay attention to what they say over the next few weeks — and when they say it. It’s one thing to speak out when everything’s still up in the air. It’s quite another to keep talking when votes are on the line.
When the budget fight was first heating up in April, four senators led by Lisa Murkowski of Alaska sent a letter to Majority Leader John Thune warning that repealing the tax credits “would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” The three co-authors were Thom Tillis of North Carolina, John Curtis of Utah, and Jerry Moran of Kansas.
Last week, after the House modified its proposal to phase out the tax credits more aggressively, Murkowski told Politico the Senate was “obviously going to be looking at” the provisions “as well as the final product, and kind of seeing where we start our conversation.” The moderate Republican has a history of supporting environmental policy, and has already broken with her party on at least one vote this year. In February, she was the only Republican who voted in favor of a Democrat-led effort to reinstate 5,500 federal public lands employees that had been fired by the Department of Government Efficiency. (The legislation failed.) Murkowski has also gone her own way to support more efficient energy codes, loans for electric vehicle manufacturers, and the impeachment of President Trump over the January 6 insurrection. But she did not vote for the Inflation Reduction Act in 2022, and if you look at her overall voting record, these occasions of deviating from the party line have been rare.
Tillis, who is a member of the Finance Committee and will therefore be directly involved in writing the tax credit portion of the bill, has made more specific comments. He said he would push to wind down the tax credits more slowly to give businesses more time to prepare. “We have a lot of work that we need to do on the timeline and scope of the production and investment tax credits,” he told Politico in the same article.
While Tillis does not have the same kind of track record as Murkowski, he’s up for re-election next year, and his state has a lot to lose. Some 34 clean energy projects worth $20 billion in investment and tied to more than 17,000 jobs came to North Carolina because of the tax credits, according to the advocacy group Climate Power. Toyota invested in an EV battery manufacturing plant and just started production last month. Several EV charger manufacturers are setting up shop in the state. Siemens Energy is building a factory to make large power transformers, equipment that is essential to expanding the grid and is currently in very tight supply.
Curtis has also continued to rally around the tax credits. He attended a press conference for Fluence, an energy storage company, back in Utah where he told the Deseret News on Tuesday that the House’s changes to the subsidies were “a problem for the future” of energy. “And I think if I have anything to say about it, I’ll make sure that we’re taking into account our energy future,” he said.
When it became clear that the House was considering changes that would effectively repeal the clean energy tax credits in the IRA, Senators Kevin Cramer and John Hoeven of North Dakota, and Shelley Moore Capito of West Virginia chimed in to voice their concerns. Cramer criticized new deadlines the House proposed for ending the tax credits, telling Politico that “it’s too short for truly new technologies. We’ll have to change that. I don’t think it’s fair to treat an emerging technology the same as a 30-year-old technology.”
After the bill passed the House, Jon Husted of Ohio decided it was time to speak up. “You have companies that have already made investments, made commitments,” he told the outlet NOTUS. “Supply chains have been built around them, and we need to phase that out more slowly. I think that they deserve to have at least five years of that credit.” Like Tillis, Husted has an election coming up — and 35 clean energy projects in his state to protect.
The D.C. insiders I spoke to mentioned a few other powerful senators who could play a role in the debate who’ve been mum on the IRA so far. Thune, of South Dakota, has a history of being friendly toward tax credits for wind energy, and was honored by the American Council on Renewable Energy for his support for renewable energy in 2019. Lindsey Graham, chair of the Budget Committee, has also long been a sometimes-ally for climate action in the Senate. His home state of South Carolina has been one of the biggest beneficiaries of the tax credits, with some 43 projects and 22,000 jobs at risk.
Susan Collins also came up repeatedly as one to watch, despite her not saying much of anything publicly about the tax credit changes yet. Collins is up for re-election next year, and while the IRA hasn’t spurred much manufacturing in Maine, it has driven a clean energy boom. The Maine Climate Labor Council, a coalition of unions, estimates there are 145 utility-scale clean energy projects that are either operating or in development that could be eligible for the tax credits. The state has also made a big energy efficiency push in recent years, with the tax credits supporting the expansion of efficiency jobs.
Then there are the potential spoilers. Republicans can only afford to lose three votes on the bill in order to send it back to the House and ultimately to the President’s desk, and the party has already split into a number of factions looking for various tweaks. Some, like Josh Hawley of Missouri, oppose the legislation’s deep cuts to Medicaid. Meanwhile, fiscal conservatives like Ron Johnson of Wisconsin have said they will push to reduce spending even more.
In the House, defenders of the tax credits ultimately cared more about raising the limit on the state and local tax deduction than fighting for clean energy subsidies. We could see a similar dynamic play out in the Senate, where Murkowski and Collins have also expressed concern about cuts to Medicaid. The Senate also can’t afford to change the bill so much that it will lose support in the House, so any changes will have to be surgical. The calculation will be, “What is the smallest thing that the authors of the bill can give these folks to fall back into line so that it is relatively easy to both pass the Senate and then get back through the House?” Freed explained.
Cramer, for his part, is not coming to the rescue for wind and solar, but he may be able to revive support for other forms of clean energy. The North Dakota Senator wrote a letter to Republican leaders in early May railing against the “indefinite entitlement” given to energy sources that depend on the wind and sun, and arguing that the tax credits should prioritize electricity generators on the basis of “reliability,” so as to encourage “geothermal, hydropower, coal and natural gas with carbon capture, and nuclear without excluding wind and solar.”
Capito has barely made a fuss about the energy credits, but she and Cramer will be the ones to watch to see how the Senate deals with the bill’s provision to repeal the Environmental Protection Agency’s greenhouse gas limits for vehicles, as both sit on the Environment and Public Works Committee, of which Capito is the chair. The repeal may not be allowed under the Senate’s rules for budget reconciliation, as it doesn’t have a direct effect on the federal budget. The Senate Parliamentarian hasn’t yet weighed in, but a negative ruling did not stop the two Republicans from leading the fight to revoke waivers granted to California that allowed it to set pollution limits on cars and trucks.
In the end, if any of these Senators wants to take a stand for big changes to the tax credits, they are going to need at least three colleagues to stick it out with them. A more likely outcome, Freed told me, is for them to attempt some smaller adjustments.
“Hopefully they can make it better, but they’re also under enormous pressure to not deviate too significantly from what the House wrote,” he said. “We just need to go in clear-eyed that it's going to be difficult.”
Editor’s note: A previous version of this article misidentified one of the signatories of the letter to Senate Majority Leader John Thune. It’s been corrected. We regret the error.
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Rob and Jesse take stock of all the trends threatening to push up power bills.
In the next few years, the United States is going to see the fastest growth in electricity demand since the 1970s. And that’s only the beginning of the challenges that our power grid will face. When you step back, virtually every trend facing the power system — such as the coming surge in liquified natural gas exports or President Trump’s repeal of wind and solar tax credits — threatens to constrain the supply of new electricity.
On this week’s episode of Shift Key, Rob and Jesse talk about why they’re increasingly worried about a surge in electricity prices. What’s setting us up for an electricity shortfall? What does the recent auction in the country’s largest electricity market tell us about what’s coming? And what would a power shock mean for utility customers, the economy, and decarbonization?
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: None of these trends guarantee that electricity prices will go up, but suffice it to say, by the end of President Trump’s term, we could be exporting one fifth, right? 20%, 25%. And so that is a huge increase, and going to increase demand for U.S. natural gas supplies. How the supply side of U.S. natural gas responds is still an open question.
But even that isn’t the only trend. At the same time, the president’s tariffs, specifically on inputs to production — so copper, steel — have gone into effect. They’ve remained in effect. And what we’ve seen is that for these key ingredients and components to build more grid infrastructure, prices have gone up. I think steel prices have doubled, copper prices have increased. It doesn’t seem like those prices are coming down anytime soon.
And so just the raw ingredients that are required to produce, to expand the grid, and to increase electricity supply and electricity capacity are going to be more expensive in the world we’re living in than in the counterfactual world.
Jesse Jenkins: Yeah, I think if you go further upstream, too, there’s some — partly because of the tariffs, partly because of the uncertain trade environment, the uncertain macroeconomic environment, we’re not exactly seeing the oil and gas industry pouring capital into expanding natural gas supplies.
So, you could argue, and I’ve heard the folks from the American Gas Association argue this, that there’s no problem with expanding LNG exports as long as we expand supply to match that. And there’s some truth to that — except that we expect supply curves to be increasing, meaning the more we produce of something, in order to get incremental production up, we have to spend a little bit more per unit of energy we produce. That’s sort of characteristic of most markets.
So sure, we could increase our supply by 10% or 20%, but that would also require paying a higher cost per trillion cubic feet, or million cubic meters, or whatever unit you want of natural gas we get out of the ground in the U.S. And that alone would put upward pressure on prices. But if the U.S. is also not expanding supply at the same time that we’re expanding exports, then that just straight-up drives prices up.
We would see, basically, a delayed response from the market, from the supply side of the market, to those prices. This is partly why natural gas prices are so volatile. Prices spike — that sends a signal to add supply, but you can’t turn on the spigot overnight. You’ve got to drill new wells, identify them, get drill rigs out there, and open up production, and in some cases even expand pipelines to get that supply to market. All that takes several years. And so there’s a lag time there that often leads to these spikes in gas prices going quite a bit above what you would expect, the kind of marginal supply curve picture alone to reveal.
And I think if you look at the rig counts, declining rig counts, stagnating production, and sort of the secular decline of our conventional gas resources and oil resources, which are all on decline curves. As we pump more oil and gas out of the ground, the pressure falls and we get less and less from those wells. All that points to the potential for a relatively constrained supply of natural gas in the near term exactly at the same time that we’re ramping up LNG exports.
Mentioned:
Jesse on The Ezra Klein Show
From Rob: The Electricity Affordability Crisis Is Coming
U.S. power use to reach record highs in 2025 and 2026, per EIA
Why the EIA expects natural gas prices to rise
The Messy Truth of America’s Natural Gas Exports
Governor Josh Shapiro’s legal action to constrain power prices
Jesse’s upshift; Rob’s downshift.
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.
A conversation with Harvard Law School’s Jody Freeman about life after the endangerment finding.
The Environmental Protection Agency unveiled a proposal on Tuesday to reverse its own conclusion that greenhouse gases are a threat to public health and welfare. Known as the “endangerment finding,” this 2009 determination initially compelled the agency to regulate carbon emissions from vehicles under the Clean Air Act. But the agency has since used it as the basis for many of its efforts to tackle climate change, including emissions limits on power plants, oil and gas operations, and aviation.
If the reversal is finalized as written — and survives court challenges — the EPA will no longer have the legal authority to regulate carbon dioxide from the tailpipes of cars or trucks, invalidating the vehicle standards issued by the Biden administration last year.
While other greenhouse gas regulations wouldn’t automatically disappear, the agency could easily use the same arguments to repeal them. Indeed, the agency said that it has already initiated or intends to initiate “separate rulemakings that will address any overlapping issues” related to other sources of greenhouse gas emissions, such as power plants.
EPA’s primary justification for reversing course, detailed in a 302-page document, is that the Clean Air Act is designed to target air pollution that endangers public health “through local or regional exposure,” and therefore that it cannot be used to rein in greenhouse gases “based on global climate change concerns.” Richard Revesz, a professor of law at New York University and former Biden official, told me this was “breathtakingly broad,” and said that it was “inconsistent with 55 years of regulation under the Clean Air Act. That limitation was never understood to be there.”
The EPA also put forth a host of other legal and scientific arguments, “basically throwing the kitchen sink at this issue,” Revesz said. The proposal asserts that the EPA should have considered the downstream costs of making the finding, as well as weighed the potential benefits of a warmer climate. In a section entitled “Alternative Rationale for Proposed Rescission,” the agency attempts to poke holes in the scientific evidence that climate change is a threat to public health, concluding that the research is uncertain. It cites a report from the Department of Energy, also released Tuesday, that says the warming caused by greenhouse gases is not as bad for the economy as people once thought, and that regulating such emissions will have “undetectably small direct impacts on the global climate.”
The proposal cherry-picks data and misinterprets scientific findings. For example, it says that recent evidence suggests that the temperature projections EPA used to make the endangerment finding were “unduly pessimistic,” citing a 2020 paper by climate scientist Zeke Hausfather. But Hausfather has already posted on social media that this is wrong — his paper supported the EPA’s 2009 temperature projections.
My inbox is currently full of statements from legal experts, scientists, and activists adamant that the administration’s arguments are baseless. The agency will be taking public comments on the proposal through September 21, and hold at least two public hearings on August 19 and 20. To get a sense of what to expect over the coming months and years as a result of this move, I called up Jody Freeman, the director of the Environmental and Energy Law Program at Harvard and a former White House counsel for the Obama administration. Our conversation has been lightly edited for clarity.
What will EPA have to do in order to finalize this proposal?
What they do is put it out for public comment. There’ll be a huge reaction to this, and so they’ll have a very big set of comments that they’re going to have to go through, which then will take them several months at a minimum. And they’re not necessarily going to be in a rush, right? At a minimum, we’re going to be getting into 2026 before we’d see a final rule. And then the lawsuits would start.
Other than just responding to the public comments, are there certain things that they would have to demonstrate to finalize this determination?
The normal process is you have to respond to the most serious and relevant comments. So if the comment says, The claims you’re making about the science are wrong, they’d have to respond to that. The normal course is they come back with a final rule that explains why they’re doing what they’re doing, and why they either didn’t agree with the comments, or they do agree with some of them, and they’ve adapted the proposal.
And as you said, then the lawsuits would start.
It doesn’t take effect for 30 days after it’s final. But yes, at that point, they get sued. These rules go to the D.C. Circuit Court of Appeals because that’s what the Clean Air Act says, and usually it would take about a year or so for a D.C. Circuit decision to happen. So now you’re in 2027. You can see the timeline on this stretching out. And if you ultimately think this could go to the Supreme Court, you can imagine that’s another year away. So basically, for the rest of President Trump’s term, you really shouldn’t expect to see enforcement or action on federal climate rules.
Even if the EPA hadn’t taken this step, wouldn’t that still have been the case, since the Trump administration is fighting the power plant rules and the vehicle emissions rules?
Well, you could see them dragging their feet enforcing these standards. Of course, they would get sued if they weren’t enforcing vehicle emission standards against the auto industry. There would be efforts to force them to enforce. But it’s more serious and more long term damage for them to try to rescind the underlying endangerment finding because depending on what the Supreme Court does with that, it could knock out a future administration from trying to bring it back. Now that would be the nuclear option. That would be their best case scenario. I don’t think that’s likely, but it’s possible.
At a minimum, let’s say they don’t win everything, but the court says they can do this for now — they have the discretion, the flexibility not to make this finding. Another administration can come back and make it and restore the rules. But that would take, again, several years. So even if they lose, they win.
If they do finalize this, would the other lawsuits that are going on around the power plant rules and the vehicle emissions rules automatically be dropped?
There are a few lawsuits that were challenging the Biden-era rules, but the Trump administration asked the courts to hold them in abeyance because they said, We’re going to go revisit all those rules and replace them. So those lawsuits aren’t moving forward anyway at the moment. It would probably be true that the administration, in taking this action, wants to set up a situation where it can go back into court and say, Well, now all these challenges are moot. We don’t have any authority to regulate anyway. But for now, they’re all on hold.
Are there other regulations this will affect besides those for vehicles and power plants?
The methane rule for oil and gas facilities is more of a question mark because they don’t seem to be announcing they’ll eliminate it. It’s possible they push off compliance. It’s possible they make the rule weaker. But there are a couple reasons why they might not rescind that.
One is that there’s a very complicated history of this rule. Congress disapproved of a weaker methane rule the first time around in the Trump administration, and because of that congressional action, there’s a barrier there. They can’t easily just rescind that methane rule. They’ve got more legal hurdles to jump through.
The other reason is there are some good reasons to regulate methane that have to do with ozone pollution and pollution that isn’t just about climate change. And the third reason is the oil and gas industry might actually want a methane rule. They might want a weak one, but they might want one federally. So that’s a bit separate, and you have to be on the lookout for them handling methane differently.
Could a future EPA just develop stronger pollution standards for other pollutants that would indirectly reduce greenhouse gas emissions?
It’s true that when you set toxics standards, for example, for power plants to control their toxic pollution, a side benefit is those power plants become more efficient, and that means they control their carbon pollution, too. But this is more around the margins. This is not taking big bites out of power plant greenhouse gas emissions or big bites out of car and truck emissions. It would be a much, much, much weaker version of what you can do with the endangerment finding.
So if the endangerment finding is reversed, is the only path for future regulation for Congress to explicitly tell EPA that it must regulate greenhouse gases?
That’s one option, but it may not necessarily be the only one. It depends on where this lands after it moves through the courts. If the Supreme Court said, You, Trump EPA, you can rescind this finding, but another administration could bring it back, then another administration can say, Well, we think the science is clear, and we’re going to make the finding again and issue these rules. So it all depends on how far the court goes. If it’s going to agree with EPA, how much will it agree? But if the court were to essentially say, this agency has no authority now and forever to make this finding, well then yes, you need new law.
Will the overturning of the Chevron doctrine also play into this?
That’s another interesting one. So what they have to do now is argue that greenhouse gases might be pollutants, but we don’t have to regulate them. And when they argue that we don’t have to regulate them, they’re going to be asking for a lot of deference. And so in that sense, they’re kind of asking for what Chevron used to give you — deference. But they don’t have Chevron anymore, so they’re going to have to say to the court, You should agree with our reading of this law. This is the best reading of this law, that we don’t have to regulate. They no longer can just say, you ought to defer to us under Chevron.
In that scenario, is it left to the court to decide?
It’s left to the court to say, your reading of the law is right. You have flexibility here, and you can decide you don’t need to regulate. The court would have to agree with their reading of the Clean Air Act.
Isn’t the endangerment finding more of a scientific question than a legal one?
Well, in making that scientific decision about what constitutes a danger to human health, there’s a lot of judgment in there. How do we interpret the science? Is it okay for us to say, well, there are a lot of good things that happen because of climate change? This is what they might do, right? They might say, The EPA, long ago, they ignored all the good stuff about climate change, and we think that’s really important. They might say some ludicrous stuff that leading scientists would think is completely wrong. But there’s some discretion in there about how you count the science and what you weigh, and they’re going to try to get the court to agree that they have a lot of flexibility in what method they use. That means the court will have to agree with them on how they read the law.
So they might say, We have flexibility to interpret the science, and the court might say, No, you don’t, the science is really clear. Then they might say, Okay, well even so, the U.S. contribution is so infinitesimally small that we don’t consider it a contribution to the problem. Now there, the court might say, Okay, you have discretion there. So it’s a little bit of a moving target, where at every opportunity they’re going to say, We have flexibility, don’t you agree?, and hope the court bites on one of those.
More than $30 billion of clean energy investments are now on ice since Trump took office, according to new data from Wellesley College’s Big Green Machine.
America’s EV factory building boom is beginning to falter.
Since President Donald Trump took office, at least 34 factories or mineral refineries — totaling more than $30 billion in investment — have been paused, delayed, or canceled, according to a new report from researchers at Wellesley College who track the country’s clean energy manufacturing base.
“When you look at the projects that are slowing down, it’s all up and down the supply chain,” Jay Turner, an environmental studies professor who leads the database, told me.
Electric vehicle manufacturing projects are now being delayed or canceled at six times the rate that they were during the same period last year, he said.
The database, called the Big Green Machine, has data on EV and mineral factory activity going back to 2010, and has been actively tracking investment in the EV supply chain since 2022.
The news is not entirely bleak for the EV buildout, however. Another 68 projects have progressed in the past six months, according to Turner’s data. Those projects represent $24 billion in investment and more than 33,000 jobs.
At the same time, more than two dozen new projects have been announced in the past six months, but they are of a much smaller scale, the report finds. Taken together, the projects in this new wave add up to only $3 billion in investment — one-tenth of the $30 billion in projects that have been paused, delayed, or cancelled.
The Big Green Machine
The new data likely does not capture recent setbacks for the EV industry. Earlier this month, President Trump signed Republicans’ budget reconciliation bill, which will terminate all tax credits for buying or leasing an electric vehicle on September 30.
Turner told me that the slowdown was the predictable outcome of the Trump administration’s turn away from electric cars.
“In some ways, it’s exactly what we expected,” he said. “As concerns about the Inflation Reduction Act and bipartisan infrastructure law began last fall, we started to see projects slowing down. Since Trump was elected, those closures, cancellations, and delays have just ballooned.”
Particularly hard hit are projects located in distressed or fossil-fuel-dependent communities, as defined by the terms set out in the Inflation Reduction Act, he added. Facilities that depended on some kind of federal support or loan guarantee have also been especially likely to pause, he added.
The slowdowns have struck across the EV supply chain. Some battery factories have switched from producing lithium ion cells for vehicles to making large-scale batteries for the power grid. The new budget law, called the One Big Beautiful Bill Act, maintained tax incentives for installing grid-scale battery storage.
Mineral producers have also been affected. Li-Cycle paused work on mineral recycling plants in April, Turner said. A Canadian rare earth processing facility — one of the few such factories in North America — scaled back its ambitions this month. (“The data in our report is just the U.S., but when you add in Canada it’s more shocking how sharp the downturn has been,” Turner said.)
That follows other delays from last year. The Chicago-based company Anovion has continued to pause work on an $800 million facility in southwest Georgia that was slated to make synthetic graphite, which is essential for lithium ion battery anodes.
Last year, the chemicals company Albemarle delayed $1.3 billion in plans to build the country’s largest lithium refinery in South Carolina. “The economics just aren't there to build that plant,” Kent Masters, Albemarle’s CEO, told Reuters in May. China controls roughly three-quarters of the world’s lithium and synthetic graphite supply chains.
Despite its antagonism toward electric cars, the Trump administration has sought to prioritize some mineral projects. Earlier this month, the Pentagon announced a complex deal to invest in — and guarantee a buyer for the output of — a rare earths mine and processing facility on the California-Nevada border.
Whatever the cause of the slowdown, it isn’t limited to just electric cars. Total private manufacturing investment in the United States has leveled off and slightly fallen since October 2024.