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At a recent rally for Donald Trump, Tesla CEO Elon Musk and Howard Lutnick, the head of Wall Street firm Cantor Fitzgerald, took the stage together and contemplated the federal budget. “How much do you think we can rip out of this wasted $6.5 trillion Harris-Biden budget?” Lutnick asked. “I think we could do at least $2 trillion,” Musk said, to the cheers of the crowd. “Your money is being wasted, and the Department of Government Efficiency is going to fix that.”
This idea — that there is $2 trillion of “waste” in the yearly federal budget that could be eliminated if only someone like Musk were given the power to do it — exemplifies his orientation toward government. It’s brash, shockingly ambitious, contemptuous of what most Americans need, and fed by Musk’s combination of arrogance and ignorance. And it will never happen — not because the deep state will prevent it, but because Musk, while brilliant in some ways, is not smart enough to know what he doesn’t know.
Tempting as it is to take seriously Trump’s proposal for Musk to head up a new cabinet department or a commission on government efficiency (it has been described both ways) if Trump becomes president, the idea that Musk will spend his days in a government building in Washington poring over budget details is laughable. Plus, we already have a department of efficiency; it’s called the Government Accountability Office, and it does excellent work. But Musk does stand to have extraordinary influence in a Trump administration. So when it comes to policy, what does he actually want?
To start, let’s do some math. Without going too deep into it, if you add up Social Security, Medicare, military spending, veterans’ benefits, and interest on debt in the fiscal 2024 budget — none of which will be cut — you get $4.4 trillion. That leaves $2.25 trillion, of which Musk thinks he could cut $2 trillion. That, in turn, would mean eliminating almost everything the federal government does, from controlling the border to issuing passports to running national parks to medical research to federal prisons to food inspections to … you get the idea.
Also in that $2.25 trillion is, of course, the money the federal government spends on the energy transition, something Musk doesn’t seem to have much enthusiasm for. It isn’t that he has embraced Trump’s climate denialism, but he also doesn’t talk much about government’s role in reducing emissions.
This represents a shift: When Joe Biden took office, Musk said, “I’m super fired up that the new administration is focused on climate.” Biden followed through on his pledges in both regulation and legislation, but Musk was less enthusiastic as time went on, and eventually embraced Trump wholeheartedly, despite the latter’s promise to undo essentially everything Biden has accomplished on climate change.
Tesla has been quietly lobbying to maintain subsidies for electric vehicles and in favor of regulations that could phase out the production of internal combustion cars, even as the candidate for whom Musk is spending tens of millions of dollars promises to eliminate those policies. But he’s not trying to change Trump’s mind, at least not publicly. On an earnings call with shareholders earlier this year, Musk said that if Trump keeps his promise to repeal the Inflation Reduction Act, it would hurt Tesla “slightly,” but “long term, it probably actually helps,” since it would be “devastating for our competitors.”
In other words, Musk may want to address climate change, but that goal will always take a back seat to what’s good for Elon Musk — and what’s good for Musk just happens to be good policy, or so he seems to think. This is an occupational hazard for billionaires, who are inevitably surrounded by sycophants eager to tell them that any brain fart that comes tumbling out of their mouths is the height of wisdom.
This tendency shows up in Musk’s views on just about everything else, too. Like many a dilettante — albeit one with his own social media platform and 200 million followers there — Musk occasionally dips his thinking-emoji into policy issues without bothering to learn about what they actually entail, like his warning that Social Security is all but doomed. He worries a great deal about underpopulation, which few experts think is really a problem; his solution seems to be to distribute his own sperm as widely as possible.
But the most likely places where Musk will exercise influence in a second Trump presidency are not his grand notions of a remade American society, but rather in his own relationship with government. That largely means two things: He would like government to give him more money, and he would also like it to get out of his way.
On the first point, Musk is already a significant beneficiary of federal contracts. As The New York Times recently documented, Musk’s “companies were promised $3 billion across nearly 100 different contracts last year with 17 federal agencies.” How handy it would be if he were in charge of rejiggering federal spending! But on the flip side, “His companies have been targeted in at least 20 recent investigations or reviews, including over the safety of his Tesla cars and the environmental damage caused by his rockets.” In a second Trump term — especially one in which the architects of Project 2025 will no doubt be busily reconfiguring the government to place nearly absolute power in the hands of the president — Trump could easily repay the nine figures Musk has spent to get him elected by making all those investigations disappear.
Musk is also counting on the courts to make it easier for him to treat his workers however he likes. He has repeatedly clashed with the National Labor Relations Board, and SpaceX is suing to effectively have the entire NLRB declared unconstitutional. (Other anti-union companies including Amazon and Starbucks are seeking the same outcome.) Trump has publicly praised Musk for firing striking workers, which is illegal; and while it appears Trump was referring to Musk firing most of the staff of Twitter, who were not actually on strike, their shared contempt for collective bargaining and worker rights is amply clear.
That Musk is an egomaniac is barely disputable, so it’s not surprising that he believes government will either be a tool in his hands or the destroyer of worlds, with no in-between. “While I have many concerns about a potential Kamala regime,” he recently tweeted, “the bureaucracy currently choking America to death is guaranteed to grow under a Democratic Party administration. This would destroy the Mars program and doom humanity.” Apparently, only by giving Musk whatever he wants can we avoid extinction.
The truth is that if Harris wins, Elon Musk will be just fine, and so will humanity. The big difference will be that Musk won’t be able to pick up the phone and tell the president what to do. But I’m sure he will react to that with all the maturity and thoughtfulness we’ve come to expect from him.
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The Loan Programs Office is good for more than just nuclear funding.
That China has a whip hand over the rare earths mining and refining industry is one of the few things Washington can agree on.
That’s why Alex Jacquez, who worked on industrial policy for Joe Biden’s National Economic Council, found it “astounding”when he read in the Washington Post this week that the White House was trying to figure out on the fly what to do about China restricting exports of rare earth metals in response to President Trump’s massive tariffs on the country’s imports.
Rare earth metals have a wide variety of applications, including for magnets in medical technology, defense, and energy productssuch as wind turbines and electric motors.
Jacquez told me there has been “years of work, including by the first Trump administration, that has pointed to this exact case as the worst-case scenario that could happen in an escalation with China.” It stands to reason, then, that experienced policymakers in the Trump administration might have been mindful of forestalling this when developing their tariff plan. But apparently not.
“The lines of attack here are numerous,” Jacquez said. “The fact that the National Economic Council and others are apparently just thinking about this for the first time is pretty shocking.”
And that’s not the only thing the Trump administration is doing that could hamper American access to rare earths and critical minerals.
Though China still effectively controls the global pipeline for most critical minerals (a broader category that includes rare earths as well as more commonly known metals and minerals such as lithium and cobalt), the U.S. has been at work for at least the past five years developing its own domestic supply chain. Much of that work has fallen to the Department of Energy, whose Loan Programs Office has funded mining and processing facilities, and whose Office of Manufacturing and Energy Supply Chains hasfunded and overseen demonstration projects for rare earths and critical minerals mining and refining.
The LPO is in line for dramatic cuts, as Heatmap has reported. So, too, are other departments working on rare earths, including the Office of Manufacturing and Energy Supply Chains. In its zeal to slash the federal government, the Trump administration may have to start from scratch in its efforts to build up a rare earths supply chain.
The Department of Energy did not reply to a request for comment.
This vulnerability to China has been well known in Washington for years, including by the first Trump administration.
“Our dependence on one country, the People's Republic of China (China), for multiple critical minerals is particularly concerning,” then-President Trump said in a 2020 executive order declaring a “national emergency” to deal with “our Nation's undue reliance on critical minerals.” At around the same time, the Loan Programs Office issued guidance “stating a preference for projects related to critical mineral” for applicants for the office’s funding, noting that “80 percent of its rare earth elements directly from China.” Using the Defense Production Act, the Trump administration also issued a grant to the company operating America's sole rare earth mine, MP Materials, to help fund a processing facility at the site of its California mine.
The Biden administration’s work on rare earths and critical minerals was almost entirely consistent with its predecessor’s, just at a greater scale and more focused on energy. About a month after taking office, President Bidenissued an executive order calling for, among other things, a Defense Department report “identifying risks in the supply chain for critical minerals and other identified strategic materials, including rare earth elements.”
Then as part of the Inflation Reduction Act in 2022, the Biden administration increased funding for LPO, which supported a number of critical minerals projects. It also funneled more money into MP Materials — including a $35 million contract from the Department of Defense in 2022 for the California project. In 2024, it awarded the company a competitive tax credit worth $58.5 million to help finance construction of its neodymium-iron-boron magnet factory in Texas. That facilitybegan commercial operation earlier this year.
The finished magnets will be bought by General Motors for its electric vehicles. But even operating at full capacity, it won’t be able to do much to replace China’s production. The MP Metals facility is projected to produce 1,000 tons of the magnets per year.China produced 138,000 tons of NdFeB magnets in 2018.
The Trump administration is not averse to direct financial support for mining and minerals projects, but they seem to want to do it a different way. Secretary of the Interior Doug Burgum has proposed using a sovereign wealth fund to invest in critical mineral mines. There is one big problem with that plan, however: the U.S. doesn’t have one (for the moment, at least).
“LPO can invest in mining projects now,” Jacquez told me. “Cutting 60% of their staff and the experts who work on this is not going to give certainty to the business community if they’re looking to invest in a mine that needs some government backstop.”
And while the fate of the Inflation Reduction Act remains very much in doubt, the subsidies it provided for electric vehicles, solar, and wind, along with domestic content requirements have been a major source of demand for critical minerals mining and refining projects in the United States.
“It’s not something we’re going to solve overnight,” Jacquez said. “But in the midst of a maximalist trade with China, it is something we will have to deal with on an overnight basis, unless and until there’s some kind of de-escalation or agreement.”
A conversation with VDE Americas CEO Brian Grenko.
This week’s Q&A is about hail. Last week, we explained how and why hail storm damage in Texas may have helped galvanize opposition to renewable energy there. So I decided to reach out to Brian Grenko, CEO of renewables engineering advisory firm VDE Americas, to talk about how developers can make sure their projects are not only resistant to hail but also prevent that sort of pushback.
The following conversation has been lightly edited for clarity.
Hiya Brian. So why’d you get into the hail issue?
Obviously solar panels are made with glass that can allow the sunlight to come through. People have to remember that when you install a project, you’re financing it for 35 to 40 years. While the odds of you getting significant hail in California or Arizona are low, it happens a lot throughout the country. And if you think about some of these large projects, they may be in the middle of nowhere, but they are taking hundreds if not thousands of acres of land in some cases. So the chances of them encountering large hail over that lifespan is pretty significant.
We partnered with one of the country’s foremost experts on hail and developed a really interesting technology that can digest radar data and tell folks if they’re developing a project what the [likelihood] will be if there’s significant hail.
Solar panels can withstand one-inch hail – a golfball size – but once you get over two inches, that’s when hail starts breaking solar panels. So it’s important to understand, first and foremost, if you’re developing a project, you need to know the frequency of those events. Once you know that, you need to start thinking about how to design a system to mitigate that risk.
The government agencies that look over land use, how do they handle this particular issue? Are there regulations in place to deal with hail risk?
The regulatory aspects still to consider are about land use. There are authorities with jurisdiction at the federal, state, and local level. Usually, it starts with the local level and with a use permit – a conditional use permit. The developer goes in front of the township or the city or the county, whoever has jurisdiction of wherever the property is going to go. That’s where it gets political.
To answer your question about hail, I don’t know if any of the [authority having jurisdictions] really care about hail. There are folks out there that don’t like solar because it’s an eyesore. I respect that – I don’t agree with that, per se, but I understand and appreciate it. There’s folks with an agenda that just don’t want solar.
So okay, how can developers approach hail risk in a way that makes communities more comfortable?
The bad news is that solar panels use a lot of glass. They take up a lot of land. If you have hail dropping from the sky, that’s a risk.
The good news is that you can design a system to be resilient to that. Even in places like Texas, where you get large hail, preparing can mean the difference between a project that is destroyed and a project that isn’t. We did a case study about a project in the East Texas area called Fighting Jays that had catastrophic damage. We’re very familiar with the area, we work with a lot of clients, and we found three other projects within a five-mile radius that all had minimal damage. That simple decision [to be ready for when storms hit] can make the complete difference.
And more of the week’s big fights around renewable energy.
1. Long Island, New York – We saw the face of the resistance to the war on renewable energy in the Big Apple this week, as protestors rallied in support of offshore wind for a change.
2. Elsewhere on Long Island – The city of Glen Cove is on the verge of being the next New York City-area community with a battery storage ban, discussing this week whether to ban BESS for at least one year amid fire fears.
3. Garrett County, Maryland – Fight readers tell me they’d like to hear a piece of good news for once, so here’s this: A 300-megawatt solar project proposed by REV Solar in rural Maryland appears to be moving forward without a hitch.
4. Stark County, Ohio – The Ohio Public Siting Board rejected Samsung C&T’s Stark Solar project, citing “consistent opposition to the project from each of the local government entities and their impacted constituents.”
5. Ingham County, Michigan – GOP lawmakers in the Michigan State Capitol are advancing legislation to undo the state’s permitting primacy law, which allows developers to evade municipalities that deny projects on unreasonable grounds. It’s unlikely the legislation will become law.
6. Churchill County, Nevada – Commissioners have upheld the special use permit for the Redwood Materials battery storage project we told you about last week.