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Who gets to block an energy project?
One of the longest-running environmental controversies of Joe Biden’s presidency is now over, but it presages much bigger controversies to come.
Last week, the Supreme Court cleared the way for the Mountain Valley Pipeline, a 303-mile natural gas project that will link West Virginia’s booming gas fields to the East Coast’s mainline gas infrastructure. The justices lifted a halt on the project that had been imposed by a lower court. In doing so, they all but guaranteed that the project will get built.
But even if the Mountain Valley Pipeline case is over, the issues and questions at the center of the dispute are not. And they suggest that a profound and unanswered tension sits at the heart of environmental and climate law — one that concerns not only conservation, but the very nature of American democracy as well.
While environmental advocates have fought the pipeline for years, it only became a national issue when Senator Joe Manchin of West Virginia began to champion the pipeline last year. He insisted that the Biden administration back the project in exchange for his support of Biden’s flagship climate and spending bill, which became the Inflation Reduction Act.
After several failed efforts, Manchin finally found a way to help the pipeline this spring, when he got Congress to automatically approve the project as part of the bipartisan deal to raise the debt ceiling. The Fiscal Responsibility Act of 2023 — better known as the debt-ceiling deal — ordered federal agencies to issue every outstanding permit necessary for the pipeline’s construction. It declared that those permits could not be challenged in court.
Furthermore, it said that legal challenges to this accelerated decision could not be heard by the Fourth Circuit, the appeals court with jurisdiction over West Virginia, but only by the D.C. Circuit Court of Appeals. The D.C. Circuit is often described as the country’s second most powerful court; more saliently, fewer of its judges were appointed by Democratic presidents.
And that seemed like the end of the story. But in June, the Sierra Club and other environmentalist groups sued to block the Mountain Valley Pipeline again. They now alleged that Congress had violated a key Constitutional idea — the separation of powers — by rushing to approve the pipeline.
Specifically, they argued that the debt-ceiling deal violated a 151-year-old case called United States v. Klein, or just Klein for short. In that case, which revolved around several hundred cotton bales seized in Mississippi during the Civil War, the Supreme Court ruled that Congress could not pass a law that forced a court to rule on a case in a certain way. In other words, Congress may not pass a law that says: If Smith sues Jones, Smith wins.
The Sierra Club and others argue that Congress violated Klein when it automatically approved the pipeline in the debt-ceiling bill. The pipeline had been mired in permit-related lawsuits in the Fourth Circuit for years; its construction has led to dozens of alleged water-quality violations. So when Congress granted those permit approvals anyway, it was essentially doing an end-run around the appeals court. That was a clear-cut violation of Klein, environmentalists argue.
Is it so simple? In a brief supporting the pipeline, Laborer’s International Union of America argues that Congress acted entirely within its authority. Congress has essentially unlimited authority to authorize agency actions and revise court jurisdiction, the union says.
But here is the rub. To make their case, environmentalists appealed to Chief Justice John Roberts — specifically a dissent he wrote back in 2018.
That year, the Court declined to strike down an Obama-era law that told courts to “promptly dismiss” any lawsuits challenging a tribal casino in Michigan. But the majority could not agree about why, and three conservative justices — led by Roberts — dissented, arguing that the Obama-era law violated Klein because it forced the Court’s hand on a lawsuit, even if the lawsuit in question had not been filed yet.
In their case against the pipeline, the environmentalists urged the Court to adopt the logic of that dissent. And that may reveal something surprising about the tack taken by environmental groups here: Their arguments draw from what has increasingly come to seem like a conservative approach to Constitutional law. And while there are understandable reasons for this, it shows that the environmental movement may be facing a deeper crisis than it realizes. The questions now confronting the climate movement go to the center of questions over American democracy.
Above all: Who gets to rule in the American republic, and who gets to determine what is and isn’t constitutional? This is a live debate, and it goes to the center of contemporary fights over permitting reform. It is worth dwelling on for a moment.
The standard historical line is the Supreme Court, above all, decides what is and isn’t Constitutional — a power that it has claimed for itself since Marbury v. Madison in 1803.
But there is another tradition in American life, which holds that the American people, not the justices, are the final arbiter of constitutionality. President Abraham Lincoln backed this view in the run-up to the Civil War. And so did the men who created the Klein crisis.
Klein did not come out of nowhere. The case emerged during one of the most wrenching moments in our Constitutional history, when radicals and moderates battled over the meaning of the Civil War in the wake of Lincoln’s assassination.
On one side, Radical Republicans in Congress wanted to enshrine equality at the heart of the American republic, protecting the economic and civil freedoms of newly emancipated Black people and harshly punishing their traitorous Southern enslavers. On the other, moderate Republicans and Democrats sought a more reconciliatory approach to Reconstruction, welcoming former Confederate elites back into American life.
This is the background of Klein. When Congress passed the 1870 law that provoked the Klein lawsuit, it sought to prevent ex-Confederates from claiming federal money as compensation for their losses. It wanted to block a man named John Klein from being paid for cotton bales seized from his client during the Civil War, specifically because Congress believed that his client had been part of the rebellion and therefore did not deserve federal funds.
But that was part of a much broader fight between Congress, the White House, and the Supreme Court, in which radical Republican lawmakers sought to assert the people’s — and therefore Congress’s — authority to govern the other branches. Since the people created the Constitution, radicals argued, then the people had final authority over the courts that it made. “It would be a sad day for American institutions and for the sacred cause of Republican Governments if any tribunal in this land, created by the will of the people, was above and superior to the people’s power,” Representative John Bingham, an Ohio radical and the leading author of the Fourteenth Amendment, said.
That theory was revived 60 years later, when President Franklin D. Roosevelt moved to rein in a Supreme Court that kept striking down his New Deal programs. He proposed packing the court with more favorable justices, arguing that the three branches of the Constitution were like a team of three horses pulling a wagon. “It is the American people themselves who are in the driver’s seat,” he said, and therefore the people who should determine the make-up of the Court.
Although Roosevelt’s packing scheme failed, it resulted in one of the Court’s more conservative justices switching to become a more reliably pro-New Deal vote. And since Democrats controlled the Senate for all but four of the following 43 years, the Court lurched in a more liberal direction through much of the 20th century. By the 1990s, the judiciary was the favored branch of establishment liberalism, an august arbiter of civil protections as enacted in Brown v. Board of Education, Loving v. Virginia, and Roe v. Wade.
No longer. Faced with the most conservative Supreme Court in 90 years, progressives have rediscovered this forgotten controversy in the Constitution. Congress, they argue, has the power and duty to regulate the Supreme Court when it strays too far from popular will. The text of the Constitution allows Congress to set exceptions to the Court’s “appellate jurisdiction,” meaning that it could simply prevent the Court from ruling on a given topic, such as abortion or climate change.
Progressives frame this claim in small-d democratic terms, framing the Supreme Court and the electoral college as institutions designed to rob majorities of the ability to govern. “As recent events have made clear, powerful reactionaries are waging a successful war against American democracy using the countermajoritarian institutions of the American political system,” the liberal columnist Jamele Bouie wrote in The New York Times last year. But “the Constitution gives our elected officials the power to restrain a lawless Supreme Court,” he added, even if it might “spark a constitutional crisis over the power and authority of Congress.”
Conservatives have noticed this push. Last week, Justice Samuel Alito argued that Congress has no ability whatsoever to set limits on the Court’s behavior. “I know this is a controversial view, but I’m willing to say it,” Alito told The Wall Street Journal. “No provision in the Constitution gives them the authority to regulate the Supreme Court — period.”
Although Alito is speaking in broader terms, his enmity gets at the simmering Constitutional dilemma at the heart of Klein, the precedent that environmentalists are citing to try to block the Mountain Valley Pipeline. When Congress approved the pipeline earlier this year, was it expressing a democratic view that must be respected by the court system (even if climate activists don’t like it)? Or was Congress instead running roughshod over due process and violating the separation of powers?
These are not academic questions. Although Congress intervened to approve a fossil-fuel pipeline this year, it could just as easily intervene to approve clean-energy infrastructure in the future. Across the country, renewable projects and long-distance electricity transmission have been slowed down by environmental lawsuits and permitting fights; even the Sierra Club has recognized the “NIMBY threat to renewable energy.” If lawsuits were to imperil, say, a major offshore wind project, should a Democratic Congress resolve that fight by granting permit approvals by fiat — or should environmentalists reject that intervention, too, as illegitimate? Under the logic of the anti-pipeline lawsuit, granting permit approvals to any stalled energy project — whether fossil or clean — would violate Klein.
These questions matter because there is no near-term political situation in which Congress and the Supreme Court will only do good things for the climate and not bad things. But there is no way to judge them without making a political assessment: Is Congress likely to expedite a renewable project? Given Democrats’ zeal for tackling climate change, such a thing doesn’t seem ludicrous to me. But if environmentalists had won their case against the pipeline, then lawmakers’ hands would be tied in the future: They could not approve a wind farm, solar plant, or nuclear reactor in the same way that they tried to rubber-stamp the MVP. They would have to wait, instead, for the legal process to run its course.
We should be clear, here, that just because the Sierra Club and others pursued a conservative line of argument in this case does not mean that they are themselves reactionary. Their job — unlike that of politicians or pundits — is to win lawsuits. They have to fight on the terrain that politics has given them, and since that terrain tilts to the right today, they are sometimes going to advance right-leaning arguments.
But the broader environmental movement, which emerged in the 1950s and '60s as a cross-partisan, mass democratic campaign, should be careful not to confuse its goals with those of the elite legal movement. The question hangs over climate policy, permitting reform, and the entire challenge of decarbonization: How should climate advocates balance the goals of decarbonization and democracy? What does democracy even mean for the environment, a term that encompasses the water quality of a stream and the carbon intensity of the atmosphere? In the 21st century, how should Americans exert their will to reshape the land, protect the environment, and power their society?
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The EV-maker is now a culture war totem, plus some AI.
During Alan Greenspan’s decade-plus run leading the Federal Reserve, investors and the financial media were convinced that there was a “Greenspan put” underlying the stock market. The basic idea was that if the markets fell too much or too sharply, the Fed would intervene and put a floor on prices analogous to a “put” option on a stock, which allows an investor to sell a stock at a specific price, even if it’s currently selling for less. The existence of this put — which was, to be clear, never a stated policy — was thought to push stock prices up, as it gave investors more confidence that their assets could only fall so far.
While current Fed Chair Jerome Powell would be loath to comment on a specific volatile security, we may be seeing the emergence of a kind of sociopolitical put for Tesla, one coming from the White House and conservative media instead of the Federal Reserve.
The company’s high-flying stock shed over $100 billion of value on Monday, falling around 15% and leaving the price down around 50% from its previous all-time high. While the market as a whole also swooned, especially high-value technology companies like Nvidia and Meta, Tesla was the worst hit. Analysts attributed the particularly steep fall to concerns that CEO Elon Musk was spending too much time in Washington, and that the politicization of the brand had made it toxic to buyers in Europe and among liberals in the United States.
Then the cavalry came in. Sean Hannity told his Fox News audience that he had bought a Model S, while President Donald Trump posted on Truth Social that “I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.” By this afternoon, Trump had turned the White House lawn into a sales floor for Musk’s electric vehicles. Tesla shares closed the day up almost 4%, while the market overall closed down after Trump and his advisors’ furious whiplash policy pronouncements on tariffs.
Whether the Tesla put succeeds remains to be seen. The stock is still well, well below its all-time highs, but it may confirm a new way to understand Tesla — not as a company that sells electric vehicles to people concerned about climate change, but rather as a conservative culture war totem that has also made sizable investments in artificial intelligence and robotics.
When Musk bought Twitter and devoted more of his time, energy, money, and public pronouncements to right wing politics, some observers thought that maybe he could lift the dreadful image of electric vehicles among Trump voters. But when Pew did a survey on public attitudes towards electric vehicles back in 2023, it found that “Democrats and Democratic-leaning independents, younger adults, and people living in urban areas are among the most likely to say they would consider purchasing an EV” — hardly a broad swathe of Trump’s America. More than two-thirds of Republicans surveyed said they weren’t interested in buying an electric car, compared to 30% of Democrats.
On the campaign trail, Trump regularly lambasted EVs, although by the end of the campaign, as Musk’s support became more voluminous, he’s lightened up a bit. In any case, the Biden administration’s pro-electric-vehicle policies were an early target for the Trump administration, and the consumer subsidies for EVs passed under the 2022 Inflation Reduction Act are widely considered to be one of the softest targets for repeal.
But newer data shows that the tide may be turning, not so much for electric vehicles, but likely for Tesla itself.
The Wall Street Journalreported survey data last week showing that only 13% of Democrats would consider buying a Tesla, down from 23% from August of 2023, while 26% of Republicans would consider buying a Tesla, up from 15%. Vehicle registration data cited by the Journal suggested a shift in new Tesla purchases from liberal urban areas such as New York, San Francisco, and Los Angeles, towards more conservative-friendly metropolises like Las Vegas, Salt Lake City, and Miami.
At the same time, many Tesla investors appear to be mostly seeing through the gyrations in the famously volatile stock and relatively unconcerned about month-to-month or quarter-to-quarter sales data. After all, even after the epic fall in Tesla’s stock price, the company is still worth over $700 billion, more than Toyota, General Motors, and Ford combined, each of which sells several times more cars per year than Tesla.
Many investors simply do not view Tesla as a luxury or mass market automaker, instead seeing it as an artificial intelligence and robotics company. When I speak to individual Tesla shareholders, they’re always telling me how great Full Self-Driving is, not how many cars they expect the company to sell in August. In many cases, Musk has made Tesla stockholders a lot of money, so they’re willing to cut him tremendous slack and generally believe that he has the future figured out.
Longtime Tesla investor Ron Baron, who bought hundreds of millions of dollars worth of shares from 2014 to 2016, told CNBC Tuesday morning, that Musk “believes that digitization [and] autonomy is going to be driving the future. And he thinks we’re … on the verge of having an era of incredible abundance.”Baron also committed that he hasn’t, won’t, and will never sell. “I’m the last in, I’ll be the last out. So I won’t sell a single share personally until I sell all the shares for clients, and that’s what I’ve done.”
Wedbush Securities’ Dan Ives, one of the biggest Tesla bulls on the street, has told clients that he expects Tesla’s valuation to exceed $2 trillion, and that its self-driving and robotics business “will represent 90% of the valuation.”
Another longtime Tesla bull, Morgan Stanley’s Adam Jonas, told clients in a note Monday that Tesla remained a “Top Pick,” and that his price target was still $430, compared to the stock’s $230.58 close price on the day. His bull case, he said, was $800, which would give the company a valuation over $2.5 trillion.
When the stock lags, Jonas wrote, investors see Tesla as a car company. “In December with the stock testing $500/share, the prevailing sentiment was that the company is an AI ‘winner’ with untapped exposure to embodied AI expressions such as humanoid robotics,” Jonas wrote. “Today with the stock down 50% our investor conversations are focused on management distraction, brand degradation and lost auto sales.”
In a note to clients Tuesday, Ives beseeched Musk to “step up as CEO,” and lamented that there has been “little to no sign of Musk at any Tesla factory or manufacturing facility the last two months.” But his bullishness for Tesla was undaunted. He argued that the scheduled launch of unsupervised Full Self-Driving in June “kicks off the autonomous era at Tesla that we value at $1 trillion alone on a sum-of-the-parts valuation.”
“Autonomous will be the biggest transformation to the auto industry in modern day history,” Ives wrote, “and in our view Tesla will own the autonomous market in the U.S. and globally.”
The most effective put of all may not be anything Trump says or does, but rather investors’ optimism about the future — as long as it’s Elon Musk’s future.
The uncertainty created by Trump’s erratic policymaking could not have come at a worse time for the industry.
This is the second story in a Heatmap series on the “green freeze” under Trump.
Climate tech investment rode to record highs during the Biden administration, supercharged by a surge in ESG investing and net-zero commitments, the passage of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, and at least initially, low interest rates. Though the market had already dropped somewhat from its recent peak, climate tech investors told me that the Trump administration is now shepherding in a detrimental overcorrection. The president’s fossil fuel-friendly rhetoric, dubiously legal IIJA and IRA funding freezes, and aggressive tariffs, have left climate tech startups in the worst possible place: a state of deep uncertainty.
“Uncertainty is the enemy of economic progress,” Andrew Beebe, managing director at Obvious Ventures, told me.
The lack of clarity is understandably causing investors to throw on the brakes. “We’ve talked internally about, let’s be a little bit more cautious, let’s be a little more judicious with our dollars right now,” Gabriel Kra, co-founder at the climate tech firm Prelude Ventures, told me. “We’re not out in the market, but I would think this would be a really tough time to try and go out and raise a new fund.”
This reluctance comes at a particularly bad time for climate tech startups, many of which are now reaching a point where they are ready to scale up and build first-of-a-kind infrastructure projects and factories. That takes serious capital, the kind that wasn’t as necessary during Trump’s first term, or even much of Biden’s, when many of these companies were in a more nascent research and development or proof-of-concept stage.
I also heard from investors that the pace of Trump’s actions and the extent of the economic upheaval across every sector feels unique this time around. “We’re entering a pretty different economic construct,” Beebe told me, citing the swirling unknowns around how Trump’s policies will impact economic indicators such as inflation and interest rates. “We haven’t seen this kind of economic warfare in decades,” he said.
Even before Trump took office, it was notoriously difficult for climate companies to raise funding in the so-called “missing middle,” when startups are too mature for early-stage venture capital but not mature enough for traditional infrastructure investors to take a bet on them. This is exactly the point at which government support — say, a loan guarantee from the Department of Energy’s Loan Programs Office or a grant from the DOE’s Office of Clean Energy Demonstrations — could be most useful in helping a company prove its commercial viability.
But now that Trump has frozen funding — even some that’s been contractually obligated — companies are left with fewer options than ever to reach scale.
One investor who wished to remain anonymous in order to speak more openly told me that “a lot of the missing middle companies are living in a dicier world.” A 2023 white paper on “capital imbalances in the energy transition” from S2G Investments, a firm that supports both early-stage and growth-stage companies, found that from 2017 to 2022, only 20% of climate capital flowed toward companies at this critical inflection point, while 43% went to early-stage companies and 37% towards established technologies. For companies at this precarious growth stage, a funding delay on the order of months could be the difference between life and death, the investor added. Many of these companies may also be reliant on debt financing, they explained. “Unless they’ve been extremely disciplined, they could run into a situation where they’re just not able to service that debt.”
The months or even years that it could take for Trump’s rash funding rescission to wind through the courts will end up killing some companies, Beebe told me. “And unfortunately, that’s what people on the other side of this debate would like, is just to litigate and escalate. And even if they ultimately lose, they’ve won, because startups just don’t have the balance sheets that big companies would,” he explained.
Kra’s Prelude Ventures has a number of prominent companies in its portfolio that have benefitted from DOE grants. This includes Electric Hydrogen, which received a $43.3 million DOE grant to scale electrolyzer manufacturing; Form Energy, which received $150 million to help build a long-duration battery storage manufacturing plant; Boston Metal, which was awarded $50 million for a green steel facility; and Heirloom, which is a part of the $600 million Project Cypress Direct Air Capture hub. DOE funding is often doled out in tranches, with some usually provided upfront and further payments tied to specific project milestones. So even if a grant has officially been awarded, that doesn’t mean all of the funding has been disbursed, giving the Trump administration an opening to break government contracts and claw it back.
Kra told me that a few of his firm’s companies were on the verge of securing government funding before Trump took office, or have a project in the works that is now on hold. “We and the board are working closely with those companies to figure out what to do,” he told me. “If the mandates or supports aren’t there for that company, you’ve got to figure out how to make that cash last a bunch longer so you can still meet some commercially meaningful milestones.”
In this environment, Kra said his firm will be taking a closer look at companies that claim they will be able to attract federal funds. “Let’s make sure we understand what they can do without that non-dilutive capital, without those grants, without that project level support,” he told me, noting that “several” companies in his portfolio will also be impacted by Trump’s ever-changing tariffs on imports from Canada, Mexico, and China. Prelude Ventures is working with its portfolio companies to figure how to “smooth out the hit,” Kra told me later via email, but inevitably the tariffs “will affect the prices consumers pay in the short and long run.”
While investors can’t avoid the impacts of all government policies and impulses, the growth-stage firm G2 Venture Partners has long tried to inoculate itself against the vicissitudes of government financing. “None of our companies actually have any exposure to DOE loans,” Brook Porter, a partner and co-founder at G2, told me in an email, nor have they received government grants. If you add up the revenue from all of the companies in G2’s portfolio, which is made up mainly of sustainability-focused startups, only about 3% “has any exposure to the IRA,” Porter told me. So even if the law’s generous clean energy tax credits are slashed or the programs it supports are left to languish, G2’s companies will likely soldier on.
Then there are the venture capitalists themselves. Many of the investors I spoke with emphasized that not all firms will have the ability or will to weather this storm. “I definitely believe many generalist funds who dabbled in climate will pull back,” Beebe told me. Porter agreed. “The generalists are much more interested in AI, then I think in climate,” he said. It’s not as if there’s been a rash of generalist investors announcing pullbacks, though Kra told me he knows of “a couple of firms” that are rethinking their climate investment strategies, potentially opting to fold these investments under an umbrella category such as “hard tech” instead of highlighting a sectoral focus on energy or climate, specifically.
Last month, the investment firm Coatue, which has about $70 billion in assets under management, raised around $250 million for a climate-focused fund, showing it’s not all doom and gloom for the generalists’ climate ambitions. But Porter told me this is exactly the type of large firm he wouldexpect to back out soon, citing Tiger Global Management and Softbank as others that started investing heavily during climate tech’s boom years from 2020 to 2022 that he could imagine winding down that line of business.
Strategic investors such as oil companies have also been quick to dial back their clean energy ambitions and refocus their sights on the fossil fuels championed by the Trump administration. “Corporate venture is very cyclical,” Beebe told me, explaining that large companies tend to make venture investments when they have excess budget or when a sector looks hot, but tighten the purse strings during periods of uncertainty.
But Cody Simms, a managing partner at the climate tech investment firm MCJ, told me that at the moment, he actually sees the corporate venture ecosystem as “quite strong and quite active.” The firm’s investments include the low-carbon cement company Sublime Systems, which last year got strategic backing from two of the world’s largest building materials companies, and the methane capture company Windfall Bio, which has received strategic funding from Amazon’s Climate Pledge Fund. Simms noted that this momentum could represent an overexuberance among corporations who just recently stood up their climate-focused venture arms, and “we’ll see if it continues into the next few years.”
Notably, Sublime and Windfall Bio both also have millions in DOE grants, and another of MCJ’s portfolio companies, bio-based chemicals maker Solugen, has a “conditional commitment” from the LPO for a loan guarantee of over $200 million. Since that money isn’t yet obligated, there’s a good chance it might never actually materialize, which could stall construction on the company’s in-progress biomanufacturing facility.
Simms told me that the main thing he’s encouraging MCJ’s portfolio companies to do at this stage is to contact their local representatives — not to advocate for climate action in general, but rather “to push on the very specific tax credit that they are planning to use and to talk about how it creates jobs locally in their districts.”
Getting startups to shift the narrative away from decarbonization and climate and toward their multitudinous co-benefits — from energy security to supply chain resilience — is of course a strategy many are already deploying to one degree or another. And investors were quick to remind me that the landscape may not be quite as bleak as it appears.
“We’ve made more investments, and we have a pipeline of more attractive investments now than we have in the last couple of years,” Porter told me. That’s because in spite of whatever havoc the Trump administration is wreaking, a lot of climate tech companies are reaching a critical juncture that could position the sector overall for “a record number of IPOs this year and next,” Porter said. The question is, “will these macro uncertainties — political, economic, financial uncertainty — hold companies back from going public?”
As with so many economic downturns and periods of instability, investors also see this as a moment for the true blue startups and venture capitalists to prove their worth and business acumen in an environment that’s working against them. “Now we have the hardcore founders, the people who really are driven by building economically viable, long-term, massively impactful companies, and the investors who understand the markets very well, coming together around clean business models that aren’t dependent on swinging from one subsidy vine to the next subsidy vine,” Beebe told me.
“There is no opportunity that’s an absolute no, even in this current situation, across the entire space,” the anonymous climate tech investor told me. “And so this might be one of the most important points — I won’t say a high point, necessarily — but it might be a moment of truth that the energy transition needs to embrace.”
On the energy secretary’s keynote, Ontario’s electricity surcharge, and record solar power
Current conditions: Critical fire weather returns to New Mexico and Texas and will remain through Saturday • Sharks have been spotted in flooded canals along Australia’s Gold Coast after Cyclone Alfred dropped more than two feet of rain • A tanker carrying jet fuel is still burning after it collided with a cargo ship in the North Sea yesterday. The ship was transporting toxic chemicals that could devastate ecosystems along England’s northeast coast.
In a keynote speech at the energy industry’s annual CERAWeek conference, Energy Secretary Chris Wright told executives and policymakers that the Trump administration sees climate change as “a side effect of building the modern world,” and said that “everything in life involves trade-offs." He pledged to “end the Biden administration’s irrational, quasi-religious policies on climate change” and insisted he’s not a climate change denier, but rather a “climate realist.” According toThe New York Times, “Mr. Wright’s speech was greeted with enthusiastic applause.” Wright also reportedly told fossil fuel bosses he intended to speed up permitting for their projects.
Other things overheard at Day 1 of CERAWeek:
The premier of Canada’s Ontario province announced he is hiking fees on electricity exported to the U.S. by 25%, escalating the trade war kicked off by President Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources. The decision could affect prices in Minnesota, New York, and Michigan, which get some of their electricity from the province. Ontario Premier Doug Ford estimated the surcharge will add about $70 to the monthly bills of affected customers. “I will not hesitate to increase this charge,” Ford said. “If the United States escalates, I will not hesitate to shut the electricity off completely.” The U.S. tariffs went into effect on March 4. Trump issued another 30-day pause just days later, but Ford said Ontario “will not relent” until the threat of tariffs is gone for good.
There was a lot of news from the White House yesterday that relates to climate and the energy transition. Here’s a quick rundown:
The EPA cancelled hundreds of environmental justice grants: EPA Administrator Lee Zeldin and Elon Musk’s so-called Department of Government Efficiency nixed 400 grants across environmental justice programs and diversity, equity, and inclusion programs worth $1.7 billion. Zeldin said this round of cuts “was our biggest yet.”
Transportation Secretary Sean Duffy rescinded Biden memos about infrastructure projects: The two memos encouraged states to prioritize climate change resilience in infrastructure projects funded by the Bipartisan Infrastructure Law, and to include under-represented groups when planning projects.
The military ended funding for climate studies: This one technically broke on Friday. The Department of Defense is scrapping its funding for social science research, which covers climate change studies. In a post on X, Defense Secretary Pete Hegseth said DOD “does not do climate change crap. We do training and war fighting.”
Meanwhile, a second nonprofit – the Coalition for Green Capital – filed a lawsuit against Citibank over climate grant money awarded under the Inflation Reduction Act but frozen by Zeldin’s EPA. Climate United filed a similar lawsuit (but targeting the EPA, as well as Citibank) on Saturday.
A new report from the Princeton ZERO Lab’s REPEAT Project examines the potential consequences of the Trump administration’s plans to kill existing EV tax credits and repeal EPA tailpipe regulations. It finds that, compared to a scenario in which the current policies are kept in place:
“In other words, killing the IRA tax credits for EVs will decimate the nascent renaissance in vehicle and battery manufacturing investment and employment we’re currently seeing play out across the United States,” said Jesse Jenkins, an assistant professor and expert in energy systems engineering and policy at Princeton University and head of the REPEAT Project. (Jenkins is also the co-host of Heatmap’s Shift Key podcast.)
REPEAT Project
The U.S. installed nearly 50 gigawatts of new solar power capacity last year, up 21% from 2023, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. That’s a record, and the largest annual grid capacity increase from any energy technology in the U.S. in more than 20 years. Combined with storage, solar represents 84% of all new grid capacity added in 2024.
SEIA and Wood Mackenzie
Last year was “the year of materialization of the IRA,” with supply chains becoming more resilient and interest from utilities and corporate buyers growing. Installations are expected to remain steady this year, with little growth, because of policy uncertainty. Total U.S. solar capacity is expected to reach 739 GW by 2035, but this depends on policy. The worst case scenario shows a 130 GW decline in deployment through 2035, which would represent $250 billion in lost investments.
“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” said Sylvia Levya Martinez, a principal analyst of North America utility-scale solar for Wood Mackenzie. “We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth.”
Tesla shares plunged yesterday by 15%, marking the company’s worst day on the market since 2020 and erasing its post-election stock bump.