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Artificial intelligence may extend coal’s useful life, but there’s no saving it.
Appearing by video connection to the global plutocrats assembled recently at Davos, Donald Trump interrupted a rambling answer to a question about liquefied natural gas to proclaim that he had come up with a solution to the energy demand of artificial intelligence (“I think it was largely my idea, because nobody thought this was possible”), which is to build power plants near data centers to power them. And a key part of the equation should be coal. “Nothing can destroy coal — not the weather, not a bomb — nothing,” he said. “But coal is very strong as a backup. It’s a great backup to have that facility, and it wouldn’t cost much more — more money. And we have more coal than anybody.”
There is some truth there — the United States does in fact have the largest coal reserves in the world — and AI may be offering something of a lifeline to the declining industry. But with Trump now talking about coal as a “backup,” it’s a reminder that he brings up the subject much less often than he used to. Even if coal will not be phased out as an electricity source quite as quickly as many had hoped or anticipated, Trump’s first-term promise to coal country will remain a broken one.
Yet in an unusual turn of events, the anticipated explosion of demand for electricity on its way over the next few years has led some utilities to scale back their existing plans to shutter coal-fired power plants, foreseeing that they’ll need every electron they can generate. Ironically, especially in Georgia, that need is driven by a boom in green manufacturing.
Nevertheless, coal’s decline is still remarkable. At the start of the 21st century, coal was the primary source of electricity generation in 32 states; now that number is down to 10 and dropping. As recently as 2007, coal accounted for half the country’s electricity; the figure is now 16%. Worldwide coal demand keeps increasing, mostly because of China and India. But here in the United States, the trajectory is only going in one direction.
Confronted with those facts, a politician could take one of two basic paths. The first is to make impossible promises to voters in coal country, telling them that the jobs that have disappeared will be brought back, their communities will be revitalized, and the dignity they feel they have lost will be returned.
That was the path Donald Trump took. He talked a lot about coal in 2016, making grand promises about the coal revival he would bring if elected. At a rally in West Virginia, he donned a hardhat, pretended to shovel some coal, and said, “For those miners, get ready, because you’re going to be working your asses off.” And in Trumpian style, if he couldn’t keep the promise, he’d just say he did. “The coal industry is back,” he said in 2018, a year which saw the second-most coal capacity retired in the country’s history to that point. “We’re putting our great coal miners back to work,” he said on the campaign trail in 2020, when the number of coal-producing mines in the U.S. declined by 18%.
When Trump took office in January 2017, there were just over 50,000 coal jobs left in the country after decades of decline. When he left office in 2021, the number was down to 38,000. The number is slightly higher today at around 43,000, but it’s still infinitesimal as a portion of the economy.
Trump’s failure to bring back coal jobs wasn’t because his affection for the fuel source was insincere. He certainly had as coal-friendly an administration as one could imagine; his second pick to run the Environmental Protection Agency was a coal lobbyist. But the triumvirate of forces that drove those job reductions — automation, emissions-limiting regulations, and competition from fracked natural gas — were irresistible.
The second path for a politician confronting the structural decline of coal is to take concrete steps to create new opportunities in coal country that offer people a better economic future. That was what the Biden administration tried to do. As part of its clean energy push, Biden put a particular focus on siting new projects in underserved communities, including in areas where coal still defines the culture even though the jobs are long gone. The administration also directed hundreds of millions of dollars in funding “to ensure former coal communities can take full advantage of the clean energy transition and continue their leading role in powering our nation,” in the words of then-Energy Secretary Jennifer Granholm. Or as the Treasury Department put it, the administration was working “to strengthen the economies of coal communities and other areas that have experienced underinvestment in past decades.” These were real commitments, backed up by real dollars.
Today, the new Trump administration is committed to freezing, reversing, and clawing back as much of Biden’s clean energy agenda as it can. Whether that includes these investments in coal country remains to be seen.
There’s good reason to believe it will, however, both because of the antipathy Trump and his team hold for anything that has Biden’s fingerprints on it, and because Trump understands the fundamental truth of his political relationship to coal country: Its support for him is unshakeable, no matter the policy outcome.
Take just one example: Harlan County, Kentucky, site of the extraordinary 1976 documentary Harlan County, USA, which chronicled a strike by miners demanding fair wages and working conditions. Coal is still being mined in Harlan County, but as of 2023, only 577 people there were employed in the industry, or about one in every 19 working-age people in the county. It remains overwhelmingly white and overwhelmingly poor — and the voters there love Trump. He got 84.9% of the vote in 2016, 85.4% in 2020, and 87.7% in 2024.
It might be fair to ask what people in Harlan County and across coal country have to show for their support for the president. The absolute best he can offer them is that while coal will continue to decline under his presidency, it might decline a bit slower than it otherwise would have. Even if escalating electricity demand offers an opportunity for the coal industry, there’s little reason to believe it will reverse coal’s decline in America. At most it could flatten the curve, allowing some coal plants to remain in operation a few years longer than planned.
A future where coal is at most a miniscule part of America’s energy mix with a tiny labor force producing it seems inevitable. Most people in coal country understand that, as much as they might like it to be otherwise. If only their favorite politician would admit it to them — and commit to offering them more than fables — they could start building something better.
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The grid needs transformers, and transformers need foreign steel.
President Trump wants to unleash American energy dominance, reduce consumer costs, and lead on artificial intelligence. But his 25% steel and aluminum tariffs, which are set to go into effect next month, could work directly against all of those goals.
The reason has to do with a crucial piece of electrical equipment for expanding the grid. They’re called transformers, and they’re in critically short supply.
Transformers serve to reduce losses along power lines by regulating voltage as electricity travels between generators and end uses, and they are made using a specific type of steel called grain oriented electrical steel, or GOES. There’s only one domestic producer of GOES — Cleveland Cliffs — and at full capacity it cannot meet even half of the demand from domestic transformer manufacturers, according to Joe Donovan, the executive director of the Transformer Manufacturing Association of America.
“We’re forced into the international markets,” he told me. “Reliance on a single domestic supplier for this critical material is a national security risk,” he added later in an email.“The grid is the foundation of our entire economy and should not be reliant on a single source for such a critical component.”
In a fact sheet about the upcoming steel and aluminum tariffs, Trump said he wants to end the “global dumping” of cheap foreign steel into American markets. It’s not yet clear whether he will impose blanket fees on all steel imports from all countries or use a finer tooth comb. But GOES only accounts for 0.15% of global steel production, Donovan said. “Any new restrictive tariffs would not onshore domestic GOES manufacturing, but would instead increase electricity costs for American consumers and delay upgrades to the grid nationally, putting manufacturing projects and developments at risk,” he told me. He said his trade group is advocating for the tariffs to exclude GOES imports from allied countries including Italy, South Korea, Poland and Japan, as well as derivative products from Mexico and Canada.
The problem is not just that the U.S. doesn’t produce enough of this material, Donovan added. Cleveland Cliffs lacks the capacity to produce GOES “in the size or efficiency levels that are needed in modern, efficient large power transformers,” he said. “Thus, domestic transformer manufacturers are unable to procure this GOES from any domestic source.”
Transformers come in many varieties and sizes, from the small metal boxes that sit atop local power lines to the larger containers at substations that have big metal coils springing out of them. Adding anything to the grid — whether it’s a generator like a new solar farm or natural gas plant, or a new source of demand like an apartment complex or a data center — requires adding transformers.
For nearly two decades, electricity growth was stagnant in the U.S., and there wasn’t much reason to invest in transformer manufacturing or supply chains. But suddenly, the rise of artificial intelligence, coupled with a push to reshore manufacturing and electrify transport, plus worsening natural disasters that damage electrical infrastructure caused demand to soar. These pressures have not just affected the U.S., and transformer manufacturers globally have not been able to keep up. Over the past four to five years, lead times for procuring transformers went from just under a year to upwards of three years, and prices jumped 60% to 80%, according to Wood Mackenzie.
“The increase in equipment costs is both threatening the economics of projects and increasing the price of electricity,” analysts from the energy research firm wrote in October. “One small ray of light from a transformer cost perspective is that the price of grain oriented electrical steel, a key commodity input, has declined 60-70% recently.”
Trump’s tariffs will cut into those declines.
“A lot of utilities and all of our clients across the country are very nervous about the potential implications of this,” Ben Boucher, a senior analyst at Wood Mackenzie, told me. “I think everyone knows their costs are going to increase as a result, even if they source domestically, because there’s going to be more competition for domestically produced products.”
When Trump imposed tariffs on steel during his first presidency, it did not lead to new investment in domestic manufacturing of GOES. Instead, there was an uptick in imports of transformer cores, a component that already contains GOES, from Mexico and Canada, Boucher said.
I reached out to the Edison Electric Institute, the main trade group for utilities, for comment on how the transformer shortage has affected its members’ ability to meet rising electricity demand, and what the tariffs could mean for them. The group did not answer my questions and sent back a statement attributed to Scott Aaronson, the senior vice president for energy security and industry operations, which said the group supports the president’s goal of bolstering domestic manufacturing and looks forward to working with him “to ensure that any new tariffs don't raise customer energy bills due to higher commodity prices.”
Jonas Nahm, an associate professor at Johns Hopkins, who worked as a senior economist at the White House under Biden, told me there was a concerted effort to increase transformer production domestically over the past four years. Several manufacturers, including Siemens Energy and Hitachi Energy, announced new plants and plant expansions. Nahm wondered whether Trump’s tariffs on steel could end up undermining his goals by making those investments riskier. “In econ terms, it’s sort of a tariff inversion, where we’re tariffing the intermediate inputs more than we’re tariffing the import of the final product.”
We often talk about industries like the “oil industry” or the “steel industry” as if they are making homogenous, interchangeable products. In reality, neither oil nor steel is one, uniform thing, and in the context of policymaking — like President Trump’s tariffs — the differences are consequential.
My colleague Robinson Meyer wrote about this when Trump was threatening to put 25% tariffs on Canadian imports. The U.S. is the biggest producer of crude oil in the world, but the oil that comes out of our wells is “light and sweet,” meaning that it has relatively low viscosity and sulfur content. Meanwhile, many U.S. refineries are designed to process the “heavy and sour” crude oil extracted in Canada. Tariffs on imported oil would lead to spikes in gasoline prices. “You couldn’t create a better scenario to destroy the economics of U.S. coking refineries,” Rory Johnston, an oil markets analyst, told Robinson. Similarly, the U.S. is a major steel producer, but we’re still heavily reliant on imports for certain types of steel.
It’s unclear whether the administration is aware of the issue. Trump is imposing tariffs on steel and aluminum under Section 232 of the Trade Expansion Act of 1962, as he did during his first term, which requires the Department of Commerce to first conduct an investigation and confirm that the import of these products threatens U.S. national security. But there’s been no new investigation since Trump took office. In his proclamation announcing the tariffs, the President referenced the investigation his administration conducted in 2018, adding in some recent data points that make the case that the threats from then are still an issue.
“They’re operating with 2018 assumptions about the state of the world, and then threw some updated data in there in order to accelerate the process,” Nahm said. “You can see how maybe this wasn’t a big deal six years ago. Now electricity demand is going up, and it’s getting more expensive. That wasn’t something that was on the horizon in 2018 at all.”
On the IEA’s latest report, flooding in LA, and Bill Gates’ bad news
Current conditions: Severe thunderstorms tomorrow could spawn tornadoes in Mississippi, Louisiana, Arkansas, and Alabama • A massive wildfire on a biodiverse island in the Indian Ocean has been burning for nearly a month, threatening wildlife • Tropical Cyclone Zelia has made landfall in Western Australia with winds up to 180mph.
Bill Gates’ climate tech advocacy organization has told its partners that it will slash its grantmaking budget this year, dealing a blow to climate-focused policy and advocacy groups that relied on the Microsoft founder, Heatmap’s Katie Brigham has learned. Breakthrough Energy, the umbrella organization for Gates’ various climate-focused programs, alerted many nonprofit grantees earlier this month that it would not be renewing its support for them. This pullback will not affect Breakthrough’s $3.5 billion climate-focused venture capital arm, Breakthrough Energy Ventures, which funds an extensive portfolio of climate tech companies. Breakthrough’s fellowship program, which provides early-stage climate tech leaders with funding and assistance, will also remain intact, a spokesperson confirmed. They would not comment on whether this change will lead to layoffs at Breakthrough Energy.
“Breakthrough Energy made up a relatively small share — perhaps 1% — of climate philanthropy worldwide,” Brigham writes. “But what has made Breakthrough Energy distinctive is its support for policy and advocacy groups that promote a wide range of technological solutions, including nuclear energy and direct air capture, to fight climate change.”
Anti-wind activists have joined with well-connected figures in conservative legal and energy circles to privately lobby the Trump administration to undo permitting decisions by the National Oceanic and Atmospheric Administration, according to documents obtained by Heatmap’s Jael Holzman. Representatives of conservative think tanks and legal nonprofits — including the Caesar Rodney Institute, the Heartland Institute and Committee for a Constructive Tomorrow, or CFACT — sent a letter to Interior Secretary Doug Burgum dated February 11 requesting that the Trump administration “immediately revoke” letters from NOAA to 11 offshore wind projects authorizing “incidental takes,” a term of regulatory art referencing accidental and permissible deaths under federal endangered species and mammal protection laws. The letter also requested “an immediate cession of construction” at four offshore wind projects with federal approvals that have begun construction: Dominion Energy’s Coastal Virginia offshore wind project, Copenhagen Infrastructure Partners’ Vineyard Wind 1, and Ørsted’s Revolution Wind and Sunrise Wind projects.
“This letter represents a new stage of Trump’s war on offshore wind,” Holzman writes. “Yes, he has frozen leasing, along with most permitting activity and even public meetings related to pending projects. But the president's executive order targeting offshore wind opened the door to rescinding leases and previous permits. Doing so would produce new, costly legal battles for developers and for publicly-regulated utilities, ratepayers. Over the past few weeks, offshore wind developers with projects that got their permits under Biden have sought to reassure investors that at least they’ll be fine. If this new request is heeded, that calm will subside.”
Heavy downpours triggered flooding and debris flows across Los Angeles County yesterday. A portion of the Pacific Coast Highway, one of the most iconic roadways in America, is closed indefinitely due to mudslides near Malibu, an area devastated in last month’s fires. Duke’s Malibu, a famous oceanfront restaurant along the PCH, was inundated. The worst of the rain has passed now and many flood alerts have been canceled, but the cleanup has just begun.
Rain flows down a street outside a burned home.Mario Tama/Getty Images
Global electricity use is set to rise by 4% annually through 2027, “the equivalent of adding an amount greater than Japan’s annual electricity consumption every year,” according to the International Energy Agency’s new Electricity 2025 report. Here are some key points:
IEA
JPMorgan Chase clients have apparently been demanding more guidance about the climate crisis. As a result, the bank launched a new climate report authored by its global head of climate advisory, Sarah Kapnick, an atmospheric and oceanic scientist who was previously chief scientist at the National Oceanic and Atmospheric Administration. The report seeks to build what Kapnick is calling “climate intuition” – the ability to use science to assess and make strategic investment decisions about the shifting climate. “Success in the New Climate Era hinges on our ability to integrate climate considerations into daily decision-making,” Kapnick writes. “Those who adapt will lead, while others risk falling behind.” Here’s a snippet from the report, to give you a sense of the tone and takeaways:
“Adhering to temperatures below 1.5C will require emissions reductions. Depending on your definition of 1.5C, they may require historic annual reductions and potentially carbon removal. Conversely, if you have a technical or financial view that carbon dioxide removal will not scale, you should assume there is a difficult path to 1.5C (i.e. emissions reductions to zero depending on your definition in 6, 15, or 30+ years). If that is the case, you need to plan for the physical manifestations of climate change and social responses that will ensue if your investment horizons are longer.”
Greenhouse gas leaks from supermarket refrigerators are estimated to create as much pollution each year as burning more than 30 million tons of coal.
Grantees told Heatmap they were informed that Bill Gates’ climate funding organization would not renew its support.
Bill Gates’ climate tech advocacy organization has told its partners that it will slash its grantmaking budget this year, dealing a blow to climate-focused policy and advocacy groups that relied on the Microsoft founder, Heatmap has learned.
Breakthrough Energy, the umbrella organization for Gates’ various climate-focused programs, alerted many nonprofit grantees earlier this month that it would not be renewing its support for them. This pullback will not affect Breakthrough’s $3.5 billion climate-focused venture capital arm, Breakthrough Energy Ventures, which funds an extensive portfolio of climate tech companies. Breakthrough’s fellowship program, which provides early-stage climate tech leaders with funding and assistance, will also remain intact, a spokesperson confirmed. They would not comment on whether this change will lead to layoffs at Breakthrough Energy.
“Bill Gates and Breakthrough Energy remain as committed as ever to using our voice and resources to advocate for the energy innovations needed to address climate change,” the Breakthrough spokesperson told me in a written statement. “We continue to believe that innovation in energy is essential for achieving global climate goals and securing a prosperous, sustainable world for future generations.”
Gates founded Breakthrough Energy in 2015 to help develop and deploy technologies that would help the world reach net-zero emissions by 2050. The organization made more than $96 million in grants in 2023, the most recent year for which data is available.
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Among its beneficiaries was the Breakthrough Institute, a California-based think tank that promotes technological solutions to climate change. (Despite having a similar name, it is not affiliatedwith Breakthrough Energy.) Last week, a representative from Breakthrough Energy told the institute’s executive director, Ted Nordhaus, that its funding would not be renewed. The Breakthrough Institute had previously received a two-year grant of about $1.2 million per year, which wrapped up this month.
“What we were told is that they are ceasing all of their climate grantmaking — zeroed out immediately after the USAID shutdown because Bill wants to refocus all of his grantmaking efforts on global health,” Nordhaus told me on Monday, referring to the Trump administration’s efforts to defund the United States Agency for International Development. “But it’s very clear that this wasn’t brought on solely by USAID. I had heard from several people that there was a big reassessment going on for a couple of months.”
The Breakthrough spokesperson disputed this characterization, and denied that cutbacks were due to the USAID shutdown or a shift in funding from climate to global health initiatives. The spokesperson also told me that some grantmaking budget remains, though they would not reveal how much.
As for Breakthrough Institute, the funding cut will primarily impact its agricultural program, which received about 90% of its budget from Breakthrough Energy. Nordhaus is trying to figure out how to keep that program afloat, while the institute’s other three areas of policy focus — energy and climate, nuclear innovation, and energy and development — remain largely unaffected.
Multiple other organizations confirmed to Heatmap that they also will not receive future grants from Breakthrough Energy. A representative for the American Center for Life Cycle Assessment, a trade organization for sustainability professionals, told me that Breakthrough had recently informed the group that it would not renew a $400,000 grant, which is set to wrap up this May. (ACLCA’s spokesperson also noted that the grant had not come with any indication that it would be renewed.) Another former grantee told me that while their organization is currently wrapping up a grant with Breakthrough and does not have anything in the works with them for this year, they expected that future funding would be impacted, though they did not explain why.
Breakthrough Energy made up a relatively small share — perhaps 1% — of climate philanthropy worldwide. Foundations and individuals around the world gave a total of $9 billion to $15 billion to climate causes in 2023, according to an analysis from the Climateworks Foundation.
But what has made Breakthrough Energy distinctive is its support for policy and advocacy groups that promote a wide range of technological solutions, including nuclear energy and direct air capture, to fight climate change.
“Their presence will be missed,” said the CEO of another climate nonprofit who was notified by Breakthrough that its funding would not be renewed. Breakthrough Energy “was one of the few funders supporting pragmatic research and advocacy work that pushed at neglected areas such as the need for zero-carbon firm power and accelerated energy innovation,” they added.
"Even if it’s a drop in the bucket, it still makes a difference,” another former grantee with a particularly large budget told me. This organization recently sent Breakthrough an inquiry about partnering up again and is waiting to hear back. “But for small organizations, it’s make it or break it.”
Speculation abounds as to the rationale behind Breakthrough’s funding cuts. “I have heard that one of the reasons that Bill decided to stop funding climate was that he concluded that there was so much money in climate that his money really wasn’t that important,” Nordhaus told me. But that is not true when it comes to agriculture, he said, which comprises about 12% of global emissions. ”There’s very little money for advocating for agriculture innovation to address the climate impacts of the ag sector,” Nordhaus told me.
Gates, who privately donated to a nonprofit affiliated with the Harris campaign in 2024 but did not endorse the Democrat, dined with Trump and Susie Wiles, the White House chief of staff, for more than three hours at Mar-a-Lago around New Year’s Day, he told Wall Street Journal editor-in-chief Emma Tucker. He said that Trump was interested in the possibility of eradicating polio or developing an HIV vaccine. “I felt like he was energized and looking forward to helping to drive innovation,” he told her, days before the inauguration.
Since then, Trump’s war on USAID has frozen funding to a polio eradication program and shut down the phase 1 clinical trial of an HIV vaccine in South Africa, Kenya, and Uganda.