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Talking to legislators from New York, Washington, Massachusetts, and New Jersey about what’s under threat, what’s safe, and the strain of it all.
State lawmakers around the country are negotiating budgets for the coming year amid unprecedented uncertainty. Any decisions they make now about how to spend state money may need to be revisited after Congress finishes its budget reconciliation bill, which could hollow out Medicaid, the largest pot of federal funds that most states receive.
On the climate and clean energy front, the Trump administration has been trying to claw back money allocated to states for electric vehicle charging, home energy retrofits, electric school buses, utility bill assistance, and more. Even longstanding tax credits that states rely on to transition to renewable energy are at risk. On top of all this, the president has threatened to sic his attorney general on states with ambitious climate policies.
I wanted to know how all of this was affecting the way the most forward-thinking state leaders on climate were contemplating their next steps. States passed some of their most ambitious policies to fight climate change during Donald Trump’s first term as president, and they are the best chance the U.S. has to continue making progress over the next four years. But if last time the administration was throwing sand in the gears of climate action, this time it’s trying to tear up the road entirely.
After talking to state senators and representatives in Washington, Massachusetts, New York, and New Jersey, it was clear that every faced its own unique set of considerations and challenges, but there were a few recurring themes.
“We’re in this weird no-man’s land,” New York State Senator Liz Krueger told me. Between losing access to funds the state was relying on and uncertainty around how the Trump administration will reshape environmental protection and clean energy tax credits, “the agenda we might have set out for ourselves a year ago does not necessarily jive with the reality we must now confront.”
Krueger was frustrated because New York has been in the process of developing a new revenue-raiser to help pay for climate programs called Cap-and-Invest, but it’s behind schedule. Eventually it will place a cap on carbon emissions from major polluters and charge them fees when they surpass it — but draft rules for the program are more than a year overdue. Governor Kathy Hochul has not said when her administration will get them out, and environmental groups are now suing the state for putting its climate targets at risk.
The delay has been “quite aggravating,” Krueger told me. But at the same time, she’s worried that if and when the regulations are out, the Trump administration will try to shut down the program. Trump signed an executive order in early April directing his attorney general to identify and “stop the enforcement” of state climate programs that “are or may be unconstitutional.” The order specifically called out California’s carbon cap and trade program, which is similar to the one New York is developing.
“I don’t think we should stop moving forward as planned. But I think hanging over us is the concern that the feds will try to stop us,” Krueger said. She hasn’t sensed much appetite in the legislature to propose new climate programs this session, but she said she’s still hoping to get through a bill that she’s sponsored for the past few years requiring utility regulators to develop a strategy to transition buildings away from using natural gas for heating — although again, she wondered aloud if Trump would quickly try to shut it down.
Washington State, on the other hand, already has a cap-and-invest program in place. Representative Joe Fitzgibbon, of Seattle was the most optimistic of the state legislators I spoke to. “Our legal framework for fighting climate change was not predicated on federal dollars,” he told me. Last year, the state spent nearly half a billion dollars raised through that program on a wide range of projects to enhance wildfire prevention, improve energy efficiency in schools and homes, install electric vehicle chargers, and electrify buildings and vehicles. “We’re not backing off on any of our policies or any of our targets,” he said.
Fitzgibbon was unconcerned about the executive order. Legal experts are skeptical that the courts would side with the White House in any challenges to state climate laws. Trump also went after California’s cap and trade law during his first term and lost. “We think it’s bluster. We think it’s him trying to get headlines, and we’re just not inclined to fan the flames,” he told me.
Instead, Fitzgibbon is pushing forward with a bill this session to strengthen the state’s clean fuel standard. Current law requires a 20% reduction in greenhouse gas emissions from on-road transportation by 2034, and his amendment would increase that to between 45% and 55% by 2038.
New York is also behind on its goal to procure 9 gigawatts of offshore wind by 2035. The state only has power purchase agreements with three offshore wind farms — the small South Fork project, which is already operating, and two larger ones under construction — for a total of 1.8 gigawatts. Then shortly after Krueger and I spoke, the Trump administration issued a stop work order on one of those bigger projects, Empire Wind. Since Trump has also paused federal permitting for new offshore wind projects, Krueger wasn’t sure whether New York officials would even try to solicit for additional contracts. “There’s no good answers,” she said, with a sigh.
Offshore wind is a major element of New Jersey’s plans to cut emissions, as well. But the Trump administration recently pulled the permits for the Atlantic Shores wind farm, the only project serving New Jersey that had said permits.
State Senator Andrew Zwicker told me the sector was already struggling due to rising costs, supply chain issues, and local opposition. Even before Trump came into office, he said, he’s had to fight to keep renewable energy on the agenda. “There is a narrative that we can’t afford renewables, and that the way to go is you need resiliency and redundancy. And the only way to do that is, in our case, with natural gas,” Zwicker told me. He hears that story from Republicans — but also, increasingly, from Democrats. “That’s being driven by the cost of electricity more than it’s being driven by an executive order from Trump,” he added.
There is one source of funding for climate action that all states have access to that may be more impervious to federal interference. This came up during my call with Michael Barrett, a State Senator in Massachusetts, who asserted that “most of our climate policies don’t require budgeting.” That’s because the legislature has designed many of the state’s clean energy programs — including the buildout of electric vehicle infrastructure, rebates for heat pumps and energy efficiency, and compliance with the state’s renewable energy standard — to be funded by fees on monthly electric and gas bills.
Massachusetts is still really early in its legislative calendar — it operates on a two-year schedule and has barely started holding hearings for bills — but Barrett said there are some strategic shifts the state should make in light of Trump’s actions. For example, Trump has stymied offshore wind development, but Barrett said there was less the president could do to hurt solar. “So if you want to preserve the state’s industrial clean energy capacity,” he said, “you pivot to both behind the meter and in front of the meter solar on the ground, on the roofs, on canopies.” He also advocated for more subsidies for EV charging infrastructure rather than for electric vehicles themselves. “You forgo subsidizing individual drivers,” he said. “Many of them will purchase EVs anyhow, because they can afford to, and you focus on getting the charging infrastructure into the ground.”
All of the other state legislators I surveyed for this piece have similar programs financed through utility bills. In general, utility regulation is an area where state leaders have significant sway. In New Jersey, for example, Senator Zwicker is working on a bill that would require utilities to invest in “grid enhancing technologies,” equipment that enables power lines to transmit more electricity without having to totally replace the line or build a new one. That could go a long way to bringing more renewable energy online in the future. In New York, Krueger’s big priority for this year is to pass her New York Heat Act, which would significantly change how gas utilities are regulated, prioritizing transitioning away from gas to electric heating, and cutting the subsidies that customers pay to expand the gas system.
Though Barrett saw the ability for states to tack the cost of clean energy onto utility bills as reassuring, Zwicker found it concerning. “Every year, I personally have gotten more and more uncomfortable with putting everything on the backs of ratepayers,” he told me. “And we don’t have another model in place right now, so there’s no way to do anything else.”
New Jersey is facing many of the same challenges as New York and Massachusetts. The state’s economy has also taken a downturn, Zwicker told me, and budgets are tight. Governor Phil Murphy has proposed cuts to many areas, including climate spending. Zwicker said one of his big focuses right now is finding money to help low-income customers pay their utility bills, as the Trump administration is attempting to zero out federal funding for a longstanding energy assistance program.
New Jersey does have some money coming in for clean energy through utility bill fees, and it also funds climate action with proceeds from the Regional Greenhouse Gas Initiative, a program that charges power plant operators for their emissions. (Massachusetts and New York participate as well.)
But Zwicker was deeply concerned about the loss of federal funding and support. “New Jersey just can’t afford to do this by itself,” he told me. Electricity costs there are already among the highest in the country. “This is a national emergency, and the federal government has got to be a strong partner. Regardless of the fight over how we’re producing energy, if we can’t transmit it, if we don’t have a robust grid, that is as basic an infrastructure as is a highway or a bridge. Under this administration, it’s far from clear that they’ll put a penny towards anything around energy, period.”
Even Washington is not quite sitting pretty. Like New Jersey, the state is in a “pretty severe budget crisis,” Fitzgibbon said, and not in a position to backfill lost federal dollars. Its economy has taken a downturn after a post-pandemic spike. One thing the legislature is doing in response is re-allocating money in the budget that in the past had been set aside for technical assistance to help households, businesses, and Tribes apply for government grants — since federal dollars will likely be scarce, anyway. While the state can still make progress with its cap and invest funds, which can’t be re-allocated to other budget lines, grant funding from the Inflation Reduction Act would help the state cut emissions faster and more cost-effectively, he said. Washington was in line to get $71 million for electric vehicle charging and $21 million for truck charging, for example, but the Trump administration is trying to claw back that funding.
At the end of my interviews, I asked lawmakers what they wanted people to know about what it’s like to do their jobs right now. Zwicker emphasized the sheer scale of the challenge of putting together a budget — especially one that advances climate action — under these circumstances. “Being part of a committee to put a budget together is always a challenge,” he said, “but when you add the threat of over a billion dollars of cuts to our school children, up to $10 billion to $14 billion of cuts for healthcare for seniors and the poor, and then you say, we need to continue to push on New Jersey’s clean energy goals, and get ourselves off of our addiction to fossil fuels, it’s an incredibly challenging task.”
Barrett wanted to make it clear that climate progress would continue under Trump. He said that even if Medicaid was gutted, the state’s efforts to cut emissions would suffer less than local public education — again, because so much of it is financed and implemented through utility regulation. “He can do a great deal of harm, but he cannot kill the resistance to climate change,” Barrett said of Trump. “We would have to play catch up in a big way after he left, but I suspect that we’re going to have to play catch up anyway.”
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It took a lot of scrutiny and a lot of patience, but the city council is finally making progress against natural gas infrastructure.
Susan Albright, a city councilor in Newton, Massachusetts, was reviewing the latest batch of requests from the local gas utility in early July when one submission caught her off guard. The company, National Grid, regularly asks the city for permission to tear up stretches of road in order to replace aging gas mains and service lines. But this time, the utility wanted to install a new 46-foot pipeline leading to Newton Crossing, a mixed-use housing development that’s currently under construction.
“I thought, Oh my god,” Albright told me. “Here we are trying to get rid of pipe, and here’s some new pipe that they’re asking for.”
Such “grant of location” requests used to be a rubber stamp exercise for the Public Facilities Committee, of which Albright is the chair. But more recently, they’ve become contentious. Activists have started showing up to public meetings to question the necessity of pipeline work. Could the pipes be repaired instead of replaced? Or even better, retired? Could the houses served by them be electrified?
To get ahead of public outcry about a brand new pipe, Albright sprung into action. She pulled up plans the housing developer had filed with the city and learned that the apartments were intended to be all-electric. The developer had requested a gas connection solely to serve commercial businesses on the ground level. Albright found a contact for the project and picked up the phone.
“Is there any possibility that you could go electric for your commercial?” she recalled asking, explaining the connection between natural gas and climate change, and the city’s goal of weaning off gas. “At first he was very reluctant,” she told me. “But then he called me back and said that he’s willing to try it.” His ability to do so will depend on whether the electric utility can supply enough power. Nonetheless, Albright had successfully pushed a vote on the request to a later date. “We will review that grant of location at our meeting on July 28, and hopefully he will withdraw it, but we don’t know,” she said.
The city committed to transitioning away from natural gas by 2050 as part of its Climate Action Plan, enacted in 2019. Although residents have started to electrify their homes, the city hasn’t been able to slow down investment into the gas system. The story of Newton Crossing illustrates a strategy that has finally begun to move the needle. Councilors and activists have begun doggedly scrutinizing each of National Grid’s requests in hopes of finding alternatives that avoid investing more ratepayer money into a gas system that is — or should be — on a path toward obsolescence.
Progress has not been linear, and almost all of these attempts have so far failed. But the city does seem to have gotten the company’s attention. Earlier, in June, National Grid came to Newton with a different kind of request — an invitation to embark on a collaboration together with the local electric utility, Eversource, to proactively plan the city’s transition away from gas, and in doing so, begin to create a model for the company, the state, and possibly the country.
“I’m so excited to be here today because this is the first of its kind,” Bill Foley, National Grid’s director of strategy and transformation told the Public Facilities Committee while presenting the proposal. “We’ve never sat down with Eversource, National Grid, and another community to talk about how we’re going to broadly electrify a community.”
The subterranean network of natural gas pipes that runs under Massachusetts is old and leaky, with some sections dating back to the late 19th century. Utilities in the Commonwealth have always been required to address dangerous leaks, but in 2014, the state passed a law incentivizing more proactive measures to replace or repair leak-prone pipes. It was a matter of public safety as well as environmental protection — the methane that seeps out can kill tree roots in addition to being a powerful greenhouse gas.
The law created the Gas System Enhancement Program, or GSEP. Each fall, companies would file annual plans to the Department of Public Utilities outlining all the pipeline repair and replacement projects they aimed to complete in the coming year. In return, they’d get quicker approvals from regulators and be able to recover the costs more quickly from ratepayers.
In the years since, utilities have spent billions of dollars replacing thousands of miles of pipelines. Simultaneously, the state has fleshed out its plans to tackle climate change, making it clear that electrifying buildings would be a key component. As a result, the tide of public opinion about the pipeline program shifted. Replacing aging pipes may actually be worse for the climate, many activists now believe, since it means putting major investments in new fossil fuel infrastructure, thereby increasing inertia in the energy system and possibly delaying the transition to carbon-free solutions.
Former mechanical engineer Peter Barrer is one of those activists. Barrer lives in Newton, and has become an expert on the local gas network and the state’s pipeline policies. Using public data filed with state regulators, he calculated that out of the $18 million National Grid spent to address aging pipes under the GSEP program in Newton in 2023, only about $200,000 went to repairs, with the rest going to replacements. (National Grid later disputed the number, reporting that it spent $3 million on repairs that year.)
Barrer is concerned that the GSEP gives the company cover to spend excessively on pipeline replacements, which earn them larger profits than repairs. Other analysts have reached similar conclusions. Last year, the energy research consultancy the Brattle Group submitted testimony to state regulators on behalf of the Massachusetts attorney general’s office arguing that utilities are increasingly using GSEP to make everyday capital improvements. The level of spending “goes far beyond remediating immediate risks to safety caused by gas leaks,” the consultants wrote.
Barrer’s research on GSEP led him to a potential point of leverage with National Grid. When the utility wants to dig up a street, it has to submit a Grant of Location request to Newton’s Public Facilities Committee, which is then subject to a public hearing.
Newton is a progressive city that has long been at the forefront of climate action in the state. It’s one of 10 communities granted permission by the state to ban gas hookups in new buildings. (The Newton Crossing development got its permits before the policy went into effect.) The city council has also passed an ordinance requiring the largest existing buildings to reduce their emissions to net-zero by 2050.
While the Public Facilities Committee doesn’t have the power to deny National Grid’s Grant of Location requests, Albright, the city councilor, told me, the meetings do present an opportunity to engage with the utility. Members and the public can ask questions and delay approvals. Barrer and other activists began using the requests as an opportunity to highlight the paradox of the city approving new gas infrastructure.
One particularly contentious fight began last October over a replacement on Garland Road, a street known for hosting a “Sustainable Street Tour,” during which residents spoke about their experiences greening their homes with solar, insulation, EVs, and heat pumps. “Bells kind of rang in my mind,” Barrer told me. “Here’s a great place to fight National Grid.”
The gas company argued that the Garland Road pipeline, 600 feet of cast iron from the 1920s, was simply too high-risk. “National Grid cannot agree to delay replacement long enough to determine if the Garland Rd customers that still use their gas service for one or more uses are willing to have their gas service disconnected,” Amy Smith, the director of the company’s New England Gas Business Unit, wrote in an email to Albright in January. “In addition, even if all customers on Garland Rd agree to have their gas service cut off, we do not currently have a mechanism to fund the costs of full electrification of each home.” The Committee signed off on the project.
But activists continued to challenge it. A resident of Garland Road, Jon Slote, surveyed his neighbors and found that all were either neutral or supportive of electrification. He also put together a cost comparison and found that the capital cost of electrifying the homes was 18% to 41% lower than that of replacing the pipeline.
National Grid didn’t budge. One of the reasons the block couldn’t be electrified, Smith explained to Barrer in emails that I reviewed, was that this segment of pipe “plays a critical role in providing pressure support for approximately 120 homes in the area. Maintaining minimum pressure is vital for both safety and reliability.”
Barrer told me he’s skeptical that replacing the pipe is the only solution, but acknowledged that the issue is real.
Perhaps Barrer’s biggest grievance, though, is that National Grid frequently makes requests that are not in its regulator-approved plans. Nearly 60% of the money the company spent in 2023 and was able to recover through the expedited GSEP process went to such projects, he found. A related issue: GSEP plans often don’t disclose the full extent of each project. “This is important for municipal planning,” Barrer told me. If the public can’t see in advance which areas the company is planning to work on, he said, “there’s no opportunity for the city to investigate. Maybe there’s streets on there that we can get support for electrification.”
He described the fight over gas pipelines in Newton as “a David and Goliath situation.” Activists want the opportunity to get ahead of these projects and figure out alternatives, he said, but aren’t given enough notice or details. “They have all the cards. They have a monopoly on gas, and they also have a monopoly on information.” He wants the state legislature to help them put up a fairer fight by passing two new bills that would require the utilities to disclose more information, sooner.
Albright, meanwhile, told me she thinks National Grid has acted in good faith. “The people that I’ve been working with, I trust that they’re trying to do the best for the company and for us as customers. I mean, they don’t want these pipes to explode.”
For about a year, Albright said, she has been having conversations with Smith of National Grid about what the city could do to start getting off gas. At the end of 2024, Smith came back with an offer — National Grid would work with Newton on an electrification pilot project. The company has since provided the city with a list of streets to consider for the pilot — mostly dead ends on the outskirts of the gas system, areas where taking out a stretch of pipe won’t affect other customers downstream.
Meanwhile, a lot has changed at the state level. Late last year and continuing into this spring, lawmakers and regulators enacted new policies to reform GSEP and better align it with the Commonwealth’s clean energy plans. That meant focusing on the highest risk pipes, prioritizing repairs instead of replacements, lowering the cap on spending for companies, and enabling them to spend some of the money on alternatives to pipelines, including electrification projects.
Perhaps these changes help explain what led National Grid to approach Newton earlier this summer with its proposal to collaborate. At the Public Facilities Committee’s June 18 meeting, representatives from National Grid and Eversource spent nearly three hours explaining their “integrated energy planning” effort, figuring out how to transition from gas to electricity while containing costs and ensuring reliable service. Now they wanted the chance to begin testing it out in a community.
“The technical stuff is easy,” Foley of National Grid told the Committee. “When it comes to knocking on a door and saying, Hey, how do we get you to electrify? That’s the challenging part. That’s what we’re going to learn.”
The Committee, the mayor, and city staff welcomed the idea. Even Barrer is optimistic. “I think it is unprecedented,” he told me, “and it could be very, very useful.” But he’s also skeptical. Will the company actually share the information advocates like him are looking for to analyze alternatives? And will it work quickly?
“From my perspective, every year that the plan doesn’t turn into action is another half a billion dollars of ratepayer money the National Grid gets to invest.” But, he added, “I’m hopeful. Let’s see what actually develops.”
On Fervo’s megadeal tease, steel’s coal gamble, and Norway’s CO2 milestone
Current conditions: Manila is facing severe flooding amid days of monsoon rains • Of the seven Marshall Islands that the U.S. Drought Monitor tracks, two are currently suffering extreme drought, and another three are under severe drought conditions • Wildfires are blazing in Oregon, where the Cram Fire has already scorched nearly 100,000 acres just 50 miles south of Portland.
OpenAI CEO Sam AltmanKevin Dietsch/Getty Images
Six months after the top executives of OpenAI and Softbank stood shoulder to shoulder at the White House to announce a $500 billion joint venture to build out the infrastructure for artificial intelligence across the United States, the so-called Stargate project has yet to complete a deal for a single data center. The companies promised in January to “immediately” invest $100 billion. But in a sign of the dialed-back ambitions, the project is now targeting the more modest goal of constructing one small data center by the end of this year, likely in Ohio, The Wall Street Journal reported.
That’s bad news for the power companies that have lavished in the projected demand from data centers. Crusoe Energy, a developer of gas- and renewable-powered data centers, boasted earlier this year that it was “pouring concrete at three in the morning” to build out its portions of the Stargate project at “ludicrous speed,” Heatmap’s Katie Brigham reported in March. Over the course of just one month this spring, Morgan Stanley ratcheted up its estimates for capital expenditures in cloud computing this year by a whopping $29 billion, to $392 billion, as Heatmap’s Matthew Zeitlin reported in May. Perhaps that’s another AI hallucination.
Fervo Energy’s breakthrough in harnessing fracking technology to tap into the Earth’s molten heat in far more places than ever before effectively launched the next-generation geothermal industry in the U.S. Now the Houston-headquartered startup is poised to vault “enhanced” geothermal power into a gigawatt-scale electricity source.
In a Monday post on LinkedIn, Fervo CEO Tim Latimer teased a “multi-GW development deal” currently in the works. He promised “more to come on this soon.” He did not respond to my inquiry Monday night. The company already has a deal for a 500-megawatt project called Cape Station in Utah, for which it netted a $206 million investment last month. But a project several times that size would put next-generation geothermal in the big leagues with nuclear power as a potential source of large-scale, baseload power.
Shares of Cleveland-Cliffs soared nearly 13% on Monday afternoon after the steelmaker said President Donald Trump’s tariffs had boosted demand. The company’s second-quarter earnings bested estimates, thanks to cost cutting and record steel shipments. CEO Lourenco Goncalves even suggested the company could sell parts of itself in the wake of Japanese steelmaker Nippon Steel’s megadeal to take over American rival U.S. Steel. He confirmed “active conversations” to sell non-core assets but said “everything else is possible.”
On the call, Goncalves also suggested the administration’s embrace of coal had improved market conditions for the company. As my colleague Matthew Zeitlin reported, the chief executive confirmed that Cleveland-Cliffs would abandon its landmark green steel project because the hydrogen it needed was not available widely enough. Instead, Goncalves said, the company would revamp the project “in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke.”
The chief executive of the largest natural gas company in the U.S. is urging Congress to overhaul energy permitting or risk losing the AI race to China. In an interview with the Financial Times, EQT CEO Toby Rice said, “The threat of not getting infrastructure built has only gotten larger — not only from bad actors getting rich by selling energy that could be replaced with American energy — it’s also the threat of China winning the AI race.” Specifically, he called on lawmakers to end what’s called “judicial review,” a period of six years during which opponents of a project can challenge the federal permits in court.
The U.S. has come to the cusp of easing federal permitting for years. After the passage of the Inflation Reduction Act, Democrats tried to ease permitting rules but faced opposition from progressives and conservationists who deemed any relaxing of regulations that could benefit fossil fuels a nonstarter. Democrats tried to revive the issue last year, but Republicans walked away from the negotiations once the election turned in the GOP’s favor. With the One Big Beautiful Bill revoking many of Democrats’ energy priorities, it’s unclear how much leverage Republicans have to restart talks ahead of next year’s midterm elections.
The world’s first carbon shipping terminal designed to permanently store captured CO2 that would have otherwise gone into the atmosphere just took its first shipment, The Washington Post reported. Located on an island on the edge of the North Sea, Norway’s Northern Lights facility accepted 7,500 metric tons of liquefied CO2 from a Norwegian cement factory. The plant — funded by the government in Oslo and fossil fuel companies — could serve as Europe’s primary carbon dump, and as a model for Asian countries looking to establish their own storage facilities.
China’s exports of clean-energy technologies such as solar panels, batteries and electric vehicles shaved 1% of the global emissions outside China last year, a new Carbon Brief analysis found.
The CEO of Cleveland Cliffs is just the latest U.S. voice to affirm the dirtiest fossil fuel’s unexpectedly bright future.
While the story of coal demand has been largely about rapid industrialization in Asia — especially India and China — the United States under President Trump has been working hard to make itself a main character.
Case in point is in Middletown, Ohio, where a one-time clean steel project may be refashioned as a standard-bearer for an industry-driven U.S. coal revival. The company behind the project, Cleveland-Cliffs, won a Biden-era award of up to $500 million to develop and deploy hydrogen-based technology for iron and steel production. CEO Laurenco Goncalves began casting doubt on that project as long ago as September, when he told Politico that he was struggling to find buyers willing to pay more for low-carbon materials, and that he wasn’t sure the project “even makes sense with the grants.” Earlier this year, he told investors that the company was working with the Department of Energy to “explore changes in scope to better align with the administration’s energy priorities.”
During an earnings call Monday morning, Goncalves said the company had scrapped the project not because of the DOE, but rather because it was unable to get sufficient hydrogen for use as fuel.
“The very first thing: It’s clear by now that we will not have availability of hydrogen. So there is no point in pursuing something that we know for sure that’s not going to happen,” Goncalves said. “We informed the DOE that we would not be pursuing that project.”
Instead, the company has had “a very good conversation” with the DOE “on revamping that project in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke,” Goncalves said. (Where have we heard that kind of language before?) “We are vertically integrated, and we use American iron ore and American coal and American natural gas as feedstock, all produced right here in the United States of America, employing American workers,” he added.
The evidence for coal’s stubborn persistence globally has been mounting for years. In 2021, the International Energy Agency forecast that by 2024, annual coal demand would hit an all-time high of just over 8,000 megatons. In 2024, it reported that coal demand in 2023 was already at 8,690 megatons, a new record; it also pushed out its prediction for a demand plateau to 2027, at which point it predicted annual demand would be 8,870 megatons.
The IEA largely chalked up the results to the world’s energy needs, writing that “the power sector has been the main driver of coal demand growth, with electricity generation from coal set to reach an all-time high of 10 700 terawatt-hours (TWh) in 2024.”
More recent analyses confirm that power demand, especially in Asia, could prop up global coal demand possibly for decades.
“Coal-fired power could be a bigger part of the energy mix for longer than expected, scuppering efforts to meet climate change goals,” a pair of Wood Mackenzie analysts, David Brown and Anthony Knutson, wrote in a report last week, echoing the IEA’s findings. China alone is responsible for almost three-quarters of global coal consumption, according to Wood Mackenzie. “New realities for energy markets in recent years have become more, not less, supportive of coal-fired power,” Brown and Knutson write.
The analysts put peak global coal demand a year earlier than the IEA, at 2026. But they also noted that “coal demand has consistently proven more resilient than expected.”
It’s possible that these fast-growing Asian nations could, for reasons of energy security or economy, decide to keep younger coal plants active for decades while extending the life of older plants to keep costs down. In this scenario, much of the world largely transitions away from using coal for power generation, but thanks to persistent Asian demand, global coal demand peaks as late as 2030. That could mean an extra 2 billion tons of greenhouse gas emissions compared to a base case scenario.
The U.S. federal government, meanwhile, has taken on a role as both a coal-friendly analyst and an active promoter of every facet of the industry.
A couple of weeks ago, a Department of Energy report declared that “absent intervention, it is impossible” for the U.S. to power the growth of the artificial intelligence industry “while maintaining a reliable power grid and keeping energy costs low for our citizens.” That energy-poor status quo, the DOE argued, was due in part to scheduled retirements of coal-fired generation.
The DOE has been doing its part to keep that generation online, using its emergency authorities to keep some coal plants open. It has joined President Trump in becoming a kind of all-purpose pitch man for the industry. Over the weekend, the Department’s X account posted an image of Secretary of Energy Chris Wright with a shovel, copied and pasted in front of an open-pit mine, with the words “MINE, BABY, MINE.”
On the supply side, congressional Republicans tucked into the One Big Beautiful Bill Act a tax credit specifically for domestic metallurgical coal production, which could be worth hundreds of millions of dollars a year.
Some of the largest end users of U.S.-mined metallurgical coal are outside the U.S., including the countries driving worldwide coal demand. India imported over 3 million tons of U.S. metallurgical coal in the first three months of 2025, with China just under a million, according to U.S. Energy Information Administration data.
The tie-up between Nippon Steel and U.S. Steel authorized in June, meanwhile, grants a “golden share” of the American company to the U.S. government, in part to ensure increased investment and capacity. That deal also explicitly provides for at least $1 billion of investment into U.S. Steel’s existing blast furnace operation, Mon Valley Works, in Western Pennsylvania. The investments “ensure Mon Valley Works operates for decades to come,” the company said in an announcement.
That means more coal: Mon Valley Works is the “largest coke manufacturing facility in the United States,” according to U.S. Steel, producing 4.3 million tons of the coal product both for its own operations and for sale to other steelmakers.
In an interview with Japanese media, Nippon Steel’s chief executive Eiji Hashimoto said that the newly expanded company will likely build a new steel mill in the U.S., as part of its goal to catch up in steel production with its Chinese rival China Baowu Steel Group Corp, while also using more of its existing capacity to increase production, hoping to eventually more than double its output by the middle of next decade.
(For what it’s worth, Japan is also a major importer of metallurgical coal from the United States, taking in just over a million tons in the first three months of 2025.)
While the future of coal will be determined in Asia, the U.S. steel industry is happy to work with the Trump administration and the coal industry to keep things burning.
“They see the value in blast furnaces just as we at Cleveland Cliffs do,” Cleveland-Cliffs’ Goncalves said of the U.S. industry’s new Japanese partners.