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According to a Times report, the administration is delaying approval of a major — and majorly controversial — LNG export terminal.
This morning, as far as anyone knew, the U.S. was considering whether to approve 17 new facilities for the export of liquified natural gas. By this afternoon, in a move destined to ripple through the race for the White House, those considerations were off. According to reporting by The New York Times, Biden officials have paused their decisionmaking, instead asking the Department of Energy to widen its review of the first of these 17 — known as Calcasieu Pass 2, or CP2 — to include effects on the global climate.
“Um, I think we all just won,” wrote Bill McKibben — perhaps the project’s staunchest foe — in a newsletter sent out just a few hours later. “Yes,” he wrote, “there are always devils in the details. And it doesn’t guarantee long-term victory — it sets up a process where victory is possible (to this point, the industry has gotten every permit they’ve asked for). But I have a beer in my hand.”
That possible breaking of historical precedent partially explains why McKibben is so exhilarated. Another reason has a lot to do with an analysis of the climate effects of U.S. LNG exports, released in November by energy analyst Jeremy Symons. Among his most incendiary findings was that, if all 17 export terminals were approved, the emissions related to the fuel that would flow through them would exceed the annual greenhouse gas emissions of the entire European Union.
This analysis was not subject to peer review, and it relies on another set of findings from Cornell University researcher Robert Howarth showing that “the footprint for LNG is greater than that of either coal or natural gas;” these findings are subject to peer review but have not yet passed that test. That’s not to say either is inherently suspect, but neither is exactly a consensus opinion.
Biden’s administration has itself been split over the decision, according to reporting last week in Bloomberg. The U.S. became the largest global exporter of LNG after Russia invaded Ukraine in 2022, according to more Bloomberg data, and some in the administration would rather continue to press that geopolitical advantage. But others — including Energy Secretary Jennifer Granholm and climate adviser John Podesta — pressed back. “Overall, top advisers are broadly aligned on the need to make changes — especially after the U.S. and nearly 200 other nations committed in December to transition away from fossil fuels,” the Bloomberg authors cautioned. “The fault lines are over how aggressive to be.”
Heatmap reached out to the White House and got a “no comment” in response — neither a confirmation nor a denial, nor any kind of signal of what may lie ahead. Let’s assume, then, that the Times got it right. Where does that leave us?
Republican leaders and their surrogates were ready with attacks even before this latest development. “Biden Toys With an LNG Export Permitting Ban,” the Wall Street Journal editorial board trumpeted on Monday. On Wednesday, Republican Minority Leader Mitch McConnell claimed (falsely) on the Senate floor that “the administration’s war on affordable domestic energy has been bad news for American workers and consumers alike.” And, of course, former President Donald Trump has made Biden’s supposed antipathy for American energy consumers a staple of his campaign pitch to re-enter the White House.
The thing is, Biden’s climate policies are actually pretty popular, even if most people don’t know what they are. A substantial majority of Americans — and an overwhelming majority of both Democrats and Independents — acknowledge that the climate is changing because of human activity and want to see the government do things like provide tax incentives for energy-efficient homes and make it easier to build new wind farms, , according to Heatmap’s polling, both of which the Biden administration is doing. (Of course, our results also find that most Americans, albeit fewer of them, want to make fossil fuel expansion easier, too.)
There are plenty of big questions remaining — not least of which is whether Biden has, in fact, put off making a decision on these LNG terminals, but also how such a decision will ripple through the global energy economy. (Although even in deciding not decide on the expected timeline, Biden has at the very least raised costs for the developers of these export facilities, which is a decision in its own right.)
What was never in question is that this would be a major campaign issue, no matter what Biden did. It looks like he has cast his bet in favor of the climate crowd. We’ll see how it plays.
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Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.
Exactly where China is in its energy transition remains somewhat fuzzy. Has the world’s largest emitter of greenhouse gases already hit peak emissions? Will it in 2025? That remains to be seen. But its import data for this year suggests an economy that’s in a rapid transition.
According to government trade data, in the first fourth months of this year, China imported $12.1 billion of coal, $100.4 billion of crude oil, and $18 billion of natural gas. In terms of value, that’s a 27% year over year decline in coal, a 8.5% decline in oil, and a 15.7% decline in natural gas. In terms of volume, it was a 5.3% decline, a slight 0.5% increase, and a 9.2% decline, respectively.
“Fossil fuel demand still trends down,” Lauri Myllyvirta, the co-founder of the Centre for Research on Energy and Clean Air, wrote on X in response to the news.
Morgan Stanley analysts predicted Friday in a note to clients that this “weak downstream demand” for coal in China would “continue to hinder coal import volume.”
Another piece of China’s emissions and coal usage puzzle came from Indonesia, which is a major coal exporter. Citing data from trade data service Kpler, Reuters reported Friday that Indonesia’s thermal coal exports “have dropped to their lowest in three years” thanks to “weak demand in China and India,” the world’s two biggest coal importers. Indonesia’s thermal coal exports dropped 12% annually to 150 million tons in the first third of the year, Reuters reported.
China’s official goal is to hit peak emissions by 2030 and reach “carbon neutrality” by 2060. The country’s electricity grid is largely fueled by coal (with hydropower coming in at number two), as is its prolific production of steel and cement, which is energy and, specifically, coal-intensive. For a few years in the 2010s, more cement was poured in China than in the whole 20th century in the United States. China also accounts for about half of the world’s steel production.
At the same time, China’s electricity demand growth is being largely met by renewables, implying that China can expand its economy without its economy-wide, annual emissions going up. This is in part due to a massive deployment of renewables. In 2023, China installed enough non-carbon-emitting electricity generation to meet the total electricity demand of all of France.
China’s productive capacity has shifted in a way that’s less carbon intensive, experts on the Chinese energy system and economy have told Heatmap. The economy isshifting more toward manufacturing and away from the steel-and-cement intensive breakneck urbanization of the past few decades, thanks to a dramatically slowing homebuilding sector.
Chinese urban residential construction was using almost 300 million tons of steel per year at its peak in 2019, according to research by the Reserve Bank of Australia, about a third of the country’s total steel usage. (Steel consumption for residential construction would fall by about half by 2023.) By contrast, the whole United States economy consumes less than 100 million tons of steel per year.
To the extent the overall Chinese economy slows down due to the trade war with the United States, coal usage — and thus greenhouse gas emissions — would slow as well. Although that hasn’t happened yet — China also released export data on Friday that showed sustained growth, in spite of the tariff barriers thrown up by the Trump administration.
The nonprofit laid off 36 employees, or 28% of its headcount.
The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.
“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.
Now, the future of that funding is being held up in court. GGRF funds have been frozen since mid-February as Lee Zeldin’s Environmental Protection Agency has tried to rescind $20 billion of the program’s $27 billion total funding, an effort that a federal judge blocked in March. While that judge, Tanya S. Chutkan, called the EPA’s actions “arbitrary and capricious,” for now the money remains locked up in a Citibank account. This has wreaked havoc on organizations such as Rewiring America, which structured projects and staffing decisions around the grants.
“Since February, we have been unable to access our competitively and lawfully awarded grant dollars,” Matusiak wrote in a LinkedIn post on Thursday. “We have been the subject of baseless and defamatory attacks. We are facing purposeful volatility designed to prevent us from fulfilling our obligations and from delivering lower energy costs and cheaper electricity to millions of American households across the country.”
Matusiak wrote that while “Rewiring America is not going anywhere,” the organization is planning to address said volatility by tightening its focus on working with states to lower electricity costs, building a digital marketplace for households to access electric upgrades, and courting investment from third parties such as hyperscale cloud service providers, utilities, and manufacturers. Matusiak also said Rewiring America will be restructured “into a tighter formation,” such that it can continue to operate even if the GGRF funding never comes through.
Power Forward Communities is also continuing to fight for its money in court. Right there with it are the Climate United Fund and the Coalition for Green Capital, which were awarded nearly $7 billion and $5 billion, respectively, through the GGRF.
What specific teams within Rewiring America are being hit by these layoffs isn’t yet clear, though presumably everyone let go has already been notified. As the announcement went live Thursday afternoon, it stated that employees “will receive an email within the next few minutes informing you of whether your role has been impacted.”
“These are volatile and challenging times,” Matusiak wrote on LinkedIn. “It remains on all of us to create a better world we can all share. More so than ever.”
The company managed to put a positive spin on tariffs.
The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”
“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.
Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.
But — and here’s where things get interesting — the company also offered a positive spin on tariffs.
In a slide presentation to investors, the company said that “sustained, severe tariffs may drive the country to a recession.” Sounds bad, right?
But no, not for Sunrun. A recession could mean “lower long term interest rates,” which, since the company relies heavily on securitizing solar leases and benefits from lower interest rates, could round in the company’s favor.
In its annual report released in February, the company mentioned that “higher rates increase our cost of capital and decrease the amount of capital available to us to finance the deployment of new solar energy systems.” On Wednesday, the company estimated that a 10% tariff, which is the baseline rate in the Trump “Liberation Day” tariffs, could be offset with a half percentage point decline in the company’s cost of capital, although it didn’t provide any further details behind the calculation.
Even in the absence of interest rate relief, a recession could still be okay for Sunrun.
“Historically, recessions have driven more demand for our products,” the company said in its presentation, arguing that because their solar systems offer savings compared to utility rates, they become more attractive when households get more money conscious.
Sunrun shares are up almost 10% today, as the company showed more growth than expected.
For what it’s worth, the much-ballyhooed decline in long-term interest rates as a result of Trump’s tariffs hasn’t actually happened, at least not yet. The Federal Reserve on Wednesday decided to keep the federal funds rate at 4.5%, the third time in a row the board of governors have chosen to maintain the status quo. The yield on 10-year treasuries, often used as a benchmark for interest rates, is up slightly since “Liberation Day” on April 2 and sits today at 4.34%, compared to 4.19% before Trump’s tariffs announcements.