Since President Trump took office on January 20, he has quickly enacted an expansive list of policies with immediate and dramatic impacts on climate and energy.
If you feel like you’re struggling to process these rapid-fire actions, you’re not alone.
Among other pursuits, the President has vowed to “terminate the Green New Deal” and paused funding for tons of clean energy projects—from offshore wind development to Solar for All and IRA grants. He has signed executive orders designed to maximize fossil fuel extraction and domestic mining, and overseen the launch of an enormous, power-hungry data center that’s part of the Stargate project, which could potentially employ solar as part of its fuel mix. Additionally, Trump instituted a 10% tariff on all Chinese imports, and has threatened to implement additional tariffs on Mexican and Canadian goods. (Okay, let’s take a breath.)
In today’s episode, the hosts dig into some of these pressing issues, debate their impact on the clean energy sector, and find some common ground on the potential upside of trimming the federal government.
This episode wraps up with the rapid-fire segment, the Mark-Up.
Credits: Hosted by Julia Pyper, Emily Domenech, and Brandon Hurlbut. Produced by Max Savage Levenson. Edited by Anne Bailey. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.
Political Climate is co-produced by Boundary Stone Partners, a leading bipartisan climate change strategic advisory and government affairs firm. Their mission-driven approach combines innovative solutions with expertise in technology, finance, policy, federal funding, and advocacy. Learn more and get in touch today at BoundaryStone.com.The energy industry is transforming – are you staying ahead of the curve? As the premier bipartisan strategic advisory firm, Boundary Stone Partners bridges the gap between technology, policy, and finance to drive real-world impact, empowering clients to shape a more sustainable future. Visit BoundaryStone.com to learn more.
Transcript
Julia Pyper: Hey guys, what are your plans for the Super Bowl? Anyone hosting? Does anyone like the teams?
Emily Domenech: No, I’m just disappointed. My Washington Commanders didn’t make it to the Super Bowl. Nobody wants to root for the Eagles.
Julia Pyper: Right. I feel like people are over Kansas City. I did have the honor of going to the Super Bowl one year I was pregnant, so it was totally a waste of time though because the whole thing is drinking. It was really lost on me.
Emily Domenech: That’s so sad.
Julia Pyper: I know. It’s bad.
Emily Domenech: Did you watch the Super Bowl when you-
Julia Pyper: Totally, yeah, we watched the Super Bowl. We were there for the Rihanna concert actually-
Emily Domenech: I think was going to say there’s no way-
Julia Pyper: -but there was some sports ball happening too. Brandon, how about you?
Brandon Hurlbut: I’ll be working on a plane to Boston, so sad.
Emily Domenech: Oh no. You’re going to miss the scripted win.
Brandon Hurlbut: But the Bears will be in the next Super Bowl. We got our coach, so I’m excited.
Julia Pyper: Nice.
Welcome back to Political Climate. I’m Julia Pyper. Since President Trump took office on January 20th, he’s quickly enacted an expansive list of policies with immediate and dramatic impacts on climate and energy. If you feel like you’re struggling to process these rapid fire actions, you are not alone. The president has paused funding for tons of clean energy projects from offshore wind development to Solar for All and Inflation Reduction Act grants. He assigned executive orders designed to maximize fossil fuel extraction and domestic mining. He’s also overseen the launch of an enormous power hungry data center called Stargate, which could employ solar as part of its fuel mix.
Additionally, Trump instituted a 10% tariff on all Chinese imports and has threatened to implement additional tariffs on Mexican and Canadian goods. So where do all of these moves leave clean energy? In today’s episode, we’ll dig into some of the issues at play and debate the impacts they could have on the industry. We’ll wrap up with our rapid fire segment, the Markup that’s all coming up on Political Climate.
As always, I’m joined by my co-hosts Brandon Hurlbut and Emily Domenech. Brandon served as chief of staff in President Obama’s energy department and went on to found Boundary Stone Partners and Overture VC. Brandon, you are not on a plane today, I take it. I know you’re always on the go. How you doing?
Brandon Hurlbut: We have a lot to discuss today. A lot’s happened since the last time we checked in.
Julia Pyper: It feels like every day is a whole month of activity these days. Yeah, buckle up. Hi, Emily. How are you?
Emily Domenech: I’m doing well.
Julia Pyper: That is Emily, who served as senior energy advisor to speakers of the House, Kevin McCarthy and Mike Johnson, and is now a senior Vice President at Boundary Stone. All right, guys, let’s jump right in. We’ve got kind of a grab bag episode today. First, let’s kick off with the executive orders and the funding freeze. We talked about this a little bit last episode, but there’s a lot of moving pieces here. To recap, President Trump put out a series of executive orders related to reviewing and ending various government programs and initiatives such as directives to withdraw from the Paris Climate Agreement and the World Health Organization. One order named Unleashing American Energy requires agencies to freeze and review funds related to the “Green New Deal.”
Then the Office of Management and Budget issued a memo stating that it would freeze “all federal financial assistance programs and supporting activities” as it determines which ones align with administration priorities and which ones don’t. Not just in the energy and environmental space, but on topics like DEI too. Heatmap News compiled a list of roughly 50 programs that were subject to the funding freeze stemming from the memo. This includes things like DOE research projects, tribal energy development grants and nuclear cleanup projects. The OMB ultimately rescinded the controversial memo following legal challenges, but many clean energy and environmental programs remain stalled due to Trump’s original executive order. Let’s get a little specific here because I know our listeners are in the weeds. Section 7 of President Trump’s Unleashing American Energy Executive Order entitled Terminating the Green New Deal mandates an immediate pause on dispersing funds appropriated through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
That is until agencies review their funding processes for consistency with the administration’s priorities and submit a report that’s due within 90 days. The section specifies that no funds shall be dispersed until the director of OMB and the assistant to the president for economic policy give the go-ahead. Long story short, a pause remains in effect for grants and loans under the IRA and IIJA, but so far none of the executive orders seem to have bearing on clean energy tax credits. So I wanted to provide that context to tee up this conversation with you guys. First, what do you both make of the use of Green New Deal in that executive order? The Green New Deal after all is not an actual piece of legislation. It’s being branded for a set of different policies. Brandon, let’s go to you first. What do you make of the president’s use of that term?
Brandon Hurlbut: Makes no sense. Let’s reset here. The New Deal was a jobs program that helped lift the US out of the Great Depression. The Green New Deal was a slogan to advocate for federal policy to create new green jobs by re-industrializing the US and manufacturing products here. The Inflation Reduction Act did that. The problem with the Republicans is when they start believing their own BS, what happened with the Inflation Reduction Act is it created hundreds of thousands of new jobs and could create millions more if it’s not repealed. And those green jobs went to red districts, more than half of those jobs in red districts and it has incentivized $500 billion in private capital investments and 3X of those investments have gone to red districts. So the Green New Deal is working for Republicans.
Emily Domenech: Are you done with your talking points? Can I answer the question now?
Brandon Hurlbut: Go for it (laughs). But they’re not talking points, those are facts.
Emily Domenech: Let’s talk about this from what the goals are, right? So for Republicans, you’re right, the Green New Deal represents a certain type and style of spending that we have seen from the previous administration. Some of that was authorized by Congress in the IRA and some of it is things that are tacked on to various grant programs throughout the government that were requirements that were never put in statute. I always use the Department of Transportation as a good example here because there’s plenty of programs where there are greenhouse gas requirements that have been included in those grant programs that were never authorized by Congress. I actually think the big-picture intent of this type of focus on let’s reevaluate what we’re looking at within the grant making structure is to suss out those places where there are policies in place that no longer align with the chief executive that were not established by Congress.
That’s why we do these kinds of reviews. I think we’ve certainly seen lots of back and forth between the OMB memo and the courts, and that’s I think all nice and flashy and interesting. I’m more interested in sort of these agency efforts to go through the grants and say, “Hey, these are the places where we think they no longer align with our core values, where it’s not something we’re required to do by statute, and that’s how they’ll reevaluate those grant making programs going forward.”
Julia Pyper: They have put pauses on programs that are very clearly in statute though like Solar for All, which is funding going to various states to help people who are low and moderate income save on their energy bills.
Emily Domenech: I think there’s a key difference here is pausing a program that’s in statute to evaluate it for the requirements of that program that are sub reg. So we’re looking at how they are implementing the program. Not saying we’re never going to implement it, we’re saying we’re pausing it, we’re evaluating it, we’re seeing what we can change going forward, and then we move ahead. And I think that’s part of why you see that 90-day requirement for that report from the agencies. If that wasn’t in there, I think we’d be talking about a different environment, but that is a pretty common evaluatory process.
Julia Pyper: Do you know how long after that they would then make a decision on a go, no-go for the program or changes to the program? Is there regulatory language around what that needs to look like?
Emily Domenech: We’ve seen some of that language come out in the individual agencies and in some cases since I suspect we’ll see change between when we record this program and when it is actually released. Even this morning, there was an announcement that the EPA started reissuing grants in a number of areas that fall under this sort of IRA green spending bucket. I think we’ll see that happen on a rolling basis in various agencies as they go through this process.
Julia Pyper: I think what shocked a lot of people on the legal side was not that a new administration would put a pause on certainly new programs, anything that’s not fully rolled out, anything that’s not under contract, Democrats, Republicans alike do that. What was different was pausing funds that were already under contract obligated being the term at play here that was different and maybe as you say, and others have argued, this is still just part of a normal review, but I think that is what caused so much of the pushback is just sort of to what extent they applied that pause. And so we certainly have to see if they continue or not. Keeping with the Green New Deal term, Emily, I’d love to get your thoughts.
Just taking a step back here, we actually years ago had the founders of some of these Green New Deal concepts, people who are progressive thinkers who started this movement years ago and they made their case for why America needs this big revitalization moment, if you will. Do you agree with that broader philosophical push that this is a time that America needs to reinvest domestically, needs to actually put federal dollars into the US economy in new ways and bigger ways to get basically ahead of the next century? Or do you think all that’s happening organically as it is today? I mean you wouldn’t call it the Green New Deal, I know, but is there an impetus there that you feel like people have different pathways to get to but the thought is not misplaced?
Emily Domenech: I think the devil’s in the details here. I am very much a small government proponent to very rarely sees a value from big federal investments. That said, I think when the Trump administration looks at those kinds of policies, there is certainly a huge populist movement there that says we should be making investments to be more competitive with China or to ensure that we can have control over our supply chains or elsewhere. And I think there’s a pretty good argument for some of those things that are focused on that Chinese competitiveness angle and maybe that’s a place for common ground when we kind of get away from the talking points and sloganeering. But I would say again, I tend to look at it as let’s look at the individual policy, how much it will cost the taxpayers and how much potential benefit could exist in the future.
Julia Pyper: Brandon, let’s put your startup hat on. You work with a lot of different companies. How are you seeing those industry leaders respond to these phrases? What sort of impacts are they having beyond just the direct funding, although I’m sure that’s having an impact on hiring and planning, but how are you seeing these companies go forward? I’m sure it’s affecting fundraisers and mergers and acquisitions and other dynamics. So what are you seeing in the marketplace?
Brandon Hurlbut: It has created confusion and uncertainty, which is very difficult to operate on. So the immediate consequences are there are layoffs and furloughs already happening, people counted on this money because it’s contractually obligated. And so there’s a bigger issue at stake here. If the US government is not going to honor legally binding contracts, then that’s like the foundation of our economy. That’s what makes us different from other countries. We rely on the sanctity of contracts. And so the problem here is if you can’t rely on that, it’s hard to invest. All right? And if you counted on those funds, it impacts your budget. And if your answer is, “Well, just go take your case to the courts, you have a strong legal standing,” well, that could take months to years and lots of legal fees. And so the either intended or unintended consequence here could be to drain some of these companies.
And so that’s a big problem. And my fear in this pause is that it’s going to be picking winners and losers that they will release the funds for what’s defined in the executive order as an energy resource like fossil fuel and nuclear and geothermal. But what’s not in that executive order is solar, wind, storage, hydrogen. And that might become a deal-by-deal case to get your money. And that might be pay to play, I don’t know, favoritism. You got to go to DC, bend the knee. I don’t know what it will take to get those done, but my advice to the industry is you got to be engaged in advocating and aligning your project, your grant with their policy priorities. So I used this quote at a conference in San Diego last week, it’s a famous quote from Ann Richards, “If you’re not at the table, you’re on the menu.” I think that’s the case more than ever in DC right now.
Julia Pyper: And you can call Boundary Stone Partners at 1-800. Let me give you…(laughs)
Brandon Hurlbut: Well, you actually call Emily.
Julia Pyper: I’d love to get your sense of what you think the ultimate goal is. It feels like there’s a flood the zone kind of approach here, a lot of headlines, a lot of concern, a lot of confusion as we’ve discussed. Brandon, you’ve been in government. If you had to put yourself in the Trump administration’s shoes, what do you think they’re trying to do here? Is this really about finding spending cuts? Is it really about remaking the government? What is your honest read of the ultimate goal here?
Brandon Hurlbut: I think the impetus is that the government bureaucracy is too big and it doesn’t work in many cases. And if you want to change that, you try in the past to turn a knob here, turn a knob there. And I saw it when I was at the Department of Energy. We had cellphones that when they were turned in didn’t get turned off and they were issued new phones and these boxes of cellphones that were… You could call the number of the person left five months ago and still got their voicemails still paying that bill. And one of the staff members tried to take that on and end it and couldn’t get it done. And I’d always ask, “How’s the cellphone thing going?” They just have this look of despair. And so making these changes are hard and they shouldn’t be that hard.
And I think maybe their conclusion from their first experience in Trump won is like you can’t just turn a knob here and there. You have to kind of break it and start over because there is wasteful spending in the government. I saw it. There is abuse and it should end, but they’re telling voters that this is the reason for inflation. This is why the government has a big deficit. That is not true. All of this stuff is on the margins. The government spends its money on entitlements, social security, Medicare, Medicaid and defense, which has an $850 billion budget. The EPA has a $9 billion budget. If you eliminated the EPA, it would make no difference in federal spending. So I applaud what they’re trying to do to root out some of this stuff and taking a fresh look at some of these contracts and some of that, but it’s not going to solve inflation in high costs. And so I wonder this is what they campaigned on, what’s the lower costs? This isn’t going to do it.
Emily Domenech: I would just add here, I think you’re completely right, and of course I agree with you that there’s tons of waste across the federal government. Republicans’ perspective here is that every dollar counts. And if we can’t go in and root out the kinds of wasteful programs at the small scale, how are we ever going to solve our budget deficit problems in the big picture? So we see this as the first step, right? So taking on every time I hear someone say, “Oh, but that’s just a small billions of dollars.” Well, if we can’t cut that, how are we ever going to deal with the fact that we have a massive entitlement problem that we have no pathway to solve in the long term? So I see it as a first step and I very much believe that for our base, having learned not just from the last Trump administration, but to your point, Brandon, from decades of previous administrations, it is next to impossible to rein in the federal bureaucracy in the way we’ve done it before and we got to change things up. And that’s what we’re seeing here.
Brandon Hurlbut: The optimist in me is trying to find this good intentions here. I hope that’s true. I just hope that the course correction, which we need does not go so far and the pendulum swings so far the opposite direction that we now are in a place where we’re using government power to do harm.
Julia Pyper: Okay. We got into this a little bit, but I’m curious if either of you are following specific programs. Are there specific programs you’re aware of, funding buckets that you think really have a target on their back? Emily, what are your thoughts? It could be a specific one or maybe a bucket.
Emily Domenech: I was going to say I don’t know that I would say a specific program, but I do think there are specific types of program and program requirements that we will see targeted in this going forward. One would be sort of the mandatory community benefit plans. That’s one issue that’s come up. One would be the programs or sub parts of grants that are specifically focused on DEI initiatives or other things that have been named in that executive order. I think the long-term goal here is to say, “Okay, where are places where we added a bunch of requirements that aren’t in statute that we can say, ‘Hey, in the grant making process going forward, we’re not going to require these things and we’re not going to give you money to do them either.'” So I think that is sort of the bucket of things we’ll expect to see.
I would say just on the broader point here, we have a long history in this country, specifically going back to Obama, but I’d say it’s certainly stretches before him, of chief executives using the executive power to push policy in one direction or another. With Democrats, we’ve seen them push funding that wasn’t authorized by Congress repeatedly. I use the Obama pen and phone example. I use the Joe Biden forgiving student loans without any authorization from Congress as a good example of those policies. The problem is when you have policies like that on one side, you’re going to see them on the other side. So you’re going to see Republicans come in and say, “Hey, what are the executive steps we can take to restrict spending?” Because that’s their core belief is that we should be restricting the size and scope of the federal government. So I think the answer here is that if you have members of Congress who care deeply about statutory programs, then they need to appropriate funds for them and be clear about how they want them to be spent.
Brandon Hurlbut: Emily, do you think that they are going to be picking winners and losers? Which is what Republicans always accuse Democrats that of when Chris Wright was nominated, I thought, okay, he’s an energy executive and he talked about all of the above, and I think we can all get our heads around all the above, but I’m wondering, do you think that they’re going to try to actively punish non-fossil fuel technologies?
Emily Domenech: You mean like how Joe Biden actively wanted to punish LNG exporters by banning LNG exports when the court threw out that answer? I mean, I think this is the same kind of flip-flop we’ve seen. I will say in this case, there aren’t a lot of grant-making programs that are going out the door for fossil fuels. So I don’t know where you’re seeing that because there really aren’t that many projects that fall in that scope that are funded by the department anymore. So I think the Department of Energy, frankly, long ago picked winners and losers in where they made their investments.
All you have to do is look at the size of the various programs and what they have funded over certainly the last four years, but longer than that. So I think what you may see is a rebalancing of efforts where we see more focus from Republicans on things that are in the basic and fundamental science R&D space, which is something where, frankly, Republicans have long history of supporting that kind of work, and less on the deployment. That’s a little less of picking winners and losers and a little more balancing priorities from my standpoint.
Brandon Hurlbut: Yeah. And the reason that Democrats have wanted to prioritize clean energy is it’s a market that we want to own. We’re trying to compete with China who is very much trying to own that market at our expense and it’s cleaner. There’s less pollution, so it’s good for humanity.
Julia Pyper: Well, as all this plays out, I think there’s going to be also a lot of legal questions. Emily mentioned, if Congress has a set of priorities, they should appropriate. There is some question now around the new executive branch and how much control they think they have over government spending and whether they can use things like the Empowerment Control Act to curb maybe spending in the flow of funds or whether that’s actually constitutional or not. These are comments that have been brought up by Russell Vought who is nominated to lead the Office of Management and Budget. So I think there’s going to be legal cases following from this that doesn’t seem to be a secret. So I think there is going to be perhaps larger battles beyond the scope of just energy here around what can the executive branch do in terms of affecting spending that even Congress has decided and passed laws to spend.
Emily Domenech: And I think we saw the inverse of that during the Biden administration where we had members of Congress and other stakeholders filing lawsuits against massive spending efforts that were not authorized by Congress and they eventually won in the courts on those issues. The student loan issue is a perfect example of that, so I think we’ll continue to see that kind of back and forth. It’s just a different set of priorities than the last administration had.
Julia Pyper: Yeah. In the meantime, it is unfortunate to see particularly some of the international programs that are helping people get clean water and basic healthcare have freezes because those are people’s lives on the line. But hopefully we get some more clarity here in the immediate future because there’s a lot going on there, including on the energy space and people, companies, nonprofits that bring electricity to folks who still don’t have it around the globe. So I would love to see, personally, a lot of that great work that America does continue on and we’ll have to watch now that Marco Rubio is officially in the State Department seat and we’ll see what happens to USAID and other funds of that nature.
Brandon Hurlbut: One of the outcomes of that, Julia, is that many of these philanthropic organizations might feel pressure to step in and fill that gap on global health at the expense of climate philanthropy.
Julia Pyper: Yeah, indeed. It’s a moving target here, and this is sort of the snapshot we have today. I guess to close out on this section, I do want to bring in the Congress angle during the presidential campaign, and even since the election, we’ve heard a lot about this scalpel versus sledgehammer metaphor largely with respect to budget reconciliation and reconciliation deal in Congress and just how much they would change things like the Inflation Reduction Act and tax credits. I guess, Emily, just to close out here, what’s your read on now how aggressive the executive branch and or Congress are going to be in this scalpel versus sledgehammer approach? It really feels reading the headlines, we’ve got a sledgehammer situation, but of course there’s different players here and time may see this evolve. So what’s your read?
Emily Domenech: Yeah, I was going to say you stole my line there because I think the headlines are very much saying this is a sledgehammer, it’s going to apply to everything. I think the end result will be that it will be much more of a scalpel, and that’s part of what, again, the evaluation period is designed to do because there are going to be limits on what they can actually pull back, particularly when things are required in statute. As far as Congress is concerned, I think this is the lesson to Congress that if you want to be sure that your programs are built and designed and executed in the way that you envisioned, that you are really specific in the lawmaking that you undertake, because when something is in statute, I suspect it will be incredibly difficult for a future administration to undo it.
Julia Pyper: All right. Let’s move on to our second topic. As we consider the impact of President Trump’s actions on clean energy, I want to zero in on solar power. So the president has moved pretty aggressively on wind, specifically offshore wind and electric vehicles. The solar industry has so far been spared some of the dramatic opposition, I would say, not making headlines in quite the same way. Some industry insiders have even expressed optimism about solar’s growth during Trump’s second term following record growth during his first term. On January 28th, the Solar Energy Industries Association, SEIA, announced targets that it hopes its member companies will hit by 2030. This includes deploying 10 million distributed storage installations and reaching 700 gigawatts of capacity.
The U.S. Energy Information Administration for its part anticipates that solar will lead the renewables charge during Trump’s second term. Yet the president himself has announced a 60-day suspension on new leases or contracts for renewables on public land like solar farms. As of this recording, the EPA has paused $7 billion in grants for the Solar for All program that we mentioned earlier, and then there are tariffs, which is another wild card. So Brandon, let’s go to you first on this one. What are you hearing from folks in the solar industry? Are they pretty bullish on the outlook here? Do they think their technology sort of has a different, no, fits into the energy landscape a little bit differently and may avoid some of the political crossfire?
Brandon Hurlbut: Yes. They’re all on the hill today delivering this message of how solar fits into energy dominance. And you don’t have to listen to me or some green nonprofit, listen to the CEO of NextEra. On their earnings call a couple weeks ago, he said, “Renewables and storage will meet the electricity demand surge over the next five years.” It takes five years to build a natural gas plant, right? So we can build lots of little things faster than we can build some large big things. And so you look at the way solar has been deployed, I mean last year it was like 37 gigawatts in the United States. Natural gas did two and a half.
So in order to start deploying new natural gas again, you’ve got to get those supply chains going. It’s going to be expensive to flip that switch again. So we talked about, on one of our recent episodes, Emily said that she didn’t think there’s an energy transition happening and she cited China building a coal plant every six days. True. China did 80 gigawatts of coal last year. They did 277 gigawatts of solar. I mean, this is just the math, it’s happening. It was two thirds of all new electricity generation in the US last year was solar.
Julia Pyper: Emily, what’s your read on the situation? Is solar a little bit of a different type of project type of technology?
Emily Domenech: I think solar developers are looking at a sort of strong swing against wind as an opportunity for them to take over some of that renewable market. I would say though that when we talk about the math on renewables and storage, I hear that a lot, like renewables and storage are going to meet this growing demand. There’s a massive disconnect between the amount of storage capacity we have in this country and the amount of renewable capacity we have in this country. And that is a huge problem if your pitch is that renewables are just as reliable when they’re paired with storage, there’s like 10% as much storage capacity in the country as there is renewable capacity. That’s a huge problem. And so if I was a developer looking at this landscape and I was saying, “Hey, how do I make the argument to Republicans that we’re not a reliability concern?” I’d be investing in storage. And you cannot make the argument that renewables without storage can meet that demand in a reliable way.
Brandon Hurlbut: True.
Julia Pyper: I think the question is can you deploy storage still faster than a gas plan? In which case you can start to level out those numbers.
Brandon Hurlbut: That’s what NextEra says, and if you look at the cost, they include storage as part of that renewable cost and it’s cheaper than new natural gas.
Emily Domenech: I think, again, I think the devil’s in the details here because we haven’t seen that storage number level out. It’s grown at a much, much, much slower rate than renewables because it’s not subsidized by the federal government. So especially in a post-IRA environment where we’re looking at potentially the deployment tax credits being reevaluated, I’m curious if the drive to deploy new solar is as high.
Julia Pyper: Fair enough on the tax credit front, certainly the industry has built itself around having consistent tax policy, and if that changes dramatically instantly, that would be damaging to all the investments lined up as it would for any project and any kind of industry. I do wonder quickly on the federal lands piece, Emily, since you’re close to this and leasing and permitting and trying to speed up that process. You’ve talked in the past about how you think the new administration and Congress under Republican control could actually speed up the deployment of solar power on federal lands. We do have this 60-day pause, however. So how are you reading the federal lands piece of this?
Emily Domenech: I do think on the federal land side, it’s going to be very case by case because you do have all of these additional requirements in terms of endangered species impact and National Historic Preservation Act impact, and that does make it harder, particularly for solar that takes up a lot of surface land. So it’s harder to fast track that stuff for solar than it is frankly for geothermal or oil and gas or even wind. So I think that the jury’s still out a little bit on whether or not there’s an opportunity there, but I do think maybe that’s where renewable developers should be working with folks who want to reform some of those permitting laws.
Julia Pyper: And finally, in this section, we’ve got frankly, a whole big bucket of tariff-related matters. I think what’s getting headlines now is the 10% tariff on all Chinese goods, and certainly there are still various components. Even if we finalize the manufacturing or do a lot of the manufacturing in America, we don’t make every single bolt, nut and screw. So what do you guys think the impact of the latest round of tariffs are going to have on the solar industry here in America and certainly other buckets? Brandon, are you getting a read on how companies are thinking about the tariff implications?
Brandon Hurlbut: Well, on some of these energy products that are already paying a high tariff up to 50%, so another 10% is a marginal increase, and a lot of this stuff is coming in through Southeast Asia already, particularly in solar as China’s tried to get around these tariffs in the past. So I’m not hearing that the 10% Chinese tariff on energy products is as consequential to some of the other policies that are being put out.
Julia Pyper: But there are of course other buckets of tariffs. So many sections I can’t even cite them.
Brandon Hurlbut: Yeah. Julia, you’re a Canadian. I mean, what’s going on? Are you going to become the 51st state?
Julia Pyper: Oh my God. Oh, it’s depressing, guys. I mean, a lot of Canadians obviously just vacation in America, they’re emotionally hurt that America would do this and tank their economy because of course Canada and Mexico would do retaliatory measures, but it would be very damaging. The auto sector would lose so many jobs right away. By the way, it’s totally in sync with so many red American states. That’s a very continent wide industry, and it would’ve implications that ripple across America too. So honestly, it’s funny on some level there was like get rid of all the American alcohol in our liquor stores, but now it’s back. So we’re good. We got one more month to get drunk on Tennessee whiskey for folks back home. Hopefully they come do a deal.
Emily Domenech: I was going to say, my take here is that President Trump very much, very clearly has said he views tariffs as a tool to get people to the table to negotiate bigger deals. I think that’s what we’ve seen both in the… I’ve had conversations with Canada and Mexico, but I think we’ll see tariffs as a part of this toolbox in dealing with competitiveness issues around the world. So I don’t think we’ve seen the last of the tariff regime here from this administration, and we probably have lots of opportunities to talk about it in the future.
Julia Pyper: Of course, it does, kind of like the contracts discussion, what becomes lines you don’t cross in negotiations, and it definitely sends a chill to all the relationships as we go forward. I don’t know what that means for supply chains and economic ties, but of course we’re neighbors, so we got to get along. All right, let’s keep moving on. Our next topic is around the recent developments on AI and the data centers that power the industry. Last week, the Chinese company DeepSeek announced it had built an AI model called R1. They can process data much more efficiently than its American competitors. The move sent shockwaves through the industry and chip manufacturers lost hundreds of billions of dollars overnight. The Trump administration also announced that it’s facilitating the construction of a 100 billion data center project in Texas called Stargate. When complete, Stargate could be the largest computing facility in the world.
The project involves several titans of AI and investing, including OpenAI, SoftBank, and Oracle. Although Stargate is expected to run primarily on natural gas, some insiders anticipate that the mix could also include solar via the company, SB Energy, which is backed by SoftBank. Okay, both of you. Let’s start with Emily this time. What sort of impacts do you think DeepSeek’s rise and its more energy efficient approach could have on the data center drive and utilities relationships with data centers and basically how we procure energy here? There’s been huge enormous forecasts for load growth in America looking to things like these large language models that OpenAI has. How do you think DeepSeek is going to change the game?
Emily Domenech: I think we’re still waiting to see a little bit of what can be recreated from this project, but I do think that it’s going to make particularly our energy developers reevaluate their partnerships going forward with folks who are building data centers and focused on developing AI here in the United States saying, “Hey, wait a minute, maybe we don’t need to be making these massive investments in new energy resources to power this growth.” I don’t think we have a strong answer on that yet because I mean, I’m like a good American, I’m skeptical of anything China says that it does. But I do think you’re going to see people reevaluate this and say, “Hey, we have sort of accepted that energy demand was going to grow as we powered this AI revolution.” And maybe that’s not something we have to accept. Maybe we can rethink the way that we power and solve these computing challenges.
Julia Pyper: Brandon, do you have a read on the change here?
Brandon Hurlbut: No, but the stakes are high. They’re going to have to make accurate projections with customer money, with rate payer money. You can’t overbuild and have a bunch of stranded assets, you can’t underbuild and lose the AI race. So we’ll see how this develops.
Julia Pyper: Yeah, I was doing some research for this and I feel like there’s a lot of attention on AI and machine learning and ChatGPT and these new language models, but we’re forgetting that there’s a massive explosion of other cloud computing, just things like companies moving everything to the cloud, more and more basic chat services being integrated in new ways. Even if DeepSeek grows and its model perpetuates, that will increase load demand. There’s going to be more energy that’s going to need to be powered for all of this. According to one estimate, only about 10 to 15% of new power would be used to support AI and machine learning. A lot of it’s around enterprise applications for software solutions and just a broader demand for data centers. So I think we got to broaden the aperture a little bit here. I think low growth I would wager is definitely going to go up in America exponentially regardless of which LLM wins the day.
And to Emily’s point, this is one new company, we don’t even know how long it can stay in business, if this was a one-off. It’s also based its technology according to reports on OpenAI’s infrastructure. So what happens if the original model goes away? Does it still succeed? The new DeepSeek type of technology? I’m not an expert in AI, but I think there’s a lot of open questions around which technology dominates. So I feel like everyone’s like, “Look over there, a new world-changing technology solution, adjust all your long-term energy plans.” I would take a beat because yeah, to your point, Brandon, these are big decisions and we don’t know what’s going to win the day on technology yet.
Brandon Hurlbut: I can’t believe you made it through all of that, Julia, without saying “Jevons Paradox.”
Julia Pyper: Because I don’t know what it is (laughs).
Brandon Hurlbut: Well, it is initially based on coal, and the fact that it was with the steam engine, it was more efficient and people with more efficiency use a lot more coal, which was the paradox. And so there is a scenario here where as these chips get more efficient and AI gets better, we just use more of it and it could increase all of the load demand even with more energy efficient chips.
Emily Domenech: Yeah, I would also say, and Brandon, I’m sure you remember this from your time at the Department of Energy, but having worked in the Office of Science basic research programs that are focused on computing for years in my congressional career, we heard from scientists over a decade ago that they thought they’d never be able to actually get to exascale in computing capacity because they weren’t going to be able to have the energy to power it. They’ve figured out how to solve that problem, and we have an exascale computer online at Argonne National Lab that’s getting opened up to researchers all across the world. So I always see this as when we predict these big problems, we assume that there will be no change in our technological capability to solve them in the long term. And we usually assume that at our detriment. And unfortunately, it’s part of why sometimes the government makes bad investments because they make them based on today’s technology.
Brandon Hurlbut: 100%. I can remember during that time, Emily, when I was at the DOE meeting with several industry leaders from utilities and they told me the grid can’t handle more than 12% renewables. It’s impossible.
Emily Domenech: You love that fact, and we can bring it up when we start getting rolling blackouts in Tennessee.
Julia Pyper: All right, what do we think about specifically the Stargate project and the Trump administration stepping in to be part of that announcement, the whole White House red carpet? How do you see the administration engaging further in the data center development? I think what everyone does agree on is that America must lead in this area, not just for fun help writing your Christmas cards or whatever we’re all doing on these ChatGPT style tools, but about frankly, defense and military capabilities, economic growth at the core of it here, security. So Emily, what do you think we can see from the Trump administration on this front going forward?
Emily Domenech: Yeah, I think we’ll see more of these public-private partnerships to advance AI and other high-performance computing projects in the future. One area where I think it could be really fascinating would be to use the Department of Energy National Lab’s authority to deploy nuclear power. They can self-regulate nuclear power that’s not being sold to the grid. That might be an opportunity to build a lot of nuclear reactors pretty quickly, way faster than you could in the private sector if you did it in partnership with a DOE National Lab. So I think housing data centers on federal facilities looking for ways to be creative about how we deal with the permitting overload that we often see that slows down these projects. That’s the kind of things I would expect to see, particularly from a secretary of energy like Chris Wright.
Julia Pyper: Do you think things like solar and battery storage will be part of that mix, Emily?
Emily Domenech: I think it depends. I think we should expect to see what’s the most efficient, cheapest option for powering these facilities. I don’t think that we’ll see the same kind of investor-driven, “Hey, we’ve got to meet a certain percentage of our power with renewables as we’ve seen in the past.”
Brandon Hurlbut: And one last point on DeepSeek, it was such a shock because we thought the US was the leader on AI. We thought. We kept hearing we were years ahead of the Chinese on this technology, and I think what we’re also seeing is on EVs, people are going to be shocked when they see how far ahead the Chinese are on that. I was looking at the new BYD vehicle online today. It’s unbelievable. And we are far behind and Trump’s going to make it harder for us to catch up.
Julia Pyper: Well, that’s a great segue to the final topic we wanted to cover today on mining. President Trump announced his intentions to boost domestic mining via executive order. Critical minerals like lithium, cobalt and graphite have tons of applications in clean energy from battery storage to solar cells. But Trump clearly aims to push some of these renewable projects to the side in favor of more defense-related applications and others. Brandon, how do you think EVs and other renewable manufacturers could still benefit from the mining boom? Do you think this is still a good thing for that clean energy segment or do you think it’s going to increase the competition for other uses of those minerals? How do you read what the Trump administration’s doing here on mining?
Brandon Hurlbut: We need it to benefit both. And this is just a good example. We’ve been talking a lot about China on this episode and their desire to own these fast-growing markets like solar and critical minerals. I mean, they’ve had a plan on this for a long time that they’ve been executing on. They have been working with African countries, South American countries to own the supply chain. So we need it both for our defense industry and for these other markets like renewables and EVs that’ll be critical for growth. And so there are ways to do this extraction sustainably. We have invested in several companies that are doing this like Endolith and Alta, very exciting new technologies with tremendous founders. And the other part is we need to not only extract, but there’s the refining and processing part that the US needs to also get in the game on. So a lot of work to do here that I think should be bipartisan.
Julia Pyper: Emily, what do you think? Heatmap ran a story talking about how President Trump wants to primarily use these minerals for the defense sector. The article subhead reads, “Knee-capping demand from clean energy is a funny way to boost supply.” What’s your thought here? Is there really a tension between these two uses or can we do it all?
Emily Domenech: Yeah, I mean, I think the United States is blessed with really vast natural resources. We have a ton of ability to mine a lot of this stuff domestically and frankly, to work with other international partners like Australia and even Canada on developing these resources here in a place where we have a secure supply chain, we have a ton of work to do in undoing decades of anti-mining policies in the environmental space that we need to fix. I don’t see there being a tension here at all because we’re still so far behind in developing, one, starting these mining projects and two, developing a robust processing facilities here in the United States.
Julia Pyper: All right, we’ll leave it there. Let’s close out now with our final rapid fire segment, the Markup for anyone tuning in for the first time at the end of the show, Emily, Brandon, and I each bring a story, anecdote, or observation to discuss and debate. Let’s see what we’ve got this time. And actually I can go first. My story this time is the LA Times’ reporting about the LA fires. It’s still very top of mind for me and a lot of people who live in LA, even if it’s maybe faded from national news. And one of the key issues here is that we do not have sensors in this area that properly measure all toxins. Things like asbestos, things like toxic metals, lead, cadmium, and other things that are in electronics, and yes, EVs and other things that burned up in a unique but now very devastating way, urban fire, right?
This is a strange and different level and type of fire than you typically see in say a more wooded area. So this has direct implications for children, for adults, for everyone alike. Should everyone in LA still be pretty much wearing an N95 mask to avoid breathing in lead? No one really knows because we don’t properly measure this. Some of the South Coast Air Quality Management District does have some sensors, but I had to dig through several news reports and government sites to even find out how much they saw lead levels spike, which by the way, were very, very, very high through January 12th. So if you were outside before then, it was really dangerous and no one I think knew that. So this is, I think, a big failure. They have the technology, there are solutions out there. The legislature needs to act to make sure the public can get information and plan accordingly so they’re not running on the beach thinking it’s okay because it’s sunny out, but in fact there are very harmful particles still floating around.
Brandon Hurlbut: 100%, Julia. I mean, I was on all the apps trying to figure out can I go outside? And the apps would tell you that the air quality was okay, but there’d be ash falling from the sky. My car was parked on the street and it would be covered in ash, so it didn’t add up. Now there are some companies out there trying to do this, and I do think that some of the equipment and technologies that the US government is using on this is outdated. So there’s opportunity to modernize and upgrade here, but these are things that we’re going to have to deal with going forward. And it was very unsettling to not be able to know is, am I okay to be outside or not in my area?
Julia Pyper: And still not know, frankly. We have these open piles of ash that when the wind picks them up, those particles will float around. So just because something is not on fire doesn’t mean the open burn pit can’t distribute toxic chemicals around the city. And frankly from the Paradise Fire, they found lead 150 miles away in San Jose. So we need the data. This is a public health emergency, I frankly think. And the fact that you have to dig through several public sites to find even some read of air lead or lead levels in the air is really a failure. Brandon, what do you got?
Brandon Hurlbut: I’ve got a quick one. It is from Electrek and the title is “The world’s largest solar and storage project will deliver power 24/7.” It’s going to be in the UAE. It’s a 5.2 gigawatt solar plant with 19 gigawatt hours of batteries. And I thought we got all this attention on the Middle East this week. Trump wants to take over Gaza and whatnot. I wanted to present a good story about other things happening in the Middle East that are a data point and some of these things that we’re talking about, about how we can meet this electricity demand. You can meet it 24/7 clean firm power. It’s happening in the UAE.
Julia Pyper: At some of the cheapest prices ever seen.
Brandon Hurlbut: $6 a watt is what I’m told.
Julia Pyper: All right. Emily, close us out.
Emily Domenech: My close out is that with Chris Wright’s confirmation this week we saw all three of President Trump’s leading energy and environment officials confirmed with bipartisan votes.
Julia Pyper: Chris Wright being the new head of the Department of Energy, right?
Emily Domenech: Department of Energy, yep. So that means we have Department of Energy, Department of Interior, and the EPA, all three officials were confirmed with votes from Democrats. And I think that’s a good thing for looking ahead to bipartisan opportunities in all three of those agencies. And it’s unique, frankly, in our time and day where we often see only partisan votes on nominees. So I think that’s something for the energy community to be excited about.
Julia Pyper: I think Scott Bessent too, the new head of the Treasury Department was confirmed with bipartisan support and I put Treasury in the energy bucket because of all the tax credits.
Emily Domenech: That’s true. Tax policy is energy policy these days.
Julia Pyper: There you go. All right, we’ll leave it there for this grab-bag episode. Political Climate is a co-production of Latitude Media and Boundary Stone Partners. Max Savage Levenson is our producer. Sean Marquand is our technical director. Stephen Lacey is our executive editor. And congrats, Stephen, on your new podcast, Open Circuit. Go check it out. You can get all of our show notes and transcripts at latitudemedia.com. And if you want us to talk about a specific topic, please email us at politicalclimatepodcast@gmail.com. Please feel free to help spread the word about Political Climate on LinkedIn, X, and beyond. I’m Julia Pyper. We’ll see you in three weeks with a special episode coming to you live from Winterfest in Big Sky, Montana.
