The image was perfect in its absurdity: Elon Musk, once one of the most powerful leaders of the energy transition, grinning wildly while brandishing a chainsaw on stage at CPAC.
In that moment, Musk’s transformation was complete — from the visionary who mainstreamed electric vehicles to the man cheerfully dismantling the very ecosystem that enabled his rise. Musk, whose fortune was built on a half-billion-dollar federal loan guarantee and $10 billion in carbon credits, is now leading the charge to tear down the institutions that saved Tesla.
The Musk of 2025 personifies the deep, confusing contradictions in the Trump administration’s energy agenda.
Two months ago, after the election, I held a modest hope that the tech luminaries in Trump’s orbit — Musk, Peter Thiel, Marc Andreessen — might be a moderating force for his energy agenda. These were people who understood the economic imperative of grid expansion for artificial intelligence, and directly championed nuclear, batteries, and solar. I also believed the billions in Inflation Reduction Act funding flowing into Republican-led districts would create opposition, even within the GOP, to dismantling these investments.
I was wrong. Very wrong.
What’s unfolding instead is an approach to energy that defies rational explanation. The Trump administration is undertaking political decisions that will complicate regulation, emphasize more expensive solutions — and possibly hobble energy infrastructure.
Over the last couple of weeks, we’ve been exploring these contradictions on Open Circuit, the new show I host with Katherine Hamilton and Jigar Shah.
“It’s the weirdest thing I’ve ever seen,” said Shah, who led the DOE’s Loan Programs Office under the Biden administration. “I don’t understand exactly what world we’re going into, but…this is having a chilling effect on the entire business of energy.”
‘Russian roulette’
Consider the Department of Government Efficiency’s indiscriminate firing of federal workers, as overseen by Musk. These terminations hit critical infrastructure personnel across cybersecurity, nuclear security, and the electric grid — including key operational employees at the Bonneville Power Administration, which manages 75% of high-voltage transmission in the Pacific Northwest. The administration had to hastily reverse course after realizing the cuts directly threatened operation of the electricity system.
As Hamilton explained, these jobs require “years of apprenticeship” and involve managing complex systems that keep our grid reliable. You can’t just replace a transmission expert or nuclear security specialist overnight. And yet, that’s precisely what the administration attempted before realizing that some of these positions might actually be essential.
Scott Simms, the former manager of long-term power planning at BPA, said the layoffs were like “Russian roulette” for the regional grid.
Trump claims we are in an energy emergency. But indiscriminate cuts could actually create a real emergency. If you’re concerned about grid reliability for data centers and AI, why would you fire the people who ensure that reliability? If you want to accelerate infrastructure development, why would you dismantle the workforce that processes interconnection requests?
Hundreds of thousands more layoffs are coming, and Musk has shown zero interest in explaining how they benefit the president’s agenda strategically — except simply to crush morale for the sake of it.
For more of Stephen Lacey’s conversation with Katherine Hamilton and Jigar Shah, listen to the whole episode of Open Circuit:
The layoffs, combined with funding freezes, are already impacting investment. The New York Times reports that funding freezes and tariff threats “are souring consumer sentiment, raising inflation expectations and stalling business investment plans.” A survey from S&P Global showed business expansion slowing due to “uncertainty and instability surrounding new government policies.”
That uncertainty is hitting the domestic manufacturing necessary to achieve energy dominance. BNEF analysts believe that half of planned U.S. manufacturing investments in clean technologies will be delayed or cancelled in 2025 because of political uncertainty — potentially wiping out tens of billions of dollars in investment for red states. Two battery manufacturing facilities have already cancelled plans this month.
Tariffs on steel and aluminum are also complicating supply chains, particularly for electrical equipment that is in short supply. The shortage of transformers is expected to worsen thanks to tariffs, making grid upgrades more difficult precisely at the time when demand is surging.
The regulatory slowdown
Meanwhile, the administration seems hellbent on slowing everything down. This month, the president issued an executive order placing independent agencies like FERC under White House control.
As Hamilton explained on Open Circuit, FERC was designed to be “technocratic, adjudicated, fair-competition minded. They’re not subject to the politics of any given administration.” By requiring approval from the Office of Management and Budget — led by Project 2025 architect Russ Vought — the administration will create a bureaucratic bottleneck at precisely the moment when FERC faces its most critical workload in decades.
FERC is currently grappling with AI co-location decisions, hydropower licensing, enabling distributed resources to participate in wholesale markets, interconnection rules, transmission incentives, and gas pipeline approvals. These highly technical decisions affect hundreds of billions in infrastructure investments. Routing them through politically-motivated reviewers at OMB won’t just delay them — it could compromise their technical integrity and chill investment.
As Hamilton noted, “having all of those decisions go through the Office of Management and Budget is not going to speed things up. It’s going to slow things down drastically, and a lot of things just simply won’t get done.”
OMB’s control also creates another fundamental problem, by hobbling the people in charge of executing Trump’s energy agenda. When Energy Secretary Chris Wright or Interior Secretary Doug Burgum — both business-minded officials with pro-energy track records — try to implement policies advancing “energy dominance,” they could find themselves waiting for White House clearance.
“I don’t know when Chris Wright and Doug Burgum will actually be able to run their respective agencies,” Shah observed. “And if they don’t get to run their respective agencies soon, then I don’t know how much longer they’ll stay. Why would you stay there and take full responsibility for all the outcomes — many negative — if you have no control over what the agency’s doing? It’s a huge reputation risk for them.”
Picking winners and losers
Finally, there’s natural gas. Trump wants to use emergency powers to fast track gas plants, but equipment shortages (which will get worse under Trump’s trade policies) and price volatility (which will increase as the administration pushes LNG exports) are challenging the economics of a large-scale gas buildout.
Major turbine manufacturers are already sold out through the end of the decade. Equipment shortages and soaring costs have led companies like Engie to withdraw a major gas project from a Texas low-interest loan program, which appropriated $5 billion to urge investment in gas generation. “They couldn’t get enough people to actually even sign the contracts to do this work,” explained Shah. “They had to twist the arms of people to beg them to build natural gas in the state.”
Meanwhile, Texas is sending a very strong signal of where the market is headed. Solar and batteries set new performance records last summer, helping the state avoid blackouts during extreme heat. Zero-carbon power now provides 47% of Texas electricity — up from 40% a year ago — and it’s happening because the economics work, not because of mandates.
In an interview on the With Great Power podcast this week, Keith Collins, vice president of ERCOT’s commercial operations, explained how solar and batteries have drastically dropped wholesale and retail rates, while helping stabilize the grid during critical peak periods. “What was behind that price drop was this significant increase in new solar generation and paired with the storage,” he said.
Along with plans to support lots of gas plants, the Trump administration is simultaneously pushing to expand exports of liquefied natural gas, which will inevitably raise domestic natural gas and electricity prices. The Energy Information Administration is already projecting that demand will outstrip supply in 2025, partly because of LNG exports.
These export-driven price increases will hit American manufacturers just as many are considering reshoring operations, and it will squeeze utilities and consumers who rely on gas for electricity and heating. This is not an “America first” energy strategy.
Trump has never made ideologically coherent policy choices. But this set of decisions on energy brings a new level of incoherence.
If you genuinely wanted energy dominance and lower prices, you would provide basic market certainty to encourage investment. You would respect the technical expertise needed to manage complex infrastructure. And you would embrace the fastest, cheapest resources available while developing a coherent framework for long-term investments.
Instead, we have Elon Musk waving a chainsaw in the air — while Trump cheers him on.
