Current Climate: Risky Bet On Dirty Energy

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The second Trump Administration kicked off with a stark speech and a head-spinning flurry of executive orders that included pardoning violent Jan. 6 rioters, pulling out of the Paris climate agreement, renaming Alaska’s Denali and the Gulf of Mexico and reversing federal rules barring racial and gender discrimination. But those aimed at ginning up oil and gas production on federal land by giving energy companies greater access to protected, environmentally sensitive areas, hard reversals on efforts to promote renewable energy, energy efficiency and electric vehicles may be the most impactful–if they hold up legally–and not in good ways.

Setting aside Trump’s animus toward wind farms, low-flow toilets and LED bulbs–which save consumers money–his promotion of higher carbon energy production ensures that costly climate-fueled weather disasters, like L.A.’s record wildfires and unprecedented hurricane damage to Ashville, North Carolina, will worsen.

There may be some short-term financial benefits to higher oil use, but like smoking cigarettes and excessive alcohol use, there’s serious long-term harm. The Biden Administration’s multibillion-dollar push to boost clean energy was costly, but it worked. Electric power generation from renewable, carbon-free sources hit a record 24% last year and should supply 25% this year. Solar panel production and deployment were the highest ever. U.S. EV sales topped a record 1.3 million units. Clean energy tech also created hundreds of thousands of new jobs–especially in the Red States that voted overwhelmingly for Trump. Importantly, renewable power is also cheaper.

U.S. oil and gas production is already the highest ever and global oil prices are stable, suggesting there’s little immediate demand or profit for all the new supply Trump wants to create. In his inaugural speech, he talked about the liquid gold under America’s feet he wants to drill for, oblivious to the cheaper, cleaner, inexhaustible energy gold the nation can tap from sunlight and wind.

The Big Read

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Fossil Fuels Lose Their Grip On Europe

As U.S. President Donald Trump promises to “drill baby drill,” new figures from Europe show fossil fuels are being pushed out of the EU’s electricity system, with solar energy generation overtaking coal power for the first time.

Hot on the heels of Trump withdrawing the U.S. from the Paris climate agreement and stopping American offshore wind projects, energy research group Ember announced Wednesday that clean energy sources generated more than 70% of the EU’s electricity in 2024, while electricity generation from fossil fuels fell 8.7% to comprise just 28.9% of the total. Significantly, solar power rose 21.7% to generate more than 11% of the EU’s electricity, while a fall in coal generation led to the most polluting fossil fuel producing just 9.8% of the total.

Hot Topic

Nexus Holdings

Ben Hubbard, CEO of Nexus Holdings, on the low-carbon energy outlook as Trump 2.0 kicks off

What’s Nexus’ role in the $300 billion of projects you work on with financial partners?

We have a combination of a services business, some development companies that are mostly focused on renewable natural gas and sustainable aviation fuel production, and we have an investment arm that deploys capital into low-carbon infrastructure development. We also have a small component that focuses on acquiring distressed assets and turning them around and potentially selling them on the market. But all of our focus is low carbon.

We do a lot of work in hydrogen, renewable, natural gas, biomass production, sustainable aviation fuels to renewable agriculture, including things like insect agriculture and regenerative agriculture. We're dedicated to decarbonizing various industries from fuels to agriculture.

On the energy front broadly, the new focus is ratcheting up fossil fuel production though both are already at record highs. Is there room to flood the market with more oil and gas?

I think it's going to be driven through the energy production avenue–combined cycle power plants, for example, to power behind-the-meter data centers, things of that nature you're going to see become at the forefront.

We’ve got this interesting inflection point where some people are trying to battle our sustainability goals over the next 20, 30 years, but that kind of flies in the face of low-cost energy and low-cost energy dominance. And then you've also got the grid stability factor. What can you actually physically put on the grid? You've got the residential component. … So you have this interesting pivot point here where you have to find the balance between how do you do what's right for the average daily user of power at their home versus not stifling growth in the economy and not leading the charge in AI revolution.

So more natural usage but more renewables as well?

The market is naturally going to find that all of these approaches have to exist at the same time. It's easy to get wrapped up in all the media headlines and these executive orders and the chaos that is a lot of the politics of the modern-day world over the past say 10 or 15 years.

But the reality is behind the scenes people are going to try to pursue all of this. What people are trying to showcase is let's not prioritize or focus or even overly subsidize any one thing. Let's open it up to let the free market determine how to play this out. I think what you're going to find is there will be companies like Microsoft and Amazon and Google and the big players that will pay a premium for renewable energy mostly because they need energy so desperately that the cost-benefit is still there to pay a premium.

What about the need for more new transmission line capacity? That’s been a challenge for all forms of electric power generation.

We do a lot of development work in many sectors. The amount of time it takes to get through the red tape process to get almost any type of permit is just astronomical. I do think that's one thing the new administration will continue to target–how we speed up that process. Because time is just as important a variable as anything else.

A lot of people are doing some creative things on the technology front too that are going to improve that naturally. But I also think you're going to see, hopefully, a major improvement in the permitting and licensing process of these things.

What Else We’re Reading

Auto dealers, manufacturers and customers are watching closely as President Donald Trump signed executive orders that threaten to impose import tariffs that could add thousands of dollars to the cost of some vehicles, and he pursues policies that aim to reduce production and demand for battery-electric vehicles. (Forbes)

‘Scare tactics’ and uncertainty: What Trump’s offshore wind order means. Trump pressed the pause button on offshore wind. Projects that have secured their permits may be unscathed, but those in earlier stages face a tough road. (Canary Media)

Mike Bloomberg steps in to help fund the UN climate body, filling a gap left by President Donald Trump. "Bloomberg Philanthropies and other U.S. climate funders will ensure the United States meets its global climate obligations," the organization said in a statement. This includes covering the amount the U.S. owes each year to the United Nations Framework Convention on Climate Change. (Reuters)

Donald Trump’s executive orders stand to undercut California’s aggressive auto emission standards, undo Biden-era environmental protections and boost U.S. fossil fuel production. Among the first signed: he nixed California’s statewide ban on selling new cars that run solely on gasoline starting in 2035. (Los Angeles Times)

China will be thrilled if Trump kills America’s green economy. America has begun a manufacturing renaissance. But you can kiss that goodbye if President Trump and the new Congress roll back the laws that made it possible. (New York Times)

The ideal EV charging station doesn’t look like you think. Many companies would like to become the 21st century’s replacement for the gas station by making the best EV charging stations. Several station plans, ranging from Tesla Superchargers to massive Buc-ee’s “destination” stations are vying to be the place you charge. The problem is, EV charging is almost entirely different from the gasoline fill-up and the needs of EV drivers look very different. (Forbes)