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Forbes
02-07-2025
- Business
- Forbes
Red States–And AI–Are Big Losers From Trump's Clean Energy Massacre
P resident Trump's One Big Beautiful Bill Act – assuming the version Senate Republicans passed on Tuesday becomes law–would cut the legs out from under the renewable energy industry. The biggest hit: The bill would quickly phase out federal tax credits that have for years enabled wind and solar developers to offset 30% or more of project costs. Yes, it could have been even worse. At the last minute, the Senate's Republican leadership ditched a proposed excise tax on wind and solar projects using Chinese components which could have added 20% to the cost of many projects. But it left in a fast phase-out of the tax credits. Moreover, there are lots of other anti-green, pro-fossil fuel bullets the industry didn't dodge. The bill would open more federal lands to oil and gas leasing at lower royalty rates; end tax credits and other subsidies for electric vehicles; and refill the Strategic Petroleum Reserve. There's also a new tax break to incentivize mining metallurgical coal, now to be considered a strategic mineral. Uncertainty, and the looming end of federally subsidized tax equity financing, could plunge renewables investing into a deep freeze, says Sandhya Ganapathy, CEO of Houston-based EDP Renewables North America (which operates wind and solar plants). 'It severely hamstrings the U.S. ability to meet skyrocketing power demands and dilutes its economic competitiveness on the global stage,' she says. Ironically, the impact will hit especially hard in Republican areas–a fact that Forbes (and others) thought last November might protect the industry from such savage cuts. A map (below) created by Michael Thomas, founder of Cleanview, shows that 78% of renewable energy projects underway are located in Red districts. Why is Trump so determined to kibosh economic growth in Texas, where last Saturday afternoon solar power met 31% of the grid's 77 gigawatts of power demand and wind power provided 15%? Sure, gas-fired generation still led with 35%, but coal provides merely 13% of the state's electricity needs. The trend is clear: Growing, power-hungry states like Texas and states where the sun shines or the wind blows, have been increasingly relying on solar and wind power. The How Green Is Your State? map makes clear that geography matters more than ideology when it comes to the adoption of green energy. Windy, sparsely populated and Republican South Dakota (Trump won 63% of the vote in 2024) gets an enormous portion of its retail electricity from renewable sources. Tiny, densely populated Delaware, Joe Biden's home state, gets almost none of its retail electricity from green sources. Complaints about the bill's assault on green energy have come from all quarters. Elon Musk calls the energy components of the bill 'insane and destructive,' saying they will destroy millions of jobs. Sean McGarvey, president of North America's Building Trades Unions, compares the impact to 'terminating 1,000 Keystone XL' pipelines (Biden, of course, terminated just the one). The U.S. Chamber of Commerce in a statement said 'taxing energy production is never good policy.' But that hasn't swayed Trump, who in an interview last weekend with Fox's Maria Bartiromo made clear his determination to undo the Green New Deal aspects of Biden's Inflation Reduction Act of 2022. His dislike for both Biden's legacy, and wind and solar energy in particular, seems almost visceral. 'We're doing coal,' Trump declared. 'I don't want windmills destroying our place. I don't want these solar things where they go for miles and they cover up half a mountain and they're ugly as hell.' And, he said, 'They're made in China.' So get ready to pay more for electricity, and to compete with big tech and artificial intelligence for the power supply. Recent growth in electricity demand from data centers has been stunning. Lawrence Berkeley National Lab data shows that in 2018 data centers used 76 terawatt hours (TWh), or 1.9% of domestic electricity; they project that will hit at least 325 TWhs (6.7% of the total) by 2028. Consultancy Rystad Energy eyes a 16% rise in overall U.S. power demand by 2035. But without affordable renewables (or rapid breakthroughs in nuclear fusion) the electricity to feed all those AI data centers may not arrive in time. Most are integrated energy projects. Meta, for its Sucre data center in Louisiana, is partnering with Entergy to invest $3.2 billion in gas turbines to provide reliable electricity for its computers, and another $1.5 billion into wind and solar–to reduce its carbon footprint. In Abilene, Texas, the Stargate consortium of OpenAI, Oracle and Microsoft is erecting its first data-gigacenter for its proximity to plentiful wind power, yet for redundancy they are also erecting 10 onsite gas turbines from GE Vernova. But 'more natural gas' is not the answer that Trump might think it is. That's because, while the U.S. is rich in gas, there's a shortage of gas turbines. Get on the waiting list for a new gas turbine now and you'll be lucky to get it in five years. 'We see many facilities that are slated to enter service in 2028, but newly built turbines are not going to be delivered until 2030,' says Zack Krause, an analyst at East Daley Analytics. 'Without growth in rapidly deployed solar, the U.S. economy will grind to a halt,' warns Ed Hirs, a lecturer in energy economics at the University of Houston. Last year, 81% of new power projects nationwide were solar and batteries. A third of that solar build out, some 11 gigawatts, was in Texas, to power data centers. California and Florida each installed about 5 GW. 'Humans are already competing against AI and crypto for electricity,' says Hirs, who credits crypto miners with raising Texas' wholesale power prices by 5% in 2023. Data centers like Stargate have so far been welcomed to rural Texas with compliant permitting and tax abatement packages. But it won't take much more than a heat wave or two to spark a showdown between AI's needs for reliable power and humans' desire that their air-conditioning not go out in the middle of summer. The pushback has already begun, with a new Texas law (S.B. 6) set to allow grid managers to disconnect data centers when electric demand is high. That makes it a good time to own irreplaceable power plant assets in Texas, like Constellation Energy and Vistra Corp., do. The Senate bill's excise tax was dropped after Alaska Sen. Lisa Murkowski–the last holdout needed for the 51 to 50 passage (with Vice President J.D. Vance voting)— called it 'just entirely punitive to the wind and solar industry.' She had joined Iowa's Republican Senators, Joni Ernst and Chuck Grassley, in pushing an amendment designed to protect green credits for longer, which never got a vote. It's no mystery why Ernst and Grassley led the effort; Iowa gets an outsized 83% of its electricity from wind and solar. In the latest version, it appears that developers will need to start their wind or solar projects within 12 months of the bill's enactment in order to get full tax credits with no deadlines. Projects starting later must be completed by year end 2027 in order to claim credits before they sunset. Other unintended victims of Trump's demolition of Biden's green energy incentives could be the so-called Southeast Battery Belt across the Carolinas and Georgia. Large scale battery storage deployments nearly doubled last year to 30 gigawatts nationwide due to demand from solar projects to balance intermittent loads. But if this bill goes through as expected, there could be less demand than expected for Toyota's $13 billion lithium ion battery plant under construction in North Carolina and Hyundai's $8 billion combination battery and car factory in Georgia. The Big Beautiful Bill does support advanced nuclear power, including $125 million to develop small modular reactors for military use. The AI industry loves the low-carbon, small-footprint potential of nuclear fusion, with billionaires Jeff Bezos, Peter Thiel, Bill Gates and Sam Altman (and even Secretary of Energy Chris Wright) all startup investors. Not all of them are happy with the shifting sands. Houston energy trading billionaire John Arnold has invested heavily in long-distance transmission lines as well as geothermal, lithium and fusion startup Helion. Arnold reflected the energy industry's collective consciousness when he tweeted Monday about Trump's Big Beautiful Bill: 'Reversing which fuels get subsidies and which get penalized every time control of Washington shifts is about the stupidest way to run an energy system that needs long term planning and stable supply chains.' More from Forbes Forbes How An Unassuming Geologist Cracked The Global Fertilizer Cartel By Christopher Helman Forbes Gold To Top Bitcoin And Silver On Way To $4K Per Oz, Says Goldman Sachs By Christopher Helman Forbes Meet The Tiny Startup Building Stargate, OpenAI's $500 Billion Data Center Moonshot By Christopher Helman
Forbes
16-06-2025
- Politics
- Forbes
Proposed Land Sale Pits Senate Republicans Against Key Constituency
The so-called Big Beautiful Bill suddenly turned ugly for America's 60 million hunters and anglers after Utah Senator Mike Lee proposed selling up to three million acres of federal land in the West. Sportsmen and women are traditionally among the most reliable Republican voters, but the nation's hunters and anglers are drawing a line in the public sand with the proposed disposal of federal ground through the reconciliation process. 'I fear some members of Congress are taking the continued support of sportsmen for granted,' says Jeff Crane, President and CEO of the Congressional Sportsmen's Foundation (CSF). "For sportsmen, selling millions of acres of our federal lands in a fast-tracked budget reconciliation effort is unacceptable." CSF is a bi-partisan Washington, D.C.-based organization that advocates for sportsmen's interests on Capitol Hill and in statehouses across the country with the support of the largest caucus of the U.S. Congress—some 250 members in all. In addition, CSF has sporting caucuses in all 50 states with more than 2,500 members of state legislators and 25 governors. When it comes to advising members of Congress on sporting, conservation and public lands issues, few groups carry more weight on the Hill. 'For many hunters and anglers,' says Crane, 'America's federal lands are the bedrock of our access to our outdoor sporting traditions. For tens of millions of sportsmen and women, it is this network of federal public lands where deep connections to fish, wildlife and the outdoors are born and where families forge lifetime memories.' It's also where conservation ethics are born, the kind Theodore Roosevelt memorialized in his many speeches and writings as he inspired the framework for America's environmental ethos. 'Land is the only thing in the world that amounts to anything,' he wrote. 'For it's the only thing in this world that lasts. It's the only thing worth working for, worth fighting for…'. Sportsmen have long embraced Roosevelt's words, for when a similar measure to sell federal lands was raised in the house version of the bill, it quickly created a storm of opposition among sportsmen's groups and was ultimately pulled thanks, in part, to CSF's opposition. That the measure was even proposed, however, has given many sportsmen pause regarding their historic support of Republicans. To many of the nation's outdoorsmen and women, disposing of federal land is seen as something akin to pawning a family heirloom to pay a bank overdraft. If you're perceived—rightly or wrongly--as someone standing between sportsmen and the ground where some of their greatest memories have been made, you can count on living in infamy in that community. It's the kind of perceived betrayal that causes some voters to switch party affiliations. You need not be a political wonk to understand that when a constituency feels their voice is ignored or marginalized by those they've supported, they are ripe to be assimilated by the opposition. Democrats who watched legions of union voters embrace Trump with his message of bringing jobs back to America witnessed this phenomenon firsthand. He attracted dramatically higher union support than previous Republican presidential candidates. Many pollsters credit Trump's message to labor as key to his victory in swing states like Pennsylvania, Michigan and Wisconsin—coincidentally, all states with high numbers of hunters and anglers. 'In the West, more than 70 percent of sportsmen say they rely on federal lands to participate in our cherished pastimes,' says Crane, 'and the concept of losing access to this ground is considered un-American.' For Senator Lee who heads up the Senate Energy and Natural Resources Committee, however, these federal lands represent a partial solution to both the budget deficit and the affordable housing crisis. In a taped statement, Lee noted that some 70 percent of his home state of Utah is owned by the federal government, 'That's not serving the Americans who actually live here,' he said. Instead, he says, he wants to expand housing, support local development and get Washington out of the way of communities looking to grow while at the same time helping reduce budget deficits. Monitor sportsmen's chat rooms, podcasts, influencers and industry media that have become a force in recent years—counting avid hunter Joe Rogan's media empire among them—and few are buying what the Republican senators are selling. Not surprisingly, sportsmen are skeptical that a Congress that hasn't balanced a budget in a quarter century is going to suddenly sell land assets to solve the deficit problem. Furthermore, Lee's home state of Utah has among the highest per capita numbers of sportsmen. In 2024, nearly 800,000 residents and non-residents purchased hunting and fishing licenses with a total population of 3.5 million people. Given the significant pushback by hunters and anglers to the initial land sale effort in the House, other Republicans—like Montana Senator Steve Daines—are opposing Lee's new land sale effort in the Senate. While Utah is blessed with stunning landscapes and tremendous natural resources (home to five national parks), understanding how the sale of millions of acres of federal lands might be part of a solution to the affordable housing crisis in that state is seen as a head-scratcher by many. Salt Lake City, for instance, only encompasses 70,000 acres, and the state is feverishly working to solve one of the West's most challenging environmental crises as Great Salt Lake is drying up. A significant expansion of homes in the area will only exacerbate the water shortage that is plaguing the region. Ultimately for Crane and CSF, however, there may be a rationale for the sale or swap of some federal lands, but the budget reconciliation process is not where any transaction should be sanctioned. Instead, CSF cautioned, any disposal or sale of federal lands should follow the long-established protocols of both the Federal Land Policy and Management Act (FLPMA) and the Federal Lands Transaction Facilitation Act. These measures are in place to, among other things, allow for public input and transparency. In a statement released Friday, CSF shared their reasons for their opposition to the Senate language, writing, in part, 'Unfortunately, the Senate public lands language guts the public's voice in determining how their lands are managed, or which lands are sold. An arbitrary, undefined, percentage-based target is the opposite of a thoughtful and transparent process. As written, the Senate language omits critical detail to determine what specific lands would actually be disposed of, regardless of whether they are underutilized or highly valuable, and instead essentially gives carte blanche authority to determine which lands would be sold.' While 3 million acres is a pittance when compared to the national total of 245 million acres of Bureau of Land Management land and nearly 200 million acres of national forest property, sportsmen worry that such a sale in the reconciliation process, which only requires a simple majority—rather than a 60 percent majority under FLPMA--represents a dangerous precedent. Once the land is sold in this manner, what's to stop this from happening to ever more federal ground most ask? When the land is transferred, there's realistically no mechanism to ever get it back. For Republicans, the larger political question is what becomes of their relationship with their core voting block of 60 million sportsmen? Can they afford to alienate them as the midterm election cycle gets underway—especially in key states where a public land sale will be anathema to the camo coalition? For now, American sportsmen have turned their attention to Senate Majority Leader John Thune who hunters know as one of their own and who represents their best hope of stripping the land sale provision from the bill. Even if the sale language is struck, however, after weeks of a national media barrage against the measure and those who proposed it, Republicans must wonder what political price they will pay with heretofore loyal supporters. The question will be: Was it worth it?
