Net Zero

1. AI gas conundrum
2. Equinor’s wind dilemma
3. Going nuclear on nuclear
4. Carbon costs
5. Cash for African climate tech

Fare thee well, 1.5.

If Big Oil execs have buyers’ remorse about US President Donald Trump, they’re keeping it pretty well hidden in Houston. The vibe inside CERAWeek — the massive energy industry conference that kicked off on Monday — is jubilant. The last few years it felt many people were walking on eggshells about their core business: Putting low-carbon projects under the spotlight while saving whispered conversations about oil and gas drilling for their time behind closed doors. Now the cavalcade of black SUVs has its swagger back. Former Democratic officials, including Obama’s Energy Secretary Ernest Moniz and Biden’s Deputy Energy Secretary David Turk, wandered the halls without an entourage, suddenly returned to sideline roles.

Then again, anxiety is percolating below the surface. Trump might be doing the industry some favors — for example, signing off on a fourth new LNG export terminal permit on Monday — but falling oil prices and the risk of a recession brought on by Trump’s trade war brinksmanship are dangerous to everyone here. Big Oil may not be as worried about the political or reputational risk of its carbon footprint. But now there’s a different orange-hued bear they need to avoid poking. “Uncertainty and self-editing abound” at the conference, one financier told me. “People are quite concerned about what they say, because they’re worried about what the reaction might be.”

Trump’s Big Oil bear hug won’t help the AI race

US President Donald Trump’s administration has the wrong idea about how to solve the country’s looming power shortage, the CEO of the largest US electricity provider told Semafor.

Speaking at the CERAWeek summit in Houston on Monday, US Energy Secretary Chris Wright told a gathered crowd of energy executives that in the Biden administration’s approach to energy policy, “the cure was far more destructive than the disease,” and that “beyond the obvious scale and cost problems, there is simply no physical way wind, solar, and batteries could replace the myriad uses of natural gas.”

That’s wrong, John Ketchum, CEO of NextEra Energy, said at a Semafor event later that evening. And he should know, as the leader of the company with more experience than any other in building both renewable and gas-fired power generation. The cost of gas turbines and the skilled labor to install them are both up three-fold from just two years ago, he said, and new gas infrastructure faces years-long delivery backlogs. Renewables plus batteries, he said, are the cheapest, fastest, and easiest way to meet the surging power demand from data centers driven by the acceleration in artificial intelligence.

“We’ve got to be really careful here, from an affordability standpoint, about the choices that we’re making. What we don’t want to do is drive ourselves to only one solution — that being a gas-fired solution — that’s now more expensive than it ever has been in its history,” he said. “It just so happens that the most economic solution comes with clean energy benefits as well.”

Ketchum is an outlier at CERAWeek. For the most part, it seems, Big Oil is relieved to have permission from the White House to stop genuflecting to the climate crisis and get back to its roots. In the conference program, energy “transition” is out, energy “security” is in. Emissions are missing, hydrogen is hiding, and renewables were removed. It’s not entirely clear that market conditions for a “drill, baby, drill” renaissance are really here — oil prices dipped this week over concerns that Trump’s tariff threats will prompt a recession, which would cut into energy demand — but the industry is tired of apologizing for itself.

Equinor’s wind dilemma

Equinor, Norway’s state-backed energy giant, is open to reversing its retreat away from renewables, the company’s chief financial officer told Semafor. The company made waves last month when it announced that it would cut its capital spending on renewables in half and ramp up oil production. That decision was rooted in a dim view of the prospective returns from new wind projects, CFO Torgrim Reitan said, as the prices of equipment and offshore leases have both skyrocketed compared to what the company was accustomed to from its first forays into renewables in the early 2010s.

“There has been too much money chasing too few opportunities for a few years,” he said. But even though “momentum around the energy transition is slowing down,” he admitted, that slowdown could ultimately prove beneficial to renewable energy adoption if it gives equipment suppliers a chance to catch up on back orders and bring their prices down. When that happens, Equinor could be ready to get back into building new wind projects, he said.

Going nuclear on nuclear

Elon Musk’s US Department of Government Efficiency is reviewing the country’s National Nuclear Security Administration, raising fears within the agency responsible for the US nuclear arsenal that it could lose mission-critical staff. Department heads have been asked to justify the roles of the contractors on their team in one-sentence summaries and DOGE is expected to categorize the roughly 1,400 support service contract employees as “keep, delete, or more information needed.” The nuclear agency, which falls under the Department of Energy, was thrust into turmoil by the firing and partial rehiring of hundreds of staff in February, and current employees fear that contractors could be next in line to lose their jobs. “It would have a really significant, negative impact” if support service contractors were to be terminated, said Scott Roecker, a former senior agency official.

Lord John Browne, managing director at General Atlantic and chairman and co-founder of BeyondNetZero.

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Carbon cutting costs

The Inflation Reduction Act’s energy subsidies could cost taxpayers some $4.7 trillion by 2050 and should be repealed, the Cato Institute, a libertarian think tank, argued in an analysis.

Travis Fisher, Cato’s director of energy and environmental policy studies and a co-author of the paper, told Semafor that the social cost of carbon estimates were “too malleable” to be a solid foundation for policy. Climate action in the US and EU isn’t enough to mitigate global damages, he added, so “we could get the worst of both worlds — trillions spent on climate change mitigation and negligible impact on global temperatures.”

The think tank has long dismissed the IRA as a fiscally reckless example of “crony capitalism,” and several other analysts interviewed by Semafor questioned its modeling. Methodology aside, taxpayers also shoulder the consequences of inaction on climate change, which “totally exceed the costs of action,” said Brad Townsend from the Center for Climate and Energy Solutions: “This is like complaining about the costs of waste management but ignoring that the alternative is leaving trash in the streets and inviting the disease that comes with it.”

Cash for African climate tech

Venture capital firm Equator closed a $55 million fund focused on climate tech startups in sub-Saharan Africa. The firm, based in Kenya and the UK, is part of a growing pool of financiers investing in green solutions across the continent. The fund — which counts the World Bank’s International Finance Corporation, British International Investment, and France’s Proparco among its backers — plans to invest in around 15 early-stage ventures in total. It has already bet on six companies, including electric motorcycles-maker Roam and solar-powered irrigation systems provider SunCulture, both based in Kenya.

New Energy

• Twenty eight international and Vietnamese investors have warned that Vietnam’s plans to end favorable energy tariffs on wind and solar risk jeopardizing more than $13 billion in investments.
• The US is pushing the World Bank to drop its decades-old ban on funding nuclear power amid alarm that Russia and China are winning the race to build new generations of plants in emerging markets.

Fossil Fuels

• The Trump administration is considering ending the oil price cap on Russia if progress is made in talks with Moscow to end its war in Ukraine.

Finance

• A new AI weather model from Europe’s intergovernmental weather forecasting center will help energy traders manage market volatility and decide where wind and solar farms should be built.

Politics & Policy

• The US is withdrawing from a “loss and damage” fund for developing countries hit by climate disasters, as well as the Just Transition Energy Partnership.
• Climate United sued the US Environmental Protection Agency and Citibank, claiming they illegally withheld a nearly $7 billion award announced last April in an escalation of an existing dispute between several nonprofit organizations and the EPA.
• A growing number of House Republicans are warning they may oppose the party’s budget bill if clean energy tax credits get axed.

EVs

• Aspen Aerogels, which manufactures thermal barriers for EV batteries, is cancelling plans for a plant in Georgia as it shifts focus to expanding production in China and Mexico.

President Donald Trump’s dismantling of the US Agency for International Development has sparked a wider debate about the benefits of foreign aid, Semafor’s Morgan Chalfant reported.

“If you look at the record of foreign aid over the course of some seven or more decades, you can’t say that it’s been a success,” Ian Vásquez, vice president for international studies at the Cato Institute, told Semafor. “It, in fact, has been a failure at promoting economic development.”