Net Zero

1. BlackRock’s Texas two-step
2. Green investment rising
3. Power on the chopping block
4. Energy’s labor gap
5. Africa’s H2 woes

Betting on fusion and gas company stocks.

BlackRock’s playbook for the ESG backlash

BlackRock, the world’s largest asset manager, is back in business in Texas after the state removed it from a blacklist of financial firms that Republican officials deemed to be prejudiced against the oil and gas industry.

The decision is a victory for Republican state officials around the US, who have argued that the ESG policies of firms like BlackRock have led them to put so-called woke politics ahead of their fiduciary duty. But it’s an even bigger victory for BlackRock, which proved capable of navigating a high-profile political storm without making too many costly compromises to its core practices and offerings.

The firm can return to managing $300 million in pensions and other public assets in Texas, comptroller Glenn Hegar said, because it “has acknowledged the real social and economic costs, both here in Texas and globally, that come from limiting investment in the oil and gas industry.”

“A lot of this was about gamesmanship,” said Shivaram Rajgopal, a finance professor at Columbia Business School. “Both parties did what they needed to so that one side can declare victory and the other can get back to business.”

Green investment rising

Global energy investment will hit a record $3.3 trillion this year, with two-thirds of that dedicated to clean energy and grids, in spite of political resistance to the energy transition in the US and Europe.

Fossil fuel investment has leveled off, the International Energy Agency reported, while public and private investment in renewables, nuclear, grids, storage, low-emissions fuels, efficiency, and electrification has surged ahead. Most of that increase is led by fossil fuel-importing countries, especially China, which alone accounted for 27% of total energy investing. Emerging economies in Africa and elsewhere remain far behind. And overall, clean energy spending is still far below what the IEA projects will be needed to decarbonize the global economy in time to meet the Paris Agreement’s warming targets.

Power on the chopping block

More than 600 gigawatts of new power generation capacity is at risk of cancellation if the tax credit cuts passed by House Republicans last week are ultimately passed into law.

Most of those cancellations — equal to about half of total current US power capacity — would be from renewable energy projects in California and Texas, according to an analysis by the energy data tracking firm Clearview. The biggest problem with the House legislation, according to the analysis, is the rapid timeline it requires for projects to start construction in order to qualify for the credits: Within 60 days of the bill’s passage, which, if the Senate were to approve the bill, would likely start the clock in July this year. Given that it usually takes months or years to lock in financing and all the necessary permits, and get hardware and construction crews in place, that timeline is impossible for most energy projects. A separate analysis last month found those cancellations could cause wholesale power prices to jump 50% in the US by 2035. The Senate will take up the legislation this week, and is likely to walk back some of the more extreme tax credit cuts proposed by the House.

Energy’s labor gap

New energy engineering jobs created each year in the US. But one-third of those roles usually go unfilled, Bloomberg reports, a symptom of a deep worker shortage that has become one of the biggest unaddressed bottlenecks in the energy transition. The lack of skilled laborers is a major drain on economic growth in the US and Europe, and an obstacle for the domestic manufacturing and AI ambitions of Trump and other leaders. But in China, which has poured resources into engineering universities and training programs, the problem is reversed: Employers are spoiled for choice, and many qualified workers struggle to find jobs.

Africa’s H2 woes

Hydrogen exports from Africa to Europe will remain “prohibitively expensive” without policy interventions, a new study suggested. The fuel known as “green” hydrogen — made by splitting hydrogen out of water molecules using renewable electricity — has drawn much interest globally as a way to decarbonize heavy industries that are hard to electrify. As countries assess the most economically viable places from which to procure the fuel, some governments in Europe have been exploring importing cheaper green hydrogen in the form of ammonia from countries including Kenya, Mauritania, and Namibia. Research published by the journal Nature Energy, however, found that “de-risking and strategic location selection” would be key to making African green hydrogen exports competitive with those of other regions.

New Energy

• The World Bank will provide $1 billion to help the Democratic Republic of Congo construct a large new hydroelectric dam.
• California’s top court will begin hearings on the state’s solar power rules, which were recently changed in a way clean energy advocates say will be devastating to the industry.
• Canada can meet its ambitious renewable energy targets using only 1% of the land in the country that is suitable for such projects, the IEA reported.

Fossil Fuels

• Saudi Arabia will sell crude oil to customers in Asia at a discount, a sign that it sees flagging demand in the region.
• Share prices of US gas companies are poised to jump thanks to a hot summer and low storage levels.

Finance

• Prosecutors in Brazil want to block a $180 billion carbon credit deal they say is being carried out without consent from local communities.

Tech

• Meta signed a 20-year deal to buy nuclear power for data centers from Constellation Energy.
• Other data center projects, meanwhile, are sparking a revival of a type of high-emissions gas turbine that had previously fallen out of favor.

Personnel

• A group of Biden-administration energy officials launched a new law firm that will help its clients “develop, buy, and invest in energy infrastructure.”
• Michael Boren, Trump’s nominee to lead the US Forest Service, has a record of feuding with the agency.

Kieran Furlong, CEO of Realta Fusion.

Senate Republicans have a new headache as they wrangle President Donald Trump’s megabill toward a final vote: Panic on Wall Street over its proposed new retaliatory tax on certain foreign investments in the US, Semafor’s Burgess Everett and Eleanor Mueller reported.

“In terms of implementation, I’m going to have to get more comfortable with it,” Sen. Thom Tillis, R-N.C., who serves on the tax-writing Finance Committee, told Semafor. “Going into it in its current form, I’m not comfortable,” Tillis added, citing the possible chill on foreign companies’ investment in the US.