Axios Future of Energy

October 02, 2025
💵 Money is flowing into AI and away from blue state energy projects. We've got all that and much more in just 1,292 words, 5 minutes.
🛢️ Situational awareness: Oil and gas heavyweight Occidental is selling its chemical division to Berkshire Hathaway for $9.7 billion.
- Why it matters: The deal enables Occidental to "reallocate capital to high-return oil and gas projects," an investor deck states.
🎸 This week in 1979, Joe Jackson released the album "I'm the Man," which provides today's intro tune...
1 big thing: Notes from the electricity-AI money frenzy
Power and data center developer Fermi saw its share price jump 55% on its first day of trading yesterday, giving it a market cap in the $18 billion range.
Why it matters: Fermi's IPO is the latest sign of capital confidence in power and AI — and not even the only one to emerge over the last day or so.
The latest: This morning, ArcLight Capital Partners said the Canada Pension Plan Investment Board is investing $1 billion for a stake in its AlphaGen power portfolio.
- Meeting AI power demand is among the explicit rationales, the companies said.
- The FT reported that a BlackRock unit is in advanced talks to buy Virginia-based power group AES for around $38 billion including debt — a figure Jefferies analysts called a "robust premium."
- AES is heavily invested in renewables and has deals with tech giants like Meta and Amazon.
Catch up quick: Fermi — co-founded by Trump 1.0 DOE head Rick Perry — is planning a massive energy and data center campus in Texas.
- New gas generation is the first part, but the wider vision includes lots of new nuclear, too.
What they're saying: "Several IPOs this year have tapped into that massive demand for AI infrastructure," Matt Kennedy, a senior strategist with Renaissance Capital.
- He points to IPOs this year from AI computing and equipment companies CoreWeave and White Fiber.
And watch how much more aggressively Trump administration officials look to help the overall buildout — and specific companies.
- Fermi plans to seek support from DOE's loan office and other agency programs, SEC filings show.
- And Trump 2.0 officials are looking to pull many federal levers to speed up AI data centers and related energy projects.
The big picture: "There is widespread awareness in DC of the challenges in providing timely access to power for new data center projects, and an increasing sense of urgency to address this challenge, given that China does not face material power challenges," a Morgan Stanley note this week says.
What we're watching: The future of power sector M&A for the balance of this year and 2026, following a robust first half of 2025.
- "The increasing energy demands driven by advancements in AI, particularly within data centers, highlight the strategic importance of vertical integration efforts," KPMG analysts recently wrote.
The bottom line: It's a hot-hot-hot time in the AI and related energy spaces as companies rush to invest in data centers and supply them with power.
- Industry execs are tossing around massive capex numbers. But a shakeout could loom, and not everyone will compete well either.
- "The capex spend is real. I think the question is, how much money can be made off of it," said Kennedy, whose firm researches the IPO market and offers ETFs of newly public companies.
2. 🛑 DOE ends billions in clean-energy awards following Vought post
The Energy Department said last night it's terminating $7.56 billion worth of financial awards that support 223 projects funded via several of its clean-energy offices.
Why it matters: It's among the starkest reversals of Biden-era DOE financial support for low-carbon energy and manufacturing initiatives.
- The announcement came hours after White House budget chief Russ Vought posted on X that "Nearly $8 billion in Green New Scam funding to fuel the Left's climate agenda is being cancelled."
The intrigue: "The projects are in the following states: CA, CO, CT, DE, HI, IL, MD, MA, MN, NH, NJ, NM, NY, OR, VT, WA," Vought added.
- Those states also all voted for Kamala Harris in 2024, have Democratic Senate delegations, and most have Democratic governors.
Driving the news: The pullback covers projects via the offices of Clean Energy Demonstrations, Energy Efficiency and Renewable Energy, Grid Deployment, Manufacturing and Energy Supply Chains, Advanced Research Projects Agency-Energy and Fossil Energy.
- "DOE determined that these projects did not adequately advance the nation's energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars," the agency said.
What we're watching: Some specifics are trickling out even though DOE didn't release a list of cancellations. Last night, California officials said DOE terminated $1.2 billion for the "hydrogen hub" in the state.
- Sen. Alex Padilla (D), in a statement, called it "vindictive, shortsighted, and proof this Administration is not serious about American energy dominance."
- And Bloomberg reported that funding for the Pacific Northwest hub is also canceled.
3. 😮💨 Fossil fuels are (sort of) spared in the shutdown
Various kinds of oil, gas and coal permitting on federal lands and waters are slated to continue during the government shutdown, Interior Department documents show.
State of play: The full agency-by-agency documents spell it out, but here's an abbreviated rundown of some Interior branches:
🛢️ Bureau of Land Management. It's continuing some work on permitting and leasing for oil, gas, coal and thanks to funding via industry fees, but also to "address the National Energy Emergency."
🌊 Bureau of Ocean Energy Management. It has "exempt employees available, funded through carryover, to work on priority conventional energy projects, such as the preparation for the Gulf of America Lease Sale 262."
- It will also have employees available to work on the planned 2026 offshore critical mineral lease sales, and oil and gas development plans.
- But it's on an "as-needed" basis and for "time-sensitive projects."
⛏️ Office of Surface Mining Reclamation and Enforcement. It considers certain employees exempt, "including to work on national energy emergency priority projects such as mining plan decision reviews and associated National Environmental Policy Act work."
The bottom line: Trump officials are keen to keep work going on White House energy priorities.
- But some still worry about a prolonged stalemate. "If it goes on for multiple weeks, then companies can potentially run into difficulties," Melissa Simpson, president of the Western Energy Alliance, told E&E News.
4. ⛏️ Number of the day: 23.3%


That's the latest surge in Lithium Americas' share price yesterday. It followed the Energy Department unveiling an agreement for a federal equity stake in the company and its Thacker Pass project in Nevada.
- The deal unlocks payments from a planned $2.26 billion DOE loan for the project.
5. 🛫 One tech thing: efficient jet deal

An aviation startup called Otto Aerospace says it has designed an ultra-efficient business jet and has already attracted its first fleet customer.
Why it matters: Aviation is a big greenhouse gas source, and the industry needs innovative aircraft and fuels to achieve its net-zero goals by 2050.
Driving the news: Fort Worth, Texas,-based Otto said the first fleet customer for its Phantom 3500 business jets will be Flexjet, the fractional jet ownership company.
- Flexjet plans to buy 300 of the sleek jets over 6-8 years, with the first deliveries expected in 2030, the companies said.
- The Phantom 3500 promises to burn 60% less fuel than similar business jets — or up to 90% less if operating on sustainable aviation fuel.
What we're watching: Otto plans to build the plane at a new high-tech factory in Jacksonville, Fla., supported by a $515 million incentive package from the state of Florida.
- But its first flight won't occur until 2027, and it still needs FAA certification.
6. 💬 Quote of the day: papal pressure edition
"Everyone in society, through non-governmental organizations and advocacy groups, must put pressure on governments to develop and implement more rigorous regulations, procedures and controls."— Pope Leo, in his first big speech on climate change yesterday
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🙏 Thanks to Chuck McCutcheon and Chris Speckhard for edits to today's edition, along with the brilliant Axios Visuals team.
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