HOUSTON — The need to power the AI revolution is the top-of-mind issue for energy CEOs and thousands of professionals at the CERAWeek by S&P Global conference here.

Why it matters: Depending on who you listen to, AI will either lead to a decades-long extension in relatively unfettered fossil fuel use or may not cause electricity demand to skyrocket as much as many assume.

• In any case, it's leading to a new energy "pragmatism" or "realism," in which some are pushing climate change concerns to the back burner.

Zoom in: In presentations and hallway conversations, experts said that increasing electricity demand for AI-related data centers is partly driving a new "energy realism," as ADNOC CEO Sultan Ahmed Al Jaber said in a speech yesterday.

• "The race for AI supremacy is essentially an energy play," Al Jaber said.
• He said the race will be won by those with easy access to adequate supplies of affordable energy and supporting infrastructure.
• "We need every energy option available," Al Jaber said.

The intrigue: Other energy leaders here have also stressed the already increasing energy demand from data centers, electrification and manufacturing.

• "We need more energy, we need more gas, we need more electricity," said TotalEnergies CEO Patrick Pouyanné.
• "Gas is going to be right at the forefront of meeting that power demand," he said.

Natural gas is a fossil fuel that tends to produce fewer greenhouse gases than coal but emits methane, a powerful global warming agent.

• Pouyanné said cutting natural gas' methane emissions is "fundamental" for continuing to rely on this energy source.

Reality check: Constellation Energy CEO Joseph Dominguez questioned the conventional wisdom about dramatically increased energy demand that may outstrip supply and require a new wave of natural gas and other fossil fuel energy sources.

• He noted that data center operators tend to shop the same data center to different parts of the country to determine where it could be built most cheaply and with particular energy sources.
• This can lead to a false assumption of many more new data centers for every one that actually gets built.

Zoom out: Dominguez also cautioned against meeting the increased demand with carbon-intensive energy sources, emphasizing the very real climate change consequences of such a strategy.

• He said of climate change: "We're going to have to address that issue, and we can't ignore it."
• Many data center users, such as tech giants like Microsoft, Google and Amazon, are searching for low-carbon energy options to power their data centers.

What we're watching: The steps that major energy companies, utilities and other players take in prepping for the new AI era.

HOUSTON — Donald Trump, accidental climate hawk? It's not quite as galaxy-brained as it sounds.

State of play: Respected energy analyst Jeff Currie has a new paper declaring the "New Joule Order."

• I won't describe all of it here. But one conclusion is that risk concerns — not climate policy — are driving countries to seek domestic sources instead of imported commodities.
• Tariffs are part of that stew of geopolitical, macro, and financial security risks.
• And the U.S. has recently "signaled a willingness to weaken its security commitments to allies and trading partners while imposing tariffs."

The intrigue: "If you have to source domestically produced energy, non-fossil fuels are the quickest and easiest way to do it, which are things like nuclear, renewables, things that are not traded," Currie, a top analyst with Carlyle, tells Axios on the sidelines of CERAWeek.

The bottom line: "If trade is under threat, then so are fossil fuels," the report notes.

• "The security-motivated transition (1973-1993) seen after the first oil crisis was about the same — if anything, 30 basis points per annum faster — than the Net Zero-motivated transition of 2010-2024," it states.

Full report...Bloomberg coverage

⚛️ Google, Amazon, and Meta just endorsed a tripling of global nuclear power by 2050, signing onto an existing pledge from banks and other companies.

• What we're watching: Whether the signatures help boost capital flows for new projects large and small.
• State of play: Tech giants are looking to reactors to power AI, and Amazon said it has invested over $1 billion in the last year on nuclear projects and tech. But many plans are aspirational. Go deeper.

🛑 EPA said it's outright terminating $20 billion in grants under the 2022 climate law's Greenhouse Gas Reduction Fund.

• Why it matters: It's among the most aggressive reversals of major Biden-era policies.
• Yes, but: Last night's move isn't the last word. It escalates the unfolding legal battle over whether EPA can freeze — and now kill — the program that Congress created and funded. Bloomberg has more.

⚖️ The White House is nominating Jonathan Brightbill, who has argued against Biden-era climate rules in court, as the Energy Department's next general counsel. Go deeper via Axios Pro.

HOUSTON — A potent combo of MAGA policy and global energy demand is bringing a harsh reality check to climate change efforts.

• Why it matters: Powerful execs gathered here for the marquee CERAWeek energy conference are declaring a new realism — even as temperatures keep shattering records.

BlackRock Chairman Larry Fink told the audience earlier this week: "Across the board, we have to think about power and energy in a pragmatic way."

• American Petroleum Institute CEO Mike Sommers told Axios: "An emerging theme that I've seen already is kind of: We're back to energy pragmatism."

🔭 The big picture: Comments here from U.S. and global execs distill what's been building in C-suites and across governments.

Read the whole story, which first appeared in Axios AM.

HOUSTON — Andrew Flanagan, CEO of RWE Clean Energy, warns that taking renewables out of the equation would boost gas demand enough to raise prices for consumers and data centers.

Why it matters: His message shows how a big onshore U.S. renewables player is navigating a White House that's hostile to wind and a Congress weighing the fate of clean power tax credits in budget talks.

Driving the news: Flanagan, on the sidelines of CERAWeek, said he's pro-gas but that renewables help keep overall costs down.

• "We expect and we know that we need more gas-fired generation to get completed. We're fully supportive of an all-of-the-above approach," said Flanagan, whose company is a subsidiary of German energy giant RWE and features solar, onshore wind, and battery storage assets.
• "But if you pull out the renewables piece of that, which is one of the lowest-cost solutions, you're going to increase the costs to consumers, and that's going to have a negative effect," adds Flanagan.

The big picture: President Trump is directly targeting marine wind, and RWE's separate U.S. offshore arm is already affected.

• Onshore, the threat is more complicated. Trump's anti-wind exec order also freezes federal onshore permitting, but RWE's work (and most of the industry's) is on private tracts.
• Still, private lands projects can need federal approval, such as permits from the FAA for tall structures. Tariffs, meanwhile, threaten to raise project costs.

State of play: Flanagan said the company took proactive steps to secure supply chains ahead of tariffs to avoid "untenable exposure" across the value chain.

• It already has permits needed for the roughly gigawatt of wind that's currently being built.
• "We don't see any material risk to our projects that are under construction," he said.

Full story

An unusually intense storm in the Plains and Midwest will bring a wide array of extreme weather hazards to more than a dozen states beginning today.

Threat level: This storm will bring everything from "extremely critical" fire weather conditions and powerful winds to New Mexico and Texas today to the likelihood for multiple days of severe thunderstorms with damaging winds and tornadoes from the Southeast to the Ohio Valley eastward Friday through Sunday.

• The states most at risk of severe weather through Sunday lie along and east of the Mississippi River, with hazardous conditions extending from Arkansas to Georgia, north to the Ohio Valley and finally the Mid-Atlantic through the weekend.

The intrigue: This storm will hit immediately after deep cuts to the NWS workforce and as more layoffs at NOAA loom.

Context: Climate studies have shown that human-caused global warming is altering the mix of ingredients for severe thunderstorms.

• Humidity and atmospheric instability are likely to increase with a warming climate, while climate change is anticipated to decrease the amount of wind shear available to severe thunderstorms, which could deprive them of a key ingredient for tornado formation.

Yes, but: When the right conditions do overlap, as they may the next few days, it is possible that severe weather outbreaks will be somewhat larger in a warming world.

That's how much U.S. electricity demand is expected to grow between now and 2040, per a new analysis from S&P Global Commodity Insights.

• The surge is driven by economic growth, "large industrial loads like data centers and manufacturing, and the electrification of transport and heating."