Chevron's young business to build gas-fired plants that directly supply data centers is "moving very quickly," and final agreements with hyperscalers could come soon, Chevron New Energies president Jeff Gustavson tells Axios.

Why it matters: Chevron's — and rival Exxon's — plunge into behind-the-meter power for data centers shows how the oil supermajors are moving to capitalize on AI's powerful energy thirst.

• "There's no reason the U.S., with its large, abundant natural resources, natural gas in particular, can't win this [AI] race," he said in an interview.

Catch up quick: In January, Chevron and investment firm Engine No. 1 unveiled a partnership to deploy gas plants co-located with big data centers starting in 2027, using GE Vernova turbines.

• They envision up to four gigawatts and are targeting the Southeast, Midwest and West.

Driving the news: "If I were to highlight one state that we're really focused on in particular, it'd be Texas," he said, citing attributes like gas availability and state and local regulatory environments.

• It also has carbon storage potential for the projects, which could integrate climate tech in the future like CO2 capture and use of hydrogen in turbines.
• "Customers want a lower carbon pathway," he said.

The intrigue: Gustavson noted Trump officials support enabling new power for AI.

• But Chevron's also watching the fluid tariff situation for how it could affect costs and equipment procurement timelines.
• "It introduces some uncertainty here," he said.

The big picture: Chevron New Energies houses the energy giant's business lines on hydrogen, CO2 capture and storage, biofuels, and its exploration of opportunities in geothermal and lithium.

Threat level: The House reconciliation plan to quickly end hydrogen tax credits could slow Chevron's plans, Gustavson said.

• "The cost of low-carbon or no-carbon hydrogen will be higher without that incentive. And so then it's basic supply and demand. When the price of something is higher, the demand is lower, and the pace of adoption will be slower," Gustavson said.
• He noted the lack of production incentives will make costs higher for customers.
• "We need to be able to generate a return to invest in anything in this space or any space. If you don't have customers that are willing to pay the price that we need, it will slow some of these projects."

What we're watching: The next phases of the data center plan.

• "We need to ... finalize some of these agreements and start construction now in order to meet the needs, not just of the hyperscalers, but of consumers, because electricity demand is growing outside of the data center space," he said.

Businesses closed, canceled or downsized over $14 billion worth of U.S. low-carbon manufacturing and energy generation projects so far this year, per a new summary of tracking data from the nonprofit group E2.

Why it matters: The pullback comes amid "rising fears over the future of federal clean energy tax credits and policy," as budget legislation advances, the group said.

• The retreat has already cost 10,000 planned jobs, per E2.
• More planned projects will be scuttled if the House reconciliation bill, which massively pares back the IRA, becomes law, it warned.

State of play: Projects disappearing or delayed include battery and solar equipment manufacturing, hydrogen production and wind generation, per E2, which is affiliated with the Natural Resources Defense Council.

• Manufacturing accounts for a large majority of the tally.

Yes, but: Renewables generation and storage additions are still progressing under current law.

• The American Clean Power Association reported this morning that utility-scale wind, solar and battery storage capacity grew by 7.4 gigawatts in Q1, the second-largest January-March stretch ever.
• "Eight of the top ten states for Q1 clean power additions voted Republican in the 2024 presidential election," the group said.

What we're watching: All eyes are on whether the Senate will soften the House-approved bill that dismantles what GOP leaders call a wasteful "green new scam."

• "Now is not the time to raise taxes on clean energy and compound the business uncertainty that is clearly taking a greater and greater toll on U.S. manufacturing and jobs," E2 communications director Michael Timberlake said.

🤏 Let's get small: the "microreactor" startup Radiant Energy closed a $165 million Series C led by DCVC and includes new investments from Giant Ventures, StepStone and a suite of others.

• Why it matters: The firm is aiming to commercialize 1 megawatt reactors that can replace diesel generators to "provide resilient power for remote villages, emergency response, and military installations."
• The intrigue: That's very different from even small modular reactors, often defined as up to 300 megawatts, let alone traditional gigawatt-scale units.
• What's next: The money will help complete a prototype and "factory siting and early construction efforts." It hopes to begin customer deployments in 2028. Go deeper on Radiant.

🧠 Let's get smart: Atomic Canyon, a startup that uses AI to help navigate nuclear regulations, raised a $7 million round led by Energy Impact Partners.

• Why it matters: As interest in new and extended-life reactors grows, Atomic Canyon says its tech can vastly improve the efficiency.
• State of play: Its Neutron Enterprise platform is already being deployed at PG&E's Diablo Canyon plant in California to help with 2 billion pages of documents. Atomic is reducing search times from hours to seconds, "enabling more strategic use of expert resources while improving regulatory compliance and operational efficiency," it said.
• Go deeper: TechCrunch first reported on the new round.

🛢️ Yesterday's federal court ruling against President Trump's tariff powers is helping lift crude oil prices this morning, with Brent crude at just under $65.

• Why it matters: Oil prices are highly sensitive to trade policies because the economic hit from heavy tariffs is bearish for demand.
• What's next: All eyes are on OPEC+, which will decide Saturday how much production to add in July.

🚘 Tesla stock is up in pre-market trading after CEO Elon Musk confirmed yesterday that he's departing the Trump administration.

• What they're saying: Musk's exit is "music to the ears of Tesla shareholders," Wedbush Securities analyst Dan Ives said in a note, enabling more focus on the company.
• Yes, but: Musk has his work cut out for him amid declining sales that partly stem from backlash to his politics.

🤝 Japan's Kyushu Electric Power Co. inked a 20-year purchase deal with Energy Transfer for gas from the U.S. firm's planned Lake Charles LNG project.

• Why it matters: It's the Japanese power heavyweight's first long-term U.S. LNG deal.

That's the jump in electric air taxi startup Joby Aviation's share price yesterday on news that it closed the first $250 million tranche of Toyota's $500 million investment.

• The money is aimed at "supporting certification and commercial production of Joby's electric air taxi," Joby said.