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The largest US power grid failed for a third straight year to secure enough future supply commitments to ensure reliability for the future amid a historic boom in data center demand.

PJM Interconnection, the largest US power grid (Regional Transmission Organization), which serves 67 million customers in 13 states and Washington, DC, said its auction to procure power for the year starting June 2028 fell 6.8 gigawatts short of what it will need to guarantee system reliability during demand spikes, in a statement released Tuesday. The shortfall is equivalent to almost seven traditional nuclear reactors.

The result ramps up pressure on a grid that’s home to Virginia’s Data Center Alley, the biggest concentration of data centers in the US, and has borne the brunt of criticism for the struggle to manage the AI boom and sufficiently protect customers from soaring costs. Attention now shifts to an emergency procurement mechanism later this year that aims to shift the burden of ramping up power generation to hyperscalers.

6.831 Megawatt Shortfall

PJM Interconnection today announced the results of its 2028/2029 Base Residual Auction (BRA), which secured 138,318 MW of unforced capacity generation (UCAP) and demand response to meet projected electricity needs for the more than 67 million people across 13 states and the District of Columbia, which fall under the RTO's umbrella.

Regions under the Fixed Resource Requirement (FRR) acquired an additional 10,864 MW in UCAP, for a total of 149,182 MW in UCAP available to serve forecasted peak electricity demand, plus a reserve margin. UCAP represents a generation resource’s maximum output adjusted for its estimated ability to reliably perform at times of highest system risk. The capacity of the resources procured in the auction, plus FRR resources, is short of PJM’s reliability requirement by 6,831 MW, meaning that the committed supply is less than what would be required to meet the one-event-in-10-year reliability standard (and with electricity-guzzling data centers popping up almost daily these days, the one-event-in-10-year has become a daily occurrence).

This shortfall was not unexpected given the conditions PJM has been observing, including a shortfall of approximately 6,500 MW in the previous capacity auction (for the 2027/2028 Delivery Year). These most recent auctions were the first in PJM history in which the entire RTO fell short of the reliability requirement. PJM plans to seek FERC approval to hold a special “Backstop Procurement” in September to help address the near-term shortfall in electricity supply.

In coordination with the governors of all 13 PJM states and the Federal Energy Regulatory Commission, PJM established a price cap and floor, or collar, for four capacity auctions to protect both consumers and investors from market volatility. This was the third consecutive auction with the price collar.

The clearing price came in at the FERC-approved price ceiling of $325 per megawatt-day which will show up in users’ monthly utility bills; the price was a 2.5% decrease from the 2027/2028 Base Residual Auction cap of $333.44 per megawatt day.

Costs would be even higher if not for the price cap first negotiated in 2024. While that has helped keep a (loose) lid on costs, PJM has been among those to say that the system also means there isn’t a sufficient price signal for producers to build new power generation. 

The table below from the PJM statement shows what prices would have been without a price cap.  For 2028/2029, all prices cleared at $554.72  except the COMED LDA, which cleared at $776.69. 

In other words, absent a regulatory cap, the price of electricity would be 70% higher ($554.72 vs $325).

Meanwhile, advanced technology providers of nuclear energy such as modular reactor companies Nano Nuclear and Oklo are just waiting for the green light to plug their energy sources into the grid. 

Payouts to generators for the year starting June 2028 matched the last auction’s all-time high of $16.4 billion set in December, according to PJM (the total value does not equate to the total cost to load because load that is hedged through self-supply or bilateral contracts is not exposed to the clearing prices in the auction). 

PJM power prices jumped 76% during the first quarter due to rampant demand from data centers, according to a report from Monitoring Analytics, the grid’s independent market monitor.

PJM CEO David Mills recently described such a situation as “untenable."

Commenting on today's auction, Mills said that “these auction results show that demand for electricity continues to grow faster than electricity supply. At the same time, PJM recognizes how this supply-and-demand imbalance impacts the reliability of the system and costs for consumers. We are working with government and industry leaders on multiple fronts to restore that balance by bringing on new generation as fast as possible and managing the growth of new load on the grid.”  

As we have repeatedly warned when discussing just how little excess capacity there is in the US grid - with PJM already well below the critical reliability threshold - a searing heat dome earlier this month showed just how close the PJM grid is to reaching its limits, with power demand likely surpassing a record that had stood for over two decades. Without urgent action, the grid risks further deterioration with demand outstripping oncoming supply.

Next summer the Eastern seaboard will look like North Korea at night thanks to chatbots pic.twitter.com/NEY97pa1LB

— zerohedge (@zerohedge) May 6, 2026

PJM already was under intense scrutiny with data centers and power generators saying they are not being connected fast enough as consumer groups and politicians hammer the grid for spiraling power bills. Those concerns are likely to come to a head at a July 23 conference called by the Federal Energy Regulatory Commission to discuss grid governance.

The latest auction result, intended to guarantee enough capacity is available for the few hours in a typical year when demand peaks, will also put further onus of an emergency measure slated for later this year to fill the supply gap and ensure data centers pay. As Bloomberg notes, PJM has yet to submit its proposal for exactly how that will work, but the process is set to get underway in September after heavy pressure from the White House and state governors.

Authored by Victoria Friedman via The Epoch Times,

The State Department is launching a campaign to “dismantle the threat posed by the International Criminal Court to U.S. sovereignty,” the department said, including through disabling the court’s ability to target American servicemen or officials.

The State Department said in a July 13 statement that actions under consideration include U.S. officials contacting foreign nations to highlight the ICC’s abuses and the risk posed to other countries by the court, and urging them to withdraw from the body.

The Trump administration is also considering revoking visas and imposing travel bans on ICC personnel, imposing increased sanctions against the ICC and its affiliates, and increasing pressure on nations that refuse to reject ICC rulings while still relying on U.S. assistance.

“No diplomatic option will be off-limits in the campaign to dismantle the threat posed by the ICC to Americans,” the department said.

The ICC was established in 2002 to prosecute genocide, war crimes, and crimes against humanity, asserting its jurisdiction if a member of the ICC is unable or unwilling to undertake prosecutions itself.

The United States has never been a member of the ICC; however, the court’s statutes give it the power to prosecute crimes committed in a member state by nationals of non-member states, including Americans.

“The ICC poses an intolerable threat to U.S. sovereignty - it claims the authority to prosecute and even imprison American servicemen and officials operating on behalf of America’s national interest,” the State Department said.

“Americans never signed up for this, and all American presidents since the ICC’s ratification have maintained that the ICC does not have jurisdiction over Americans.”

The ICC’s spokesperson, Oriane Maillet, said the court would not comment on the matter at this stage.

President Donald Trump’s opposition to the court goes back to his first term in office. He and other officials in Washington have long said the ICC should not have the authority to investigate and prosecute U.S. citizens, particularly members of the military.

In March 2020, ICC prosecutors opened an ?investigation in Afghanistan that included looking into possible crimes by U.S. military personnel. However, since 2021, it has deprioritized the United States’ role, focusing ?on alleged crimes committed by Taliban forces and the Afghan government.

‘Waging a War Against Our Country’

“As we speak, the ICC and its friends are waging a war against our country, not with bullets or missiles, but with statutes and compacts and the force of so-called international law,” Secretary of State Marco Rubio said in a video message posted on July 13.

Rubio said that when the ICC was established, it said it was limited to dealing with the most serious of offenses.

“But the truth is, it was something far more radical and extreme. It was a global tribunal staffed by unelected globalist bureaucrats who claim their power is almost unlimited,” he said.

Rubio said that the court’s power has only continued to grow, and that the United States should not stand idle and let judges living thousands of miles away make determinations well beyond their jurisdiction.

“The American people never agreed to any of this, and they never will,” Rubio said.

“Read the words of our Declaration of Independence. We fought a revolution against a foreign power, transporting us beyond seas to be tried for pretended offenses. Independence is our birthright. We will never let foreign bureaucrats take that away from us.”

In December 2025, Rubio sanctioned two ICC judges after accusing them of being engaged in the “illegitimate targeting” of Israel. Rubio said at the time that neither the United States nor Israel is a party to the Rome Statute, the international treaty that established the ICC, and therefore rejected the court’s jurisdiction.

“The ICC has continued to engage in politicized actions targeting Israel, which set a dangerous precedent for all nations. We will not tolerate ICC abuses of power that violate the sovereignty of the United States and Israel and wrongly subject U.S. and Israeli persons to the ICC’s jurisdiction,” Rubio said in the Dec. 18 statement.

The blowback against data centers escalated this morning, when New York became first state in the nation to enact a moratorium on data centers, pausing construction on new facilities for one year.

An executive order by Gov. Kathy Hochul bans state lawmakers from approving environmental permits for hyperscale data centers. Hochul said Tuesday the pause will give lawmakers time to create a framework to protect residents and the environment. 

"Massive data centers are being built across our state and our country. The scale and speed of this development has put unprecedented demand on energy and water resources, and threatens to drive up utility costs. Before it goes any further, I need safeguards in place to protect New Yorkers," Hochul said in a social media post. 

AI data centers, which contain thousands of servers and typically use 50 or more megawatts of power to operate, have been blamed for everything from noise pollution to sending regional electricity prices soaring. They also require a steady supply of water to keep cool. 

Hochul said the state still welcomes AI investments and businesses, and looks forward to helping them grow and thrive. 

"But when you benefit from the talent and energy of New York, we expect you to protect our resources and give back to our communities," Hochul said. 

New York will lead in responsible innovation while protecting families and communities.

Today, I’m signing a first-in-the-nation Executive Order to hit pause and set the rules for AI data centers.

Join me live: https://t.co/5T2eFyoc7m

— Governor Kathy Hochul (@GovKathyHochul) July 14, 2026

The order comes as the state is experiencing unprecedented growth in the demand for data center development driven by AI and other computing operations, according to the governor's office. The data centers require "millions of gallons of water, draining the local supply." 

"The bottom line is progress shouldn't arrive with a higher utility bill, depleted water supplies, or noise pollution. So we have no choice but to address these challenges created by these massive facilities," Hochul said. 

Hochul said New York will require data centers to either produce their own energy or pay a premium for accessing New York's grid. Hochul also said she opposes any tax subsidies for AI data centers as well. 

The Department of Public Service will create the guidelines for centers to ensure new facilities meet consistent standards. 

Hochul said the process will take up to a year, prompting the moratorium. Once state officials finalize the standards, the ban will be lifted. 

Democratic Senator Kirsten Gillibrand applauded the move: "This one-year moratorium is fundamentally about trust. Right now, New Yorkers aren't convinced these massive facilities benefit them. Before we move forward, our communities need ironclad guarantees that their energy bills won't spike, their water will be protected, and their air will remain clean," Gillibrand said.   

Gillibrand described the need for federal action regarding AI as well: "That requires establishing clear, reliable rules of the road. We must build a framework that protects our kids from harmful algorithms and social media tools; shields seniors and consumers from AI-driven scams and fraud; and safeguards American jobs and livelihoods from displacement."
"It kills good-paying union jobs"

Not everyone is pleased with the moratorium. 

"A shortsighted moratorium only accomplishes one thing: it kills good-paying union jobs. Rather than implementing guardrails to build the future of American ingenuity, Governor Hochul is taking her ball and going home. We urge the governor to work with all parties, including the hardworking New Yorkers whose jobs are at stake, to implement common sense guardrails," United Association of Union Plumbers and Pipefitters general president Mark McManus said. 

The  Associated General Contractors of New York State also objected to the moratorium, calling it "the wrong policy for New York." 

"Halting permits for as much as a year in this fast-moving sector will not simply delay projects—it will send them permanently to Virginia, Texas, Georgia and other states actively competing for these investments and the construction and other jobs that come with them. Once a developer breaks ground somewhere else, that project—and the opportunities and tax revenue that come with it—are not coming back," AGS NYS president and CEO Mike Elmendorf said. "Data center construction is the strongest-performing segment in an otherwise uncertain construction market nationwide, and New York's construction industry—which still has not recovered to pre-pandemic employment levels—cannot afford to forfeit it."

Elmendorf called the moratorium a "de facto ban that tells the marketplace New York is closed for business."

Meanwhile, PA senator John Fetterman, snubbed the NY decision by simply stating "China wins."

China wins. ???? pic.twitter.com/tTiMwxPNaq

— U.S. Senator John Fetterman (@SenFettermanPA) July 14, 2026

A grassroots pushback against data centers has been spreading across the nation in the past year and most recently culminated in the so-called Silion Alley in Virginia - which has the highest concentration of data centers in the US - and where we reported a week ago that giant data center landlord Blackstone is walking away from plans to build its portion (which at this point is the only portion left after its partner already pulled out days earlier) of a 2,100-acre data center campus in Virginia - also known as Prince William Digital Gateway which would house as many as 37 data-center buildings - handing a win to residents who fought for years to topple the project. 

Authored by Rystad Energy via OilPrice.com,

• Venezuela could increase crude production by about 194,000 bpd by late 2028, with most growth coming from existing producing fields rather than new discoveries.

• International oil companies led by Chevron are expected to deliver nearly two-thirds of the forecast production increase through brownfield investments.

• The biggest obstacles are operational, including drilling rigs, diluent supplies, infrastructure upgrades, and a competitive fiscal regime capable of attracting long-term investment.

Venezuela's upstream industry has entered a new phase. Following sweeping hydrocarbon reforms and broader geopolitical developments in early 2026, the conversation has shifted from whether the country can reopen its oil sector to whether it can successfully execute a meaningful production recovery. The country's resource potential has never been in doubt. The greater challenge now lies in converting policy momentum into sustained operational growth.

Rystad Energy estimates Venezuela's crude production could increase by approximately 17%, or around 194,000 barrels per day (bpd), between the fourth quarter of 2025 and the fourth quarter of 2028. Importantly, this growth is expected to come primarily from existing producing assets rather than large-scale new discoveries, highlighting that operational execution, not resource availability, will determine the pace of recovery.

Near-term production growth will be dominated by heavier crude grades. Around three-quarters of Venezuela's output through 2028 is expected to come from heavy, extra-heavy crude and bitumen, with the Orinoco Oil Belt accounting for roughly 60% of total production. This makes access to diluents, workover activity, infill drilling, and mature field management considerably more important than reserve additions over the next several years.

Venezuela upstream figure 1

International operators are driving the recovery

International oil companies (IOCs) are expected to contribute nearly two-thirds of Venezuela's forecast production increase through 2028. Chevron remains the largest contributor, followed by Repsol, Eni, Maha Energy and Maurel & Prom. Most of this growth is expected to come from expanding production at existing joint ventures, reflecting renewed investment following regulatory changes and sanctions relief rather than greenfield developments.

Chevron continues to occupy a particularly strategic position. Recent portfolio adjustments have strengthened its exposure to the Orinoco Oil Belt, while future production growth is expected to rely on brownfield optimization, infill drilling and the phased development of Ayacucho 8. Beyond Chevron, companies such as Eni and Repsol continue to play a dual role in both Venezuela's crude and natural gas sectors through assets including the Cardón IV block and the giant Perla gas field.

However, international participation remains highly selective. Companies continue to balance the opportunity presented by Venezuela's vast resource base against fiscal uncertainty, operational complexity and long-term investment risk.

Execution, not geology, remains the key constraint

While policy reforms have improved the investment outlook, they do not eliminate the operational bottlenecks that have constrained production for years.

Sustained production growth will require continuous access to diluents, higher drilling activity, extensive workover campaigns, improved infrastructure and significantly greater rig availability. These operational requirements represent the critical link between resource potential and realized production.

Fiscal competitiveness also remains an important consideration. International operators have indicated that future capital commitments will depend on further improvements to Venezuela's fiscal framework, particularly around royalty rates and taxation. Lower project breakeven costs through more competitive fiscal terms could materially improve investment economics and encourage broader participation across the sector.

Oilfield services could become the industry's defining bottleneck

Perhaps the greatest challenge facing Venezuela's recovery lies beyond the upstream operators themselves. The Venezuelan Oil Ministry has identified a requirement for 93 active drilling rigs by 2028, a significant increase from current activity levels. Achieving this target would require a phased expansion involving reactivating domestic rigs, refurbishing idle equipment, and eventually importing additional rigs from international markets.

This creates substantial opportunities for drilling contractors and oilfield service providers but also highlights the scale of the execution challenge. Companies must balance equipment mobilization costs, contract duration requirements, and country risk before committing capital.

Local contractors have begun reactivating existing fleets, while international service providers remain more cautious, waiting for greater evidence that recent policy reforms will translate into a stable, commercially attractive operating environment. As a result, rebuilding operational capacity may ultimately prove just as important as attracting upstream investment.

Venezuela upstream figure 2

The next phase depends on implementation

The 2026 Hydrocarbons Law represents one of the most significant structural reforms to Venezuela's upstream sector in decades. By expanding opportunities for private participation and introducing greater fiscal flexibility, the legislation has created a more attractive framework for future investment.

Yet legislation alone cannot restore production. The speed of implementation, the stability of fiscal policy, continued sanctions relief, and the industry's ability to rebuild operational capacity will ultimately determine whether Venezuela can translate ambition into sustained output growth.

For investors and operators alike, the opportunity is considerable. But the country's upstream revival will depend less on the size of its resource base than on its ability to consistently execute across drilling, infrastructure, services, and investment policy. That execution gap, not geology, is likely to define Venezuela's production trajectory over the remainder of the decade.