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JPMorgan warns of need for ‘reality check’ on phasing out fossil fuels

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JPMorgan has warned that the world needs a “reality check” on the transition from fossil fuels to renewable energy, saying it could take “generations” to reach net-zero targets.

In a global energy strategy report sent to clients this week, the US bank said efforts to reduce the use of coal, oil and natural gas have been hampered by high interest rates, inflation and wars in Ukraine and the Middle East.

Christyan Malek, JPMorgan’s head of global energy strategy and lead author of the report, told the Financial Times: “While the net zero target is still some way off, we have to face the fact that the variables have changed. Interest rates are much higher. Government debt is much higher and the geopolitical environment is structurally different. This cost, which will be $3 to $4 million a year, is in a different macro environment,” he said.

Malek argued that the level of investment required would put pressure on governments to back away from more aggressive energy policies. The Scottish government, for example, on Thursday shelved its ambitious plan to cut carbon emissions by 75 per cent by 2030, admitting the target was unachievable.

JPMorgan said in its report that changing the world’s energy system is “a process that should be measured in decades or generations, not years”.

The bank added that investments in renewable energy ‘currently offer low returns’ and there is even a risk of social unrest if energy prices rise sharply.

The report comes after oil companies such as Shell and BP cut their climate targets this year and hundreds of companies including Microsoft, Unilever and JBS failed to set targets ambitious enough to be endorsed by a ‘science-based targets’ initiative set up after the UN’s COP26 climate summit in Glasgow.

Malek noted that there is no guarantee that demand for oil and gas will peak in 2030, as populations in developing countries begin to buy more cars and fly more, as predicted by the International Energy Agency.

JPMorgan estimates that the world will need 108 million barrels of oil a day in 2030, and building more wind, solar and electric vehicle capacity could add another 2 million barrels a day to that figure.

“We are at a tipping point in terms of demand. More and more of the world has access to energy, and more and more of the world wants to use that energy to improve their standard of living. If this growth continues, it will put enormous pressure on energy systems and governments.

JPMorgan is a leading financier of fossil fuel and low-carbon energy projects. The bank has signed $101 billion of fossil fuel deals and $71 billion of low-carbon deals in 2021 and 2022, according to BloombergNEF data.

Chief executive Jamie Dimon told a US congressional hearing in 2022 that the bank would continue to invest in large oil and gas projects, that pulling out of such deals would be ‘the road to hell for America’ and that ‘the world is not getting the energy transition right’.

Echoing JPMorgan, energy consultancy Wood Mackenzie said on Thursday that higher interest rates would make the transition to a net-zero global economy ‘even more difficult and costly’.

Wood Mackenzie chief economist Peter Martin said that “the rising cost of capital has profound implications for the energy and natural resources industries” and that high interest rates disproportionately affect renewable energy and nuclear power due to their high capital intensity and low returns.

Wood Mackenzie added that many companies in the oil and gas sector have low levels of debt and will be relatively unaffected by higher interest rates.

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Anthropic AI models breach corporate systems after escaping isolated test environment

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Anthropic has announced that several of its advanced artificial intelligence models escaped an isolated testing environment and accessed the live internet.

In a review published Thursday night, the company stated that in three separate incidents dating back to April, the models independently breached the systems of multiple companies without the AI developer’s knowledge.

Anthropic said the incidents involved an unreleased internal research test model, alongside its Opus 4.7 and Mythos 5 models.

Mythos was made available last month to a limited audience composed of technology companies and cybersecurity researchers, an initiative also known as Project Glasswing.

The AI developer did not disclose which companies were breached, but said the affected firms were informed of the incidents on Monday.

Anthropic noted that it conducted the review after OpenAI revealed last week that two of its most powerful models had breached containment, escaped their testing environment, and infiltrated several entities, including the AI platform Hugging Face and cloud provider Modal Labs.

System misconfiguration allowed internet access

Anthropic stated that it examined more than 140,000 tests to find evidence of whether Claude could gain access to the internet from test environments designed to be isolated.

The evaluations included “capture-the-flag” exercises, in which Claude was instructed to breach other systems to obtain information. This is a method frequently used by experts to assess a model’s hacking capabilities.

The San Francisco-based company stated that a “misconfiguration” in systems operated by Anthropic and its testing partner left the models with live internet access, enabling them to infiltrate external systems.

Anthropic said it approached remediation efforts “with full ownership of the responsibility.”

Neither Anthropic nor the affected organizations detected the unauthorized entries at the time they occurred.

Anthropic added that it may examine its logs more extensively, noting that the findings gave the company “cautious optimism” that such risks can be overcome through increased investment and more stringent safeguards.

David Allott, a cybersecurity expert, told the BBC: “The overarching lesson here is not that AI has developed fundamentally new attack vectors.”

“Instead, it means that AI agents can combine capabilities, acquire credentials and system access to act autonomously, while adapting scope and scale at machine speed,” Allott said.

The developments come as technology companies invest billions of dollars to develop AI agents capable of independently executing a range of tasks, from research and customer support to cybersecurity.

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Elon Musk’s America PAC plans $100 million field operation for 2026 Republican midterm push

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Tesla and SpaceX CEO Elon Musk is returning to the political spending arena with a new field program designed to help elect Republicans in at least eight states ahead of the 2026 midterm elections.

Musk has authorized his political action committee, America PAC, to spend between $100 million and $120 million on a new ground game focused on conservative voter turnout for the 2026 midterms, according to a Thursday report by The New York Times, which cited two unnamed sources informed about the plans.

America PAC funneled more than $250 million into Donald Trump’s reelection campaign in 2024, a expenditure that established Musk as the largest political donor in US history.

The New York Times reported that America PAC is reviving its spending initiatives and has reached out to other Republicans in recent weeks regarding the new field operations.

The effort is also being coordinated with other Republican Party spending groups, according to the report.

The newspaper identified targeted Senate races in the states of Alaska, Iowa, Maine, Michigan, and Ohio, while noting that discussions are also underway regarding contests in North Carolina, Georgia, and Texas.

The political action committee is additionally expected to deploy funds for House of Representatives elections in Washington, Wisconsin, and California.

The news comes a day after Axios first reported that America PAC’s operations were resuming, with a focus on driving Republican turnout during the non-presidential election cycle.

A spokesperson for America PAC declined to comment on The New York Times report but confirmed the Axios reporting to The Hill. The spokesperson stated that the spending group was “excited” to contribute to efforts to maintain the Republican majorities in Congress this fall.

“The President’s political team and the rest of the GOP apparatus have built a world-class operation that has Republicans well-positioned to make history and retain control of Congress this fall,” America PAC spokesperson Andrew Romeo said in a statement. “We’re excited to be part of the team again.”

The campaign will reportedly target Republican voters through door-to-door canvassing, mailers, and digital advertisements, enabling other groups to concentrate their resources on television advertising.

The developments were reported days after Musk told The Economist magazine that he had gotten “carried away” during his brief foray into politics.

The SpaceX CEO entered the political arena during the 2024 election, pouring hundreds of millions of dollars into Trump’s presidential campaign and accompanying the candidate on the campaign trail.

Musk went on to lead Trump’s cost-cutting initiative, known as the Department of Government Efficiency (DOGE), which executed sweeping employment and funding reductions across the federal government. Those efforts sparked controversy for Musk and his enterprise empire, including Tesla, whose shares fell sharply during his period of political involvement.

Musk departed the White House in late May 2025, and DOGE officially terminated its operations on July 4.

Shortly after leaving government, Musk and Trump engaged in a public dispute over the president’s sweeping spending legislation, the “One Big Beautiful Bill Act.” During the friction, Musk threatened to form a third party, though the initiative never materialized.

Musk and the US President appeared to resolve their differences last year, with the tech billionaire most recently joining Trump alongside other technology leaders on a trip to China in May.

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Trump administration seeks to reopen closed US oil refineries as war drives fuel prices up

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The Trump administration is seeking to reopen closed oil refineries across the country—including a troubled facility in the Virgin Islands—in response to rising gasoline prices driven by the war in Iran.

A White House official confirmed in an email to The Hill newspaper on Thursday that the Trump administration “would like to see refineries re-opened across the country, particularly the St. Croix refinery.”

The official noted that the facility holds specific significance due to its “strategic” location and the fact that it was constructed to process Venezuelan crude oil.

The statement noted that companies have contacted the administration since April 2025 to submit purchase inquiries for the refinery, adding that interest surged further following the abduction of Venezuelan leader Nicolás Maduro and the subsequent US takeover of the country’s infrastructure.

The push to reactivate closed refineries was first reported by Politico. Three senior industry executives told the outlet that the White House is conducting talks to reopen refining facilities stretching from the Virgin Islands to California.

White House spokesperson Taylor Rogers addressed the initiative in a statement, saying: “Energy security is national security. America’s refining capacity is critical to ensuring the United States has uninterrupted access to safe, affordable, and reliable energy.”

“The President’s Council on National Energy Dominance will continue to support the re-opening of closed refineries and the construction of new ones to drive prices down and bolster our national security,” Rogers said.

The initiative comes as gasoline prices remain elevated amid the war in Iran.

According to data from the American Automobile Association (AAA), the national average gasoline price stood at approximately $4.10 per gallon as of Thursday. That figure is more than $1 higher than the level recorded when the conflict broke out earlier this year.

The St. Croix refinery halted operations indefinitely in 2021. The shutdown followed an order from the Environmental Protection Agency (EPA) requiring a 60-day suspension after determining that oil spills and air pollution originating from the plant posed an “imminent threat to public health.”

David Johnson, a director at Port Hamilton Refining & Transportation, welcomed the prospect of resuming operations at the facility in a statement shared with The Hill.

In his statement, Johnson said:

“Through the mobilization of substantial private capital alongside targeted federal initiatives that strengthen infrastructure and industrial capacity of national significance, the revitalization of the St. Croix refinery offers an opportunity to advance US energy security, expand domestic production, strengthen supply chain resilience, support advanced technology, create thousands of high-quality jobs, and build long-term American economic competitiveness, while accelerating the return of a strategic American industrial asset.”

Johnson added that the company “continues to engage in constructive discussions with federal and local officials, commercial parties, investors, and financing sources regarding the future of the refinery.”

Noting that the negotiations remain confidential, Johnson said: “While these discussions are confidential, we remain optimistic that the St. Croix refinery can once again make a substantial contribution to America’s energy security, industrial competitiveness, and long-term economic resilience.”

Crude oil is processed into gasoline at refining facilities. While crude oil costs generally constitute the primary driver of pump prices, refining capacity also plays a direct role in price formation.

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