Trump’s DOJ Targets Powell as Energy Wars Ignite on West Coast

Paul Riverbank, 1/13/2026 A historic showdown brews in Washington as the independence of the Federal Reserve faces political threats, DOJ scrutiny, and Senate gridlock—while, out west, a fierce state-federal battle over California offshore oil signals deepening divides in American governance and energy policy.

At the heart of all this is an unusual political standoff that’s pulled in heavy-hitters from both sides of the aisle. The tension ramped up after the Department of Justice—a body that, under ordinary circumstances, keeps its distance from monetary policy—opened an investigation into Federal Reserve Chair Jerome Powell. The official line is that the probe concerns renovations at the Fed’s headquarters, but nearly everyone watching suspects there’s more at play.

North Carolina Senator Thom Tillis, who’s on his way out of public life, chose this moment to plant his flag. In a move that left pundits and policymakers scrambling to recalibrate, Tillis announced that he’ll block any new nominees for the Fed—up to and including a replacement for the chair—unless the legal dust settles first. “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” he declared. For Tillis, too, this is more than procedure; it’s about the credibility of the nation’s foundational institutions.

All the while, questions about Powell’s future are swirling. His term as chair wraps up in May, but he could hang around as a Fed governor, potentially outlasting even the outcome of this legal drama. Powell, never one to mince words when institutional autonomy is threatened, reminded reporters, "No one—not the chair of the Federal Reserve or anyone else—is above the law." But in the next breath, he signaled the broader stakes: “This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.” For Powell, decisions about interest rates aren’t meant to drift with the winds at 1600 Pennsylvania Avenue.

In the battle’s crossfire, President Trump continues to lob his own criticisms, taking aim at Powell for what he calls “overly high” interest rates and even ribbing him over the central bank's construction woes. In public remarks, Trump insists that economic leadership has, in his opinion, fallen short. Meanwhile, Kevin Hassett, Trump’s top economic adviser and now the frontrunner to succeed Powell, has thrown his support behind the DOJ investigation. “If I were chairman of the central bank, I’d want them to do that,” he commented, underscoring how the line between monetary policy and politics blurs further every day.

If Hassett doesn’t get the nod, there are several others circling—names like Michelle Bowman and Christopher Waller, both current Fed governors, plus former governor Kevin Warsh and Rick Rieder from BlackRock. All bring their reputations and distinct monetary philosophies to the rumor mill.

As Washington obsesses over the drama at the Fed, a second—no less volatile—struggle is boiling over on the California coast. Oil rigs off Santa Barbara, sitting idle since a calamitous spill a decade back, have become the flashpoint in a showdown over the country’s energy future. Sable Offshore Corp., headquartered far from the Pacific’s haze, argues that restarting these aging pumps is vital for local job creation and taming spiking gas prices. California’s government, local regulators, and environmental groups are having none of it.

“This isn’t just about bringing back a few pumps,” says Linda Krop, chief counsel for the Environmental Defense Center. “We’re talking about old equipment that already failed once, and did so in spectacular fashion.” The legal tug-of-war now centers on a pipeline that would carry oil from the rigs. Sable leans on federal law to fast-track its aims, while state authorities argue that every environmental blemish must be scrubbed clean under toughened regulations before a single barrel moves.

Pressure from the White House has not gone unnoticed. Late last year, Trump invoked a national energy emergency, paving the way for regulators to grant Sable a waiver that sidestepped layers of environmental oversight. With energy costs surging, the administration’s bet is clear: get the oil flowing, then ask for forgiveness if needed. The courts, predictably, are now referees. Environmental groups sought an urgent block, but for now, a federal appeals court has refused. A fuller hearing is coming soon, so both sides dig in; California’s own courts, not to be outdone, have warned that flipping those switches back on today would breach standing injunctions.

All of this might explain why public meetings in coastal towns—sometimes raucous, sometimes weary—feel so urgent. The Surfrider Foundation and other grassroots groups gather crowds to argue their cases while the federal government eyes even bigger plans: auctions for new offshore drilling leases loom over the horizon.

Back in D.C., the consequences of the Fed fight are trickling into every nook of the financial system. With the Senate at a razor-thin divide and Tillis holding the cards on future confirmations, uncertainty reigns. What happens next matters well beyond the beltway bubble: decisions made in the coming months could ripple across every mortgage negotiation, every small businesses’ balance sheet, every American’s paycheck.

For now, the independence of the nation’s central bank and the future of energy policy remain in limbo. And while the country watches, the question at the core—just how much should political power reach into the institutions meant to be insulated from it—continues to gnaw. If history’s any guide, this chapter is far from its final page.

It’s been a tense week inside Washington’s tangled corridors, with the usual hum of summer turning sour in the marbled halls of the Capitol. The country’s economic nerve center—the Federal Reserve—has become the unlikely stage for a power struggle that could reshape how America’s money is managed.At the heart of all this is an unusual political standoff that’s pulled in heavy-hitters from both sides of the aisle. The tension ramped up after the Department of Justice—a body that, under ordinary circumstances, keeps its distance from monetary policy—opened an investigation into Federal Reserve Chair Jerome Powell. The official line is that the probe concerns renovations at the Fed’s headquarters, but nearly everyone watching suspects there’s more at play.North Carolina Senator Thom Tillis, who’s on his way out of public life, chose this moment to plant his flag. In a move that left pundits and policymakers scrambling to recalibrate, Tillis announced that he’ll block any new nominees for the Fed—up to and including a replacement for the chair—unless the legal dust settles first. “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” he declared. For Tillis, too, this is more than procedure; it’s about the credibility of the nation’s foundational institutions.All the while, questions about Powell’s future are swirling. His term as chair wraps up in May, but he could hang around as a Fed governor, potentially outlasting even the outcome of this legal drama. Powell, never one to mince words when institutional autonomy is threatened, reminded reporters, "No one—not the chair of the Federal Reserve or anyone else—is above the law." But in the next breath, he signaled the broader stakes: “This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.” For Powell, decisions about interest rates aren’t meant to drift with the winds at 1600 Pennsylvania Avenue.In the battle’s crossfire, President Trump continues to lob his own criticisms, taking aim at Powell for what he calls “overly high” interest rates and even ribbing him over the central bank's construction woes. In public remarks, Trump insists that economic leadership has, in his opinion, fallen short. Meanwhile, Kevin Hassett, Trump’s top economic adviser and now the frontrunner to succeed Powell, has thrown his support behind the DOJ investigation. “If I were chairman of the central bank, I’d want them to do that,” he commented, underscoring how the line between monetary policy and politics blurs further every day.If Hassett doesn’t get the nod, there are several others circling—names like Michelle Bowman and Christopher Waller, both current Fed governors, plus former governor Kevin Warsh and Rick Rieder from BlackRock. All bring their reputations and distinct monetary philosophies to the rumor mill.As Washington obsesses over the drama at the Fed, a second—no less volatile—struggle is boiling over on the California coast. Oil rigs off Santa Barbara, sitting idle since a calamitous spill a decade back, have become the flashpoint in a showdown over the country’s energy future. Sable Offshore Corp., headquartered far from the Pacific’s haze, argues that restarting these aging pumps is vital for local job creation and taming spiking gas prices. California’s government, local regulators, and environmental groups are having none of it.“This isn’t just about bringing back a few pumps,” says Linda Krop, chief counsel for the Environmental Defense Center. “We’re talking about old equipment that already failed once, and did so in spectacular fashion.” The legal tug-of-war now centers on a pipeline that would carry oil from the rigs. Sable leans on federal law to fast-track its aims, while state authorities argue that every environmental blemish must be scrubbed clean under toughened regulations before a single barrel moves.Pressure from the White House has not gone unnoticed. Late last year, Trump invoked a national energy emergency, paving the way for regulators to grant Sable a waiver that sidestepped layers of environmental oversight. With energy costs surging, the administration’s bet is clear: get the oil flowing, then ask for forgiveness if needed. The courts, predictably, are now referees. Environmental groups sought an urgent block, but for now, a federal appeals court has refused. A fuller hearing is coming soon, so both sides dig in; California’s own courts, not to be outdone, have warned that flipping those switches back on today would breach standing injunctions.All of this might explain why public meetings in coastal towns—sometimes raucous, sometimes weary—feel so urgent. The Surfrider Foundation and other grassroots groups gather crowds to argue their cases while the federal government eyes even bigger plans: auctions for new offshore drilling leases loom over the horizon.Back in D.C., the consequences of the Fed fight are trickling into every nook of the financial system. With the Senate at a razor-thin divide and Tillis holding the cards on future confirmations, uncertainty reigns. What happens next matters well beyond the beltway bubble: decisions made in the coming months could ripple across every mortgage negotiation, every small businesses’ balance sheet, every American’s paycheck.For now, the independence of the nation’s central bank and the future of energy policy remain in limbo. And while the country watches, the question at the core—just how much should political power reach into the institutions meant to be insulated from it—continues to gnaw. If history’s any guide, this chapter is far from its final page.