Ben Geman
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Good morning and welcome back to Generate! After this edition I'll be off for a few days, which is good news for you, because my colleague Amy Harder will be bringing you great content as Generate guest host.

Speaking of great content, Mike Allen will have one-on-one conversations with House Speaker Paul Ryan and Bob Woodward at our Axios News Shapers event this morning. Details here. And if you didn't RSVP, you can watch Ryan's livestream at 8:15 am Eastern. Plus, make sure you read the second edition of the weekly Axios Science newsletter tomorrow.

Ok let's dive in . . .

From Amy’s notebook: Wind execs are bullish despite Trump

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Amy's at the American Wind Energy Association conference in Anaheim, where yesterday she moderated a panel with top executives. She passed along this dispatch...

The mood: Positive, even though they're facing a potential adversary in the White House after eight years of mostly friendly policies under President Obama.

Key thoughts: Tom Kiernan, head of AWEA, touted wind's new position as America's top renewable energy source by generating capacity and urged fellow executives to make sure it stays there. Tristan Grimbert, CEO of EDF Renewable Energy and newly elected chair of AWEA's board, predicted the electric grid will change more in the next 10 years than it has in the last 100 years. "The grid of the future will be distributed, decarbonized and digital," Grimbert told a packed crowd in Anaheim.

About President Trump: Executives, including Karen Lane, chief financial officer for onshore Americas in the newly merged Siemens Gamesa Renewable Energy, agreed that the most important thing coming out of Washington isn't the budget or Trump's rhetoric, but instead stable tax policy. This would include keeping intact a 2015 congressional deal to extend for five years a production tax credit for wind energy.

OPEC’s big day arrives tomorrow

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We're one day away from OPEC's big meeting in Vienna to decide on the future of the production cutting agreement between the cartel and several outside producers including Russia.

A few things to note as zero-hour approaches...

The latest: While a nine-month extension of the deal is considered the most likely outcome, Reuters reported Wednesday morning that Kuwait's oil minister says all options are on the table, including a one-year extension and deepening the 1.8 million barrel per day cut.

Setting the table: The BBC has a useful explainer about the meeting and the oil market challenges facing OPEC.

Trump's curveball: Bloomberg reports that the new White House proposal to sell another 270 million barrels from the Strategic Petroleum Reserve over the next decade, on top of sales Congress has already authorized, could undermine OPEC's effort to prop up prices and relieve the global glut.

  • Meh: Goldman Sachs, in a new research note, downplays the relevance to the cartel, noting the scope of the proposed sales is "negligible" relative to the size of OPEC's cuts and the global market.

Go deeper: A huge issue for OPEC in recent years and going forward is the rise of U.S. shale production. "A harsh reality may emerge, likely well after the May 2017 meeting, that the price at which shale can grow quickly could be much lower than the price OPEC members want and need," Columbia University analyst Jamie Webster says in a piece that lays out several paths OPEC could take regarding shale.

Europe’s climate approach with Trump

Boston College international affairs expert David Wirth, a State Department vet, has an interesting preview of Trump's NATO and G7 meetings in Europe this week.

His Lawfare post explores how European countries will grapple with Trump's hostile stance toward the Paris pact, which is toggling between watering down the U.S. engagement and withdrawing outright.

Why it matters: With climate expected to come up at the May 26-27 G7 summit, the meetings will be Trump's biggest foray into multilateral global climate diplomacy.

Bottom line: Wirth expects the carefully negotiated summit communique to be a compromise with the U.S. by avoiding the strong support for Paris that was a feature of last year's summit.

  • But he doesn't expect any blessing of a U.S. pullout either, or, conversely, an express appeal for the U.S. to stay. Instead, there will be "mundane" references to Paris that nonetheless "communicate the expectation that the status quo will prevail."
  • "That necessarily includes the assumption that all the G7 states, including the United States, will remain party to the Agreement going forward, as a flexible vehicle both for asserting their own national interests and for coordinating their efforts for the benefit of the ecosphere and all humankind."

Breaking Wednesday morning: Via Bloomberg, Pope Francis added to the voices urging Trump to work on climate change. The news service reports that Francis gave Trump a copy of his encyclical on the topic when they met Wednesday.

"Francis's choice of gift suggests he added his voice to those who are urging Trump not to renege on the Paris accord, which is the cornerstone of global efforts to limit climate change," Bloomberg notes.

Budget takeaways

A few more nuggets Trump's first detailed budget proposal...

Energy and climate at State: The plan proposes roughly $13 million for the State Department's Bureau of Energy Resources. That's about a $1 million cut, but nothing approaching the 47 percent reduction floated in a draft budget document that Foreign Policy obtained last month.

The draft, like the March outline the White House floated, would vastly curtail State's climate work and end payments to multilateral climate and green energy funds.

ARPA-E: The budget plan plows ahead with seeking to eliminate the Energy Department's Advanced Research Projects Agency-Energy, a division with bipartisan support that funds work on breakthrough energy tech. But the detailed DOE proposal does not explain the reasoning behind the effort, which is highly unlikely to succeed.

  • "With at least a half dozen key GOP Senators already pushing for full ARPA-E funding, maybe the Administration just didn't want to waste the ink," Paul Bledsoe, a senior fellow on energy at the Progressive Policy Institute who works with ARPA-E backers, tells Axios in an email.

SPR: In a sign that Trump's proposal to sell roughly half the oil in the Strategic Petroleum Reserve faces huge headwinds, GOP Sen. Lisa Murkowski called it "crazy," according to The Hill. She's chairwoman of the energy committee.

Ok, a little more on the budget

By now you've probably seen plenty on the cuts and policy changes Trump is seeking, but just in case, some further reading...

DOE: Greentech Media has a close look at the proposals to sharply curtail several Energy Department programs.

EPA: E&E News carefully examines the specifics of the proposal to cut EPA by nearly a third.

Climate: Bloomberg looks at the various ways in which the plan would curtail federal work on the issue, such as eliminating a Federal Emergency Management Agency program that maps flooding risks.

Science: Science magazine describes proposals to cut programs across the government.

Oil: The Houston Chronicle reports on pushback from Gulf Coast lawmakers over Trump's proposal to overturn the law that shares royalties from production in federal waters with those states.

Lobbying notes

Several new filings have popped up in the Lobbying Disclosure Act database. So here's what's new in influence...

Oil: Extraction Oil and Gas has hired lobbying giant Squire Patton Boggs for representation on topics including Bureau of Land Management permitting and other federal lands issues.

Biofuels: Renewable Energy Group, Inc. has retained West Front Strategies to lobby on extension of biodiesel tax credits.

Hydro: The Pacific Northwest Generating Cooperative has registered to lobby in-house on "issues related to protection of the federal Columbia River Hydropower system."

Nuclear: General Fusion has tapped Hobart Hallaway & Quayle Ventures to lobby on "education around magnetized target fusion."

Materials: Troy Corp. has also brought on Hobart Hallaway & Quayle Ventures in this case for work on "environmental issues including the Superfund program and regulatory reform."

One cute thing

Instagram

The Interior Department's Instagram feed has another winner: this shot of a pine marten at Yellowstone National Park.

Thanks for reading! I'll see you in a few days, and get ready for some great stuff from Amy in my absence. But you can still find me at ben@axios.com.

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Good morning and welcome back to Generate. A quick reminder that the weekly Axios science newsletter has launched and it's a great read. You can sign up for Axios Science and all of our free newsletters here. Ok let's dive in . . .

Paris hopes and dreams

Two prominent figures in the climate and energy world say they're hopeful about the odds of President Trump deciding to stay in the Paris climate accord.

There's last night's tweet (above) from Tesla CEO Elon Musk, who is among Trump's industry advisers. Meanwhile, the Guardian reports that former VP Al Gore said in Cannes that he believes there's an "excellent chance that he will surprise many by deciding to stay in the Paris agreement."

Wait, what? I'm just seeing this Bloomberg story, which quotes Germany's environment minister predicting Trump will announce his decision at the G-7 meeting in Sicily late this week.

The whole thing has been a moving target for a while, but the most recent word from the White House was that a decision would come after the summit. White House aides could not be reached this morning by your Generate host.

Why it matters: European leaders are expected to make the pro-Paris case to Trump during his visit to the continent over the next few days.

Tea leaves: As climate advocates are on pins and needles, one veteran of global climate diplomacy offered a "glass half full" observation. It's that Trump is traveling with several top officials believed to support staying in the pact, including Jared Kushner, while anti-Paris adviser Steve Bannon has returned to Washington.

Trump’s energy budget: Slash, drill, sell

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Driving the news: My Axios colleagues have an informative and visually interesting look at the fiscal year 2018 budget plan that the White House is sending to Congress today.

Obligatory "to be sure" comment: White House budget proposals are messaging documents that, at best, lay down a marker for talks with Congress. Without further ado, here's some of the energy and environment portions...

Sell: The plan would raise an estimated $16.6 billion over a decade by selling half the oil in the nation's Strategic Petroleum Reserve, which currently holds 688 million barrels.

  • Congress has been willing to use the SPR as a cash machine in recent years, but this would be a far larger drawdown.

Drill: Trump is reviving long-stymied efforts to open the Arctic National Wildlife Refuge in Alaska to oil development, but that request to Congress will generate massive opposition from Democrats and environmentalists.

Slash: Trump's budget seeks to cut the Environmental Protection Agency's budget by nearly a third, and would also reduce spending by the Energy and Interior departments.

End: The plan aims to raise roughly $3.6 billion over 10 years by tossing out a 2006 law which provides Gulf Coast states a cut of the royalties from oil-and-gas production in federal waters off their shores. Won't happen.

Go deeper: Bloomberg has a more detailed look at the energy proposals here. And Reuters points out that Trump's push to sell SPR oil "counters OPEC's efforts to control supply in order to boost prices."

Good listen

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The latest Columbia Energy Exchange podcast has a wide-ranging chat about global energy with analyst Christof Rühl, head of research at the Abu Dhabi Investment Authority and BP's former chief economist. But if you don't have 34 minutes, here's a couple takeaways

Crude oil: He splits with some experts who believe low prices have have stymied new investment enough to create big risks of a supply crunch in just a few years.

  • "These forecasts that there is a big gap because of lack of investment when oil prices fell … seem to be not very realistic if you talk to private industry. If you look at their production growth forecasts, there doesn't seem to be a big shortfall coming in the next two to three years."

Energy transition: Rühl is very pessimistic about renewables growing fast enough to help put the world on an emissions path that holds the rise in global temperatures below 2 degrees celsius.

While there's lots of focus on technological improvements helping to boost the supply of wind, solar and others, he notes that over the last decade, tech advances have been a far bigger boon to oil and gas as shale has been unlocked.

  • "Strictly speaking and fairly compared, new technologies have generated twice as much energy in oil and gas as they have in renewables, and that is not a very good sign," he said. "People assume new technologies just benefit renewables. It's not true."

From Amy's notebook: What wind execs want from Trump

My Axios colleague Amy Harder, who is in California at the American Wind Energy Association's annual conference, writes about what she is hearing from wind power executives. Take it away...

Wind executives gathered in Anaheim for the sector's annual conference are hoping the Trump administration will speed up what they characterized as a slow permitting process under former President Obama.

Why it matters: President Trump hasn't said anything nice about the renewable industry generally, and the rhetoric from his cabinet members hasn't been favorable either. The focus on permitting is one sign of how the industry is repositioning itself in the wake of Trump's election after eight years of Obama, whose policies mostly supported the industries with the exception of federal permitting.

What we're hearing: "We're hopeful the new administration will help coordinate federal agencies better and shorten the time frames for getting the kind of regulatory approvals we need, just like any other big infrastructure whether it's oil, gas or big transmission lines," said Jeff Grybowski, CEO of Deepwater Wind, the company with the first offshore wind farm in the U.S. That farm, located off the coast of Rhode Island, took eight years to work its way through the permitting processes and went into operation last year.

Read more here.

How fracking could smooth oil markets

A new National Bureau of Economic Research paper about crude supply and demand concludes that a big expansion of the share of global oil produced via hydraulic fracturing would reduce the volatility of prices.

  • The characteristics of fracking-enabled production — notably the ability to economically adjust production levels and the relatively short time to bring projects online — can smooth out the rough ride, the authors say.
  • "Since fracking firms are more nimble, they respond rapidly to shocks, moderating the equilibrium price increase and making it less profitable for conventional firms to change their investment and extraction rates," notes the paper from researchers at Northwestern University and the Institute for International Economic Studies in Sweden.
To be sure: While the paper predicts that fracking's rise will eventually make prices much less volatile, it models a world in which the technique that unlocks shale oil enables a much larger share of global production than today's totals.

On my screen: OPEC deal, Trump's nominees, climate

Offshore drilling: The New Orleans Times-Picayune has a look at Scott Angelle, the Louisiana regulator that Trump has tapped to lead the Interior Department's Bureau of Safety and Environmental Enforcement.

BSEE emerged from the reorganization of federal offshore drilling oversight after the BP Deepwater Horizon catastrophe in 2010.

Nuclear: The Hill reports on the White House announcement of nominees to the Nuclear Regulatory Commission.

OPEC: Saudi Arabia's energy minister said the stage is set for the cartel to continue its production-cutting agreement for nine months, now that Iraq has agreed to the plan, the Associated Press reports.

Climate change: The New York Times examines California Gov. Jerry Brown's moves on carbon emissions at a time when the White House is abandoning Obama-era initiatives. The state is "emerging as the nation's de facto negotiator with the world on the environment," the paper notes.

The Dallas Fed’s crystal ball

The head of the Federal Reserve Bank of Dallas, which closely tracks the oil and gas industry, offered a few predictions and observations in a broad essay about the economy. Among Robert S. Kaplan's comments...

  • A "fragile equilibrium" has arrived in global oil supply and demand.
  • Assuming OPEC and non-OPEC producers extend their production-cuts, he predicts oil prices to stay between the mid-$40s and mid-$50s per barrel for the balance of 2017.
  • Those prices support increased investment in shale production by oil exploration and production companies in the bank's jurisdiction. With continued tech improvements, the roaring Permian Basin production has room to grow "substantially" in coming years.
In his words: "We expect that major oil companies, in the near term, may continue to avoid large long-lived capital projects and will, instead, focus their capital spending on more flexible and shorter life-cycle shale opportunities in the U.S."

Thanks for reading! Tips and feedback always welcome at ben@axios.com.

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Happy Friday! Quick note: The inaugural issue of the Axios Science newsletter dropped yesterday. It's great. You can sign up here to get Axios Science in your inbox every Thursday. Ok, let's head for the weekend . . .

Rise of the machines

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The analysts at Wolfe Research are out with the first installment of their "Journey to the End of the Oil Age" series.

The big idea: One part of Wolfe's lengthy report is a thought-provoking analysis of when and how electric vehicles might really, really take off. The conclusion? By becoming more like iPhones and less like cars.

Crystal ball: Basically, they forecast no medium-term collapse in U.S. gasoline demand (which accounts for nearly half of all U.S. oil use).

But after 2025, things could get really interesting. They see autonomous cars, electrification, and digital connection converging into such a new system that it will be like the ultimate "killer app"— one that transforms the business and consumer equations that have thus far held EVs to a tiny market share.

In their words: "Like other Killer Apps, such as the smartphone, consumers will feel a strong desire to upgrade from old to new, regardless of price relative to the old tech. This will be a step-change in consumer experience."

  • "Automakers...will be highly motivated to sell (unlike current EVs), because the digitally-connected ecosystem and data collection of each unit could hold more revenue opportunity than the initial vehicle sale itself — some estimates are as high as 10x the revenue over the vehicle life."

Bottom line: The report models several adoption scenarios for this "new travel ecosystem." The fastest adoption scenario cuts U.S. gasoline demand in half by around 2033.

My conversation with Rep. Shimkus

GOP Rep. John Shimkus is chairman of the environment subcommittee under the powerful Energy and Commerce Committee. He chatted with me at his Capitol Hill office earlier this week. Some takeaways...

Yucca Mountain: He wants to get legislation to revive the long-stalled nuclear waste repository through the House before the August break, and said there's "no reticence" among leadership.

  • Shimkus knows Yucca faces big hurdles amid opposition in Nevada, but says that "you can pick up bits and pieces of some interest" in the state too.

Ethanol: Shimkus still wants to convene bipartisan talks to seek agreement on changes to the controversial Renewable Fuel Standard. But actual negotiations "have not begun."

Superfund: EPA administrator Scott Pruitt has signaled that he wants to prioritize waste cleanup and Shimkus is hopeful it will happen (though President Donald Trump's proposed budget would cut funding).

  • "I think a lot of Democrats — if [Pruitt] focuses on getting the job done — will appreciate his streamlining the process and really getting to the point of the problem, and trying to fix the problem. Because you can't defend these delays," Shimkus said.
  • Shimkus is interested in working with EPA on potential legislative changes to aid cleanups.

Paris: Amid the internal White House debate, he's leaning toward the side that favors withdrawing from the climate deal, saying he's not a fan of joining international pacts using executive authority.

"The majority of members of the House Republicans would not cry if we left the Paris accords. I think it would be a large majority of our conference," he said.

The Permian engine roars

Federal Reserve Bank of Dallas

The Federal Reserve Bank of Dallas is out with a helpful, reader-friendly snapshot of oil-and-gas data and trends in the region, including the red-hot Permian Basin region of Texas and New Mexico.

Why it matters: The Permian's beehive of activity is a big reason why U.S. production didn't sink further during the price doldrums and why it's moving steadily up toward record levels.

Go deeper: The report notes that the Permian now accounts for nearly 40 percent of the active U.S. drilling rigs.

In their words: "Better economics and higher interest due to the region's favorable geology have likely contributed to the rise; many shale formations in the Permian are stacked, making it efficient to drill into different reservoirs from the same location."

Earth is very warm again in 2017

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Newly released federal data suggests the planet is on track for another extremely warm year.

The findings: The National Oceanic and Atmospheric Administration reported that the global land and ocean surface temps from January-April was the second highest such period since records began in 1880, trailing only 2016, and was 0.95°C above the 20th century average.

Why it matters: because global warming.

Let's turn it over to Mashable's science expert Andrew Freedman, who looked at the new NOAA data alongside new NASA data on Arctic warmth fueling high temperatures in April.

"The new findings illustrate how the planet is still setting climate milestones even in the absence of other factors that tend to elevate global air and sea temperatures, such as an El Niño event," Freedman writes.

From Amy’s notebook: conservative climate hires

My Axios colleague Amy Harder reports...

A conservative group, which is pushing a long-shot bid at getting Washington to back a carbon tax, keeps beefing up its ranks.

Exclusive: After launching in February with elder GOP statesmen like James Baker, Henry Paulson, and George Schultz, the Climate Leadership Council has quickly hired several people, including two more this week: Jill Sigal, a top official in President George W. Bush's Energy Department; and, Taiya Smith, who worked with Paulson at the Treasury Department under Bush.

Liberal TED? Speaking of the CLC, its president and founder Ted Halstead gave a TED Talk that posted online this week, which apparently is popular among liberals only.

After Halstead gave his 10-minute pitch (tax carbon emissions, return the money to the public, and scuttle climate regulations), TED curator Chris Anderson returned to the stage during the applause and said: "I'm actually not sure I've seen a conservative getting a standing O at TED before, that's pretty cool."

Reality check: Most of the support for climate policy rests within the Democratic Party, but Halstead and his group are nonetheless confident in their uphill battle.

Roundup: BP personnel moves, OPEC, Paris, and Russia

People: Geoff Morrell, a familiar name in journalism and energy circles, has been promoted to BP's group head of communications and external affairs, based in London.

Morrell is currently the energy giant's senior VP for U.S. communications and external affairs. The former Pentagon spokesman and journalist has been with BP since 2011, and said he's "honored and excited" about the new role that starts in August.

Stepping into Morrell's shoes in the top U.S. role will be Mary Streett, who is currently the company's head of U.S. government affairs.

Paris: Shell CEO Ben van Beurden is pretty outspoken as far as big oil CEOs go, and he's back at it with this NPR interview, where he makes the case for the U.S. staying in the Paris climate accord.

  • "Van Beurden argues CEOs have a responsibility to speak out against industry organizations that support politicians who deny the existence of climate change," NPR reports.

OPEC: Reuters looks at the cartel's behind-the-scenes planning for next week's meeting, where hotly anticipated decisions about extending the production-cutting agreement are expected.

Russia: The Wall Street Journal reports that U.S. officials are looking into Russia's influence over Citgo Petroleum Corp., a move that arrives "amid heightened concern that the Kremlin is seeking to use energy as a political weapon against the U.S."

Thanks for reading! Next week should bring some interesting moments on Capitol Hill. President Trump's two nominees for the Federal Energy Regulatory Commission, as well as his pick for the number two Energy Department position, appear before the Senate Energy and Natural Resources Committee on Thursday.

Confidential tips and feedback are always welcome at ben@axios.com. Have a great weekend.

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Good morning. Big news. The weekly Axios Science newsletter launches later today and it's really good. Sign up here and it'll arrive in your inbox later today and every Thursday going forward. Let's dive in . . .

One big idea: blockchain as a grid shield

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The Rocky Mountain Institute uses the recent ransomware attacks as a jumping off point for an interesting piece about how blockchain technology can help protect power grids.

The new blog post says the decentralized digital transaction technology is "inherently robust" against cyber threats for several reasons, such as the difficulty of changing data after it's written and decentralized data storage.

Why it matters now: The energy think tank notes that with the huge expansion of energy-using, internet-connected devices expected over the next decade, the grid is about to get way, way more vulnerable to cyberattacks.

Elsewhere, RMI notes that blockchain can help protect wholesale power markets against cyber intrusions aimed at injecting false data and manipulating prices.

On tap today: Interior and EPA in focus

In the hot seat: David Bernhardt, a lobbyist that President Donald Trump has nominated for the number two slot at Interior, will appear before the Senate Energy and Natural Resources Committee.

A Democratic aide tells Axios to expect skeptical questioning about how or if he can prevent conflicts of interest, given his past work with fossil fuel and mining companies.

  • Also in the crosshairs: Bernhardt's time as a high-level official at Interior during the George W. Bush administration, when the agency was rocked by several scandals, could be a focus of Democratic questions too.

More about DOE’s budget shock

Foreign Affairs has a new piece on the international ramifications if the White House succeeds in deeply cutting Energy Department research, development, and demonstration programs for clean energy tech.

Flashback: Yesterday my colleague Amy Harder had two scoops (here and here) about the White House plans.

The global stakes: The Foreign Affairs piece says these kinds of cuts would hurt the U.S. economically and diplomatically.

  • The U.S. could cede ground in the race to command emerging and future industries, like next-wave batteries and nuclear reactors.
  • The U.S. government currently supports international partnerships on clean energy development, and ending it would would cost the U.S. diplomatic leverage with nations like Japan, China, and India.

Go deeper: The piece made the point that the U.S.-China Clean Energy Research Center is a bright spot in the difficult relationship with China at a time when cooperation over North Korea is important.

The essay also notes the U.S. accrued goodwill when it spearheaded a 2015 multi-country pledge to double clean energy R&D over five years.

Perspectives on geoengineering

Rebecca Zisser / Axios

My colleague Alison Snyder, who leads our expanding science coverage at Axios, has rounded up important perspectives on geoengineering. Alison asks: What do we need to know before someone pushes start on a large-scale geoengineering attempt? And what Earth-altering experiment should we try first?

Five leading researchers answered those questions and offered their take on the risks, as well as the thorny ethical and legal issues that come with unleashing a technology that could span countries, cultures, and generations. Check out the links below...

On my screen: OPEC, fracking, and climate

Crude oil: The Wall Street Journal notes that for all the obsession with OPEC and U.S. shale, other players are making their presence felt in the markets ahead of the crucial OPEC meeting next week.

  • "Rising output from Canada and Brazil, along with smaller gains in the U.K. and Norway, represents an under-the-radar concern for some oil traders ahead of next week's meeting between members of the Organization of the Petroleum Exporting Countries," the WSJ reports.

More OPEC: The Financial Times has an informative table-setter about the OPEC meeting as the cartel seeks to avoid another price collapse.

  • "It is indicative of their reduced ambition that few members are prepared to talk of a significant recovery in the market, even as the cartel moves to extend its output cuts for another six to nine months," FT reports.

Fracking: Bloomberg reports that shale oil drillers are "struggling to find enough fracking crews after thousands of workers were dismissed during the crude rout."

More fracking: The Houston Chronicle reports on the changing of the guard at oilfield services giant Halliburton.

Climate: Reuters reports that the European Union has agreed to provide $891 million to help 79 African, Pacific, and Caribbean countries implement the Paris agreement to combat climate change.

From Amy’s notebook: Trump CEO advisor goes solar

Campbell Soup, whose CEO Denise Morrison has advised President Trump on regulatory issues, announced Wednesday it was putting solar panels on its headquarters in New Jersey.

Why it matters: The move shows how businesses of all kinds — not just those owned by Elon Musk, for instance — are increasingly investing in renewables regardless of moves by the Trump administration that are calling to slash Energy Department funding for renewables by nearly 70%.

The news coincided with a Washington visit by Tom Werner, CEO of SunPower Corp., whose technology Campbell is using for its project. Discussing the Campbell move with Axios, Werner noted a Pew Research study from last year that found 75% or more of Republicans back solar power.

Reality check: GOP backing for solar power helped compel Congress to pass legislation extending key tax credits for solar (and wind) energy in 2015, but Energy Department priorities will likely be driven less by polls and more by administrative priorities, which don't include boosting solar power at all, let alone to the scale former President Obama did.

Lobbying notes

Filings that just surfaced in the Lobbying Disclosure Act database show that...

Science: The recently formed pro-science advocacy and candidate recruitment group 314 Action — which advocates for climate science among other areas — has brought on Cozen O'Connor Public Strategies.

Ethanol wars: The Louisiana Oil Marketers & Convenience Store Association has also tapped Cozen O'Connor.

The pro-ethanol trade group Fuels America has brought on Sextons Creek. William Smith, Jr., who was VP Mike Pence's chief of staff when he was in Congress, will be their lobbyist, the filing shows.

Transmission: The Ingram Group LLC, acting on behalf of transmission developer Clean Line Energy, has hired Douglass E. Bobbitt.

Thanks for reading everyone! Confidential tips and feedback are always welcome at ben@axios.com. See you right back here tomorrow.

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Good morning and welcome back to Generate! You opened this email from me, but I want to give credit where it's due. Today's edition has a pair of scoops from my Axios colleague Amy Harder, this time on President Donald Trump's plans for the Energy Department budget.

Speaking of Trump, the Axios stream has all kinds of informative coverage of the Russia- and FBI-related scandals increasingly engulfing the White House and Capitol Hill. Ok, let's dive in . . .

Scoop #1: Trump's plan to slash renewables 70%

Data: Draft of Energy Department budget; Chart: Andrew Witherspoon / Axios

Amy Harder got a look at a draft budget document that shows the Trump administration wants to cut several Energy Department's renewable and energy efficiency programs by nearly 70 percent.

I've highlighted some of the main points, but I also recommend reading Amy's entire piece.

Why it matters: Congress is probably not going to grant such deep cuts, but the numbers are nonetheless important for two reasons: 1) It shows how extreme the administration wants to go with its budget cuts in policy areas its rhetoric hasn't supported. 2) It puts a low marker down to negotiate with Congress. The lower the starting point, the lower the ultimate numbers could well end up.

For the record: An Energy Department spokesperson didn't immediately respond to a request for comment.

What's next: The Trump administration has said it will send its budget request for fiscal year 2018 to Congress next week. These proposed cuts are part of a broader effort from the administration to make deep spending reductions, including plans to cut funding for DOE offices handling nuclear and fossil fuel energy.

Scoop #2: Trump's plan to cut fossil-fuel and nuclear funding

Data: Draft of Energy Department budget; Chart: Andrew Witherspoon / Axios

The draft budget document Amy viewed proposes cutting Energy Department's offices for nuclear power and fossil fuel energy by 31% and 54%, respectively. I've pulled out some of the main points below, but read her full item here.

Go deeper: Top Trump administration officials have repeatedly said they back nuclear power and fossil fuels, in particular coal burned more cleanly with technology that captures and stores carbon underground instead of emitting it. These proposed budget cuts show a mismatch between the rhetoric and what they're willing to allocate.

What we're hearing: Some conservative groups say cutting funding for policies like cleaner-burning coal technologies would undercut Trump's promise to save the coal industry.

  • "It would be very difficult, especially on the carbon capture front, to keep some of the promises that the administration made to the coal community if it's not going very deep on innovation in this space," said Rich Powell, executive director of ClearPath Foundation, a conservative organization pushing cleaner energy technologies within the GOP.

A clean energy report card

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This is cool. The International Energy Agency has a tech-by-tech look at how 26 industries and energy sources are faring in the effort to hold the global temperature rise to 2°C above pre-industrial levels.

Uh-oh: The world isn't close to being on that path right now. Just a few of the sectors covered in the IEA report — onshore wind and solar, electric vehicles, and energy storage — were on track toward a "sustainable energy transition."

Get smart: The IEA has an "interactive dashboard" that provides useful information about lots of specific industries and sectors, ranging from metals to appliances to buildings and a lot more.

Why it matters: The report helps to underscore the scope of energy and industrial transition needed to drive emissions downward enough to provide what analysts say would be a good shot at avoiding some of the most dangerous impacts of climate change.

On my screen: oil and electric vehicles

Oil: The prominent analyst Dan Yergin, writing in the Wall Street Journal, explains why $100-per-barrel oil may be in the rearview mirror forever as "the entire business has been recalibrated to a lower price level."

  • "An industry that had become accustomed a few years ago to $100 oil now regards that as an aberration that will not recur absent an international crisis or a major disruption."

EVs: Reuters reports that German Chancellor Angela Merkel said her country probably won't meet its target to have one million electric cars on its roads by 2020.

Big EVs: Platts takes a look at the potential for electrification in big, heavy duty vehicles including tractors and container ships.

Trump and Aramco: Bloomberg reports that Saudi Aramco, the kingdom's state oil giant, will ink agreements with a number of big U.S. companies including GE and Schlumberger during Trump's visit.


A Texas-sized answer to Perry's big question

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Four University of Texas experts have a detailed piece in The Conversation that looks at the integration of lots of wind power onto the Texas grid during the governorship of Rick Perry.

Why this matters now: The Energy secretary version of Perry has commissioned a wide-ranging grid study that's got renewables' backers very nervous (more on that here). They fear DOE will conclude that pro-renewables policies are threatening power reliability.

The analysis by the University of Texas experts describes why that's not the case in Texas, and won't be in other areas that integrate more renewables.

Bottom line: "[D]espite concerns to the contrary, incorporating wind and solar into the grid along with fast-ramping natural gas, smart market designs and integrated load control systems will lead to a cleaner, cheaper, more reliable grid," the UT experts write.

More thoughts on the Lyft-Waymo collaboration

Axios' Kia Kokalitcheva succinctly explained the ramifications (for Uber in particular) of the new deal between Lyft and Waymo to collaborate on self-driving cars, and now a Barclays research note provides some more thoughts.

Tesla and GM: Barclays notes that both companies are facing competition in the race toward autonomy. As Kia noted, GM is already working with Lyft.

The research note sizes up what this could mean for GM, noting the upside is that it opens up a pathway for collaboration with Waymo. But that said...

"[I]t could be seen as a negative, amplifying competition, and exemplifying the 'frenemy' concept that is quite common in Silicon Valley."

Either way, Barclays says, the Lyft-Waymo deal underscores the need for GM to "remain nimble" and have flexibility in the evolving autonomous vehicles space.

Thanks for reading! See you back here tomorrow. Tips and feedback welcome at ben@axios.com.

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Good morning! A couple of quick notes before we dive in. In case you missed it, I recommend reading my Axios colleague Amy Harder's latest column, which provides an inside look at how the fossil fuel industry is navigating the Trump era behind closed doors.

And while I'm in the recommendations game, the Axios science stream has launched and it's already stuffed with informative content. Axios is also launching a weekly science newsletter, which you can sign up for here. Ok, here we go . . .

Upton speaks on Paris climate pact, coal and energy bills

Rep. Fred Upton, the Michigan Republican who chairs the energy subcommittee of the powerful Energy and Commerce Committee, is the latest guest on the Columbia Energy Exchange podcast. Here are a few takeaways:

Paris: He's not calling for the U.S. to abandon the Paris climate accord, a move the White House is considering. Upton notes that it doesn't impose binding emissions requirements.

  • "I don't have a problem with that, because there was no mandate that was there, it was a goal," he said when asked whether the U.S. should stay.

Infrastructure: The package that lawmakers and the White House are expected to work on (at some point) should have a substantial energy title, he said.

Upton, who spent three terms as chairman of the full panel, envisions it focusing on protecting grid infrastructure and cybersecurity.

Energy Department: He expects a DOE reauthorization bill to emerge in the late summer or early fall. "I think that will be a pretty big item on our agenda," Upton said.

Coal: Asked if he sees a comeback for coal, once the dominant source of U.S. electricity, Upton replied: "I don't."

  • But he noted, "we're not turning it off like that, [snaps fingers]," and predicts it will stay in the "neighborhood" of its current share. Coal provides roughly a third of the nation's power.

Reasons to be worried about cleantech venture capital

Data: Brookings analysis of Cleantech group's i3 Connect database; Chart: Andrew WItherspoon / Axios

Trends in venture capital funding decisions are hindering the commercialization of the next wave of green energy technologies, according to a new Brookings Institution analysis.

Why it matters: Despite the urgency of climate change, the cleantech VC funding woes — especially for early-stage companies — will get worse if President Donald Trump succeeds in gutting Energy Department initiatives, the authors say.

Here are some of the headwinds Brookings identifies...

  • VC funding on cleantech companies fell from $7.5 billion in 2011 to $5.2 billion last year, and there were almost 200 fewer deals in 2016.
  • VC cleantech investment is concentrated in a few regions (check out the chart above), leaving other areas "starved for participation." Taken in tandem with a prior Brookings analysis on the wide geographic distribution of cleantech patents, report co-author Mark Muro tells Axios that the relatively narrow concentration of VC dollars suggests that promising climate-friendly ideas aren't getting VC money.
  • The vast majority of VC funding goes to more mature companies, while there's a declining slice of the pie over the last decade for riskier, early stage companies trying to create "radically" better climate-friendly tech. That means, the report states, "fewer novel and potentially game-changing technologies are getting past the early stage."
Read more here.

Oil report signals OPEC's challenge

International Energy Agency

Out this morning: The International Energy Agency's latest monthly oil markets report. A summary is here.

The bottom line: Oil markets were "almost balanced" in the first quarter of the year and the trend toward balance is "accelerating."

Coming up fast: The latest report arrives ahead of OPEC's hotly anticipated May 25 meeting, where the cartel and other producers including Russia are believed likely to extend the six-month, production-cutting deal that began in January.

But that said: Simply extending the cuts would not bring global inventories down to the five-year average level that OPEC is seeking, "suggesting that much work remains to be done in the second half of 2017 to drain them further," the IEA said.

Go deeper: Reuters has a detailed look at the IEA data here.

Glacier National Park could be glacier-free in 15 years

Data: Northern Rocky Mountain Science Center; Map: Lazaro Gamio / Axios

My colleagues Alison Snyder and Lazaro Gamio have an important story and visual (see above) over in the killer new Axios science stream. Take it away...

Over the past 50 years, the 39 remaining glaciers in Glacier National Park area have shrunk by an average of 39% — and as much as 85% , according to a study released by the U.S. Geological Survey. The map above shows how six of the park's iconic ice masses changed between 1966 and 2015.

Why it matters: The park says there won't be any active glaciers in 15 years if the current trend continues. Melting of the 7000-year-old glaciers could affect runoff into rivers and streams and, in turn, wildlife, as well as tourism.

Study: Fracking boom did not lead to greater marriage rates

A departure from the usual Generate fare: A new National Bureau of Economic Research paper uses data from the U.S. fracking surge to explore social science trends. Here's what my colleague Christopher Matthews wrote...

The issue: The decline in marriage rates among less-educated Americans has been a trend of concern for both the left and the right in recent years. Progressives have generally seen this data as the result of a lack of economic opportunity, while conservatives have argued the reverse: that economic inequality is being driven by a decline in cultural affinity for marriage.

The research: The study published Monday argues against the first interpretation, showing that between 1997 and 2012, areas that experienced fracking booms — and therefore increased wages and economic opportunity for the less-educated — experienced a spike in births but not marriage rates.

Why it matters: Though there is some evidence that falling working-class marriage rates were in part caused by shrinking economic opportunity, these results poke a hole in notion that better job opportunities will necessarily lead to more marriage.

On my screen

Tesla: SolarCity founder Lyndon Rive, whose company Tesla acquired last year, told Reuters that he's leaving Tesla next month.

  • "In an interview, the former SolarCity chief executive said he wanted to start a new company next year and spend more time with his family. Rive had been serving as head of sales and services for Tesla's energy division since last year," Reuters reports.

EVs: Via Bloomberg, the head of the mining and trading company Glencore says electric vehicle adoption will happen faster than expected, boosting demand for minerals like copper and lithium in coming decades.

Congress: The Hill reports on the brewing Senate battle over Trump's nominees to the Federal Energy Regulatory Commission.

China: CNN looks at the climate and energy dimensions of China's big One Belt, One Road trade and infrastructure initiative.

Solar: Greentech Media dives into the Solar Energy Industries Association's battle plan against a petition for steep import duties in solar cells and and a floor price on imported modules.

One silly thing

Sad and Useless

The title kind of speaks for itself: "Animals That Look Like They're About To Drop The Hottest Albums Ever."

More images here.

Thanks for reading! Tips and feedback welcome at ben@axios.com. We'll see you back here tomorrow.

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Sounding the alarm on cleantech venture capital

Trends in venture capital funding decisions are hindering commercialization of next-wave green energy technologies, according to a new Brookings Institution analysis.

Why it matters: Despite the urgency of climate change, the cleantech VC funding woes—especially for early-stage companies—will get worse if Trump succeeds in gutting Energy Department initiatives, the authors say.

Here are some of the headwinds Brookings identifies . . .

  • VC funding on cleantech companies fell from $7.5 billion in 2011 to $5.2 billion last year, and there were almost 200 fewer deals in 2016.
  • VC cleantech investment is concentrated in a few regions (check out the chart below), leaving other areas "starved for participation."

Data: Brookings analysis of Cleantech group's i3 Connect database; Chart: Andrew Witherspoon / Axios
  • Taken in tandem with a prior Brookings analysis on the wide geographic distribution of cleantech patents, report co-author Mark Muro tells Axios that the relatively narrow concentration of VC dollars suggests that promising climate-friendly ideas aren't getting VC money.
  • The vast majority of VC funding goes to more mature companies, while there's a declining slice of the pie over the last decade for riskier, early stage companies trying to create "radically" better climate-friendly tech. That means "fewer novel and potentially game-changing technologies are getting past the early stage."
  • On a related note, a handful of tech areas—efficiency, smart grids, storage, solar, bioenergy, and transportation—received about 80 percent of the funding between 2011-2016, while technologies including advanced nuclear are missing out.

What Brookings recommends:

  • Support for federal programs that Trump wants to ax, like the Advanced Research Projects Agency-Energy and loan guarantees. It also makes the case for programs like the Cyclotron Road incubator at Lawrence Berkeley National Laboratory.
  • At the state level, one suggestion is having existing "green banks" in places like New York and Hawaii expand operations to finance riskier technologies.
  • In the private sector, cleantech money should experiment with new financing models, like greater funding by corporations and corporate VC arms.
The good news: There's some reason for optimism for early stage cleantech funding, via developments like the $1 billion Breakthrough Energy Ventures fund recently launched by Bill Gates and other investors.
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Russians and Saudis team up — favor extending oil deal

Alexei Druzhinin/Sputnik / AP

Saudi Arabia and Russia jointly said they favor extending the production-limiting deal between OPEC and some other big producers through the first quarter of 2018.

Why it matters: The comments by the world's largest producers signals what could happen when OPEC meets May 25 to weigh the future of the six-month production agreement that began in January.

"I think there is general consensus that this is the right approach and the right thing to do," said Saudi Energy minister Khalid Al-Falih at a Beijing appearance, according to several accounts.

The big bounce: Oil prices rose in trading on Monday after the announcement. Via CNBC, both West Texas Intermediate and Brent crude gained over 3 percent Monday morning.

What they're saying: "I think OPEC and Russia recognize that in order to get the market back on their side they will need 'shock and awe' tactics where they need to go above and beyond a simple extension of the deal," Virendra Chauhan, an analyst at Energy Aspects, told Reuters.

  • In a joint statement, the two countries' oil ministers said they want to ensure "market stability, predictability and sustainable development" and pledged to agreed to do "whatever it takes" to stabilize the market and reduce commercial inventories to their five-year average level.
To be sure: Output growth by U.S. shale producers even amid modest prices is a check on OPEC's influence. In a research note late Sunday night, Goldman Sachs noted that the U.S. rig count climbed for another week to reach a level that's 125% higher than it was a year ago.
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Good morning and happy Friday! I don't want to stall momentum toward the weekend, so let's just dive in . . .

Risky business: Climate disclosure battle heats up

Giphy

Going on offense: A new report is attacking recommendations from a Michael Bloomberg-led initiative TCFD on how corporations — including fossil-fuel companies — should boost disclosure of climate-related risks to financial regulators worldwide.

The report from the prominent consulting firm IHS Markit breaks down draft recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), which plans to finalize its proposals to the G20 this summer.

What they're saying: IHS calls TCFD's recommendations a "radical departure" from established financial reporting, and claims they could mislead investors and distort markets. Among the criticisms:

  • The scope of the recommended disclosure would prevent financial markets from "accurately assessing, comparing, and pricing risks and opportunities," states the report, which IHS conducted with funding from BP, Chevron, ConocoPhillips and Total.
  • It argues that much of the information the task force wants in financial disclosures should be conveyed and discussed in other channels. The report also criticizes the push to require so-called scenario planning for various climate outcomes, arguing it does not provide the "substantive, objective" info needed to assess financial risk.

Going on defense: The TCFD's aim is to "increase transparency by developing a framework for consistent climate-related disclosures, which helps industries and investors to better understand the risks posed by climate change," a TCFD spokesperson told Axios.

  • "It is unfortunate that IHS Markit's report obscures this fundamental point, in addition to missing or inaccurately reporting on several key facts about our work," the TCFD spokesperson said. The TCFD is pushing back against IHS claims that its proposals are a radical departure from established concepts of what's material risk in financial disclosures, among other criticisms.
  • "As disclosure demands get more real for companies, we are not surprised to see more opposition," Jim Coburn, senior manager of the pro-disclosure and sustainable investment advocacy group Ceres, told Axios.

What's next: The Chamber of Commerce will hold an event next Tuesday to highlight the findings of the IHS Markit report.

Facts matter: Trump follows Obama's lead on LNG exports

A piece in the Axios stream by Amy Harder provides some useful context to last night's news about an agreement aimed at expanding access to Chinese markets for U.S. natural gas exports.

From Amy's item...

Continuity: With the China move, Trump is mostly doubling down on what former President Barack Obama started. The Obama administration approved roughly two dozen natural gas export applications to countries with which the U.S. doesn't have free-trade agreements, according to Energy Department data. The Obama administration also rejiggered the federal review process in 2014 to make it go faster for most companies waiting for approval.

Why it matters: In these highly divisive times in Washington, it's a shock to find a policy area where President Donald Trump and his predecessor align. Trump will try to approve applications faster than Obama, but in this area Obama actually moved so swiftly he upset a lot of environmentalists, and Trump's latest move doesn't make any concrete changes that would indicate the process will move any faster.

Listening notes

Lots of good energy and climate news for your ears lately. A few new downloads of note...

Oil markets: Platts Commodities Spotlight podcast has an interview with Neil Atkinson, a top International Energy Agency oil analyst.

It quickly covers lots of ground, including Atkinson pushing back against claims that OPEC's production-level agreement has failed because prices have fallen back to levels present at the deal's early 2017 inception.

  • "You could argue that perhaps OPEC has succeeded in at least stabilizing the market, because the price is certainly not lower than it was when the cuts were implemented," he said.

Tesla, FERC: the latest recording of The Energy Gang by Greentech Media has a deep dive into the specifics and outlook for Tesla's new solar roof product, which opened for consumer orders this week, as well as Trump's FERC nominees and more.

  • One fun quote: "I can't imagine how much free press Tesla gets for itself. It's just awe-inspiring how all of us...just march in line when they have something to talk about," solar entrepreneur Jigar Shah says. Yup.

Paris battle: On Point with Tom Ashbrook provides a high-level look at the arguments on both sides of the stay-or-go debate that's raging inside the White House over the Paris climate accord. It's substantive but also feisty. On the feisty side...

  • Todd Stern, who was Obama's top climate diplomat, goes after Trump EPA chief Scott Pruitt's claims that China's doing nothing while the U.S. has vowed near-term action, noting China's pledge for a major build out of non-fossil fuel power. "The notion that they don't have to do anything until 2030 is just poppycock, it's a complete misunderstanding," he said.
  • Conservative activist Myron Ebell of the Competitive Enterprise Institute, who is strongly pushing for withdrawal, on the internal Trump administration struggle: "The fight within the White House is between the deplorables and the swamp. Between the promise-keepers and the promise-breakers."

Global carbon emissions in focus

Data: Carbon Dioxide Information Analysis Center; Chart: Lazaro Gamio / Axios

My colleague Shannon Vavra has a snapshot in the Axios stream of global carbon emissions as the U.S. weighs its stance on the Paris climate accord, nicely shown by colleague Lazaro Gamio's graphic above.

More news: polling on gas tax and Trump’s climate moves

Gas taxes: The idea of raising the long-frozen gasoline tax gives lots of lawmakers strong stay-away vibes, but a new Quinnipiac University poll suggests it shouldn't be that third rail-ish.

  • Asked about raising the gas tax specifically to pay for infrastructure repairs, 51 percent think it's a good idea while 41 percent think it's a bad idea.
  • Unlike lots of other issues, there's not much of a partisan divide — 48 percent of Republicans think it's a good idea, and so do 52 percent of Democrats.

Climate regs: Trump's moves to unwind carbon-cutting mandates are unpopular with the overall sample of voters, but here the partisan gap runs deep in the Quinnipiac survey released Thursday .

  • Just 28 percent agree that Trump should "remove specific regulations intended to combat climate change."
  • 53 percent of Republicans hold that view, compared to just 8 percent of Democrats.

On my screen

Energy Information Administration

Coal: The Energy Information Administration has a look at how natural gas has displaced coal over the last decade in nine northeast states (one of the charts is above).

  • Key stats: Natural gas supplied 41 percent of the region's power last year, up from 23 percent a decade earlier, while coal went from 31 percent down to 11 percent over the same 2006-2016 period.
Permian Basin: The Dallas Fed is out with a handy snapshot of economic and energy data for the booming shale oil region.

Offshore wind: Utility Dive looks closely at the two offshore wind projects that Maryland regulators approved yesterday.

  • AP notes that they would jointly have over 10 times the power generation capacity of the nation's first (and right now only) offshore wind project near the Rhode Island coast.

Thanks for reading! Tips and feedback always welcome at ben@axios.com. Have a great weekend.

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A European view: good riddance to U.S. from Paris pact

Charlie Riedel / AP

For all the European diplomatic lobbying for President Donald Trump to stay in the Paris climate pact, the notion that the deal and the planet are better off with the U.S. in the accord is not universally held. Two new opinion pieces from across the Atlantic make the opposite argument...

Not worthy: Over at Climate Home, Joseph Curtin makes the case that aggressive White House steps to unwind domestic emissions controls leaves the U.S. undeserving of the pro-climate cred that Paris membership provides. Paris, he argues, should not be a "fig leaf" or a "branding opportunity."

Why it matters: "There is a danger [that] remaining in [the pact] could muddy the waters and allow U.S. citizens [to] believe they are contributing to resolving a global problem, when the opposite is the case," writes Curtin, a senior fellow at the Dublin-based Institute of International and European Affairs.

The second voice: Former EU climate diplomat Jorgen Henningsen makes a related case in a letter to the Financial Times, arguing that the U.S. has already "de facto left the agreement," given Trump's actions so far.

Go deeper: He argues that if other nations keep accepting the U.S. as a partner in the deal, it undermines the discussion of strengthening the national commitments needed to keep the global temperature rise below 2 degrees celsius.