Ben Geman
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Rep. Upton weighs joining climate caucus

Carlos Osorio / AP

Axios sat down with Rep. Fred Upton yesterday, the former Energy and Commerce Committee chairman who now leads the energy subcommittee. A few notes from our conversation in the Michigan Republican's office:

Upton revealed he may join the bipartisan Climate Solutions Caucus, which currently has 48 members split evenly between the parties.

Why it matters: Membership from Upton would add stature to the group, given his longtime prominence on energy policy and seniority in GOP circles.

Upton said Democrat Jan Schakowsky approached him this week about joining, and that he's "running the traps" on the idea. (Note: It's a "Noah's Ark" caucus with equal party representation, so members join in bipartisan pairs.)

Paris: Upton is "disappointed" that President Trump is abandoning the Paris climate accord. He noted that the agreement does not impose emissions mandates or penalties, and noted the provisions that improve monitoring of China's and India's emissions.

  • "I didn't think it was worth joining Syria and Nicaragua as being the only two other countries that were not signatories to it," he said.

Go deeper: Upton was among the 46 Republicans who broke with most of their colleagues by voting last week to support new Defense Department's work to assess the national security threat of climate change.

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Good morning and happy Friday! Let's head for the weekend . . .

Fred Upton's wide lens

Your Generate host chatted yesterday with Rep. Fred Upton, the former Energy and Commerce Committee chairman who now leads the energy subcommittee. A few notes from our conversation in the Michigan Republican's office...

Big picture: These days Upton is jazzed about a wide-ranging subcommittee exploration of U.S. power markets and systems.

  • The second hearing of what Upton says will be many is July 26, when the panel will hear from the heads of the nation's regional power system operators.
  • Upton stressed that he's in listening mode, and legislation that could flow from the hearing series is a long-term project. "We will see where it takes us," he said.
  • Upton is interested in a range of topics including: the rise of natural gas, the fall of renewables costs, the need for backup generation, the future of nuclear power, and infrastructure modernization.
  • "Right now natural gas is the cheapest way to go, but as one that supports all of the above...how much is too much in terms of a percentage?" he mused at one point.

Nearer term: Upton expects a bill on the House floor in coming weeks that revives the stalled Yucca Mountain nuclear waste repository in Nevada and authorizes the creation of "interim" storage facilities.

  • It sailed through the full Energy and Commerce Committee on a 49-4 vote, and Upton is hopeful that political space has opened up in the Senate. "We may get some supporters that we didn't have before," he said.

DOE structure: Another former committee chairman, Rep. Joe Barton, is taking the lead on plans for Energy Department reauthorization legislation. Upton said there have been "early discussions" and expects the effort to take further shape as Energy secretary Rick Perry gets more of his team in place.

"I think you will see us start that in earnest after the August break," Upton said.

Upton also signaled that he's eyeing another run at crafting companion legislation to the wide-ranging bipartisan energy bill that Sens. Lisa Murkowski and Maria Cantwell are seeking to advance in the Senate, but did not offer specifics. A bicameral compromise came close to final passage through Congress last year.

Upton weighs joining climate caucus

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During my interview with Upton, he also revealed he may join the bipartisan Climate Solutions Caucus, which currently has 48 members split evenly between the parties.

Why it matters: Membership from Upton would add stature to the group, given his longtime prominence on energy policy and seniority in GOP circles.

Upton said Democrat Jan Schakowsky approached him this week about joining, and that he's "running the traps" on the idea. (Note: It's a "Noah's Ark" caucus with equal party representation, so members join in bipartisan pairs.)

Paris: Upton is "disappointed" that President Trump is abandoning the Paris climate accord. He noted that the agreement does not impose emissions mandates or penalties, and noted the provisions that improve monitoring of China's and India's emissions.

  • "I didn't think it was worth joining Syria and Nicaragua as being the only two other countries that were not signatories to it," he said.

Go deeper: Upton was among the 46 Republicans who broke with most of their colleagues by voting last week to support new Defense Department's work to assess the national security threat of climate change.

On my screen: Exxon's $2 million fine, Tesla, Facebook

Sanctions: Reuters looks in depth at the $2 million fine that the Treasury Department slapped on Exxon for "reckless disregard" of sanctions against Russia, and the oil giant's responding lawsuit.

Oil: MarketWatch sizes up the stakes of the Monday's meeting of oil ministers from OPEC and non-OPEC producers about the production cutting pact, noting the session in Russia "could make or break oil prices which have already tumbled more than 12% year to date."

Tesla: My Axios colleague Steve LeVine unpacks Tesla CEO Elon Musk's claim that he secured a "verbal" government approval to build a super-fast, 29-minute "hyper loop" taking passengers from New York to D.C.

Climate change: The Washington Post reports that shortly before Facebook CEO Mark Zuckerberg's tour of Glacier National Park last weekend, "the Trump administration abruptly removed two of the park's top climate experts from a delegation scheduled to show him around."

Notes on Trump’s regs agenda

Yesterday the White House published a detailed, agency-by-agency look at planned regulatory actions and rollbacks of Obama-era energy and environmental initiatives.

Recommended: E&E News has a pretty comprehensive rundown of the environmental and energy items here, and The Hill has a good big-picture look here.

Catching my eye: The documents reveal that the Energy Department is planning to propose a rule late this year aimed at providing quick approval of "small scale" natural gas exports.

  • "The intent of the rule is to improve DOE's application procedures related to natural gas exports, reduce the administrative burdens associated with the small-scale natural gas export market, and result in more efficient processing of applications for small-scale natural gas exports," it states.

SEC limbo: The documents don't offer much on next steps in the long and winding road for a mandate in the 2010 Dodd-Frank law that requires oil, gas, and mining companies to disclose payments to foreign governments in filings with the Securities and Exchange Commission.

The rule, opposed for years by some powerful oil companies including Exxon, occupies an unusual place in the regulatory universe. Congressional Republicans and Trump nullified the SEC's 2016 final rule under the Congressional Review Act early this year, but the Dodd-Frank provision requiring some kind of regulation still stands.

  • In the agenda released Thursday, it's listed in the SEC's "long-term" actions, but no target date is given for issuing a proposed regulation.

From Amy's notebook: beating the carbon tax drum

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Axios' Amy Harder has the latest on uphill efforts to enact a U.S. carbon tax. Here's her take:

Driving the news: Democratic Sens. Sheldon Whitehouse of Rhode Island and Brian Schatz of Hawaii are introducing a carbon tax bill next Wednesday at the American Enterprise Institute. If that sounds familiar, that's because they did the same thing two years ago with another carbon tax bill. Meanwhile, former Treasury secretary Hank Paulson urged lawmakers to back a carbon tax in private meetings last week, E&E News reported yesterday.

Then and now: A lot has changed since 2015, to be sure (ahem, enter Trump, stage right). Despite the lack of public interest or support from the White House, Whitehouse's carbon tax push could receive more support from new pro-carbon tax coalitions, like the Climate Leadership Council, than it did two years ago.

Our thought bubble: Washington often has do something over and over again before it finally moves the needle (or, gives up). If a carbon tax ever happens (a big if), it'll be thanks in part to the regular efforts by Whitehouse, Paulson, and others to push the issue over the past few years when most people thought it would never happen.

Solar trade battles escalate with new coalition’s arrival

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Launching today: The Energy Trade Action Coalition is a broad industry group that says it will fight against the petition from two solar panel manufacturers for steep duties on imported solar components and solar "protectionism" more broadly.

  • The group encompasses trade associations, individual companies, and groups that span "utilities, co-ops, manufacturers, supply chain suppliers, solar companies/developers, retailers, local union workers, small businesses, venture capital groups and conservative free-trade advocates," an announcement states.

Why it matters: It's an escalation of the fight over whether the Trump administration should impose new solar trade restrictions.

  • In April the bankrupt manufacturer Suniva, later joined by SolarWorld, petitioned the U.S. International Trade Commission for new tariffs on cells and for a price floor on modules, arguing cheap foreign imports are throttling the domestic panel industry.
  • But the wider solar industry, via the Solar Energy Industries Association, and other critics say granting that petition would wreak havoc on the economics of U.S. solar projects by basically doubling the cost of key components, greatly slowing the addition of new installations.

ETAC details: The member list isn't public, but some known names include the National Tooling and Machining Association, the International Council of Shopping Centers, SEIA, and the Precision Metalforming Association. Also, companies like Johnson Controls, Keystone Power Holdings and Seminole Financial Services, according to Bracewell, the law and lobby shop coordinating the effort.

  • It will work in "partnership" with groups including the conservative Heritage Foundation and the R Street Institute, a free-market think tank.

What's next: The ITC will determine by Sept. 22 whether the imports are causing "serious injury." If it makes that finding, the body will later recommend remedies to Trump.

Go deeper: GTM Research analyzed the impact of the potential new import penalties here.

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Good morning and welcome back! My colleague Amy Harder went to the movies and wrote about it. I looked at a GIF from a classic 90s movie and included it. All this and more is below, so let's dive in . . .

Interior whistleblower complaint raises hearing stakes

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Driving the news: An Interior Department scientist has filed a complaint with the Office of Special Counsel that alleges he faced retaliation from Trump officials for speaking out about the threat that climate change poses to Alaskan natives.

Joel Clement, in a Washington Post op-ed, said he was removed from directing the Office of Policy Analysis and sent to the Office of Natural Resources Revenue, which handles royalties from oil, gas, and mining on public lands.

May impact hearing: The allegations surfaced on the eve of this morning's Senate confirmation hearing for nominees for several high-level Interior positions.

  • An aide said Democrats on the Senate Energy and Natural Resources Committee "definitely plan to ask about this" at the hearing.

Interior's response: Spokeswoman Heather Swift told The Hill that Clement's reassignment is part of a broader reorganization that stems from one of President Trump's executive orders, and that personnel moves are designed to better serve taxpayers and Interior operations by "matching Senior Executive skill sets with mission and operational requirements."

More news: The Senate also will take a procedural vote this afternoon on the nomination of David Bernhardt to be deputy secretary, the number two position at Interior. He's a lobbyist who was also a high-level Interior official under George W. Bush.

Last night, the White House announced that Trump is nominating Joseph Balash, currently Alaska Sen. Dan Sullivan's chief of staff, to be Interior's assistant secretary for land and minerals management.

A bright spot for U.S. jobs: oilfields

Data: Challenger, Gray & Christmas and the Energy Information Administration; Chart: Andrew Witherspoon / Axios

Over in the Axios stream, Steve LeVine unpacks the data on oil-and-gas industry labor. Here's some key points from his piece...

Jobs are returning to the U.S. oil patch after three straight years of bloodletting that included 206,000 layoffs and the bankruptcy of more than 125 companies. A 27-month plunge in oilfield employment is over (see chart above), and companies have added about 2,500 jobs so far this year, according to the Bureau of Labor Statistics.

More hiring appears likely: According to a new report by rating agency Fitch, U.S. shale drillers can manage through oil prices averaging as low as $45 a barrel, even less than the $47.09 where they closed Wednesday, which explains a 142% rise in the number of working rigs in the U.S. since the nadir in May 2016.

Petro notes: Earnings preview, Congress, sanctions, climate

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We're about to get into the heart of oil industry earnings report season, with companies like Shell, Chevron, and Exxon all reporting second quarter results next week (and BP on August 1).

What to expect: HSBC, in a new note previewing the major integrated companies' reports, expects the results to be "solid," but "less impressive" than the first quarter, largely because average crude prices were somewhat lower than the first three months of the year.

At your service: Reuters looks at the state of play for U.S.-based oilfield service companies like Halliburton and Schlumberger. "[S]econd-quarter earnings should easily top last year's depressed results, but a near 15 percent slide in oil prices since January has weakened the outlook for the second half of the year," they report.

Congress: The House, largely along partisan lines, approved legislation yesterday to streamline the permitting process for cross-border oil, gas, and transmission lines. Lawmakers also passed a separate GOP-backed bill designed to speed up permitting of interstate natural gas pipelines.

  • Roll Call has a break down of the debate, Democratic criticisms, and GOP arguments for the measures.

Sanctions: Industry lobbying for changes in Russia sanctions legislation that the Senate approved overwhelmingly appears to be paying off, Bloomberg reports.

  • "House Majority Leader Kevin McCarthy said there's a consensus among lawmakers to change legislation on Russian sanctions so that U.S. companies won't be blocked from lucrative foreign oil deals," the report states.

Cleanup warning: ClimateWire reports on a new warning from the head of the Coast Guard on the challenges of cleaning up a potential oil spill in the Arctic. It comes as the Trump administration and congressional Republicans are seeking to open more areas for exploration.

Lobbying notes

Second quarter reports are rolling in. A few new filings of note are below. The links bring you to the forms that show what issues they lobbied on as well as the aggregate dollar figures.

Fuels: American Fuel & Petrochemical Manufacturers, a big refining industry trade group, spent slightly over $1 million in the April-June stretch, well above the $593,000 they reported in Q1 lobbying.

Electricity: Utility giant American Electric Power reported $1.9 million, a slight dip from the prior quarter.

Cars: The Alliance of Automobile Manufacturers reported $1.89 million, compared with $2.3 million in Q1, which was their biggest quarterly outlay since 2012. A separate trade group, the Association of Global Automakers, spent $1.2 million in quarterly lobbying.

Natural gas: The American Gas Association, which represents local gas distribution companies, spent $310,000 on second quarter lobbying. LNG exporter Cheniere Energy showed $240,000 in lobbying costs.

And some new registrations . . .

Wind: Dong Energy Wind Power U.S., a branch of the Danish wind giant, has registered to lobby U.S. policymakers.

Green group: The Center for Biological Diversity has formally registered a number of lobbyists.

Sizing up Al Gore's new climate movie

My Axios colleague Amy Harder went to the D.C. premiere of Al Gore's new film last night. Some notes from her dispatch...

A lot has shifted in climate change issues over the last 11 years, but you might not be able to tell by watching former Vice President Gore's sequel to his 2006 Academy Award-winning "Inconvenient Truth." As one attendee told me after the screening: "The film was an unusual combination of electoral self-deprecation and climate narcissism."

Quick review: Despite its name ("Inconvenient Sequel: Truth to Power), it's the film that actually ignores the inconvenient reality that climate change advocates are now facing with the Trump administration. Instead, we mostly saw more of the first film, which is to say: Gore himself and the impacts of climate change (albeit marginally worse).

A thought-provoking chart

Wind Energy Advisory analysis of Energy Information Administration data

This one comes courtesy of the Wind Energy Advisory, a branch of the Danish Consulate General that works with wind energy companies based in Denmark to identify U.S. business opportunities.

Their case: The diagram looks at the U.S. power system's average CO2 emissions and finds that wind last year began offsetting more emissions than natural gas.

In other words, as the average CO2 output of the power system has fallen for years thanks to lots of gas displacing carbon-heavy coal, the marginal CO2 benefits of adding more gas have fallen in comparison to the contribution of wind.

Why it matters: It illustrates the fact that while the transition from coal to gas in the power sector has helped to lower U.S. carbon emissions, it's the expansion of zero-carbon sources that will be crucial to enable deep decarbonization of electricity.

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First half of 2017 was the second hottest on record

The first half of 2017 is the second warmest in the historical record that dates back to 1880, trailing only last year's high mark, the National Oceanic and Atmospheric Administration said in data released Tuesday. It was the third-warmest June on record. So far, the average global temperature this year is 1.64°F above the 20th-century average of 56.3°F, according to the federal statistics.

June 2017 marks the 41st consecutive June and the 390th consecutive month with temperatures at least nominally above the 20th century average," NOAA said in its latest monthly report.

Data: National Oceanic and Atmospheric Administration; Chart: Lazaro Gamio / Axios

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Good morning and welcome back to Generate. Please keep the tips and feedback coming to ben@axios.com. Let's dive in . . .

Drilling and spending fights take shape on Capitol Hill

Looking north: Environmental groups are gearing up for what could be the biggest fight over drilling in the Arctic National Wildlife Refuge since the mid-2000s, the last time Republicans had unified control of Washington and came oh-so-close to opening the Alaskan reserve to oil exploration.

What's happening: As we noted yesterday, the new House GOP budget resolution has a $5 billion reconciliation instruction to the Natural Resources Committee, which basically means they need to find that much money in savings or revenues — and selling drilling leases is one option they could promote.

  • Why it matters: It's inside baseball, but legislation passed under reconciliation is immune from Senate filibusters, which matters because ANWR drilling is far short of 60 Senate votes.

Mum's the word: Aides to Natural Resources chairman Rob Bishop declined requests for comment from Axios about whether he'll go that route.

Buzz: A new ANWR fight would be a close call, with the Senate whip count uncertain. And more broadly, the entire budget process could unravel amid battles among Republicans over tax cut and spending proposals.

  • As Reuters notes, Republican leaders seeking to move the budget blueprint "face the same divisions between conservatives and moderates that helped killed their efforts to replace Obamacare."
* * *

DOE Spending: White House efforts to enact deep, deep cuts in Energy Department renewables and efficiency programs hit a wall in the Senate yesterday.

A Senate Appropriations subcommittee approved a fiscal year 2018 spending plan that would provide over $1.9 billion for DOE's Office of Energy Efficiency and Renewable Energy. That's a slight cut from current spending but well above the roughly $1 billion cut in the DOE spending bill moving through the House and the even steeper 70% reduction that the White House wants.

  • Also, the Senate bill would boost funding for DOE's Advanced Research Projects Agency-Energy to $330 million, a stark contrast to White House and House GOP plans that would kill the program.
  • The bill would provide $573 million for fossil energy R&D, which is $95 million below current spending but almost $300 million above the White House request. The House plan proposes $635 million for those programs.
  • A summary of the overall Senate package is here.

So hot right now: 2017

NOAA

The first half of 2017 is the second warmest in the historical record that dates back to 1880, trailing only last year's high mark, the National Oceanic and Atmospheric Administration said in data released Tuesday. It was the third-warmest June on record.

  • So far, the average global temperature this year is 1.64°F above the 20th-century average of 56.3°F, according to the federal statistics.

Quite a streak: "June 2017 marks the 41st consecutive June and the 390th consecutive month with temperatures at least nominally above the 20th century average," NOAA said in its latest monthly report.

Go deeper: The agency has more data and graphics.

Oil-and-gas news on my screen

OPEC: The Carnegie Middle East Center has a good interview with oil expert Carole Nakhle on the ascension of Mohammed bin Salman as crown prince of Saudi Arabia and the future of Saudi and OPEC policy.

Sanctions: Bloomberg reports that there are divisions within the Trump administration over whether potential sanctions against Venezuela should include a ban on U.S. imports of Venezuelan crude.

  • The internal debate "reflects friction over the potential impact on U.S. gasoline prices and concerns about exacerbating the worsening humanitarian situation in Venezuela," they report.

Sanctions, part 2: The Financial Times has an informative look at oil industry pushback against Russia sanctions legislation approved overwhelmingly in the Senate but facing an uncertain future in the House.

  • "[O]il executives and industry representatives have warned that the proposed rules are so broadly drawn that they could hurt the competitiveness of US companies and potentially hamper oil and gas production in many countries other than Russia," they report.

Projects: Via Reuters, Argentina's state-run oil company is joining with players including BP on a $1.15 billion joint investment to boost shale gas production there.

Finance: CNBC looks at BP's plans to spin-off some of its U.S. pipelines into a new company. The oil giant is weighing an IPO of a master limited partnership that "could include crude oil, natural gas and refined petroleum product pipelines in the Midwest and Gulf Coast."

Amy’s notebook: Africa could leapfrog over coal

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Axios' Amy Harder has this dispatch from an interview she did Tuesday with Fatih Birol, executive director of the International Energy Agency, shortly before his flight out of town. Take it away...

Get smart: A lot of experts in the climate and energy world talk about how other countries could leapfrog — skip over, essentially — being dependent upon coal and go straight to cleaner forms of energy. China and India are already too far along in their dependence on coal to leapfrog it, but Africa is primed for such a jump, Birol says. The continent has nearly 700 million people without access to electricity and lots of good solar potential, according to Birol.

Quoted: "When it comes to Africa, I think we will see something for the first time," Birol said. "Namely, Africa will bring electricity to people by mainly using renewable energy and natural gas. That would be the first time that would happen, and it's extremely important."

Why it matters: Africa's ability to leapfrog to renewable energy and cleaner burning natural gas can help not only with the planet's attempts at curbing carbon emissions but also at cutting down traditional air pollution like sulfur dioxide that's plaguing more coal-dependent nations like China.

The headline was updated to clarify the continent is poised to leapfrog over coal, not coal and natural gas.

California's big move

Let's spend a little more time with something we only grazed in yesterday's edition: California lawmakers' deal this week to extend the state's cap-and-trade program through 2030.

Big deal: "This is undoubtedly the most important climate news since President Trump decided to withdraw from the Paris Agreement, and it is perhaps even more consequential," writes veteran Resources For the Future analyst Dallas Burtraw in a new post that unpacks some specifics of the complex program,.

  • Why it matters: It provides a key mechanism to help meet the commitment of the country's largest economy to cut its greenhouse gas emissions by 40% by 2030, Burtraw notes.

Brothers in arms: Analysts emphasized that the legislation, which a number of state GOP lawmakers endorsed, provides an opportunity for greater linkage with other carbon pricing markets beyond the existing collaboration with Quebec.

  • ClearView Energy Partners, in an analysis Tuesday, notes that the legislation "offers lawmakers elsewhere greater certainty when looking to link their cap-and-trade programs with California."
  • Ontario is already planning to link up with the California-Quebec market in 2018, while ClearView sees possible collaboration with Oregon and Washington State.

What it means for power companies: Fitch Ratings, in an analysis yesterday, said the deal will reduce regulatory risks for the state's public utilities by providing greater legal clarity, which will "allow better resource planning decisions."

One lovely thing

Interior Department

Maybe I'm biased because I worked there almost 25 years ago, but I agree with this new post in the Interior Department's popular Instagram feed: Mount Rainier National Park "will shock you with its natural beauty."

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Good morning and welcome back to Generate! A quick reminder to keep an eye on the Axios stream on GOP's health care repeal efforts, budget maneuvers, and, of course, energy.

Ok, let's dive in . . .

Latest from the Beltway

Interior nomination: Senate Majority Leader Mitch McConnell filed for cloture yesterday on the nomination of lobbyist David Bernhardt to be the deputy secretary of the Interior Department, which sets up a vote in the coming days.

  • Why it matters: Interior secretary Ryan Zinke needs bodies to help push his agenda to expand energy development on federal lands (among other goals). However, Democrats are wary of Bernhardt's past work with fossil fuel and mining companies as a lobbyist and a former high-level Interior official in the George W. Bush administration.

EPA nomination: The White House said yesterday that it's tapping Michael Dourson to be the Environmental Protection Agency's top chemicals regulator. Dourson is currently a professor in the Risk Science Center at the University of Cincinnati's College of Medicine and is a founder of the nonprofit consulting firm Toxicology Excellence for Risk Assessment.

Latest in lobbying: Marathon Petroleum has brought on Capitol Tax Partners, and EDF Renewable Energy has tapped Pillsbury Winthrop Shaw Pittman, newly posted filings show.

On tap Tuesday:

  • A Senate Appropriations subcommittee will mark up Energy Department funding legislation. It's expected to break with the effort by the White House and House Republicans to kill off DOE's Advanced Research Projects Agency-Energy, and Senate GOP appropriators are also unlikely to make the massive cuts in R&D that the White House wants.
  • The Senate Energy and Natural Resources Committee will hear from Fatih Birol, the head of the International Energy Agency, and others in a broad hearing on North American energy.
  • Birol will join Energy secretary Rick Perry at a National Press Club event this morning.
  • The House Appropriations Committee will mark up Interior Department spending legislation.
  • A House Natural Resources Committee panel will hold a hearing about onshore oil-and-gas development in Alaska. The state's oil production has been on a generally downward trajectory for decades, but a number of companies have recently announced large discoveries.

House GOP unveils budget plan

Breaking Tuesday morning: The House GOP released their fiscal year 2018 budget resolution, with aspirational, nonbinding language calling for cuts in applied R&D at the Energy Department and preventing the DOE from issuing new loans under its loan guarantee program. The Budget Committee will mark up the measure on Wednesday.

Elsewhere, it contains a $5 billion reconciliation instruction to the Natural Resources Committee. But it's not immediately clear what legislation that committee's lawmakers might seek to meet it, such as raising money by opening up the Arctic National Wildlife Refuge to oil exploration.

  • Natural Resources aides were not immediately available for comment Tuesday. E&E News, in a piece Tuesday morning, noted that moderate Republicans would push back against efforts to open ANWR.
  • Reconciliation is important because policy bills crafted to meet those instructions are immune from Senate filibuster.

India’s (potential) EV revolution

India aspires to have all new vehicles being sold by 2030 to be electric ones. A new study take a look at this goal...

Details: A recently published paper from Lawrence Berkeley National Laboratory finds the goal — which is "technically attainable" due to falling battery costs — would add only 6% to the country's peak electricity demand.

Benefits include additional revenue for the nation's power companies to the tune of roughly $10 billion annually, and lowering carbon emissions "significantly," especially if the nation meets its renewable energy goals in the Paris climate deal (check out the "NDC" scenario in the chart above). It would also help smooth the integration of renewable electricity sources onto India's grid, the paper finds.

Why it matters: India is the world's third-largest greenhouse gas emitter behind China and the U.S., and policies that enable economic expansion without a surge in carbon emissions are key to slowing global warming.

Listening notes: Browner talks cap-and-trade

Carol Browner, a top White House climate and energy official under former President Obama, has a wide-ranging chat on the latest Columbia Energy Exchange that should bring back memories for anyone remembering the 2009-2010 fight over cap-and-trade.

In retrospect: At one point she notes the problems with the push for an economy-wide bill (which ultimately collapsed in the Senate after passing the House) and wonders if a different strategy might have worked.

  • "That was huge. That was really, really complicated," she said of the sweeping bill. "I think, in retrospect, we should have sort of gone sector by sector, we should have broken off some big sectors."

Yes, but: Browner also muses about a silver lining:

  • "When you go back and look at the bill that passed the House and then we were unable to pass in the Senate, it had so many carve-outs by the end in an effort to secure votes — which is the legislative process, it's the way things are done — if the Obama regulations, executive actions, stay on the books, you are probably going to get more reductions sooner than you would have gotten under a new law."
There's also plenty from Browner, who also was former President Clinton's EPA chief, on the economic case for the kinds of regulations that President Trump's EPA is trying to scuttle.

More listening notes

OPEC: The new edition of the Platts' OPEC Outlook podcast explores what former Oasis frontman Liam Gallagher's new song has to do with OPEC's current quandary.

But seriously, stay for a smart and concise preview of the upcoming July 24 meeting of the monitoring committee overseeing the production-cutting deal between OPEC and other producers, notably Russia.

  • Bottom line: Host Herman Wang explains why the cartel is unlikely to deepen the agreement anytime soon, even though there's still a glut of crude worldwide.

Gulf of Mexico shallow waters: A pair of new Wood Mackenzie podcasts (available here) look at recent developments in the shallow water Gulf, both on the Mexico side, where a number of firms have announced some big discoveries, and on the U.S. side.

  • One takeaway is that Interior's decision to lower royalty rates for in shallow-water leases to be auctioned soon has a real effect on the economics of regional projects.
  • Another is that Chevron's recent sale of its shallow water Gulf assets to the company Cantium is part of a broader trend of private equity-backed companies expanding their holdings there while the major and big independents exit the region.
Russia: The latest offering from the Center for Strategic and International Studies' podcast series is a wide-ranging discussion of the geopolitics of Russian energy. One of the things it talks about is Russia's work with OPEC producers on the production-limiting agreement. Several things are motivating Russia's involvement.
  • "This is a carrot, I suppose, that Russia can offer to the cartel countries in exchange for other kinds of things that may or may not be specifically tied to the energy industry," notes Jeffrey Mankoff, a Russia expert with the think tank.

From Amy’s notebook: It’s natural gas, stupid

Axios reporter Amy Harder has a stark reminder for all the talk about the Energy Department's grid study coming up. Take it away...

Quoted: "It's pretty clear to everyone that right now in the PJM region, and it's also true elsewhere, that the lowest cost set of resources are natural gas, combined cycle, power plants," said Stu Bresler, senior vice president for operations and markets at PJM Interconnection, an East Coast regional electric transmission organization.

Why it matters: Bresler's comments echo almost every expert everywhere, including those in the DOE, according to its own leaked draft of the grid study. The only people who can't seem to admit this truth is Trump administration officials, who have said many times that it's environmental regulations and subsidies for renewable energy that are driving the knife into coal and nuclear power.

My thought bubble: The administration will have a hard time simultaneously backing competing fuel sources in the zero sum game that is America's power market. Check out my latest Harder Line column on this topic for more.

On my screen: Oil, Tesla, climate change

Oil: The latest Energy Information Administration monthly report on U.S. shale oil anticipates that production will be 113,000 barrels higher per day in August than July, with increases forecast in all the major shale-producing regions.

  • Total U.S. shale output is slated to be nearly 5.6 million barrels per day.
  • "The increase comes amid market concerns that rising shale output will dampen the Organization of the Petroleum Exporting Countries' efforts to curb a global supply glut," Reuters reports.

OPEC: "Ecuador has dealt a blow to OPEC unity by announcing it will start raising oil production this month, arguing it needs the money," Bloomberg writes.

Tesla: The company announced yesterday that it has two new board members. They are Linda Johnson Rice, chairman and CEO of Johnson Publishing, and 21st Century Fox CEO James Murdoch.

  • Fortune notes that the move follows "months of pressure" from investors in the Silicon Valley company to add independent members to the board.

Climate change: California lawmakers approved a plan Monday slated for Gov. Jerry Brown's signature that will extend the state's cap-and-trade program until 2030. The Los Angeles Times reports that the vote "included unprecedented Republican support for fighting global warming."

Solar: More California news — the Financial Times has a deep dive into the state's big solar market and how regulators deal with excess supply that sometimes arrives on the grid.

  • "To mop up some of the surplus, California's grid operator has formed a new marketplace that automatically dispatches power across the US west," the story notes.

That's the spirit

The DOE's National Renewable Energy Laboratory didn't let yesterday's World Emoji Day go by unnoticed.

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American divide: Russia, Paris deal could sway 2018 votes

A new survey, conducted in mid-June by Harvard's T.H. Chan School of Public Health and Politico, reveals how party affiliation defines what will motivate voters in the 2018 midterm elections.


Data: POLITICO/Harvard T.H. Chan poll conducted June 14-18, 2017; Chart: Chris Canipe / Axios

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Good morning and happy Friday! Let's celebrate with some dated pop music GIFs as we head into the weekend . . .

What the House climate vote does and doesn't mean

Forty-six House Republicans joined Democrats Thursday to protect language in defense policy legislation that calls climate change a "direct threat" to national security and requires new Defense Department analysis of its effect on the military.

Why it matters: Bipartisanship on climate has been in short supply for years in the Beltway, and Thursday's vote provides a lift for advocates hopeful that Republican views on the importance of global warming are shifting.

Reality check: There's still a massive gulf between the parties on climate change, and scant evidence that GOP lawmakers or the White House are open to the emissions-cutting policies that many Democrats support, such as direct regulation of industrial greenhouse gas emissions or the implementation of carbon taxes.

Read more here.

From Amy’s notebook: On climate deal, using words to say nothing

My Axios colleague Amy Harder has a look at new comments by President Trump and a White House official...

Trump's overtures on re-negotiating the Paris climate deal appear to be nothing more than words, and even those words offer little for observers to judge.

Driving the news: Speaking in Paris on Thursday, Trump repeated lines he has used a lot about this topic: "Something could happen with respect to the Paris accord. We will see what happens."

Get smart: Trump is leaving the door open to re-negotiate a climate deal with passive and vague statements like that. But he's not looking through the door, not talking about walking through it, and not talking to anyone on the other side of it. All signs today suggest he will never walk through the door.

One level deeper: A White House official told reporters that the prospect of re-negotiating the Paris deal did not come up in discussions with G20 counterparts during the recent meeting in Europe, where the Paris accord was a point of contention between the U.S. and the rest of the G20 nations. If this idea of re-negotiation was going to gain traction, the G20 meeting was an obvious starting point.

What's next: The White House aide said it was the job of administration officials to develop potential pathways for how the Paris climate deal could be fairer to the U.S., a key issue for Trump. When the official was asked whether such a pathway existed, the official responded: "I think that's a 'stay tuned' kind of question and answer."

Trump’s Russia defense: fossil fuels

Trend watch: Trump is ramping up his defense against suggestions that he's the Kremlin's preferred occupant of 1600 Pennsylvania Ave., by increasingly pointing out his energy policies. As Amy noted yesterday, Trump says his energy goals collide with Russia's heavy reliance on energy revenues.

On message: Now, Trump's remarks to reporters on Air Force One made public yesterday show him test-driving the same defense in extended remarks on energy and Russia.

  • "If Hillary is there, you're going to have a far less amount of fuel. Therefore, energy prices will be much, much higher. That's great for Russia," Trump said en route to Paris on Wednesday night.

Later in the session, he added: "What was the first thing I signed when I got in? The Keystone Pipeline, and the Keystone Pipeline goes from Canada all the way through our country right into the Gulf, and the ships are there to take it all over and compete with Russia."

To be sure: Hillary Clinton's State Department promoted U.S. natural gas exports as a way to boost Europe's energy security and ease dependence on Russia.

Geopolitics: A new Carnegie Europe post offers a range of views about the risks involved in the shifting geopolitics of Europe's reliance on Russian energy and the prospect of diversifying suppliers.

Update: the fight over deep decarbonization

On the record: The Interchange, one of Greentech Media's podcasts, has an in-depth chat with Stanford's Mark Jacobson, lead author of controversial research that argues the U.S. can obtain 100% of its energy from wind, solar, and hydro sources by 2050.

  • Jacobson's work is the subject of a deeply critical, high-profile paper in the Proceedings of the National Academy of Sciences by several respected energy and climate experts, who say his research suffers from errors and faulty assumptions.
  • The challenging but civil, hour-plus interview gets into several of the controversies over Jacobson's research, including his conclusions about the prospects of massively scaling up hydropower from existing dams.
  • Jacobson also argues that his work has been examined through too narrow a lens, arguing that it's not just about cutting carbon but also a pathway to a system that avoids various environmental problems and health risks.

In his words: "We are trying to address air pollution — four-to-seven million people every year die from air pollution worldwide, including 65,000 in the U.S. — global warming, and energy security. It's trying to minimize land-use, and other environmental impacts...This is really the difference between a lot of our studies and a lot of these other studies, which are looking primarily at just carbon."

Why private equity isn't challenging Buffett for Oncor

Axios' Dan Primack, an expert in all things private equity, has an interesting post about a big, unfolding story in power industry finance. Take it away...

There have been some questions as to why private equity isn't challenging Warren Buffett's bid for electric grid giant Oncor, either on its own or in tandem with Oncor creditor Elliott Management (which says it is seeking financing for a rival bid). Three basic explanations, per private equity sources:

  • Synergy: Buffett is doing this deal via Berkshire Hathaway Energy, which means he can find strategic synergies that pure financial bidders can't.
  • History: Texas regulators have blocked Oncor sales twice before, and would take a particularly dim view of private equity getting involved – given its past (disastrous) involvement with Oncor's parent Energy Future Holdings.
  • Size: Even if private equity overcame each of those aforementioned concerns, it may still have difficulty with financing. Buffett is offering around $9 billion in cash, and few private equity firms can afford equity checks in excess of $2 billion (and even that's a stretch).

On my screen: lobbying, oil, EVs

Lobbying: Sempra Energy has brought on The Duberstein Group to work on "energy issues," tax reform, and trade, a newly posted filing shows. In solar news, REC Silicon has tapped Smirnow Law for representation on trade issues.

Finding oil: Forbes chats with the CEO of Talos Energy, one of the companies behind a major new shallow water discovery on the Mexican side of the Gulf of Mexico. The find is being heralded as a sign that Mexico's decision to open up its state-run oil sector to outside players is bearing fruit.

Electric cars: Bloomberg's Liam Denning has an interesting look at how auto companies should think about the projected rise of EVs that remain just a tiny share of the market.

  • Historical warning: "Kodak's ultimately doomed focus on its leading position in film and, conversely, International Business Machines Corp.'s prescient exit from the commodifying PC business are business-school cliches. But they're cliches for a reason. Companies disregard marginal change and retreat to the comfort of their historic strongholds potentially at their peril."

More on EVs: Reuters reports that "Global automakers have urged China to delay and soften planned quotas for sales of electric and hybrid cars, saying its proposals will be impossible to meet and would severely disrupt their businesses."

Nuclear power: Axios' Shannon Vavra has an in-depth look at cyber-intrusions at U.S. nuclear power plants.

Aramco IPO: The New York Times' DealBook section explores Britain's efforts to host Saudi Aramco's massive planned IPO next year, "with regulators unveiling proposals on Thursday that aim to make it easier for state-owned companies to list on the London Stock Exchange."

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Dozens of Republicans side with Dems on climate vote

Carolyn Kaster / AP

Forty-six House Republicans joined Democrats Thursday to protect language in defense policy legislation that calls climate change a "direct threat" to national security and requires new Defense Department analysis of its effect on the military.

  • The House voted 185-234 against GOP Rep. Scott Perry's amendment to the National Defense Authorization Act that would have stripped the language in the bill requiring the study.
  • Why it matters: bipartisanship on climate has been in short supply for years in the Beltway, and Thursday's vote provides a lift for advocates hopeful that Republican views on the importance of global warming are shifting.
  • Reality check: there's still a massive gulf between the parties on climate change, and scant evidence that GOP lawmakers or the White House are open to emissions-cutting policies that many Democrats support, such as direct regulation of industrial greenhouse gas emissions or carbon taxes.

In their words: Perry said during floor debate that he offered the amendment because climate should not be the priority for military commanders who are dealing with issues like Islamist extremism and North Korea, and that lawmakers should not dictate what matters they focus on.

  • "Literally litanies of other federal agencies deal with environmental issues including climate change," said Perry, an Army veteran.

But GOP Rep. Ileana Ros-Lehtinen argued against the amendment, noting the threat of sea-level rise on military installations. She said policymakers must be "clear eyed" about the topic. GOP Rep. Elise Stefanik said in opposing Perry's amendment that "we would be remiss in our efforts to protect our national security" by not accounting for the effect of climate change on the military.

Go deeper: A number of experts and senior military officials have warned that climate change poses various risks and challenges to the Defense Department, including the role that global warming may play in exacerbating conflict in unstable regions.


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Climate fight teed up in House

Susan Walsh / AP

The House Rules Committee laid the groundwork for a House floor fight over the threat of climate change. After midnight, the panel announced more of the amendments for the National Defense Authorization Act for Fiscal Year 2018 that will be debated on the floor, including one on climate change.

Why it matters politically: The attempt to strike the climate provision will test the posture of Republicans who have become more vocal about addressing the dangers of global warming.

On the list: One of the amendments is an attempt by two GOP lawmakers — Reps. Scott Perry and Ken Buck — to strike a provision in the NDAA that recognizes climate change as a "direct threat" to the national security of the U.S., one that is "impacting stability in areas of the world" where the military operates and where "strategic implications for future conflict exist." The defense bill also notes the threat to military installations from rising seas, wildfires, and other climate conditions.

  • It requires a new Defense Department study on the vulnerabilities of bases and "combatant commander requirements" over the next 20 years.

If it comes to a roll call vote: Watch the votes of GOP members of the bipartisan Climate Solutions Caucus, which now counts 24 GOP members, according to the Citizens' Climate Lobby, an advocacy group which tracks the membership.