Ben Geman
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Big corporations up pressure on Trump to stay in Paris pact

Pablo Martinez Monsivais / AP

New this morning: Over a dozen major companies are joining the ranks of corporate giants who are publicly pressing the White House to remain in the Paris climate accord.

Who's in favor: Companies sending a new letter to President Donald Trump include tech giants Google, Microsoft and Intel; oil majors BP and Shell; and other large entities like Walmart, General Mills, Unilever and DuPont.

What they're saying: The letter organized by the Center for Climate and Energy Solutions argues that staying in the pact helps U.S. economic competitiveness, arguing that climate change presents business risks and opportunities.

  • "U.S. business interests are best served by a stable and practical framework facilitating an effective and balanced global response. We believe the Paris Agreement provides such a framework."

Happening Thursday: A closed-door White House meeting, where competing factions of high-level officials discuss the administration's approach to the Paris climate change accord. Politico first reported the meeting, which was confirmed by Axios. A decision is expected by late May about whether to begin pulling out of the 2015 pact.

  • Flashback: The meeting was supposed to happen last week but was scuttled.

Where it stands: Internal lines were defined a little sharper yesterday. Energy secretary Rick Perry said publicly that he's in the camp that supports staying in the accord, but altering the U.S. commitment.

  • That puts the Energy secretary at odds with EPA administrator Scott Pruitt and White House chief strategist Steve Bannon, who are are pushing for Trump to stick with his campaign promise to bail. Forces inside the administration in the "remain" camp include White House senior advisor Jared Kushner and Secretary of State Rex Tillerson.

Once you're in it, you're in it: On Capitol Hill, GOP West Virginia Sen. Shelley Moore Capito, a coal industry ally, told Axios that at this point it's best to stay. "I would prefer that we weren't in it, but I think that the ramifications of pulling out right now — we might be able to do better work if we stay in and reach more reasonable parameters," she said.

Not too late to bail: But Wyoming GOP Sen. John Barrasso, chairman of the Republican Policy Committee and whose state is the largest coal producer, told reporters yesterday that he's still advocating for the U.S. to pull out.
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Generate

Good morning and welcome back to Generate! A quick note: my colleagues on the Axios health care team are all over the latest moves on tumultuous GOP efforts to repeal and replace the Affordable Care Act. So I highly recommend signing up for Vitals, the Axios morning health care newsletter, which you can do here. Ok, let's dive in . . .

Paris maneuvers

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New this morning: Over a dozen major companies are joining the ranks of corporate giants who are publicly pressing the White House to remain in the Paris climate accord.

Who's in favor: Companies sending a new letter to President Donald Trump include tech giants Google, Microsoft and Intel; oil majors BP and Shell; and other large entities like Walmart, General Mills, Unilever and DuPont.

What they're saying: The letter organized by the Center for Climate and Energy Solutions argues that staying in the pact helps U.S. economic competitiveness, arguing that climate change presents business risks and opportunities.

  • "U.S. business interests are best served by a stable and practical framework facilitating an effective and balanced global response. We believe the Paris Agreement provides such a framework."

Happening Thursday: A closed-door White House meeting, where competing factions of high-level officials discuss the administration's approach to the Paris climate change accord. Politico first reported the meeting, which was confirmed by Axios. A decision is expected by late May about whether to begin pulling out of the 2015 pact.

  • Flashback: The meeting was supposed to happen last week but was scuttled.

Where it stands: Internal lines were defined a little sharper yesterday. Energy secretary Rick Perry said publicly that he's in the camp that supports staying in the accord, but altering the U.S. commitment.

  • That puts the Energy secretary at odds with EPA administrator Scott Pruitt and White House chief strategist Steve Bannon, who are are pushing for Trump to stick with his campaign promise to bail. Forces inside the administration in the "remain" camp include White House senior advisor Jared Kushner and Secretary of State Rex Tillerson.

Once you're in it, you're in it: On Capitol Hill, GOP West Virginia Sen. Shelley Moore Capito, a coal industry ally, told Axios that at this point it's best to stay. "I would prefer that we weren't in it, but I think that the ramifications of pulling out right now — we might be able to do better work if we stay in and reach more reasonable parameters," she said.

Not too late to bail: But Wyoming GOP Sen. John Barrasso, chairman of the Republican Policy Committee and whose state is the largest coal producer, told reporters yesterday that he's still advocating for the U.S. to pull out. Yesterday, Barrasso, also circulated documents supporting his position at a GOP luncheon. And Politico reported that after meeting with Pruitt, the National Mining Association said they decided to support pulling out of the pact (although the NMA denies Pruitt urged them to publicly support pulling out).

In the tanks: energy patenting and carbon pricing

A couple of new think tank reports caught my eye.

Patenting: The Brookings Institution looks at U.S. clean energy innovation's future through the lense of detailed data on technology patenting trends.

Why it matters: Patenting trends are one proxy of the health and economic competitiveness of the clean tech sector and its future attributes.

A big takeaway: Congress should prevent Trump's effort to cut clean tech R&D and commercialization programs.

It's important right now, because "several indicators of the competitiveness of U.S. clean tech innovation are raising warning lights." A few things worrying the authors:

  • Clean tech patents issued have been declining since 2014 after years of growth.
  • Patenting is concentrated in a few areas like advanced materials, efficiency and transportation, with "drastically fewer" in areas including advanced nuclear and hydro power. That could stymie the potential for nuclear in particular to play a larger role in zero-carbon power.
  • Clean tech patents are increasingly held by foreign companies, which could hinder U.S. competitiveness.

Carbon pricing: A Resources For the Future paper explores power companies' use of internal or "shadow" carbon pricing as a way to prepare for future emissions policies and hedge their bets.

  • Bottom line: Trump's effort to upend EPA's Clean Power Plan makes it unclear whether utilities will assume those reductions in their plan. But author Joseph Kruger argues that companies should keep using internal carbon pricing that assumes the need to cut emissions in the future, regardless of the CPP's fate.
  • One key recommendation: State utility commissions should require power companies in their jurisdiction to include carbon pricing in their resource plans.

Notes from the oil (and gas) patch

Climate: The Energy Intelligence Group is out with a new report that broadly explores how the world's largest oil companies are approaching climate change and low-carbon energy.

  • Reality check: One interesting takeaway is that despite lots of pro-climate talk by European majors, their investments are modest, with 5 percent or less of their 2017 spending devoted to low-carbon energy.
  • "In many cases, the greenest oil majors do plan to ramp up renewables spending, but are holding out until 2020 or until the business case for renewables improves."

Offshore: Trump's upcoming executive order on Friday will open the door (eventually) to new oil-and-gas lease sales off the Pacific coast for the first time in decades, according to Bloomberg.

LNG: Platts has a look at the Energy Department's decision to approve liquefied natural gas exports from the Golden Pass project in Texas.

  • It's happening "against a backdrop of a seemingly glutted global LNG market and continued concerns about the impact on US natural gas prices."

Service companies: The Houston Chronicle examines how oilfield service companies have new wind in their sails and more promising earnings results after years of having to cut prices.

  • "Higher prices have helped the world's biggest services companies — Schlumberger, Halliburton and Baker Hughes — send more equipment into the field, resume hiring after deep job cuts and report significantly better earnings in the first quarter of the year."

From Amy's notebook

Reaction to Energy secretary Rick Perry's speech Tuesday at the Bloomberg New Energy Finance conference in New York was muted at best, according to conversations Axios reporter Amy Harder had with attendees at the event. The reason is simple: most of the hundreds of executives there focus more on renewables than fossil fuels.

What happened: In a room full of hundreds of mostly renewable energy executives, Perry gave a forceful speech that focused more on backing fossil fuels than backing renewables. He also indicated that at least some of the deep budget cuts the White House is calling for at the department, much which affect renewable energy programs, will come to pass.

What we heard: "While the energy secretary suggested that science will guide the U.S. energy policy, his speech communicated preference for coal and fossil fuels," said Vikram Aggarwal, CEO of EnergySage, an Expedia-like company that runs a market for solar installers.


On tap Wednesday

Interior: Trump will travel to Interior Department headquarters to sign an executive order calling for a review of national monument designations.

  • The review will examine designations that date back to the start of 1996, according to the Washington Post.

Earnings: Energy companies including Entergy, Hess, First Solar and Total SA will report first quarter results today.

Congress: A House Energy and Commerce subcommittee will hold a hearing on new GOP legislation to revive the proposed Yucca Mountain nuclear waste dump. Witness testimony is already available here.

Plus a Thursday preview: Sens. Bernie Sanders and Jeff Merkley will roll out new legislation aimed at phasing out fossil fuel use in the U.S. by 2050. It's got no chance of passage but can serve as a rallying point for activists.

Lightning round

Trump and efficiency: CNN reports that Trump's properties have received low ratings under the federal Energy Star program that the White House budget proposal would gut.

Jobs: The New York Times has a useful graphic on employment levels in various parts of the energy sector.

Tech: MIT Technology Review checks in on the latest developments at the Cyclotron Road, the incubator at Lawrence Berkeley National Laboratory.

EVs: Volkswagen is planning to launch an all electric vehicle in China next year, according to the Associated Press story that provides a good look at China's EV market and plans.

Nuclear: The Wall Street Journal reports that the American Petroleum Institute, a powerful lobbying group, has waded into state-level fights over nuclear power in Ohio and Pennsylvania. The group is opposing subsidies that would keep aging plants operating.

Thanks for reading! As always, your confidential tips and feedback (which has been very helpful!) is welcome at ben@axios.com.

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Good morning and welcome back to Generate! You can see an iconic moment between Jennifer Grey and the late Patrick Swayze below. So let's get going . . .

Quantifying coal’s decline

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Columbia University's energy think tank is out with a new study Tuesday on the forces behind coal's U.S decline and why Trump's promised resurgence probably won't happen.

Why it matters: The Center on Global Energy Policy analysis arrives as the Trump administration has begun unwinding Obama-era environmental restrictions.

The details: One key section attempts to quantify the influence of different forces that have driven coal's once-dominant share of U.S power generation downward for years.

  • 49% of the decline in U.S. coal consumption stems from competition from cheap natural gas; 29% from lower power demand thanks to more efficient buildings, lights and appliances; and, 18% due to the rise of renewables.
  • Environmental rules account for only a low-single-digit percentage of coal's decline (though the study acknowledges it's a tricky thing to measure).

Global markets hold sway too: "A slow-down in Chinese coal demand, especially for metallurgical coal, depressed coal prices around the world and reduced the market for U.S. exports."

Reality check: "If natural gas prices remain at or near current levels or renewable costs fall more quickly than expected, U.S. coal consumption will continue its decline despite Trump's aggressive rollback of Obama-era regulations."

The latest on Saudi Aramco’s IPO

You're hired: HSBC has joined the ranks of financial institutions advising Saudi Aramco on its planned IPO of 5% of the state oil giant next year, according to Reuters. It's slated to be the biggest offering ever.

  • "Europe's biggest bank joins peers including JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N) on the deal, which is expected to raise some $100 billion and is the centrepiece of the Saudi government's ambitious strategy to diversify away from oil," they report.

For what it's worth: The Wall Street Journal looks at Aramco's valuation of the Saudi state oil giant ahead of its massive IPO. It cites insiders who are valuing the entire company at $1.5 trillion, which is $500 billion less than the government has estimated.

Why it matters: "The valuation discrepancy raises new challenges for a deal that is already fraught with complexity and facing opposition within the ranks of the kingdom's government bureaucracy, according to people familiar with the matter," the WSJ reports.

Climate research corner

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Stormy: Mashable explores what it calls an "ambitious" new paper, published in the Proceedings of the National Academy of Sciences, on the global connection between climate change and extreme weather events like heat waves and intense precipitation.

  • What's new: "[T]his study differs from many other so-called 'climate attribution' studies by looking at how climate change is tipping the scales in favor of unprecedented events worldwide, rather than focusing on one or two extreme occurrences in particular."

Signal and noise: A new paper in Environmental Research Letters on global temperatures makes the case that recent fluctuations — like the seeming "pause" from 1998-2014 and the recent string of three hottest years on record — are wholly consistent with the underlying warming trend, plus the usual 'noise.'

  • In their words: "We find that the public discussion of time intervals within the range 1998–2014 as somehow unusual or unexpected, as indicated by terms like 'hiatus', 'pause' and 'slowdown', has no support in rigorous study of the temperature data. Nor does recent talk of sudden acceleration based on three record-hot years in a row and the exceptional value in 2016."

From Amy’s notebook: Greens soften anti-nukes stance

In reaction to Amy's latest Harder Line column on the nuclear industry, experts pointed out how some environmental groups, including the Environmental Defense Fund and the Sierra Club, are beginning to cautiously back the idea that existing nuclear reactors should not close prematurely.

Why it matters: Longstanding environmental opposition to nuclear power is one of the many obstacles facing this fuel in the U.S., so the softening opposition to existing reactors closing early could help on the margins of an industry besieged. The trend to close the reactors early also has been accelerated by cheap natural gases.

The latest: The Environmental Defense Fund is by far the most explicit in its backing: Its lead lawyer, John Finnigan, wrote a blog post last week with the headline, "Why We Still Need America's Nuclear Power Plants — At Least For Now."

Action > Words: Sierra Club and the Natural Resources Defense Council aren't saying publicly that they're backing the idea, but their state chapters are supporting state deals, like this one in New York, to keep reactors open longer.

The big picture: This shift is coming just as Westinghouse, which is constructing the first new U.S. reactors in almost 40 years, is going through bankruptcy.

  • "After fighting with environmental organizations for the past three decades, it's ironic that Westinghouse's problems are happening at the same time the environmental movement is coming around to support nuclear power as a solution to climate change," Jeff Navin, partner at Boundary Stone Partners and former acting chief of staff at the Energy Department under Obama, told Axios in an email.

A new emissions roadmap

A broad coalition called the Energy Transitions Commission — which includes a range of energy and investment companies to figures like Al Gore — is out with a new roadmap for cutting global carbon emissions in half by 2040 while "stimulating economic development and social progress."

How to get there: Bloomberg explains the analysis by the coalition. "The declining costs of wind, solar and batteries will make it possible within 15 years to build power networks that get as much as 90 percent of their power from renewable sources while providing electricity at a cost that's competitive with fossil-fuels."

  • They're pushing policies like carbon pricing, phasing out fossil fuel subsidies, boosting R&D, and raising public spending.
Reality check: According to the Financial Times, the authors are warning that in order to hold the rise in global temperatures below two degrees Celsius, "the pace of improvement in energy efficiency and in cutting carbon emissions from energy production must be 'far higher' than that achieved over the past 30 years."

On tap today

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Rick Perry: The energy secretary is appearing at the Bloomberg New Energy Finance summit in New York City.

  • Context: The appearance at the cleantech-focused event arrives as the White House is pushing for steep cuts in Energy Department programs.

Paris drama: GOP Rep. Kevin Cramer will join energy experts and advocates at a Capitol Hill panel discussion on U.S. involvement in the Paris climate change accord. They will discuss whether staying in the 2015 pact creates "legal responsibilities" for the U.S.

Cramer, who advised Trump on energy during the campaign, is a prominent member of the group that advocates staying in the pact but altering the conditions of U.S. involvement.

  • For weeks he has been circulating a sign-on letter that says the U.S. should soften its emissions pledge, promote its fossil fuel industry, and push for greater focus on tech to trap carbon emissions from coal.

Tesla update: charging and production plans

A couple of items about Tesla caught my eye.

The Silicon Valley electric automaker says that it plans to double its network of charging stations this year, our tech reporter Kia reported yesterday.

The goal:

  • 10,000 Superchargers (fast-charging stations that can provide 170 miles of charge in half an hour), up from current 5,000
  • 15,000 Destination Charging connectors (stations at hotels, restaurants, etc.)
  • North American Superchargers will increase by 150%, including an additional 1,000 in California
Why it matters: One of the biggest drawbacks to electric vehicles is the fear that it won't have enough charge to reach the driver's destination and there won't be a charging station nearby.

One level deeper: Chris Nelder, an EV expert with the Rocky Mountain Institute, tells your Generate host that Tesla's plan to build stations that support a few dozen vehicles at a time is consistent with his group's view that the future will bring well-sited "charging hubs." These will be particularly useful for autonomous EVs used as taxis.

Even more on Tesla: Of course, this plan to double its charging networks will not help with a different challenge facing Tesla — the backlog of drivers who just want to purchase the company's new and less expensive car. Reuters has an interesting look at how the company is using a "risky" plan to get the upcoming Model 3 sedan into assembly line production by skipping the "relatively cheap, prototype tools" and instead starting with permanent, more expensive equipment.

Quotable

Some interesting thoughts from appearances yesterday at Bloomberg's two-day energy finance summit.

Politics: "The people who voted for President Trump are not the CEOs of Exxon Mobil, BP, Shell and Conocophillips. The people who voted for Trump and elected him think that those CEOs are part of the problem," Myron Ebell of the Competitive Enterprise Institute, who wants Trump to pull out of the Paris climate change accord, said in response to major fossil fuel companies urging the White House to remain in the accord.

Candor: "Carbon capture is total bullshit," Michael Bloomberg, who opposes coal-fired power and doesn't see much potential for commercial deployment of emissions-trapping tech, told the summit. The Associated Press has more on the former New York mayor's climate work here.

Lightning round

French election: Platts is out with a detailed report on the energy policy and market stakes in the runoff between Emmanuel Macron and Marine Le Pen. Click here to read about their differences on nuclear, wind and more.

Banks: Credit Suisse has positioned itself strongly in the "brutally competitive energy advisory business," according to a new look at the bank's energy practice in Bloomberg.

Budget: Foreign Policy got their hands on an internal document showing the specifics of how deeply the White House wants to cut State Department programs.

  • Includes a steep reduction at Bureau of Energy Resources and a "sweeping 94.5 percent cut in funding for the State Department's Bureau of Oceans and International Environmental and Scientific Affairs," a major office that works on climate change.

Transportation: Reuters explores a new report on which cities worldwide are doing the most to curb greenhouse gas emissions from transportation. Oslo, London and Amsterdam are leading the way.

People: ClearPath, a group that pushes for "conservative clean energy solutions," has plucked Jeremy Harrell from Capitol Hill to be its policy director. Harrell comes to the group from the office of Sen. Dean Heller, who he advised on energy (among other things), and he has also worked for House lawmakers.

Thanks for reading! Do you think your friends might want Generate in their inboxes each morning? Or maybe the other Axios newsletters on tech, health care, finance and politics? They're all breezy, informative reads. For free. The sign-up page is here. And your feedback and confidential tips are always welcome at ben@axios.com

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Generate

Good morning and welcome back to Generate! I hope you had a nice weekend. In case you missed it, the great Mary Keitany ran very, very, very fast yesterday and broke the women's only marathon world record in the London Marathon. And...a bit of an awkward transition...energy news is happening fast, too! Let's dive in . . .

America's nuclear failure

Rebecca Zisser / Axios

Here's a bit of my Axios colleague Amy Harder's new "Harder Line" column....

After almost 40 years and billions of dollars, the American nuclear industry's bid to revive itself is falling flat.

The latest: Self-inflicted problems on top of adverse market conditions and public fears about nuclear power has put Japanese conglomerate Toshiba on the brink of bankruptcy.

Why it matters: Toshiba is attempting to build the first new nuclear reactors in the U.S. in more than three decades. That's now in doubt. The effort represents a big chance for the industry to follow through on oft-repeated calls for an American renaissance — and, if it fails, it will exacerbate efforts to cut greenhouse gas emissions.

Why it matters, part 2: Industry officials worry that if these reactors don't come through, investments in advanced nuclear power technologies could dry up. Billionaires Bill Gates and Peter Thiel want to build futuristic reactors, but that effort would face big headwinds if the effort to build reactors using current technology falls apart. An industry that isn't growing can't innovate.

You can find the whole thing here. I recommend the read.

White House turns to energy in search for momentum

Let's check out the energy policy stakes from my colleague Jonathan Swan's scoop yesterday about President Trump's upcoming flurry of executive orders.

What's happening: We don't have details yet on the offshore energy order, but look for the White House to seek to unravel two major Obama-era decisions aimed at protecting vast swaths of U.S. waters.

  • Trump wants to rescind the December 20 decision to permanently ban development in nearly all U.S. Arctic waters and swaths of the Atlantic coast, according to an informed industry source and press accounts.
  • The White House will also likely instruct the Interior Department to rewrite Obama's 2017-2022 offshore oil-and-gas lease sale plan, which does not include any sales in Arctic waters or the Atlantic coast (the Pacific remains off-limits too).

Why it matters: Obama's moves keep most areas outside the Gulf of Mexico off-limits to development. Republicans and industry interests say this needlessly bottles up potentially huge U.S. energy resources. Green groups say development would disrupt and endanger sensitive ecosystems.

What's next: A slog. A splashy executive order will eventually be followed by court battles and lengthy bureaucratic efforts to unwind Obama's policies. Use of the Outer Continental Shelf Lands Act to permanently withdraw massive areas, as Obama did, has never been tested in court, while rewriting Interior's 2017-2022 plan requires a detailed, years-long administrative process.

Reality check: Oil-and-gas companies aren't pushing to launch hugely expansive and complicated drilling projects in Arctic waters in the foreseeable future.

  • Chilling factors including cheaper options elsewhere (think onshore U.S. shale); Shell's Arctic debacle; and, modest prices.
  • In the Atlantic, companies want to know what's actually there, because there hasn't been drilling in decades. Something to watch for is an Interior move to let companies undertake seismic undersea testing, which Obama blocked.

Trump's Earth Day message: between the lines

In case you missed it, I looked at Trump's first Earth Day statement Saturday, which promotes his environmental approach and underscores his sharp break with Obama-era policies.

Why it matters: Trump's statement arrived amid the March for Science in D.C., and cities worldwide, where demonstrators took to the streets to decry Trump's moves to cut funding for science programs, and unwind various environmental and climate regulations.

What it doesn't say: The statement breaks with many of Obama's Earth Day messages by omitting any mention of climate change

Battle lines: The 188-word statement, which appears to respond to the March without mentioning it directly, seeks to parry arguments that Trump's aggressive deregulatory push will hurt the planet, arguing that the administration is "reducing unnecessary burdens" while being mindful of the environment.

Quick take: The statement has language that's consistent with the administration's skepticism of the scientific consensus on human-induced global warming. "[R]igorous science depends not on ideology, but on a spirit of honest inquiry and robust debate," it states, using the type of phrasing that's common in climate-skeptic circles.

Lightning round

Apple: The Portland Business Journal reports on new developments in the tech giant's renewable energy push.

  • "Answering a mystery that's been brewing since last fall, Apple has revealed it's the company behind two big renewable-energy projects in Oregon — and one of them is the consumer-tech giant's largest ever."

Climate: My Axios colleague Alison Snyder's sharp look at Saturday's March for Science explores why divides over climate change are so tough to bridge.

Politics: Bloomberg looks at support for clean energy in Trump's political base. From their piece:

  • "The genie is already out of the bottle," Debbie Dooley, a Tea Party organizer and solar energy activist, said. "Renewables are popular among conservatives."

Pipelines: Clip and save for 2020. The New York Post bashes Gov. Andrew Cuomo with a new U.S. Chamber of Commerce report on the costs to consumers of thwarting natural gas pipelines.

Fracking: The Alaska Dispatch reports on efforts to bring the lower-48 shale oil revolution up north.

Week ahead

Here's a few things on our radar this week....

Earnings: First-quarter reports start rolling in this week from big energy companies. Look for reports from Exxon, Chevron, coal giant Cloud Peak Energy, renewables players including Iberdrola and First Solar, and more.

Rick Perry: The Energy secretary will speak Tuesday at the Bloomberg New Energy Finance summit in New York. So will a lot of clean energy industry players. Full agenda here.

Tax policy: The White House is slated to unveil a tax proposal this week. It won't include the border adjustment tax (BAT).

  • Why it matters: The dismal prospects for the BAT are welcome news for the oil industry, which has been wary of it from the get-go.

Congress: A House Energy and Commerce subcommittee will hold a hearing Wednesday on new draft legislation aimed at reviving the proposed Yucca Mountain nuclear waste repository.


Thanks for reading! That's all for today. Please send tips, feedback, and any interesting London Marathon analyses I might have missed to ben@axios.com.

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Trump’s Earth Day message defends science approach amid protest

Sait Serkan Gurbuz / AP

President Trump issued an Earth Day statement Saturday that promotes his environmental approach and underscores his sharp break with Obama-era policies.

Why it matters: Trump's statement arrives amid the "March for Science" in Washington, D.C., and cities worldwide, where demonstrators are in the streets decrying Trump's moves to cut funding for science programs, and unwind various environmental and climate regulations.

My Administration is committed to keeping our air and water clean, to preserving our forests, lakes, and open spaces, and to protecting endangered species.
—President Trump

What it doesn't say: The statement breaks with many of Obama's Earth Day messages by omitting any mention of climate change.

Battle lines: The 188-word statement seeks to parry arguments that Trump's aggressive deregulatory push will hurt the planet, arguing that the administration is "reducing unnecessary burdens" while being mindful of the environment.

  • It also appears to respond to the March for Science without mentioning it directly. "Rigorous science is critical to my Administration's efforts to achieve the twin goals of economic growth and environmental protection," it states.

Quick take: The statement has language that's consistent with the administration's skepticism of the scientific consensus on human-induced global warming. "[R]igorous science depends not on ideology, but on a spirit of honest inquiry and robust debate," it states, using the type of phrasing that's common in climate-skeptic circles.

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Trumpworld puts $5.5B in Interior spending under close scrutiny

Pablo Martinez Monsivais / AP

Here's two updates on how the Trump administration is putting new restrictions on funding decisions at energy and resource agencies.

Interior Department: Axios obtained an internal memo showing that high-level Trump officials at the Interior are requiring a new review of fiscal year 2017 grants and cooperative agreements of $100,000 or more before they can move forward.

  • Secretary Ryan Zinke, in the April 12 memo, notes that the agency distributes $5.5 billion in such funding annually and that he wants to better understand the "immense impact" the spending has on Interior's "mission delivery."
  • The effort includes a review of "flexibility" to direct specific grants and agreements to "new priorities" at Interior.

Energy Department: Politico Pro reported yesterday that the department has begun withholding funding on Advanced Research Projects Agency-Energy (ARPA-E) grants that have already been approved under the Obama administration.

  • Projects that received initial backing are expected to have money withheld under the "procurement hold," according to the report.
  • ARPA-E funds research and development in a wide range of "breakthrough" energy technologies. The agency has bipartisan support in Congress, but Trump's proposed fiscal year 2018 budget seek to end all funding.

Quick take: The apparent restrictions at ARPA-E could set up an early clash between Congress and the Trump administration over support for green energy R&D ahead of wider spending battles over fiscal year 2018 appropriations.

  • The apparent funding restrictions are already getting attention on Capitol Hill, where ARPA-E has backing on both sides of the aisle. An aide to Sen. Dick Durbin, who is on the Appropriations Committee, told Axios that funding for an ARPA-E recipient in Durbin's state of Illinois has been frozen.
  • The Energy Department isn't offering any details about what's happening in response to press inquiries. "As with any transition from administration to administration, we have undertaken a full review of all department programs, policies, and taxpayer funded grants," a spokeswoman said in a statement to Axios, adding that the department is "applying good governance principles to how these programs are being executed."
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Happy Friday! Welcome back to Generate, where today's topics include: oil sands, weed and money. I wish Warren Zevon was alive to write that song. Message me at ben@axios.com if you agree. And confidential tips and feedback are always welcome. Let's dive in . . .

From Amy’s Notebook: Industry splits over methane rules

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From my Axios colleague Amy Harder....

Some global oil-and-gas companies are splitting from smaller, more domestic players over whether EPA should alter or simply jettison methane emissions standards for new wells.

Why it matters: The side that prevails could signal which industry faction wields the most influence as the White House upends Obama-era policies. Oh, and methane is a powerful greenhouse gas.

What's happening: This week EPA chief Scott Pruitt said companies can forgo compliance with Obama's 2016 methane rule for at least three months. The move sets up a debate over whether to make Obama's mandate more industry-friendly, or scrap it outright.

Battle lines: Big international companies like Royal Dutch Shell want a less restrictive methane rule on the books, industry sources say. One reason is because the massive companies can comply easily. Another: being "for" the (albeit altered) rule enables the industry to tout natural gas as a solution to climate change. Burning natural gas spews way less carbon dioxide than coal, but methane leaks can erode much of that climate advantage.

However, independent producers like Pioneer Natural Resources and Devon Energy want the rule simply killed with no replacement. Why?

  • Compliance costs are a bigger deal for independents than behemoths like ExxonMobil.
  • Independents are more ideologically opposed to Obama's EPA agenda and don't believe the agency should regulate methane at all.
Thought bubble: Pruitt may be more inclined to side with the independent players. They're the top producers in Oklahoma, where he served as attorney general and had close ties to those companies.

Trump’s money squeeze at Interior and DOE

Here's two updates on how the Trump administration is putting new restrictions on funding decisions at energy and resource agencies.

Interior Department: Axios obtained an internal memo showing that high-level Trump officials at the Interior are requiring a new review of fiscal year 2017 grants and cooperative agreements of $100,000 or more before they can move forward.

  • Secretary Ryan Zinke, in the April 12 memo, notes that the agency distributes $5.5 billion in such funding annually and said that he wants to better understand the "immense impact" the spending has on Interior's "mission delivery."
  • The effort includes a review of "flexibility" to direct specific grants and agreements to "new priorities" at Interior.

Energy Department: Politico Pro reported yesterday that the department has begun withholding funding on Advanced Research Projects Agency-Energy (ARPA-E) grants that have already been approved under the Obama administration. Projects that received initial backing are expected to have money withheld under the "procurement hold," according to the report.

ARPA-E funds research and development in a wide range of "breakthrough" energy technologies. The agency has bipartisan support in Congress, but Trump's proposed fiscal year 2018 budget seeks to end all funding.

Quick take: The apparent restrictions at ARPA-E could set up an early clash between Congress and the Trump administration over support for green energy R&D ahead of wider spending battles over fiscal year 2018 appropriations.

  • The apparent funding restrictions are already getting attention on Capitol Hill, where ARPA-E has backing on both sides of the aisle. An aide to Sen. Dick Durbin, who is on the Appropriations Committee, told Axios that funding for ARPA-E recipient in Durbin's state of Illinois has been frozen.
  • The Energy Department isn't offering any details about what's happening in response to press inquiries. "As with any transition from administration to administration, we have undertaken a full review of all department programs, policies, and taxpayer funded grants," a spokeswoman said in a statement to Axios, adding that the department is "applying good governance principles to how these programs are being executed."

New look for auto group

New look: The Coalition for Advanced Diesel Cars, a lobbying and advocacy group of several auto industry suppliers, is about to relaunch with a broader focus as the Alliance for Vehicle Efficiency. The group's members are: Bosch, BorgWarner, Honeywell, Johnson Matthey, and Umicore.

Driving the change: The market has shifted, and the development of other technologies warrants advocacy beyond diesel, executive director Jeffrey Breneman tells Axios in an email.

  • "For example, many of the technologies we will promote (turbos, 48v batteries, transmissions, emissions technologies, etc.) can be utilized on a diesel or gasoline model," he said.
  • The change also comes as the market for diesel has become very tough, especially with scandal-plagued VW's models coming off the market, though there are still automakers in the diesel space.

The goal: The group believes that widespread market adoption of "innovative" internal combustion engine improvements and other advanced efficiency tech has "positive impacts for the U.S. economy, jobs, consumers and environment."

Exxon’s sanctions relief bid hits Capitol Hill resistance

The Wall Street Journal is out with an update to its scoop on Exxon's quiet bid for a waiver from U.S. sanctions against Russia in order to proceed with a key drilling project there. (We explored the topic in yesterday's Generate.)

Lining up against it: Prominent Capitol Hill players including GOP Sen. Marco Rubio have joined the ranks of lawmakers calling on the Trump administration to oppose the request.

  • "While a waiver to allow business with prohibited Russian entities may be in Exxon Mobil's interest, it would clearly not be in America's national security interest," Rubio told the paper.

Lobbying

Here's a few newly surfaced lobbying disclosure filings....

Solar: Tesla has brought on Rubin and Rudman LLP to lobby on "Solar energy and storage related issues."

Oil-and-gas: Marathon Oil has hired Four Rivers Consulting to lobby on "all issues" related to domestic oil-and-gas production. PDC Energy has brought on the Coffee Group to work on "air regulation and emissions matters."

Power: Dominion Resources Services has tapped D Squared Tax Strategies, LLC to lobby on "overall electricity legislation."

Coal: Clean Coal Technologies Inc. is now represented by Squire Patton Boggs, which is lobbying on federal funding for low-emissions tech.The Lignite Energy Council has hired Hollier & Associates to lobby on Energy Department appropriations.

Lightning round: Oil sands, pot, and money

Oil sands: BP may sell its stake in several Canadian oil sands projects, Reuters reported.

  • BP would be the latest international oil major to shed holdings there, and the U.S. shale boom could be a reason. "BP would deploy capital in more attractive regions, such as the Permian basin in the United States, where the rate of return tends to be higher," Reuters notes.
Weed: The California Public Utilities Commission is out with a new summary of its exploration of how to ensure power demand associated with newly legal recreational weed doesn't collide with the state's clean energy goals. Growing pot is energy intensive.
  • The commission is creating a "Cannabis Working Group" that will weigh policies "up to and including the possibility of a specific energy tariff for cannabis cultivation"

Tesla: The electric automaker is voluntarily recalling 53,000 Model S and Model X vehicles built between February and October 2016 because a faulty electric parking brake could remain engaged. No accidents or injuries have been reported, Tesla said.

Finance: World Bank President Jim Yong Kim says the White House uncertainty about the Paris accord won't change the group's approach to financing alternative energy projects, according to MarketWatch.

  • Al Gore and others will join Kim onstage for a panel discussion in D.C. later today on "unlocking financing for climate action."
People: Former Energy secretary Ernest Moniz is the first "distinguished fellow" with the Emerson Collective, a nonprofit "social impact" group. One major focus will be aiding areas where the shift to low-carbon energy is affecting jobs and "communities where infrastructure designed for heavy industry and manufacturing has weakened economic equality," the group said.

Up, up and away

WMO

The World Meteorological Organization noted this on Twitter this morning.

That's it for today! Thanks for reading, and Generate will be back Monday. Until then, you can find more coverage in the Axios stream. Have a great weekend.

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Generate

Good morning and welcome back to Generate, where your host is admiring the Wall Street Journal's awesome headline a couple days ago, with its inclusion of an iconic 80s music and movie reference ("Highway From the Endangerment Zone.") Respect. Confidential tips and, of course, your feedback is welcome at ben@axios.com. Let's dive in . . .

Trump vs. the world on climate

Giphy

Happening today: Trump meets with Italian Prime Minister Paolo Gentiloni at the White House. It's unclear whether they'll talk about climate change, but the White House says it plans to decide its stance on the Paris climate accord ahead of the G-7 meeting that Gentiloni is hosting in Sicily in late May. Maybe they'll even get a question about it at their joint press conference.

Tension: The latest sign of the climate split between Europeans and Trump, who is aggressively rolling back Obama-era emissions curbs, arrives via the Washington Post.

  • "It's clear that we cannot expect the same kind of leadership from the U.S. following the change in administration," Miguel Arias Cañete, the European Union's climate action and energy commissioner, told the paper.

The whole world is watching: Inside Climate News reports on an obscure United Nations document that features inquiries to the U.S. from China, the EU, and others about how the U.S. intends to meet its emissions targets.

  • "The queries are an early sign that tense negotiations lie ahead if the U.S. does not quit the climate talks outright," the website reports, adding that the questions signal "widespread concerns" that Trump's policies will make it impossible for the U.S. to meet its international emissions pledges.
Pressure point: One administration insider, who favors staying in Paris, is making the case that bailing on the pact is actually inconsistent with Trump's "America First" mantra. "What opponents to Paris want is an America Alone approach, not America First," the source told my Axios colleague Amy Harder. Syria, Uzbekistan and Nicaragua are the only nations that have not signed onto the Paris deal.

A closer look at Musk's semi-truck battery

Axios battery wizard Steve LeVine has a very interesting new post up about Tesla's plans to enter the heavy trucking market. Here's a bit of his item, but I really recommend checking out the whole thing here. Take it away....

Elon Musk's latest product — an electric Tesla semi-truck that he said he will introduce in September — is less outlandish than some have suggested, according to a leading battery researcher.

Why it matters: Musk threatens to upend the truck-making industry, as he has with electric cars — at least as posed by an analyst with Piper Jeffray this week who downgraded and revised his ratings on a few makers of conventional semi-trucks in light of the coming Tesla model. In addition, semi-trucks are responsible for an estimated 20 percent of greenhouse gas emissions from the U.S. transportation sector.

Gerbrand Ceder, a materials scientist at UC Berkeley, says in a back-of-the-envelope calculation that a battery capable of powering a long-haul semi-truck for 500 miles on a single charge would cost roughly $70,000 and weigh around three tons. If fast-charging standards are upgraded to account for the trucks, an hour of fast-charging could replenish about 300 miles of range, he said. Fuel savings could pay it off in fewer than five years.

Influence

Your Generate host likes looking at the Lobbying Disclosure Act database, where you can learn things like....

Coal giant Peabody Energy has tapped Polsinelli PC, including former Rep. John Shadegg, to lobby on, well, something or other. The newly posted Lobbying Disclosure Act registration filing simply says, "legislation related to energy issues." (Reminder: LDA filings are often really vague, which frustrates transparency advocates.)

Fulcrum Bioenergy, Inc. has brought on Hogan Lovells US LLP to lobby. The company, which won a USDA loan guarantee a few years ago, seeks to turn household garbage into low-carbon transportation fuels.

FuelCell Energy, Inc. has signed up Foley & Lardner LLP, including former Rep. Scott Klug, to lobby on their behalf. The goal, according to their filing, is to "restore fuel cell tax credits and Department of Energy fuel cell research funding."

Northeast Public Power Association has hired Meguire Whitney, LLC to lobby for them, and their form lists the issues as "energy, utilities, nuclear, tax."

More influence

An item in the Axios stream yesterday looked at the new disclosure of donors to President Trump's inaugural committee. Energy interests on the list include:

  • J. Clifford Forrest, coal executive, $1 million
  • Green Plains, ethanol producer, $1 million
  • Chevron, $525K
  • Exxon Mobil, $500K
  • Chevron, $500K
  • Citgo Petroleum, $500K
  • Murray Energy Corporation, $300K
  • Nextera Energy, $250K
  • Valero, $100K
  • Anadarko Petroleum, $100K
  • Clean Energy Fuels Corp., $100K

​Fallout from Exxon's Russian sanctions relief bid

The Wall Street Journal had the scoop yesterday that Exxon Mobil is asking the Treasury Department for a waiver from sanctions against Russia in order to resume work with Rosneft on a drilling project in the Black Sea.

  • Perspective: My Axios colleague Steve LeVine notes that "[i]f granted, the waiver would erode one of the most powerful American levers against Russia in terms of getting it to pull back from Ukraine."
  • Fallout: Exxon's push has gained quick notice and criticism on Capitol Hill. "Are they crazy?" wondered prominent GOP Sen. John McCain on Twitter. Rep. Adam Schiff, the top Democrat on the House Intelligence Committee, gave a statement to the WSJ calling on Treasury to reject the request. Democratic Sen. Ron Wyden tweets: "Current Exxon CEO asks Former Exxon CEO now Sec. of State to waive Russian sanctions. Right…"
  • To be sure: The request is with Treasury, not Secretary of State and former Exxon chief Rex Tillerson's department, but the WSJ notes that State would have input. Tillerson has recused himself from Exxon-related matters for two years. But Wyden's tweet and other Capitol Hill responses exemplify how tricky the politics of the request have immediately become.

The promise and challenge of renewables jobs for coal workers

Potential: The Louisville Courier-Journal reports that a coal mining company in eastern Kentucky, where mining employment has been falling, is planning to build " what could become the state's largest solar farm on a reclaimed mountaintop strip mine, promising jobs for displaced coal miners."

Caution: A blog post this week up at the University of California's Haas School of Business looks at, among other things, the overall national potential for displaced coal industry workers to transition to the renewable energy industry.

  • Citing an Energy Department report, Energy Institute at Haas executive director Andrew Campbell notes several challenges — such as the fact that coal industry job losses and renewables industry job gains tend to be located in different regions. The piece also notes, however, that jobs at utility-scale solar projects (which is relevant to the story above) tend to pay more than rooftop installations.

Lightning round

Finance: Reuters reports on a new wrinkle in Saudi Aramco's massive IPO plans. "China is creating a consortium, including state-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering."

Tech: MIT Technology Review looks at the potential for blockchain to enable local solar energy microgrids, with a focus on the Brooklyn Microgrid.

EPA: The Associated Press obtained documents showing that Dow Chemical is urging the Trump administration to "scrap the findings of federal scientists who point to a family of widely used pesticides as harmful to about 1,800 critically threatened or endangered species."

  • "Lawyers representing Dow, whose CEO also heads a White House manufacturing working group, and two other makers of organophosphates sent letters last week to the heads of three Cabinet agencies. The companies asked them 'to set aside' the results of government studies the companies contend are fundamentally flawed."

Oil sands: Big international oil players including Shell have been dumping their holdings in Canada's oil sands. Bloomberg has a look at the effect of the consolidation of the operations in Canadian corporate hands.

  • "Cenovus Energy Inc. and Canadian Natural Resources Ltd. are betting they can exploit new technologies and their deeper understanding of Canadian-specific issues, such as environmental rules and relations with native communities, to profit from one of the world's biggest hydrocarbon reserves without their former partners."

That's it for today! Thanks for reading everyone.

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Generate

Good morning and welcome back! Yesterday I was so jazzed by the Boston Marathon news that I forgot to mention something: Axios has a bunch of smart, breezy newsletters on tech, health care, politics and business that you can sign up for here. They're free! Ok let's dive in . . .

Paris suspense builds

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Still happening, eventually: In case you missed the Axios stream yesterday, a hotly anticipated White House meeting on the Paris climate accord didn't occur because, the administration said, key players were traveling with President Trump. "It will be scheduled at some point over the next couple of weeks," spokeswoman Sarah Sanders told reporters.

  • Sanders, on Air Force One, batted aside the suggestion that discord among top advisors about whether to withdraw from Paris was behind the scuttling of the meeting. "They wanted to have that conversation. Since they haven't had it, I don't think they could say that there's a lot of discord between where everyone is. And that's the purpose of the meeting," she said.

Filling the void: Well, nothing happened yesterday that could match the kinetic excitement of a (likely inconclusive) session of people sitting around a table talking about policy. But a couple things of note . . .

Some conservative House Republicans sent Trump a letter urging him to get out of Paris, including Reps. David McKinley and Paul Gosar, who posted it on his website. A dozen members signed the letter, according to Politico.

Why it matters: The low number of signatures signals that it's not a priority for many Republicans on Capitol Hill. "The constituency pushing that agenda is small, alienated, and getting less relevant by the day," one industry source tells Axios.

  • In contrast, there's wide support among GOP lawmakers and business groups aligned with fossil fuel companies and manufacturers for unwinding President Obama's domestic climate regulations, which the administration is pursuing with gusto.

What to watch, part 1: How many signatures Rep. Kevin Cramer eventually gets on a competing letter he's circulating for signatures. It argues for a separate path — staying in Paris but scaling back the Obama-era emissions pledge, defending U.S. fossil fuel sectors and promoting deployment of tech to capture carbon from burning coal.

What to watch, part 2: On Thursday, Trump will meet with Italian Prime Minister Paolo Gentiloni. The White House says the administration will reach its decision on Paris ahead of the G-7 summit in late May that Italy is hosting. It's possible they'll get a question about it at their joint press conference.

Recommended read: Vox has a good article that explores the repercussions of both abandoning Paris and staying in while seeking to scale back U.S. commitment. On the abandon side…

  • There's concern that some big developing nations where emissions are rising could scale back their efforts to rein them in. "If that were to happen, the chances of avoiding severe global warming would start to look far more dire."
  • "China, the world's largest emitter, would be poised to assume a dominant role in future talks, and its leaders have tended to argue for looser oversight and accountability mechanisms within the deal than the U.S. has."

From Amy's notebook: Forget King Coal, it's King Gas now

Energy Information Administration

My colleague Amy Harder has a quick observation on some data that the Energy Department highlighted yesterday....

Natural gas is poised to be the top electricity source for the third straight summer this year, the Energy Information Administration said.

Why it matters: There's a saying that three makes a trend, and thus worth writing about. Natural gas has been creeping past coal in the U.S. electricity market for a few years now, fueled by plentiful supplies, cheaper prices and a cleaner profile. This latest data by the government shows how its market dominance is solidifying — no matter what the Trump administration does. For decades as the top U.S. power fuel, coal was dubbed King Coal, but the crown has now really been handed over to natural gas.

Tech notes

Oil: Bloomberg has a nice look at how the oil price collapse helped drive the industry to fully embrace high tech.

  • "[T]hey're using DNA sequencing to track crude molecules and mapping buried streams with imaging software. Robots are fitting pipes together. Roughnecks consult mobile apps for drilling-direction advice."
  • Sign of the times: Schlumberger, the big oilfield services provider, "recently opened an office on Sand Hill Road in the heart of Silicon Valley."

Solar: The National Renewable Energy Laboratory, an international team that includes Energy Department scientists, is out with a new paper in Science that explores the pathway for adding 5-10 terawatts of global solar photovoltaic capacity by 2030.

  • "Reaching that figure should be achievable through continued technology improvements and cost decreases, as well as the continuation of incentive programs to defray upfront costs of PV systems," an NREL summary states.

Lightning round

Tesla: Barron's explores why one analyst, Piper Jaffray's Alexander Potter, is taking Elon Musk's plan to build electric semi trucks very seriously.

  • "He feels strongly enough about Tesla's potential in this industry that he downgraded shares of Paccar, a truck manufacturer, and Cummins, which makes engines, based partly on the threat from electric vehicles."

EVs: Speaking of Tesla, Bloomberg reports that Volkswagen is getting ready to challenge the Silicon Valley automaker with plans to unveil four "affordable" electric vehicles in the coming years, while its Audi division is readying an "upscale battery-powered crossover it aims to introduce in 2019."

Iran: The Associated Press reports that the Trump administration "notified Congress that Iran is complying with the terms of the 2015 nuclear deal negotiated by former President Barack Obama, and says the U.S. has extended the sanctions relief given to the Islamic republic in exchange for curbs on its atomic program."

Climate change: The New York Times magazine has a lengthy but highly readable look at the prospect of curbing global warming by spreading particles high in the atmosphere that reflect some solar energy away from the planet. It's pegged to the launch of Harvard's new Solar Geoengineering Research Program, which includes Bill Gates among its funders.

  • "The new Harvard program is not merely intent on getting its concepts out of the lab and into the field, though; a large share of its money will also be directed to physical and social scientists at the university, who will evaluate solar geoengineering's environmental dangers — and be willing to challenge its ethics and practicality."

More climate change: The Washington Post examines what a team of researchers are "describing as the first case of large-scale river reorganization as a result of human-caused climate change."

One cool thing

Interior Department

This is kind of like saying you just learned the Rolling Stones have some good songs, but whatever....The Interior Department's Instagram feed is featuring some lovely shots of U.S. national parks and monuments, like the photo above of Bryce Canyon in Utah posted a couple days ago. (Your Generate host is admittedly biased toward the National Parks as he was a short-order cook at the spectacular Mount Rainier National Park 24 years ago.)

That's all for today. Thanks for reading and please keep the tips and feedback coming. You can find me at ben@axios.com. We'll see you back here tomorrow and during the day in the Axios stream.

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White House scuttles Paris climate meeting

The White House postponed a meeting Tuesday on the administration's approach to the Paris climate accord, blaming the schedules of staffers — Reince Priebus, Steve Bannon, Kellyanne Conway and Stephen Miller — traveling with President Trump. It did not provide a rain date.

Slated to attend the meeting, per various news outlets: Bannon and EPA Administrator Scott Pruitt, who both favor abandoning the pact, as well as Jared Kushner, who supports remaining in the accord, and Secretary of State Rex Tillerson, who has said the U.S. should maintain a "seat at the table" in global climate talks.

Why it matters: The eventual decision on whether to remain in the 2015 international pact is one of the biggest unresolved climate policy questions at the White House.