Ben Geman
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GE sells Industrial Solutions unit for $2.6 billion

Photo: Paul Sakuma / AP

ABB, the Swiss multinational tech and engineering giant, announced a $2.6 billion deal Monday to acquire GE Industrial Solutions, the General Electric unit that makes an array of electrical equipment.
  • "With GE Industrial Solutions, we strengthen our Number 2 position in electrification globally and expand our access to the attractive North American market," ABB CEO Ulrich Spiesshofer said in a statement.
  • The GE unit — which makes a wide range of electrical equipment like transformers and circuit breakers — had revenue of $2.7 billion last year, according to ABB.
  • Go deeper: The Wall Street Journal explores how the deal is part of GE's efforts to streamline its sprawling operations.
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Good morning and welcome back. Let's head into the weekend . . .

Solar industry girds for Trump persuasion campaign on trade

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Late this morning the U.S. International Trade Commission will make a hotly anticipated ruling about whether cheap imports of solar panel equipment from Asia and elsewhere are a major cause of "serious injury" to domestic manufacturers.

Focus shifts to Trump administration: If the ITC rules in favor of the financially distressed petitioners Suniva and SolarWorld, the White House will decide in coming months whether and how severely to impose import penalties to protect the struggling domestic panel industry.

Pro-tariffs: "President Trump can remedy the industry's injury with relief that ensures U.S. energy dominance that includes a healthy U.S. solar ecosystem and prevents China and its proxies from owning the sun," Suniva said in a statement.

Anti-tariffs: The wider solar sector, including the Solar Energy Industries Association, has urged the ITC to reject the petition, warning that new tariffs and price floors would cause project costs to soar, badly hindering solar energy's growth in the U.S. and the jobs that come with it.

  • SEIA and its allies, including a wider business alliance called the Energy Trade Action Coalition, have already been waging an aggressive PR campaign against the import penalties. (Just yesterday SEIA circulated an anti-tariff letter to the ITC from four governors.)

What we're hearing: The industry and its allies are preparing to ramp up their efforts to make their anti-tariff case to White House officials if the decision lands in Trump's lap.

  • SEIA CEO Abigail Ross Hopper said the group will employ a strategy of inside persuasion as well as continue what has been highly public advocacy. "We play the inside game and the outside game and would continue to do both," she said.
  • Another industry source said targets of industry lobbying outreach would be broad, including the vice president's office, White House trade advisor Peter Navarro, White House energy advisor Mike Catanzaro, and Commerce secretary Wilbur Ross.
Big picture: "The imposition of tariffs would...likely affect the pace of decarbonization in the U.S. by delaying investments in solar generation and, in turn, extending the life of some coal plants," Moody's said in a note.

All eyes are on Vienna's OPEC meeting today

Ministers from OPEC nations and allied producers are meeting in Vienna today to take stock of the production-limiting deal that's aimed at taming the glut of crude oil in global markets.

One big question: Observers of the committee meeting will be looking for hints of whether the deal will eventually be extended beyond the first quarter of next year, when it's currently scheduled to sunset.

Where it stands: There has been progress cutting excess supplies, mainly due to compliance with the deal by the cartel and its allies, combined with strong global oil demand growth and the currently modest pace of U.S. production increases, Goldman Sachs points out in a note Friday.

  • The result? Goldman Sachs says there's no rush to make a decision. "This progress made in the rebalancing suggests that it is in OPEC's interest to wait before committing to an extension of the cuts."
  • A Bloomberg story Friday morning echoes that sentiment. "OPEC and its allies indicated that they'll wait a bit longer to see if further action is required in their bid to clear a global oil glut," they report.

Yes, but: Despite the progress, another WSJ piece this morning delves into one of the big challenges facing OPEC, Russia, and other countries seeking to tighten the market. OPEC, they note, is "scrambling to contain output from its strife-torn members Libya and Nigeria, where surging production could threaten to derail the oil cartel's efforts to withhold crude supply and raise its price."

Also in play: One issue they're discussing is whether stepped-up tracking of producers' crude oil export levels is needed. Via Reuters: "OPEC officials have said exports have become a key metric tracked by the market because they have a more direct impact on the international supply than production."

Be smart: Platts OPEC reporter Herman Wang has a front row seat to the action. You can follow him on Twitter here.

Venezuelan oil embargo still under consideration

Nikki Haley, the U.S. ambassador to the United Nations, told reporters yesterday that the Trump administration hasn't ruled out blocking crude oil shipments from Venezuela. "It's not off the table, I can tell you that," she said.

  • Why it matters: Thwarting Venezuelan oil exports to the U.S. would represent a major escalation of sanctions. But it remains highly unclear if the U.S. is willing to take that step. U.S. refiners that buy Venezuelan crude have pushed back against the idea, while some members of the administration have expressed wariness of sanctions that would hurt the Venezuelan public.

In focus: Corporate procurement driving renewables growth

A new Deloitte report scans the horizon of green power purchase deals among companies and concludes that "corporate procurement now rivals policy as a driver of growth in the sector."

A few takeaways:

  • 215 Fortune 500 companies have a sustainability target, a renewables target, or both, according to the report which cites stats from the group Advanced Energy Economy. But Deloitte adds that lots of small- and mid-cap companies are also in the game.
  • Multiple factors are driving the trend, including: growing cost-competitiveness of wind and solar; reputation enhancement and customer/investor demand; and a hedge against fossil fuel price volatility.
  • Trump's decision to bail on the Paris climate deal isn't likely to affect the trend and may even enhance it.
  • Warning: The report notes that hurdles remain, notably the complexity of power purchase agreements.

Why it matters: Corporate decisions on low-carbon energy are poised to take on an increasingly important role at a time when the Trump administration is rethinking or backing off policies that can help speed commercial deployment.

***

Apple's latest moves: The tech behemoth yesterday announced the latest steps in its efforts to bolster renewables at its facilities worldwide and in its massive supply chain. Apple said that its facilities in Japan are now supplied by 100% renewable energy, and the worldwide total is 96%.

  • Supply chain: "Apple has added six new suppliers to its Supplier Clean Energy Program who are committed to 100 percent renewable energy for their Apple production. The new companies are Qorvo, Wistron, Mega Precision, Golden Arrow, Yuto, and Sunway Communication," the company said.

On my screen (and in my earbuds)

Fracking: The Hill reports that the 10th Circuit Court of Appeals dismissed litigation over an Obama-era Interior Department regulation of hydraulic fracturing on public lands, ruling that the lawsuit is unnecessary because the Trump administration is working to repeal the rule.

  • "The court also vacated a lower judge's ruling that the Bureau of Land Management had overstepped its bounds by trying to regulate fracking," they report.

White House huddle: Via Politico, "Trump administration officials huddled at the White House on Wednesday in a bid to chart a more cohesive energy and environmental policy strategy, including a game plan for communicating its position on climate change."

Efficiency: The Rocky Mountain Institute released a series of podcasts related to the annual Climate Week NYC. RMI's Iain Campbell has some useful comments about buildings and energy in this one, including:

  • Buildings' energy use account for 30 percent of global greenhouse gas emissions, so making them more efficient is a key part of holding the global temperature rise to two degrees Celsius above preindustrial levels. "We actually would have no chance to achieve that without a major decarbonization of buildings," he notes.
  • There's an important nexus between renewable energy and building efficiency. One example: "If you were putting solar panels on your home, would you put on the solar panels necessary to power incandescent lightbulbs? Probably not, [it] doesn't make sense."
  • Increasing the efficiency of buildings in order to need less electricity is important amid the transition to electric vehicles. "If we decarbonize buildings, we also create the capacity necessary to power the electric vehicles that we are going to increasingly see with the electrification of the transportation system," he said.

An inside perspective on the DOE grid study

Behind the scenes: Let's send another moment with a good podcast I flagged yesterday, the latest episode of Grid Geeks. I didn't mention that one key author of the high-profile DOE grid report, the energy consultant Alison Silverstein, dishes a little starting at 29 minutes in.

Takeaways . . .

No interference: Silverstein bats aside the idea that higher-ups at DOE sought to bend the analysis and research toward a pre-ordained conclusion or outcome. The report ultimately placed less blame for baseload plant retirements on pro-renewables policies and environmental regs than some had feared.

"DOE management had a lot of warning about where the facts were going, but no one ever tried to interfere, no one ever tried to deny the facts, no one tried to tell me what to write," she said.

  • "The whole plotline about this evil cabal of DOE people who were going to squash it? Didn't happen."

Yes, but: Silverstein gently critiques how DOE summarized the findings of the lengthy and detailed analysis she helped craft of what's driving power plant retirements, noting that they downplayed a couple of factors, including:

  • "Wholesale electric competition works. It kicked into gear around 2000 and it did exactly what it was supposed to do, which is drive inefficient, high cost generation out of the market and incent more efficient generators into the places that we need them," she said.

As for environmental regulations and subsidized renewables, "both of those causes came late to the party."

  • "They didn't cause most coal or nuclear plant retirements, they just exacerbated the problems, and in the case of regulations, they set a lot of the retirement dates for a lot of those plants," she said, noting that most coal plants that went offline were inefficient and not especially competitive, which is why the owners didn't invest in retrofits to meet emissions rules.

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The meaning of Lindsey Graham’s carbon announcement

GOP Sen. Lindsey Graham and Democratic Sen. Sheldon Whitehouse are teaming up to "put a price on carbon." Photo: John Minchillo / AP

GOP Sen. Lindsey Graham announced at a climate change event at Yale Tuesday that he's working with Democratic Sen. Sheldon Whitehouse on legislation to "put a price on carbon." He didn't get into details, but Whitehouse has for years been pushing a carbon tax.

The big question: Whether Graham's announcement can lead to other sitting GOP senators coming out in support of pricing carbon in some fashion beyond the tiny circle that already has in years past.

In the Senate that's...

  • Graham himself, who worked with then-Sens. John Kerry and Joe Lieberman on a cap-and-trade plan in 2010 but ditched the talks, dooming any slim chance of passage.
  • John McCain, who co-sponsored cap-and-trade bills in the 2000s.
  • Susan Collins, who offered a carbon-capping bill with Democrat Maria Cantwell in late 2009.
  • Jeff Flake (sort of), who co-sponsored a carbon tax bill in 2009 as a House member, though he later walked away from the idea, suggesting it had been a tactical move to counter cap-and-trade legislation he opposed.

Why you'll hear about this again: The ecosystem of conservative and free-market groups trying to work with Republicans is larger and better organized than it used to be. A number of groups have emerged in recent times, such as the Niskanen Center and the Alliance for Market Solutions.

  • The highest profile has been the Climate Leadership Council, which launched earlier this year and is led by GOP elder statesmen including James Baker and Hank Paulson. The group is pushing a plan that, among other things, would create a carbon tax with the revenues returned to the public via dividend payments, while scuttling emissions regulations that the group says are no longer needed with the tax in place.
  • Indeed Graham's videotaped remarks to the Yale event were at a session where Baker was the speaker. Founding members of the group include oil-and-gas giants Exxon, Shell, BP and Total, as well other large corporations.

Reality check: I should have cleared the decks already by noting by there's probably zero chance of a carbon tax moving anytime in the next few years — especially under a GOP administration that's dismantling the regulations that may have helped to force tax-curious lawmakers to the table.

Yes, but: Graham's announcement shows the idea has a faint pulse. The question now is whether it gets any stronger. At an American Enterprise Institute event in July, Whitehouse said he and Democratic co-sponsor Brian Schatz have had discussions with six to 10 GOP lawmakers (scroll to the 24-minute mark of the video here).

  • Ted Halstead, the CLC's executive director, said there's a larger appetite among Capitol Hill Republicans to his group's idea than has been made public. He tells Axios: "Behind closed doors there's a lot of interest in what we are proposing."
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Good morning and welcome back to Generate!

Two quick notes before we get started. The first is that Axios health care reporters are putting out vital news and analysis every day on the latest GOP health care bill. So please keep an eye on the Axios stream, and you can sign up for our free morning health care newsletter here.

The second: Happy birthday to the late and brilliant poet and songwriter Leonard Cohen, who would have been 83 today. RIP. This is beautiful, and for that matter, so is this.

Huge in solar tomorrow: trade verdict

My Axios colleague Amy Harder passes along this primer on the biggest storyline in the solar world...

The solar industry is on edge ahead of tomorrow's vote by the International Trade Commission on whether it finds domestic solar manufacturers have been injured by cheap foreign imports. If it does — and most observers expect it will — President Trump makes the final decision on whether to impose tariffs or other trade remedies.

Driving the news: A Greentech Media article published Wednesday is making waves because it backs up the narrative asserted by the two bankrupt manufacturers, Suniva and SolarWorld: that tariffs would help revive the domestic solar manufacturing sector. The story quotes foreign solar companies weighing opening U.S. facilities as a way to hedge against potential tariffs Trump might impose.

Quoted: "If [new tariffs] come into effect, I think the clear direction that will emerge from this is that manufacturing in the U.S. will be incentivized, or supported by direct or indirect means," Gagan Pal, chief marketing officer of fast-growing Indian photovoltaic manufacturer Adani Solar, told Greentech Media.

Why it matters: This storyline feeds straight into Trump's "America First" manufacturing mantra, fueling the prediction Trump will likely issue tariffs. It also provides a competing narrative to the louder and larger opposition, led by the Solar Energy Industries Association, which has argued tariffs would raise the cost of solar panels and hurt other jobs in the sector.

The meaning of Lindsey Graham’s carbon announcement

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Let's spend a little more time with news about GOP Sen. Lindsey Graham that's not about his authorship of the latest GOP move to jettison the Affordable Care Act. Instead it's Graham's announcement, in remarks to a climate change event at Yale Tuesday, that he's working with Democratic Sen. Sheldon Whitehouse on legislation to "put a price on carbon." He didn't get into details, but Whitehouse has for years been pushing a carbon tax.

The big question: Whether Graham's announcement can lead to other sitting GOP senators coming out in support of pricing carbon in some fashion beyond the tiny circle that already has in years past. In the Senate that's...

  • Graham himself, who worked with then-Sens. John Kerry and Joe Lieberman on a cap-and-trade plan in 2010 but ditched the talks, dooming any slim chance of passage.
  • John McCain, who co-sponsored cap-and-trade bills in the 2000s.
  • Susan Collins, who offered a carbon-capping bill with Democrat Maria Cantwell in late 2009.
  • Jeff Flake (sort of), who co-sponsored a carbon tax bill in 2009 as a House member, though he later walked away from the idea, suggesting it had been a tactical move to counter cap-and-trade legislation he opposed.

Why you'll hear about this again: The ecosystem of conservative and free-market groups trying to work with Republicans is larger and better organized than it used to be. A number of groups have emerged in recent times, such as the Niskanen Center and the Alliance for Market Solutions.

  • The highest profile has been the Climate Leadership Council, which launched earlier this year and is led by GOP elder statesmen including James Baker and Hank Paulson. The group is pushing a plan that, among other things, would create a carbon tax with the revenues returned to the public via dividend payments, while scuttling emissions regulations that the group says are no longer needed with the tax in place.
  • Indeed Graham's videotaped remarks to the Yale event were at a session where Baker was the speaker. Founding members of the group include oil-and-gas giants Exxon, Shell, BP and Total, as well other large corporations.

Reality check: I should have cleared the decks already by noting by there's probably zero chance of a carbon tax moving anytime in the next few years — especially under a GOP administration that's dismantling the regulations that may have helped to force tax-curious lawmakers to the table.

Yes, but: Graham's announcement shows the idea has a faint pulse. The question now is whether it gets any stronger. At an American Enterprise Institute event in July, Whitehouse said he and Democratic co-sponsor Brian Schatz have had discussions with six to 10 GOP lawmakers (scroll to the 24-minute mark of the video here).

  • Ted Halstead, the CLC's executive director, said there's a larger appetite among Capitol Hill Republicans to his group's idea than has been made public. He tells Axios: "Behind closed doors there's a lot of interest in what we are proposing."

Puerto Rico has no electricity after Maria

Emergency: Hurricane Maria has left Puerto Rico completely without electricity. Gov. Ricardo Rosselló tells CNN that fully restoring power could take months.

  • From their piece: "Rosselló said officials think some power stations are not badly damaged, but the distribution system is ruined. If transmission lines are in better shape than thought, power outages might be fixed sooner, the governor said."

Useful: NBC provides info and links here to some of the organizations helping with relief efforts and accepting donations.

Electricity notes: hurricanes and the "resilience" conversation

Data on Florida power outages and restoration after Hurricanes Irma and Wilma. Chart: EIA

Sunshine state stats: The Energy Information Administration has posted an interesting report about electricity outages and restoration in Florida after Hurricane Irma pummeled the state, knocking out power to roughly two-thirds of the state's customers.

One thing it reveals is how much more quickly electricity was restored compared with Hurricane Wilma 12 years earlier (see the chart above). Via EIA:

  • "Since 2005, Florida Power & Light and other utilities in the state have made significant investments to improve their hurricane preparedness. These utilities have upgraded electric infrastructure, including replacing wooden utility poles with concrete poles. Utilities have also deployed smart grid technologies, which provide more timely and more accurate information about outages and can help utilities better target restoration efforts."
Go deeper: The new episode of the Grid Geeks podcast is a very lucid and helpful discussion grid resilience and reliability, and the differences between them.

An obscure document that matters

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Behind the scenes: The White House Office of Information and Regulatory Affairs has been posting records of outside parties coming in to meet with aides about EPA's plan to jettison the Clean Power Plan (CPP), which was a major Obama-era rule to cut carbon emissions from power plants.

What's happening: A newly posted record about a meeting requested by a power industry group called the Coalition for Innovative Climate Solutions highlights an important dynamic in the CPP fight. Here's a key line from the paper they gave to administration aides (emphasis added):

  • "Repealing the rule without promulgating a replacement would create a regulatory vacuum, leading to uncertainty about the requirements that may be imposed in future rulemakings and, potentially, exposing companies to increased risk of citizen suits."
  • The wonky paper from the group, which includes companies with substantial coal-fired generation, is an example of the tension surrounding EPA's plan. Even industries that didn't like the Obama-era rules and that want weaker regulation are worried about the prospect that EPA might just scuttle the CPP without creating a new regime.

Go deeper: A recent story in Politico goes into detail on this topic, noting that the Trump administration is weighing plans to offer a replacement rule, a step that would "would run afoul of demands from some conservative activists, who have pressured EPA Administrator Scott Pruitt to reject the idea that climate change is a problem requiring federal action."

On my screen: EVs, oil, lobbying, climate change

Electric vehicles: Two items to pass along about the global EV market.

Via Reuters, the Chinese automaker BYD offered a prediction about how quickly China, the world's largest auto market, might seek to transition away from traditional fossil-fuel powered cars. From their item: "All vehicles in the country will be 'electrified' by 2030, which could range from full electric cars to mild hybrids, BYD Chairman Wang Chuanfu said on Thursday."

Bloomberg reports: "The only electric-car maker in India says the business case for the clean technology is starting to make sense — and it won't require government subsidies to take off in a big way."

Oil production agreement: On our radar tomorrow is a meeting of officials from OPEC, Russia and other countries in Vienna to review the production limiting agreement. The big question is whether signs will emerge if they will extend the output cuts beyond the first quarter of 2018, when the production agreement is currently scheduled to sunset.

Lobbying: A few new energy-related filings have surfaced.

  • The refiner Valero Energy has tapped Ernst & Young LLP to lobby on tax issues.
  • The Kentucky utility LG&E and KU Energy has retained Akin Gump to lobby on energy legislation.
  • The National Stripper Well Association brought on The Ferguson Group to lobby on federal funding.
Global warming: The Wall Street Journal takes stock of lawsuits filed by the cities of San Francisco and Oakland against five huge oil companies — Exxon, BP, Shell, Chevron and ConocoPhillips — in state court. "The suits...are among the first in which plaintiffs are seeking to force companies to pay for infrastructure to protect coastal cities from potential damages caused by rising sea levels," the paper reports.

More on climate: The New York Times explores how much progress states including California and New York can make toward meeting the U.S. emissions pledge under the Paris climate agreement.

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Good morning and welcome back to Generate! Have I mentioned that your confidential tips and feedback are always welcome at ben@axios.com? Ok, let's get to the news . . .

Scoop: Ex-Obama and Clinton aides helm new energy group

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Your Generate host has learned that a group called New Energy America is launching today that will promote renewable energy industry jobs in rural regions nationwide.

Why it matters: The group, which is funded by renewable energy companies, could influence lawmakers in red-leaning areas amid policy battles that affect wind, solar, biofuels, and other sectors.

  • "The point is to make sure there is accountability in places where clean energy jobs are growing, but elected officials are voting against policies that can support the growth of clean energy," a source familiar with the group's planning tells Axios.

Who they are: Mike Carr, who was a senior Energy Department renewables official under President Obama, is the executive director. Kendra Kostek, who was an aide to Hillary Clinton's presidential run, is director of public engagement.

  • Advisory board members include former longtime California Democratic congressman George Miller, who chaired the House Education and Labor Committee; and Jon Powers, co-founder of the solar investment firm CleanCapital and was the federal chief sustainability officer under Obama.

Opening move: They're releasing a report today that provides a state-by-state tally of jobs in fossil fuels versus renewable power sources like wind and solar, biofuels, and energy efficiency. It finds that these clean energy and efficiency jobs combined already outnumber fossil fuel employment in 41 states. Efficiency jobs are the the bulk of the tally.

Read more of my story here.

A crude oil crystal ball

Peak Permian: The prominent consulting firm Wood Mackenzie has new research that takes stock of just how much oil production could eventually come from the booming Permian shale play in Texas and New Mexico.

Their base case sees production surpassing 5 million barrels per day in 2025 (the current level is roughly 2.5 million, according to the Energy Information Administration).

Yes, but: They describe a case in which the intense ongoing drilling and fracking development pushes up against geological limits, leading to a peak several years sooner that's around 1.5 million barrels per day lower.

  • "These reservoir issues could begin to manifest as sweet spots become exhausted. Taking into account some bearish assumptions, if future wells tap more difficult rocks, and are not offset by continued technology evolution, the Permian may peak in 2021," said Robert Clarke, a top researcher with the company, in a summary of the analysis.

Why it matters: The Permian is a major reason why U.S. oil production is growing and projected to reach record levels as soon as next year. How long companies can continue to economically wring more and more oil out of this and other shale plays will help dictate how long the U.S. will keep challenging OPEC and other big producing countries for market influence.

Go deeper: This new episode of their Crude for Thought podcast goes in depth into the questions of how future Permian wells may perform, noting the potential for lower reservoir pressure to affect the amount of recoverable oil in newer wells located adjacent existing wells.

The latest in electric vehicles

Bullish forecast: The firm Energy Innovation is out with a new research note projecting that electric vehicles will account for 65% of new U.S. light-duty vehicle sales by 2050, and possibly even more if technology costs fall faster than their base case or if oil prices are high.

Tesla caution: In the nearer term, MarketWatch reports on an analyst's projection that EV maker Tesla is likely to lose money through at least 2019.

  • Reuters notes that the Silicon Valley automaker's shares fell Tuesday after the warning from a Jeffries analyst that Tesla's business model can't be scaled up as quickly and profitably as some think.

Go big or go home: MIT Technology Review has a nice roundup of new prospects for electrification of heavy duty vehicles, even huge mining trucks.

China's plan: "China is discussing a plan to allow foreign carmakers to set up wholly owned electric-vehicle businesses in its free-trade zones in a major revision of a fundamental principle governing the country's auto industry policy since the 1990s," Bloomberg reports. China is the world's largest auto market.

Amy’s notebook: Speaking Trump’s language on climate change

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My Axios colleague Amy Harder has this look at White House messaging on energy ...

We have a few data points now to size up how Trump administration officials publicly talk about the Paris climate deal, including most notably the readouts from the climate meetings during the United Nations meetings this week.

The most obvious point is that they don't ever actually use the words climate change, which may seem odd because this deal is inherently about that very topic.

Between the lines: Nonetheless, they use a lot of other words and phrases that shed a light on where they're coming from and where they may be going. Let's break it down:

  • Instead of climate change, it's protecting the environment and reducing emissions.
  • Instead of wind and solar, it's advanced energy technologies.
  • It's highly efficient fossil fuels, instead of any mention of capture technology that can enable coal and other fossil fuels to be burned more cleanly.
  • It focuses on these four attributes repeated throughout the administration: affordable, reliable, secure, and accessible.
  • It's innovation and technology breakthroughs, instead of government support for those things.

Why it matters: Any path to reengagement on the Paris climate deal would be done with these words, not climate change or any of its linguistic cousins, like carbon emissions or pollution.

Last linguistic note: We're talking reengagement, instead of renegotiation. If the Trump administration does reverse course on its plan to withdraw the U.S. from the Paris climate deal, it will likely be lowering the U.S. commitment to a level that the administration deems suitable to fill the above attributes. That's why we use the word reengagement, not renegotiation, which implies broader changes that would need more buy-in from other countries.

In focus: upcoming federal climate science report

On track: A major federal report that describes powerful scientific evidence of human-induced global warming and its damaging effects — now and in the future — appears to be set for release in early November.

What's happening: E&E News, quoting one of the scientists involved, reported yesterday that the Climate Science Special Report has cleared key procedural steps. Axios confirmed its progress separately. However, the multi-agency U.S. Global Change Research Program that's overseeing the study did not respond to requests for comment on Tuesday.

Why it matters: The study, authored by a suite of federal and academic scientists, drew intense attention in early August when the New York Times reported that some scientists were concerned that the Trump administration might suppress or alter the report. This report, in turn, helps inform the periodic, statutorily mandated National Climate Assessment.

Yes, but: The apparent upcoming release of the report hardly proves that top Trump administration officials are backing off their skepticism of the dominant scientific views of climate science. This study was in the works long before the current administration took office.

  • Case in point: Via The Hill, EPA administrator Scott Pruitt said at a forum in New York yesterday that he's proceeding with his plans to organize a "red team-blue team" review of climate change science.
  • Nor does the Climate Science Special Report affect the ongoing reversal of Obama-era greenhouse gas emissions regulations and policies.

What they're saying: "The Climate Science Special Report will be the most up to date and comprehensive review of the state of the science since the IPCC Fifth Assessment was published in 2013," Katharine Hayhoe, a Texas Tech University scientist involved with the report, told Axios.

"It summarizes our latest understanding of what's happening in the atmosphere, the oceans, and the cryosphere, from Arctic sea ice to Antarctic ice sheets," Hayhoe said.

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Scoop: Ex-Obama and Clinton aides helm new energy group

Wind turbines slowly spin in the wind at the High Sheldon Wind Farm, Photo: Julie Jacobson / AP

A group called New Energy America is launching today that will promote renewable energy industry jobs in rural regions nationwide, Axios has learned.

Why it matters: The group, which is funded by renewable energy companies, could influence lawmakers in red-leaning areas amid policy battles that affect wind, solar, biofuels, and other sectors.

"The point is to make sure there is accountability in places where clean energy jobs are growing, but elected officials are voting against policies that can support the growth of clean energy," a source familiar with the group's planning tells Axios.

Who they are: Mike Carr, who was a senior Energy Department renewables official under President Obama, is the executive director. Kendra Kostek, who was an aide to Hillary Clinton's presidential run, is director of public engagement.

  • Advisory board members include former longtime California Democratic congressman George Miller, who chaired the House Education and Labor Committee; and Jon Powers, co-founder of the solar investment firm CleanCapital and was the federal chief sustainability officer under Obama.

Opening move: They're releasing a report today that provides a state-by-state tally of jobs in fossil fuels versus renewable power sources like wind and solar, biofuels and energy efficiency. It finds that these "clean energy" and efficiency jobs combined already outnumber fossil fuel employment in 41 states.

What's next: Going forward, the source tells Axios that the group will engage in many areas that affect renewables and efficiency, such as: the fate of EPA's Clean Power Plan; tax credits for renewable power projects; solar trade policy; federal spending decisions; and work on grid reliability at the Energy Department and FERC. (Editor's note: there's concern in the renewables world that the Trump administration's focus on "reliability" is a stalking horse for attacking pro-renewables policies or propping up coal and nuclear.)

They're also likely to engage at the state level on topics such as proposed legislation in California to transition to all-renewable power in coming decades; state-based renewable power mandates and more. The push in rural areas and red states will involve grassroots work as well and digital and earned media campaigns, the source said.

In their words: "The electricians installing solar panels, the welders building wind turbines, and the truck drivers delivering biofuels all benefit from policies that promote clean energy, and we're here to tell their stories," Carr said.
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Generate

Good morning and welcome back to Generate. Your host is pretty psyched for Sunday's Berlin Marathon, where the world record might fall and there's a great chance of a great race regardless. Letsrun.com sets the table here.

Ok, let's get to energy news . . .

Trump's asking price for Paris: unknown

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Into the great wide open: The recent burst of attention toward the White House posture on the Paris climate deal has underscored two basic things...

  • President Donald Trump is absolutely still planning to bail, something the White House reiterated multiple times yesterday.
  • The administration also insists that the door remains open to staying in the pact if the U.S. can secure better terms.

So... Here's the thing about the second point, which the U.S. has been stating since June: Nobody knows what this means, and the Trump administration won't say, instead defaulting to the most general of generalities.

Why this matters: The information void makes it impossible, for now, for the international community to assess whether there's really a pathway here, and indeed whether it's one worth walking down.

Case in point: Paris surfaced in yesterday's meeting between Trump and French President Emmanuel Macron. State Department advisor Brian Hook, briefing reporters on the sidelines of the U.N. meeting in New York yesterday, said that Trump reiterated that the agreement is unfair to the U.S., and bad for its workers and economy. But he declined to offer any specifics about what it might take for the U.S. to remain in the deal.

Between the lines: It's one thing to avoid details in a press conference. But they're not emerging behind the scenes either. Nobody your Generate host has spoken with has picked up on any signs of a tangible position behind the White House claim that the U.S. is open to staying on more favorable terms (especially given that the agreement is largely nonbonding and countries set their own emissions targets anyway).

  • A spokesperson for Miguel Arias Canete, the European Union's climate action commissioner, confirms to Axios this morning that "No detail or information has been given [from the Trump administration]."

One expert notes:

  • "Until such time as the Trump administration is more clear about what it means, there won't be a lot of efforts by the international community to read his mind about what it will take to make the president like the Paris agreement," says Nigel Purvis, who worked on climate at the State Department under Bill Clinton and George W. Bush and later advised Barack Obama's 2008 campaign.

However, there's little to suggest that the administration is putting more meat on the bones of its policy.

  • "There's no real evidence that they are actively pursuing that theoretical opening that the president provided," Purvis, the CEO of the consulting firm Climate Advisers, tells Axios. "There has been no cabinet-level or high-level process to define 'the ask' of the international community."

On my screen: Power sector deals and analyses

Total's latest: The France-based global oil giant Total announced Tuesday that it's spending 237.5 million euros for a 23% share in the renewable power company EREN RE, a deal that could lead to fully taking over the company in several years.

Too smart: Greentech Media breaks down a new deal in the smart grid and smart city market as Itron announces plans to buy Silver Spring Networks in a $830 million transaction. "Monday's surprise merger would create a company with more than 90 million smart endpoints deployed with some of the world's biggest utilities," they report.

Coal's future: A detailed, chart-heavy new story in The Financial Times looks at why efforts to revive the coal industry's long-term future face stiff headwinds.

  • One of many interesting stats: "In 2013, the US Energy Information Administration projected that world coal demand would rise 39 percent by 2040. Now it is expecting growth of just 1 percent."

Warning: A new report from the consulting firm IHS Markit warns of the economic costs of the U.S. power system's move away from coal and nuclear power.

  • It suggests policy changes that better value and compensate resilience. It points to nuclear's role as a carbon-free resource to balance out mandates and subsidies that reward renewables specifically.
  • The research was funded by the Edison Electric Institute, which represents investor-owned utilities, as well as the Nuclear Energy Institute and the U.S. Chamber of Commerce.

Amy’s notebook: What Montreal can teach Paris

Giphy

My colleague Amy Harder compares global environment agreements struck three decades apart...

The 30-year-old Montreal Protocol offers a glimpse into how global environmental accords can be done in a more enduring way than the Paris climate deal.

Why this matters: While the rumors churn about what President Trump might do with the mostly voluntary Paris deal, action quietly carries on with the legally binding Montreal Protocol, as reported in the latest Harder Line column yesterday.

Two big differences:

1. Political process: The Senate voted to approve the underlying Montreal treaty. The same must happen with an amendment agreed to last year in Kigali, Rwanda, which phases down powerful greenhouse gas emissions called hydrofluorocarbons. On the other hand, President Barack Obama had agreed to the Paris climate deal without input from Congress (because he knew he wouldn't get it).

  • "A big part of the frustration on Capitol Hill about the Paris deal is the way they were treated by the previous administration," says Kevin Fay, executive director of the Alliance for Responsible Atmospheric Policy, an industry trade group representing companies like Honeywell, Arkema, Carrier, and Johnson Controls.

2. Smaller bites: The Montreal Protocol tackles one sector and a narrower batch of emissions. With climate change and all of the global efforts that have tried to tackle it so far, emissions are ubiquitous and come from almost everything human life depends on. Companies have more certainty in the Montreal Protocol than they do in the Paris deal.

  • "We haven't pursued a sectoral agreements as aggressively as I think we should have," says Durwood Zaelke, founder and president of the Institute for Governance & Sustainable Development, an environmental group. "If you have a sectoral approach, you can quickly address competitive issues."

Oil market notes

Shale snapshot: The Energy Information Administration's latest report on shale oil and gas forecasts that crude oil production from these plays will grow by another 79,000 barrels per day next month to reach 6.08 million barrels per day, largely driven by ongoing rise in production from the Permian Basin in Texas.

Hurricane Harvey crimped output in the Eagle Ford region to some degree, which led to a downward revision of production there.

  • Why it matters: The ongoing growth of shale oil production even at modest oil prices has shaken up world oil markets and poses a huge challenge to OPEC and petro-states, notably Russia. EIA forecasts that total U.S. crude oil production will average 9.8 million barrels per day next year, breaking the annual average record set in 1970.
  • Go deeper: CNBC looks closely at the latest shale snapshot here, noting that the projected October production is "the first time in seven months EIA's growth forecast came in below 100,000 barrels a day." And looking much further ahead, the latest edition of the Platts Capitol Crude podcast explores how high U.S. crude production might ultimately rise. Hint: the limiting factors in the next few years are economic, not technical.

Latest in trading: Reuters reports that oil is trading near its highest prices in five months on Tuesday "after fresh data showed key Middle Eastern producers continued to cut supply in line with an OPEC-led deal aimed at ending a crude glut."

So hot right now: 2017

Graphic showing relative warmth of global surface temperatures in 2017. Credit: National Oceanic and Atmospheric Administration

New data: Average global temperatures on planet Earth for the first eight months of the year make 2017 the second-warmest in the modern temperature record that dates back to the late 1800s, trailing only 2016, according to National Oceanic and Atmospheric Administration data released Monday.

The year to date has been 1.58°F above the 20th century average.

Why it matters: The latest evidence of a warm planet arrives amid intense focus on global climate change policy as the Trump administration abandons its predecessor's emissions rules and reiterates its plans to abandon the Paris climate deal (more on that above).

Go deeper: A few other data points in NOAA's latest global snapshot...

  • It was the third warmest August in the records going back to 1880 behind 2016 and 2015, and the summer (June-August) was also the third warmest behind those years.
  • The average reach of Arctic sea ice was 683,000 square miles, or 24.3%, below the 1981–2010 average, and it was the third smallest extent since tracking of this metric began in 1979, NOAA said.
  • The extent of Antarctic sea ice last month was 3.6% below the 1981–2010 average, making it the second smallest on record.

Science corner: Hunting oil with seismic guns kills scallops

My Axios colleague Erin Ross reports...

Blasts from seismic air guns used to search for oil and gas beneath the ocean floor increase the death rate in scallops and change their behavior, according to a study published Monday. The U.S. Atlantic scallop fishery raked in $546 million dollars in 2012, making it one of the most lucrative in the country.

Why it matters: The Trump administration's plan to allow oil and gas exploration in Atlantic coastal areas has re-ignited a decades-old controversy about the impacts of tools like seismic airguns. This research means opposition may not just come from environmental groups and marine mammal advocates, but the shellfish industry as well.

Click here for the rest of the story in the Axios stream.

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Trump's position on the Paris accord hasn't changed

Illustration: Lazaro Gamio / Axios

There's a lot of noise surrounding a WSJ story today saying the Trump administration has changed its mind on the Paris climate accord and isn't pulling out. The White House responded that there has been "no change" in the position on Paris and that the U.S. is "withdrawing unless we can re-enter on terms that are more favorable to our country."

Trump's position announced in June was the U.S. is bailing but willing to renegotiate. Remember it actually takes several years to formally withdraw.

Our thought bubble: Nobody has really taken this "renegotiation" idea especially seriously. Why people are surprised today is that it wasn't believed the administration was serious about really engaging on this at all. It is still a very big question how genuine their efforts are, but today's news represents the next stage regarding what Trump already said in June he was willing to do. He said the U.S. is going to withdraw unless it can get a better deal.

Bottom line: The basic question here is whether the U.S. might be cracking the door open slightly to a more serious willingness to stay in with a softened commitment.

Go deeper: What we've written before about the Trump administration's climate outreach.

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Generate

Good morning and welcome back to Generate! Before we head into the weekend, it has been a while since I mentioned that Axios has a bunch of cool, informative and free email newsletters on politics, business, science and more. You can sign up here.

Oh, and I buried a Rolling Stones song title in today's newsletter. Think about one of the best double albums ever and you'll be partway there. Ok, let's dive in . . .

Trump's orbit of climate skeptics

By now you've probably seen that President Trump yesterday appeared to dismiss scientists' argument that global warming is adding to the impact of hurricanes.

Behind the scenes: But when you look beyond the high-profile Trump comments, you can see indications of how skepticism of mainstream climate science in the administration and potential advisers extends well beyond POTUS.

A new Climatewire story looks in-depth at the people the administration is considering for spots on EPA's Science Advisory Board, and finds numerous examples of candidates who break sharply with mainstream climate research.

In their words: Separately, newly available written answers from GOP nominees for the Federal Energy Regulatory Commission and the Interior Department show acceptance of the existence of climate change, but also stop short of endorsing the dominant scientific view that human actions have been the main driver of the warming trend since the mid-20th Century.

Here are snippets of their submissions to the Senate Energy and Natural Resources Committee, which will vote next week on the nominations:

  • "I believe that the climate is changing and that many factors influence that change," said Ryan Nelson, the nominee to be Interior's solicitor general, when asked specifically role of humans and fossil fuels.
  • "My general understanding is that Earth's climate has been in a state of constant change for as long as the planet has existed. I do not regard climate change as a hoax...My general understanding is that climate change is affected by numerous factors, including human activity such as the combustion of fossil fuels," said Kevin McIntyre, the nominee for FERC chairman.
  • Joseph Balash, the nominee for Interior's assistant secretary for land and minerals management, said: "[M]an does have an influence on climate change," but did not weigh in on the degree.
  • In contrast, Richard Glick, a Democrat nominated for an open FERC seat, said human-induced emissions are contributing "significantly."

Why it matters: As for policy, McIntyre emphasized that FERC "does not have a climate change mission," though noted that its environmental studies of natural gas infrastructure do review emissions. Glick concurred that FERC does not regulate emissions and is fuel-neutral, while emphasizing the role it can play in removing market barriers to sustainable energy sources.

EIA: No oil demand peak for over two decades at least

Forecast of liquid fuels use by region. Chart: Energy Information Administration

Still thirsty after all these years: The federal Energy Information Administration's latest long-term global supply and demand outlook, which looks ahead to 2040, does not forecast a peak in global oil demand during that period.

Why it matters: EIA's outlook provides more weight to the camp of analysts who believe the world is nowhere near a plateau in oil demand, despite the growth of new technologies like electric vehicles and much more efficient internal combustion engines. It's one reason why it will be an immense challenge to achieve deep worldwide cuts in greenhouse gas emissions in coming decades.

And it's another data point in vigorous ongoing discussion, one featuring dueling forecasts from major energy companies and other analysts, such as Shell, whose CEO has argued a global oil demand peak could arrive as soon as the late 2020s. The Wall Street Journal has a nice look here at various projections.

Yes, but: A few caveats. EIA has long faced criticism for being too conservative in its predictions about the pace of market penetration of emerging and green technologies. A related caveat is that EIA's outlook models only existing national policies.

Compare that to Statoil's central projection of a global oil demand peak in 2030. That happens under their "reform" scenario, which assumes some tightening of nations' emissions targets and policies. Anyway, as the late Yogi Berra is credited with once saying, "it's tough to make predictions, especially about the future."

Big picture: The annual report is a wide-ranging look at global electricity, transport fuels, industrial demand and more. Here's a few other toplines from the central "reference" case in EIA's latest International Energy Outlook...

  • Total world energy consumption grows 28% between now and 2040, driven largely by increased demand in China, India, and other Asian countries.
  • Renewables are the fastest-growing energy source at an average increase of 2.3% annually as wind and solar deployment rise.
  • Fossil fuels remain "dominant," supplying 77% of global energy in 2040, but the mix is changing — coal use is basically flat while natural gas rises considerably.
  • Global carbon dioxide emissions from energy, which is the dominant source of those emissions, rise an average of 0.6% annually.

Amy’s notebook: Budget cuts worry energy officials

My Axios colleague Amy Harder checked in on some budgetary matter...

The three-month continuing resolution Congress passed last week has got some career Energy Department employees worried their offices would be funded at Trump's proposed levels, which slashed research dollars across the board, some by more than half.

What we're hearing: When Congress passes short-term spending bills like the one on Sept. 8, government agencies are often instructed to operate according to whatever budget is the lowest out of the House, Senate, or White House. That's because when Congress does pass a full budget, agencies will not have overspent in the interim. Trump's budget was the lowest of the three by far.

One level deeper: For some programs, like the Energy Efficiency and Renewable Energy office, Trump's proposed slashed funding by nearly 70%, from about $2 billion to $636 million. Much of that money goes to projects across the country's national labs that conduct research.

For the record: An Energy Department spokeswoman has appeared to resolve these concerns. The department, including EERE, will fund its operations under the terms of the continuing resolution, a spokeswoman said by email. The White House's Office of Management is set to issue formal guidance by the end of the month, before the fiscal year begins.

On my screen: carbon regs, lobbying, oil markets

Markets: Bloomberg looks at the forces that have pushed up oil prices lately. Yesterday WTI cracked $50 per barrel in trading for the first time in weeks.
  • "OPEC and the International Energy Agency boosted demand forecasts, signaling the surplus that has weighed on prices may shrink further. U.S. refiners are resuming operations after Harvey halted almost a quarter of the nation's capacity," they report.

Climate: Politico has a detailed look at EPA's efforts to abandon the big Obama-era carbon regulation for power plants. EPA may offer a weaker replacement rule rather than abandoning CO2 regs for power plants altogether.

  • "A mend-it-don't-end-it approach on Obama's 2015 rule could appease power companies that say the EPA needs to impose some kind of climate regulation — even if it's much weaker — to avoid triggering courtroom challenges that would cloud the industry in years of uncertainty," the story notes.

Lobbying notes: A few filings that popped up recently in the Lobbying Disclosure Act database...

  • The National Biodiesel Board has tapped Sextons Creek, the firm headed by Bill Smith, a former top aide to Mike Pence when he was Indiana governor and a member of Congress.
  • The Edison Electric Institute, a major trade group of investor-owned utilities, has brought on the Alpine Group for representation on tax reform, commodities oversight legislation, energy legislation and more.
  • Power heavyweight Duke Energy Corp. has tapped Ulman Public Policy for representation on "workforce development and apprenticeship policy."
  • The oilfield services company Grit Energy Services has hired Van Heuvelen Strategies, LLC for lobbying on Energy Department and EPA regulations and grants.

Hurricanes: The Houston Chronicle takes stock of how energy companies in the region are dealing with the aftermath of Harvey's flooding, using the damage to BP's offices as a set piece. The lede: "By the time the storm lifted, floodwaters nearly crested over the top of the turnstiles in the lobby of BP's main office tower in Houston."

Regulations: Via the Washington Post, EPA "plans to reconsider parts of an Obama-era effort to regulate potentially toxic waste known as coal ash, again siding with energy-industry efforts to slow or reverse standards put in place in recent years."

The energy plan that Clinton buried

Giphy

Let it loose: Hillary Clinton's book "What Happened" and interview blitz telling us what she really thinks reveals an interesting tidbit about a sweeping economic idea her campaign weighed, but rejected for several reasons — including a collision with energy policy goals.

Quick background: The campaign batted around the idea of a universal basic income, dubbed "Alaska for America" because it would have been a wider version of the Alaska Permanent Fund that provides an annual dividend to state residents funded by oil revenues.

Clinton's book notes that the campaign looked at a suite of different potential national revenue sources, including natural resources.

What she said: Vox has more on it here, and now let's cut to the energy-relevant part of what Clinton told Vox editor in chief Ezra Klein on his podcast (which you can find here) about the problems they faced . . .

  • "Are we talking about fossil fuels, which then might sort of perversely encourage the continued extraction of fossil fuels, which would be an outcome that we weren't necessarily thinking was in the best interest," Clinton says at one point.
  • "The fossil fuels, climate change issue was one of the complications," she says.

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Saudi Aramco denies report that IPO may be delayed

Hasan Jamali / AP

Saudi Aramco said on Thursday that its planned initial public offering remains on track, Reuters reported. The state oil giant was responding to a Bloomberg article that said the planned IPO may slip past the second half of next year and into 2019.

Yes, but: As Bloomberg's Javier Blas tweeted in response, "Saudi Aramco (and Saudi officials) said the IPO remains 'on track' and 'on time.' But note the conspicuous absence of 2018 date in statement."

Bloomberg's report: Citing "people familiar with the matter," they wrote that the timetable looks increasingly tight and that the Saudis are "preparing contingency plans for a possible delay to the initial public offering of its state-owned oil company by a few months into 2019."

  • "Several important decisions on the IPO have yet to be taken, stretching the ability of the company and its advisers to sell shares before the end of next year," their story stated.

One of those big outstanding decisions is where will be the principal listing venue outside of Riyadh. New York and London are considered the leading candidates (a topic we explored here), and the differing levels of transparency required by different exchanges is a key part of the consideration.

Why it matters: I reached out to David Goldwyn, who was the top State Department energy official early in Hillary Clinton's tenure as secretary, for perspective on if there were to be a delay of the IPO...

Overall, the IPO requires Aramco to allow a higher level of outside scrutiny. Goldwyn notes the range of key issues, including:

  • the type of transparency that different stock exchanges will require
  • how Aramco will "regularize" the amount of money the government takes from it;
  • and, "what level of comfort investors will have in the size and quality of the reserves."

More: Goldwyn says, "The Saudis don't want to sell at the bottom of the market, so timing matters. But delay is risky. Will the OPEC deal collapse? Will shale boom? Will EVs slow demand?"