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Oil employment's lagging recovery

A new presentation from the Dallas Fed has a chart that caught my eye. It shows how employment in one key part of the industry — extraction and supporting activities — has not bounced back alongside U.S. production, which fell sharply in 2015 after prices collapsed but has been moving up again for a year and heading for record levels.

Data: Federal Reserve Bank of Dallas, Bureau of Labor Statistics; Chart: Axios Visuals

Between the lines: Kunal Patel, a senior research analyst with the Dallas Fed, offered some insight in an email exchange:

"There are likely a variety of factors causing employment to not keep up with rising production. Primarily, efficiency gains (faster drill times and more production output per well) are allowing operators to produce more with less people," Patel said.

  • Some evidence: He notes that the oil rig count as November 10 was 738, which is slightly under half of the 2014 average, yet production has risen by by about a million barrels per day over the last year to the current level of roughly 9.6 million barrels per day.

"Additionally, greater use of technology is likely leading to automation of some tasks and allowing operators to be streamlined and more efficient. Big data has also allowed the industry to be more efficient," Patel said.

Go deeper: He highlighted this Bloomberg piece on industry adoption of advanced tech and data analysis, and this Dallas Morning News story on industry employment trends and technology.

Featured

The Bonn coal phaseout pledges in context

One of the splashier announcements at the Bonn climate talks this week has been the rollout of the Powering Past Coal Alliance — a pledge by roughly 20 countries (so far) to phase out use of coal in power generation by 2030. The countries include Canada, the U.K., several other European nations, New Zealand and more.

Data: Energy Information Administration; Chart: Chris Canipe / Axios

Reality check: The chart above compares coal use in the countries that have adopted the pledge against global coal consumption in 2015 as reported by the U.S. Energy Information Administration. (It does not include pledges by some provincial governments or the U.S. states of Washington and Oregon.)

  • It shows that the pledge currently covers slightly over 2% of global coal use. The New York Times, using a separate dataset based on BP's big annual report on energy statistics, arrives at roughly the same tally.
  • The absence of dominant coal users China, the U.S., and India — and to a lesser extent Germany, Russia, Japan and some others — means that for now, the pledge only covers a small amount of the world's use of the fuel.

Why it matters: Coal currently accounts for around 40% of worldwide power generation. Cutting emissions from coal — the most carbon-intensive fossil energy source — is vital to eventually ensuring the steep global greenhouse gas cuts that scientists call necessary to avoid the most dangerous levels of global warming.

What's next: The organizers of the pledge say they plan to add many new partners ahead of the next big UN summit a year from now. Stay tuned.

Featured

Coal’s technology problem, and vice versa

Illustration: Rebecca Zisser / Axios

BONN, Germany -- The future of coal in a carbon-constrained world depends on technically feasible but prohibitively expensive technology that captures emissions from coal power plants. That technology, in turn, has become politically and inextricably linked to coal, despite the fact that most of it right now is used for purposes separate from coal.

Why it matters: Coal has been a popular topic here at a global climate conference hosted by the United Nations precisely for its unpopularity among many of the thousands of political leaders, activists and experts attending. On Thursday, 15 nations announced plans to phase out coal by 2030. Meanwhile, the capture technology itself is getting caught up in the political theater.

Coal's technology problem

The U.N.'s scientific body concluded in its most recent assessment of climate science in 2014 that if this technology isn't widely deployed, it would be 138% more expensive to keep global temperatures below a roughly 2-degree Celsius rise over the next century.

Today, only 17 such projects exist around the world, according to a report released at the conference this week by the Global CCS Institute, which was founded in 2009 and funded by fossil-fuel companies and others to more widely deploy the technology. Just two of those are capturing carbon from coal, the dirtiest fossil fuel that needs the technology the most.

Technology's coal problem

The other 15 large-scale carbon capture projects around the world are capturing industrial emissions of one kind or another, which are often processes that inherently emit greenhouse gas emissions and can't easily be swapped out with renewable energy.

"We keep saying, 'I'm not here to promote coal use or oil use or natural gas use," said Brad Page, head of the institute, in an interview at the conference. "We, the institute, only exist because climate change is a problem. There is no other reason for us to exist."

The environmental group Clean Air Task Force, which works to promote the technology as a solution to climate change, cites World Bank data to say that if China's industrial emissions, which come from processes that make steel, cement and related products, were their own country, they would be the third-largest emitter in the world.

But many liberal politicians, including those who traveled to the conference, say the technology, which has the acronym CCS, is just a prop the Trump administration uses to push coal without it. Top White House officials hosted an event here earlier this week touting the role cleaner fossil fuels and nuclear power should fill in addressing climate change.

"CCS is is principally used by the Trump administration to camouflage their interest just to burn coal without it," said Democratic Gov. Jay Inslee of Washington, in an interview here. "If they came here and said, 'We're not going to promote coal-based technology unless it is in fact CCS, that would have—."

He pivoted mid-sentence to tell a story about a conversation he had with then-President George W. Bush about the viability of the technology, which was facing economic challenges back then much like it is today.

Featured

Elon Musk unveils an electric semi-truck

Screenshot from Tesla live feed

In a typically showy ceremony in Southern California last night, Tesla CEO Elon Musk unveiled a sleek prototype electric semi-truck that he said will travel 500 miles on a charge, go zero to 60 mph in 20 seconds fully loaded, and charge most of the way in 30 minutes while a driver rests and eats. He appeared to say that the vehicle will be able to operate semi-autonomously in convoy, which would be the first step to self-driving trucks.

Why it matters: Musk did not say how much the truck will cost, but that it will be cheaper to operate than a standard diesel. If he is able to deliver the semi-truck as described, it seems likely to shake up the freight market just as he has the car business. Experts expect semi-truck traffic to surge in the coming decades as the global population grows to 9 billion people.

The unveil in an airport hanger in Hawthorne, CA., came as Musk is confronting doubts about his ability to pull off arguably his most important project of all — the scale-up of the Model 3, the flagship mainstream-priced electric that he has touted as Tesla's route to the mass market, and the jump-starting of a global electric car industry.

Tesla has taken more than 450,000 reservations at $1,000 apiece for the Model 3, which launched in July, and he was supposed to be turning out 5,000 of them a week by now. But, while making high-profile announcements about a Hyperloop, Space-X launches and now the prototype semi-truck, he has failed to create a standard automated assembly line for the Model 3, so his workers are building them in part by hand, and only by the dozen. As a result, Tesla's sky-high share price has plunged by about 19% over the last two months, closing at $312.50 yesterday.

    • Yet the semi-truck launch, with unexpected specs including a far-more-than-expected range, seems likely to wow his fans and quiet at least some of his critics. Musk said the average truck trip is less than 250 miles, which meant that a driver could do a round trip without recharging. Still, Musk said the truck's battery pack, built into the floorboard, can be charged to 80% of capacity in 30 minutes. He said solar-powered "mega-charging" stations for the trucks would be installed worldwide, and would be priced at 7 cents a kilowatt.
    • The cost per mile would be $1.26, compared with $1.51 for a diesel-operated truck. If the semi-truck is operated in a convoy, he said, the efficiencies took the operating cost below $1 a mile, and made them cheaper than moving freight by train.
    • The two details — range and recharge time — were crucial, and they dispelled the most profound doubts about the truck. In addition, he said standard equipment will include automatic breaking, lane-keeping and forward collision warning.
Featured

The world's biggest sovereign wealth fund may drop oil and gas stocks from Index

Norway's trillion-dollar sovereign wealth fund has asked the government for permission to drop oil and gas stocks from its main index in an effort to reduce the bank's, and in turn the Norwegian government's, vulnerability to fluctuating oil prices, per Reuters.

Why it matters: If the bank's proposal is approved by the finance ministry and adopted by parliament, oil and gas companies would be hit with a significant cut in investments. According to Reuters, the energy stocks, which currently represent about $37 billion of the fund's benchmark equity index, would be entirely eliminated in the coming years.

Featured

Trucks are fueling the world's oil demand

Tesla is hardly the only player in the nascent electric truck market — as Bloomberg notes — as big companies like Daimler and Cummins are moving toward commercialization.

Why electric trucks matter: Trucks, especially big rigs, are a small percentage of vehicles on the road but use lots of oil. (Check out the chart above, reconstructed from the International Energy Agency's new World Energy Outlook 2017.)

Data: IEA World Energy Outlook 2017, OECD/IEA; Chart: Andrew Witherspoon / Axios

In what amounts to IEA's base case (a model of existing and officially announced policies), oil demand for trucking swells to 20 million barrels per day in 2040, led by that sharp increase you see in diesel demand for heavy-duty freight.

  • It's one reason, though hardly the only one, why IEA does not forecast a peak in global crude oil demand through the end of their analysis period in 2040.

The bottom line: Widespread deployment of electric heavy-duty trucking — alongside other alternative fuels and stronger fuel efficiency mandates for diesel-powered rigs — could alter the trajectory of oil demand in coming decade if Musk and other players can make it cost-effective.

Go deeper: Check out a preview of Tesla's electric truck, which is scheduled to be unveiled today.

Featured

15 nations announce plan for 2030 coal phaseout

The coal-burning Longview Power Plant in Maidsville, W.Va. Photo: Michael Virtanen / AP

Big news from the UN climate talks in Bonn, Germany, today is that multiple countries are forming a coalition to phase out power generation from coal before 2030.

Why it matters: Coal is the most carbon-intensive fossil fuel, and cutting emissions from coal-fired power generation is key to driving global greenhouse gas output downward in the future.

Ganging up: "At least 15 countries have joined an international alliance to phase out coal from power generation before 2030, delegates at U.N. climate talks in Bonn said on Thursday," via Reuters.

The nations: Britain, Canada, Denmark, Finland, Italy, France, the Netherlands, Portugal, Belgium, Switzerland, New Zealand, Ethiopia, Chile, Mexico and the Marshall Islands, according to the story.

Yes, but: The world's biggest coal-consuming nations — notably China, the U.S. and India — are not currently part of the initiative.

The other side: George David Banks, a top White House adviser who is in Bonn this week, said the administration is considering forming a "clean coal alliance," adding to comments Energy secretary Rick Perry made recently in Africa.

"The administration is interested in the idea and would like to explore exactly what that means," Banks told Axios' Amy Harder and other reporters at a briefing Wednesday.

Gritty details:

  • Banks said the following countries would probably be interested: Japan, Australia, India, Vietnam and some African countries.
  • He said the alliance would focus on first and foremost on technology known as "high efficiency, low emission," which offer gains of up to 30% less carbon emissions compared to older plants, according to the World Coal Association.
  • Looking at more expensive — but more effective — technology that captures up to 90% of carbon emitted from a coal plant would be another focus.
Featured

Top Trump energy adviser talks solar, climate

Trump aide George David Banks speaks at climate event in Bonn, Germany, on Nov. 13. Photo: Lukas Schulze / Getty Images.

Bonn, Germany – A top adviser to President Trump on international energy issues, George David Banks, sat down with a small group of reporters at the United Nations climate conference here Wednesday. Here are the highlights — and reality checks:

On what Banks says the administration is doing to mitigate climate change, which he says is a priority, despite actions and rhetoric indicating otherwise:

  • Remaining a party to the United Nations' underlying climate treaty, the Framework Convention on Climate Change, despite President Trump's announcement he intends to withdraw the U.S. from the Paris climate deal.
    • Reality check: This is technically true, but a negative — not withdrawing from this treaty — does not equate a positive — prioritizing climate change.
  • Promoting exports of liquified natural gas, which burns 50% fewer carbon emissions than coal.
    • Reality check: This is true. President Obama laid the groundwork.
  • Promoting research and development in the budget.
    • Reality check: Along with most budgets save for the Pentagon, the administration is proposing to slash the Energy Department's R&D budget across the energy spectrum.
  • Banks wouldn't comment on what matters most: whether the Environmental Protection Agency will not just repeal but replace regulations addressing climate change. He deferred questions to EPA, which has said only generally it acknowledges current law requires it to address carbon emissions somehow.
    • Reality check: Whatever happens, it won't be much.

On a pending trade case, where two U.S.-based solar manufacturers are asking Trump to impose remedies on a flood of cheap imports.

  • "The United States has been helping finance the deployment of renewable energy technologies, but it's essentially a jobs program for China and other countries ... I think where we have been involved from an energy policy perspective, first of all, is asking the question, is having a vibrant solar manufacturing industry in the U.S. national interest? I think we would say yes, is in national interest."
    • Reality check: We reported back in September the administration was likely to issue tariffs, and that remains as true today as ever, much to the chagrin of most of the U.S. solar industry that's benefiting from cheap solar imports.

On progress of the actual negotiations at the climate conference, which are hashing out boring but important details of the Paris deal that Trump said in June the U.S. will withdraw from, citing Obama's pledge being unfair compared to other commitments.

  • "We've got the best negotiating team in the world … My guess is the pledge was created and invented in the Obama White House."
    • Reality check: Just like this White House, Obama's executive team had discretion. The negotiations are moving along mostly as normal, according to multiple sources, creating a sometimes awkward but cordial relationship between America and the rest of the world here.

On the circumstances the administration would decide to stay in the Paris deal:

  • "That's yet to be determined."
    • Reality check: No effort is being made here on behalf of the administration. The rhetoric remains empty.

On the emphasis that the impacts of climate change have dire impacts on migration and public health issues.

  • "There is a much more direct link between energy access and these issues."
    • Reality check: That's true, but it doesn't make the climate impacts any less relevant. They're intertwined problems.

On the World Bank's restrictions funding new coal-fired power plants.

  • "I would say the World Bank guidance should be changed," adding that the administration will work toward that outcome.
    • Reality check: The U.S. alone can't make this happen, but it's certainly be influential.

On how many times he has met with the president himself on this issue:

  • "No comment."
    • Reality check: The non-answer — the only one of the nearly 40-minute briefing — indicates the answer is probably no, or at least almost no.
Featured

Musk will unveil his electric, self-driving semi-truck tomorrow

The image Tesla released on its invitation to tomorrow's unveil of its electric semi-truck prototype (Photo: Tesla)

In a move to capture a piece of one of the most promising sectors of robotization, entrepreneur Elon Musk plans tomorrow evening to unveil a Tesla semi-truck, a prototype electric with self-driving technology. According to one estimate, its enormous battery could make it double the price of a standard diesel-propelled vehicle. But Musk has said he already has customers waiting for the vehicle.

The jobs impact: There are about 3.5 million truckers in the U.S., in addition to about 5 million workers in other parts of the industry. Many of those jobs are threatened in a future of autonomous freight transportation.

Much is made of the future of self-driving, but the biggest early impact — with huge money on the line — is likely to be cargo trucks, and not passenger vehicles.

  • The U.S. trucking industry had $676 billion in revenue last year, according to the American Trucking Association, a sum that experts expect to surge over the coming decades with the global population boom to 9 billion people.
  • Numerous startups in Silicon Valley and elsewhere are hoping to capture that flow of revenue.

In a paper earlier this year, Shashank Sripad and Venkat Viswanathan of Carnegie Mellon University estimated that a lithium-ion battery that could take a truck 300 miles on a charge would weigh about seven tons and cost roughly $150,000. The price of a diesel semi-truck is about $120,000 to $130,000; while an electric drive train would lower the cost, you would be talking a total of about $250,000 for the electric self-driving truck.

A bigger battery, allowing a truck to go say 600 miles, would cost $300,000, too much to be cost-effective, they said.

A thought bubble: Musk may introduce a creative approach to the autonomous electric trucking future, such as leased batteries or battery swapping. But whatever he has to say and show us, he seems likely also to face more than his share of doubters. There is reason for that: He is arguably distracting himself from his core mission, which is to work out the bugs and reliably produce hundreds of thousands of his currently troubled mainstream Model 3 sedan per year.

Facts Matter Featured

The vast limits of the Michael Bloomberg, Jerry Brown climate campaign

The group represents just 35% of America's total greenhouse gas emissions. Photo: Martin Meissner / AP

The issue

Former New York Mayor Michael Bloomberg, California Gov. Jerry Brown and other leaders representing more than a dozen states and hundreds of U.S. cities are in Bonn, Germany, this week to tell the world America is still on board with tackling climate change. The group just released a report that said if these non-federal entities were a country, their economy would be the third largest in the world. It also said the group represents nearly half of all Americans and more than half of the U.S. GDP.

The facts

The group largely represents America's coasts, where a lot of people live in big cities, but that's not where most of the greenhouse gases are emitted from coal, oil and natural gas production. The group represents up to 35% of America's total greenhouse gas emissions, according to the report's appendix data. That means this group represents roughly less than 5% of the world's emissions, despite comprising an economy that's the world's third-largest.

Why it matters

The report released here in Bonn is seeking to be optimistic, but it also concedes more action will be necessary. The biggest reductions would need to come from the fossil-fuel emitting states not currently on board.

The 35% figure -- not highlighted as part of the report's release -- underscores why federal action is essential in making sizable cuts in greenhouse gases. That's clearly going to be harder at a time when President Trump has said he intends to withdraw the United States from the Paris climate deal.