From presidential politics to China to oil prices, here’s what I’m watching this year.
The big picture: A few key decisive moments this year will help determine whether concerns over climate change — rising since my last two annual outlook columns — will translate into action that would transform our global energy system.
We’re seeing a new high water mark for climate change’s role in the presidential contest among Democratic candidates. And although it’s unlikely to be the top issue, I expect it to be a wedge issue in the general election more than it has been in previous cycles.
If Democrats win the White House, keep control of the House and regain the Senate, the party would likely attempt big climate legislation similar to the last such efforts in 2009 and 2010.
But, but, but: If that occurred (a big if, especially in the Senate), it’s still a big open question whether the party would have enough support from even its own ranks to pass the type of sweeping policy White House hopefuls are proposing.
2. Bottom of the barrel for oil and gas
Middling global oil prices are producing reliably affordable gasoline. That’s great for consumers — and President Trump’s reelection campaign.
- The increased geopolitical risk in the oil-rich Middle East following the U.S. killing of Qasem Soleimani, a top Iranian military official, late last week is a wild card, but for now it appears the early spike may not last unless more escalation occurs.
Meanwhile, middling prices are bad for producers struggling to profit off a global glut of oil and gas.
- Several major oil companies, including Shell, Chevron and Spanish producer Repsol, have written down billions worth of assets due to that glut.
3. Big oil’s greenish shifts
Lurking in the background of those write-downs is the prospect that even more assets could become stranded if the world takes drastic steps to combat global warming, as scientists and a vocal group of politicians, investors and activists are calling for.
That pressure is compelling some companies to accelerate a trend that has been underway in earnest since 2017: Invest in green technologies and set increasingly ambitious emission reduction targets.
4. Carbon taxes
That trend among big oil companies is adding momentum and money to what is still a long-shot campaign to get Congress to pass legislation pricing carbon emissions.
- In fact, most major corporations support such a policy, and organizers of the campaign say the goal is to have both chambers of Congress introduce bipartisan measures this year.
But, but, but: Even if that happens, many of the loudest Democrats in Congress and on the campaign trail are saying such a policy isn’t nearly enough, and meanwhile, nearly all Republicans remain publicly opposed to energy taxes.
5. Paris Climate Agreement
If a decades-long problem like climate change ever had a make-or-break moment, 2020 would be it for two reasons.
- The United Nations annual conference, set for November in Glasgow, Scotland, will offer the most high-profile moment for the Paris deal since it was signed in 2015. The accord calls upon nations to submit new plans by this year to slash emissions over the next 10 years, but efforts are already falling short.
- Trump is also likely to formally withdraw from the deal on Nov. 4, the day after the election, which will increase rallying cries and protests but likely only further dampen actual potential for progress.
6. China rising
China, which announced in 2017 it would create a national system for trading carbon dioxide credits as a way to cut emissions, is on track to begin trading sometime this year, according to the Environmental Defense Fund and others following it closely.
- The development, which is not a foregone conclusion, would immediately create the world’s largest system for controlling carbon dioxide emissions — given China's huge economy, energy appetite and related emissions.
7. Trade wars
I’m watching two:
- The well-known one underway since Trump became president, which has affected several facets of the energy industry, including solar and natural gas.
- A lower profile one but whose implications could sweeping: The European Union announced late last year it’s moving forward on plans to impose financial penalties on imports from nations that are less aggressive on climate change, which in this status quo would include the U.S.
8. Renewable challenges
- California’s law requiring rooftop solar in new homes just went into effect this month, and I’m watching how other states with especially aggressive clean-energy targets — Hawaii, New York and New Mexico — actually implement them.
9. Senior reactors
Several nuclear reactors — up to 20% of those operating in the U.S. — could likely receive approval this year to run an unprecedented 80 years, after the first such approval late last year.
- The trend helps combat climate change, but it's also raising serious safety concerns among environmental groups.
10. Climate change, in real time
Two trends are colliding:
- Scientists are increasingly conducting what are called attribution studies on extreme weather events to ascertain how much global warming caused specific events.
- Meanwhile, extreme weather is happening more and more — and getting covered more in the media. Australia’s ongoing bushfires are a prime example. While several factors are feeding that crisis, global warming is a key driver.