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Good morning and welcome back to Generate, where your host is happy to have contributions today from talented Axios colleagues Amy Harder (who will be a regular) and Shannon Vavra. You can find them both on Twitter at @amyaharder and @shanvav. Let's dive in...

Notes from the oil patch

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Wait, did the movie There Will Be Blood (the source of the GIF above) really come out 10 years ago? That went by fast. Anyway, here's a a few tidbits about oil powerhouses caught my eye over the last day . . .

Chevron: CEO John Watson chatted with the Columbia Center on Global Energy Policy for their latest podcast.

  • Tepid on Paris: Watson's public stance is kind of meh. He doesn't align with conservatives calling on the U.S. to bail outright (a stance that appears to be losing political ground), but he doesn't praise the accord like some of his peers in the Big Oil CEO club. "It's a beginning, but we need to understand a lot more about the commitments, about how we are going to have certainty, and what the costs of those commitments are, particularly to the U.S. government and to the U.S. consumer," he said of the climate accord.
  • NAFTA: His message to policymakers is don't mess with it too much, because it has been good for all three nations involved. "It creates jobs and creates well-being in all three countries."
  • Permian basin drilling: He's psyched about it. The roughly $2 billion in Permian investment planned in 2017 "could grow in future years."

Shell: The BBC has the latest on leaked recordings and internal emails that have surfaced in recent days about the oil giant's 2011 deal to secure access to a promising oilfield off Nigeria's coast.

  • "Shell has admitted for the first time it dealt with a convicted money-launderer when negotiating access to a vast oil field in Nigeria," the BBC reports. BuzzFeed and the Italian newspaper Il Sole 24 Ore reported on the murky deal and the investigations into it.

Russia and America: "In a crazy twist of international events, Russia's state-owned oil company Rosneft might end up owning Citgo, a US energy company based in Houston, Texas," CNN reports on the complicated arrangement. It hinges on whether Citgo's parent company, the Venezuelan state oil giant PDVSA, can repay a loan to Rosneft.

  • "In hotly worded letters to the Trump Administration in recent days, members of Congress and senators warned that it could be a big problem for US national security if Russia gets a hold of Citgo," CNN notes.

From Amy’s notebook: Calling the bluff on carbon taxes

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Get up to speed: Yesterday Axios energy reporter Amy Harder explored one of the biggest barriers to carbon taxes gaining any political traction: the refusal of Democrats and green groups to trade away regulations in return, and the refusal of Republicans and industry to accept EPA climate rules on top of a tax.

Now she's got a little more on that topic …

One level deeper: David Bookbinder, former chief climate counsel for the Sierra Club and now a fellow at the right-leaning Niskanan Center, which advocates for a carbon tax, says there's more than meets the eye when it comes to the carbon tax versus climate regulations debate.

What he's saying: Environmental groups publicly say they wouldn't trade climate regulations at the Environmental Protection Agency for a carbon tax, but privately the groups say they would if the price is right, Bookbinder asserts.

  • "Like most entities that have no experience in actual negotiations, they [environmental groups] believe that they can't say publicly that they will make the trade until the R's put the tax on the table," Bookbinder tells Axios.
Our thought bubble: At least one side is going to have to be the first to show a willingness to compromise privately and eventually publicly to break the logjam that is this perennial carbon tax debate. So far, that's not happening. A spokesman for the Sierra Club declined to comment on the record about their official position, which is that they wouldn't support a trade of EPA regulation for a carbon tax.

U.S. carbon footprint shrinks—again

Data: Energy Information Administration; Chart: Andrew Witherspoon / Axios

U.S. carbon emissions from energy dropped another 1.7 percent in 2016, largely because natural gas and renewables are displacing coal in power production, data from the federal Energy Information Administration shows.

Why it matters: It's a clear signal that President Trump's effort to revive the coal industry's fortunes by cutting regulation is an uphill battle against underlying market trends.

  • Emissions from electric power fell by almost 5 percent. Total CO2 emissions are around 14 percent below 2005 levels, putting the U.S. roughly halfway toward meeting its pledge under the Paris climate accord to cut emissions by 26-28 percent by 2025.
  • The emissions drop last year was smaller than the 2.7 percent decline between 2014 and 2015. Energy accounts for nearly all U.S. carbon emissions.

To be sure: Not everything is trending downward. Emissions from transportation rose by almost 2 percent last year as vehicle travel increased amid low gasoline prices. Transportation overtook the electricity sector as the largest U.S. carbon emissions source in 2016, according to EIA.

What happens in Rome

From the Axios stream, my colleague Shannon Vavra summarizes coverage from Italy about what did and didn't happen when Energy Secretary Rick Perry went to Rome for the G-7 meeting of energy ministers . . .

No comment: The U.S. delegation to the G7 was the only country not to sign a draft joint-statement that included a commitment to follow the Paris climate agreement's provisions, according to the AP. As a result, the group didn't issue a statement at all.

Why the U.S. didn't sign: It's still reviewing its position, per the Italian development minister. Energy Secretary Rick Perry also wanted to include references to coal and fossil fuels in the statement, Reuters reports.

Thanks Shannon! Here's a bit more . . .

Not business as usual: The unusual absence of a communique from the meeting signals how the lack of a White House position on the Paris climate agreement is starting to percolate into diplomacy.

The suspense won't last forever though. White House press secretary Sean Spicer said recently that the U.S. plans to announce its plans ahead of the late May G-7 meeting that Trump will attend.

  • The headline of Bloomberg's piece on Perry's Italian adventure adds some drama: "Trump Faces Showdown With G-7 Over Climate Stance Next Month."

Tesla and Trump

Tesla CEO Elon Musk is among the executives who will meet with President Trump at the White House on Tuesday. Mike Allen sets the stage in Axios AM this morning. Speaking of Tesla ...

Worth a lot: On Monday, trading sent the electric vehicle and solar company's valuation past GM to make it the most valuable U.S. automaker, Reuters reports.

Kim Hart sizes up the news and injects some caution over in the Axios stream.

Bubble? Over at Business Insider, Matthew DeBord argues that "none of this makes any sense. The Los Angeles Times notes that the company's surging valuation puts an even more intense spotlight on the company as it prepares to launch its Model 3 sedan later this year.
  • "The propulsive rise in Tesla's stock — up more than 70% since December — amps up the pressure on the company and its visionary chief executive, Elon Musk, to deliver near-flawless performance," their story states.

Thanks for reading! Please keep the tips and feedback coming to ben@axios.com.

Featured

Trump trade adviser circulated docs linking manufacturing declines to abortion, spousal abuse

Peter Navarro. Photo: Andrew Harnik / AP

Peter Navarro, President Trump's top adviser on trade policy, circulated two diagrams internally claiming without evidence that decreased manufacturing is causing divorce, spousal abuse, increased abortion rates, increased drug use and more, according to the Washington Post, which obtained the documents.

Why it matters: President Trump and Navarro are aligned on trade, both contending that broad agreements like NAFTA are killing U.S. manufacturing. Two White House officials told the Post of concerns that "such unverified information could end up steering White House policy."

Go deeper: The art of the deal-breaker.

Featured

White House weighs in on Niger deaths, travel ban ruling

Trump at a Rose Garden press conference Tuesday afternoon. Photo: Carolyn Kaster / AP

President Trump called the families of the four U.S. service members killed in action in Niger to offer condolences, Press Secretary Sanders said Tuesday evening. Trump was questioned about his public silence on the deaths yesterday, and falsely claimed his predecessors had declined to call families of those killed.

The White House also released a statement calling a Hawaii federal judge's block on Trump's revised travel ban a "dangerously flawed" decision. The Justice Department will "vigorously defend" the ban, the White House said.

Meanwhile, Trump sent out two afternoon Twitter attacks — one aimed at the media and the other aimed at Democrats in Congress.

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McCain says he'll support bipartisan health care plan

McCain speaks after he received the Liberty Medal from the National Constitution Center in Philadelphia. Photo: Matt Rourke / AP

Sen. John McCain, whose opposition sunk an earlier Republican health care proposal, said Tuesday night that he looks "forward to supporting" the bipartisan plan put forward by Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray. McCain added that he hopes the plan is "a sign of increased bipartisanship moving forward."

President Trump has called it a "good short term solution" and Chuck Schumer has said most Democrats are supportive. House conservatives, meanwhile, are more skeptical.

Go deeper: The details of the plan.

Featured

Mueller's team interviewed Sean Spicer Monday

Spicer resigned as Press Secretary over the summer. Photo: Alex Brandon / AP

Former White House Press Secretary Sean Spicer was interviewed Monday by Special Counsel Robert Mueller's team, Politico reports. Spicer fielded questions on the firing of James Comey and Trump's meetings with Russians, including his Oval Office meeting with Russian Foreign Minister Sergei Lavrov, per Politico, in a meeting that lasted "much of the day."

The big picture: Mueller's investigation has reached people who were in the room when Trump made key decisions and statements that are now under scrutiny.

Go deeper: Spicer kept notebooks detailing goings-on at the White House; Mueller wants to speak with six Trump aides

Featured

Close Putin ally linked to Russia's fake news factory

Photo: Mikhail Klimentyev / AP

The Russian "troll factory" that spread misinformation during the 2016 U.S. election, the Internet Research Agency (IRA), was funded by a close ally of Vladimir Putin's, according to a CNN report. The oligarch, Yevgeny Prigozhin, is nicknamed "Putin's Chef." His business, Concord Management and Consulting, had a contact drawn up with IRA in 2013 for 20 million rubles ($650,000).

Why it matters: This is further evidence that election meddling efforts reached into Putin's inner circle.

Featured

EPA loosens radiation safety standards

Photo: Pablo Martinez Monsivais / AP

The Environmental Protection Agency has labeled levels of radiation 10x greater than those considered acceptable under the Obama administration as not harmful to people's health, according to a Bloomberg report. The EPA sets such regulations in case of nuclear meltdowns or other events that expose the public to radiation.

  • EPA spokesman Michael Abboud said: "EPA has not changed its standards regarding radiation exposure, and no protective guidelines were changed during this administration...The guidance was released on January 11, 2017 -- before the President was inaugurated." Bloomberg said an FAQ on the decision was released last month.
  • Jeff Ruch, executive director of the Public Employees for Environmental Responsibility, told Bloomberg: "This appears to be another case of the Pruitt EPA proclaiming conclusions exactly opposite...of scientific research."
Featured

Facebook's head of experimental hardware is leaving

Regina Dugan is leaving Facebook. Photo: Photo by Brad Barket/Getty Images

The head of Facebook's skunkworks division Building 8 will leave the company. Regina Dugan said in a statement given to Recode that there's "is a tidal shift going on in Silicon Valley, and those of us in this industry have greater responsibilities than ever before" and that the "time feels right" to be "thoughtful about new ways to contribute in times of disruption." She said in a different post that she will be in charge of a "new endeavour."

Why it matters: Dugan arrived at Facebook last year to lead a division tasked with projects like building a way to type with your mind. Her departure comes as the company faces enormous pressure over its role in an increasingly unequal and divided society.

Featured

Magic Leap confirms $502 million fundraise

Magic Leap CEO Rony Abovitz
Photo by Brian Ach/Getty Images for Wired

Magic Leap, the secretive "mixed reality" startup, announced on Tuesday that it has raised $502 million in new venture capital funding led by Singapore sovereign wealth fund Temasek. This is the same round that Axios discussed last week, based on a Delaware regulatory filing (which authorized up to $1 billion in new shares at an increased valuation). The post-money valuation appears to be around $5 billion.

Bottom line: Investors clearly keep seeing something they like in Magic Leap, but consumers are still waiting for the Florida-based company's first product to debut.

Cap table: In addition to Temasek, other new Magic Leap investors include EDBI (Singapore), Grupo Globo (Brazil) and Janus Henderson Investors. Return backers include Alibaba Group, Fidelity Management and Research Company, Google, J.P. Morgan Investment Management, and T. Rowe Price.

Related: A pair of former Magic Leap engineers today announced that their new startup, which helps streamline the design process of 3D concepts for VR/AR apps, has raised $3.5 million in seed funding.

Featured

Federal judge blocks Trump's latest travel ban

An Iraqi family landed in the United States as a federal court blocked a travel ban in March. Photo: Felipe Dana / AP

A federal judge in Hawaii has blocked President Trump's third attempt at implementing a travel ban, which was set to go into effect Wednesday.

What's next: The administration is almost certain to appeal, meaning the revised ban could again reach the U.S. Supreme Court. But for now, the block means the administration cannot deny travelers from six of the eight countries officials said were either unable or unwilling to provide the information the U.S. requested for entry.

  • His quote: Judge Derrick K. Watson in Hawaii, who issued a temporary restraining order against the administration, said the latest version of the ban, "suffers from precisely the same maladies as its predecessor."
  • What's in question: As with the previous versions, the underlying decision relies on whether the ban is based on animosity toward Muslims.
  • What makes this ban different from the previous versions: The latest order was only passed after the U.S. underwent extensive negotiations with other countries for more information that would vet their citizens. The list of countries affected by the ban also now includes North Korea and Venezuela, two countries that are not Muslim-majority. The other countries include Syria, Libya, Iran, Yemen, Chad, and Somalia.
  • What critics are saying: Challengers argue the additions are largely "symbolic," per the Washington Post's Matt Zapotosky, who writes that the new order would only impact" certain government officials from Venezuela, and very few people actually travel to the U.S. from North Korea each year."
Featured

Trump's short list for Fed chair

Yellen at a hearing in Washington. Photo: Andrew Harnik / AP

President Trump is expected to name his pick to be chairman of the Federal Reserve before leaving on an Asia trip Nov. 3, Bloomberg reports. Here are the candidates:

  1. Current chair Janet Yellen
  2. Fed board member Jerome Powell
  3. National Economic Council Director Gary Cohn
  4. Former Fed member Kevin Warsh
  5. Stanford University economist John Taylor
Why it matters: "At issue for the next Fed chair, if Yellen isn't renominated, is ensuring the long expansion doesn't give way to a recession," Bloomberg writes.