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Good morning and welcome back to Generate! Please don't forget to sign up for the cool Axios Science newsletter — the next one will arrive in your inbox on Thursday, but only if you register here. Ok let's dive in . . .

Big oil ramps up carbon tax support

My Axios colleague Amy Harder reports on the shifting plates of carbon tax advocacy:

Strange bedfellows: The Climate Leadership Council today announced its founding members, which include four of the world's biggest oil and natural gas producers, two environmental groups, and political leaders. The group plans to launch a unified push urging Congress to enact a carbon tax to address climate change.

Why it matters: The support of oil-and-gas majors — Exxon, Shell, Total, and BP — will be needed to get Republicans to back a policy that remains politically toxic. The coalition, which launched in February with the backing of conservative leaders from earlier GOP administrations, represents the most diverse set of interests pushing Washington on climate policy in a decade.

"We expect that when the moment is right, the companies will lend their lobbying weight to our plan," executive director Ted Halstead said.

Reality check: Big oil backing is a prerequisite, but it may not be enough with strong conservative opposition to a carbon tax from powerful groups like Americans for Tax Reform and Competitive Enterprise Institute. Plus, almost no elected Republicans back a tax.

More details:

  • Besides the major oil companies, its founding members include: General Motors, Schneider Electric, two NGOs, and influential policy and political leaders. Click here for the full list.
  • The groups states its rough action plan involves: a CO2 tax, returning the payments to the public via carbon dividend payments, rolling back emissions regulations that are "no longer necessary," and, trade measures known as border carbon adjustments.
  • A Washington Post op-ed says: "The carbon dividend approach is best for the environment."

Click here for Amy's story.

The battle over deep decarbonization

Giphy

Let's spend a little more time with the idea that creating a carbon-free power system with renewables alone isn't practically or economically feasible, as we discussed yesterday in a story about a new paper published by a suite of prominent energy researchers.

  • ICYMI: The study argues that deep decarbonization likely requires technology options that will include nuclear and fossil fuels with carbon capture.
  • It strongly rebuts — and criticizes — claims by Stanford's Mark Jacobson that a renewables-only system is affordable by mid-century.

Policy impact: This piece in MIT Technology Review explores how the Jacobson-led analyses have become a rallying point for some climate activists — and why that may be a problem.

What they're saying: The University of California's David Victor, a co-author of the paper, tells MIT Technology that he fears "wildly unrealistic expectations" and the "seeds of backlash" as advocates and even some lawmakers rely on Jacobson's work.

  • Jacobson, meanwhile, is bashing the new paper with some powerful language, calling it "intentionally scientifically fraudulent" on Twitter.

Go deeper: Chris Nelder's latest Energy Transition Show podcast that dropped yesterday explores the controversy with Christopher Clack, an author of the new study.

In the tanks: Swaying the DOE budget fight

Third Way

Here's some food for thought as Energy secretary Rick Perry testifies about the White House budget plan at several hearings starting today.

No substitute: The centrist think tank Third Way has a new post explaining why the private sector wouldn't replace President Trump's proposed pullback in funding for innovative energy tech.

  • "Very few private sector investors have the risk appetite or capacity to invest in a promising but unproven technology with high upfront costs and no immediate revenues," writes senior fellow Fahad Siddiqui. That's especially true when there are bigger and faster returns available in other sectors, notably IT, where startups pull in vastly more VC money.

Existing energy companies, meanwhile, devote a pretty small share of their own money to R&D...

  • "[F]rankly because the end customer for an energy product can't tell whether the electrons flowing to their TV or the fuel molecules in their tank were produced in some innovative way," Siddiqui says. Check out the chart above.

It's the economy: The American Energy Innovation Council — a group of CEOs (plus Bill Gates) that works through the centrist Bipartisan Policy Center — is out with a detailed report today making the economic case for robust federal support for energy innovation programs.

AEIC recommendations include: Investing $16 billion per year in advanced energy innovation; funding the Advanced Research Projects Agency-Energy at $1 billion per year; and, creating a federal "New Energy Challenge Program."

Programming note: I'll be moderating a panel this afternoon at their event on Capitol Hill that features keynote remarks by GOP Sen. Lamar Alexander, who heads the Appropriations subcommittee on energy.

Listening notes

Big oil: Wood Mackenzie's latest podcast explores Exxon's big announcement that it's moving ahead with production in the massive Liza field off Guyana's coast

  • "This goes to show that projects with compelling economics will still move forward, even in the current environment," says Wood Mackenzie's Tom Ellacott. He notes that the breakeven costs for the project "rank alongside some of the best tight oil plays."
  • Really big: While Exxon's phase one plan calls for production of about 120,000 barrels per day, the company also announced good results from a well that could eventually drive production in the field much higher.
  • "We think that this could drive gross production up to 330,000 barrels per day by the mid 2020s," Ellacott said.
Technology: S&P Global Platts latest Brussels to Beijing podcast explores how big European utilities are beginning to use blockchain technology for trading and why it's "completely new territory" for regulators.

Quoteable: The latest episode of the Columbia Energy Exchange has a wide-ranging conversation with Iain Conn, CEO of British energy giant Centrica.

Sizing up OPEC's positioning, Conn notes that the cartel's moves for market share are driven by a realization that "we are in the foothills of the endgame for oil."

Generate readers: I'm looking for recommendations on energy- and climate-themed podcasts. Please drop me a line at ben@axios.com and tell me what you like.

On my screen: huge gas deal, ‘fracklog,’ and a lonely appliance

Energy Information Administration

Oil: Bloomberg looks at the "fracklog" that could put further downward pressure on crude prices. "There were 5,946 drilled-but-uncompleted wells in the nation's oilfields at the end of May, the most in at least three years," they report, citing Energy Information Administration estimates.

Appliances: The EIA has published a look at Americans' use of dishwashers, which are less common in U.S. households than some other appliances (see above).

  • Why it matters: As EIA notes, dishwashers save water and energy compared to hand-washing. Lower-income households are more likely to have older and unused dishwashers, the report notes.

Natural gas: Forbes lays out the scope of EQT Corp.'s $6.7 billion deal to acquire Rice Energy, creating a Marcellus and Utica shale powerhouse.

  • "The deal vaults EQT past ExxonMobil and Chesapeake Energy to make it the nation's biggest natural gas producer with more than 3 billion cubic feet per day of production — responsible for about 5% of America's gas supply. Analyst Tim Rezvan at Mizuho called the deal 'empire building' for EQT," the Forbes piece notes.

Featured

NYPD responds to explosion of unknown origin at 42nd and 8th

This is a breaking news story and will be updated as we learn more.

Featured

Rohingya women say they’ve been raped by Myanmar military

Portraits of some of the Rohingya Muslim women taken during an interview with The Associated Press.

The use of rape by Myanmar's armed forces has been sweeping and methodical, AP found in interviews with 29 Rohingya Muslim women and girls now in Bangladesh.

Why it matters: "The testimonies bolster the U.N.'s contention that Myanmar's armed forces are systematically employing rape as a 'calculated tool of terror' aimed at exterminating the Rohingya people."

More from AP's Kristen Gelineau:

  • "They were interviewed separately, come from a variety of villages in Myanmar and now live spread across several refugee camps in Bangladesh. Yet their stories were hauntingly similar. The military has denied its soldiers raped any Rohingya women."
  • "Here are the accounts as told by 21 women and girls [ranging in age from 13 to 35]. They agreed to be identified in this story by their first initial only, out of fear the military will kill them or their families."
Featured

Polluters are getting off easier under Trump's EPA

EPA Administrator Scott Pruitt speaks to the media during a June briefing. Photo: Pablo Martinez Monsivais / AP

"An analysis of [EPA] enforcement data by The New York Times shows that the administration has adopted a more lenient approach than the previous two administrations — Democratic and Republican — toward polluters," Eric Lipton and Danielle Ivory write on the front page:

  • "The Times built a database of civil cases filed at the E.P.A. during the Trump, Obama and Bush administrations. During the first nine months under [Administrator Scott] Pruitt's leadership, the E.P.A. started about 1,900 cases, about one-third fewer than the number under President Barack Obama's first E.P.A. director and about one-quarter fewer than under President George W. Bush's over the same time period."
  • "[T]he agency sought civil penalties of about $50.4 million from polluters for cases initiated under Mr. Trump. Adjusted for inflation, that is about 39 percent of what the Obama administration sought and about 70 percent of what the Bush administration sought over the same time period."
  • Get smart: "The E.P.A. ... can force companies to retrofit their factories to cut pollution. Under Mr. Trump, those demands have dropped sharply. The agency has demanded about $1.2 billion worth of ... injunctive relief ... in cases initiated during the nine-month period, which, adjusted for inflation, is about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush."
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North Korean threat intensifies as it grows its bioweapons program

People watch a TV screen showing an image of North Korean leader Kim Jong Un. Photo: Ahn Young-joon / AP

"North Korea is moving steadily to acquire the essential machinery that could potentially be used for an advanced bioweapons program," the WashPost's Joby Warrick reports atop column 1.

Why it matters: "The gains have alarmed U.S. analysts, who say North Korea — which has doggedly pursued weapons of mass destruction of every other variety — could quickly surge into industrial-scale production of biological pathogens if it chooses to do so."

Details of prorgram expansion:

  • "Kim Jong Un's government also is dispatching its scientists abroad to seek advanced degrees in microbiology, while offering to sell biotechnology services to the developing world."
  • The takeaway: "Such a move could give the regime yet another fearsome weapon with which to threaten neighbors or U.S. troops in a future conflict."
Featured

Report: Mueller focusing on obstruction of justice around Flynn

Former Trump national security adviser Michael Flynn leaves federal court in Washington. Photo: Susan Walsh / AP

Robert Mueller and his team are focusing on the days after White House officials were told Michael Flynn was vulnerable to Russian blackmail, NBC News' Carol Lee and Julia Ainsley report, citing "two people familiar with Mueller's investigation".

Why it matters: This means Mueller's team could be working to determine if Trump obstructed justice and is likely seeking out what President Trump knew about Flynn's conversations with former Russian Ambassador Sergei Kislyak, and subsequently, when Trump learned Flynn lied about them.

That period: January 26 to February 13, 2017.

The focus reportedly includes interviews with White House Counsel Don McGahn, who briefed Trump and senior White House staff about Yates' report that Flynn had lied to White House officials on January 26 and that he was vulnerable to Russian blackmail, according to Sean Spicer. That included Flynn's lie to Vice President Pence, which is what Trump cited in his firing statements.

  • Yates testified before Congress that McGahn asked about Flynn's FBI interview but that she refused to answer questions about that.
  • McGahn briefed Trump and senior White House staff about Yates' report that Flynn had lied to White House officials on January 26, according to Sean Spicer including Vice President Pence, and that he was vulnerable to Russian blackmail.
  • The effort reportedly includes interviews with other White House officials as well.
Featured

Saudi Arabia set to lift ban on movie theaters

Visitors enter the Saudi Comic Con in February 2017. Photo: AP

Saudi Arabia will allow movie theaters to open in the country next year for the first time since the 1980s, per the AP. The government hopes to open 300 theaters with 2,000 screens by 2030, paving the way for a new industry — though it’s unclear what movies might play and edited they might be.

Why it matters: It’s part of a continuing social modernizing push to attract international investment by Crown Prince Mohammed bin Salman, who has announced an end to a ban on women driving and allowed rock concerts to be held in Saudi Arabia. That’s happening in conjunction with his controversial corruption crackdown, which is set to seize hundreds of billions from prominent businessmen for ailing Saudi coffers.

Featured

How Ajit Pai tore up the rulebook for the information age

FCC Chairman Ajit Pai has rewritten the rules of the information age so thoroughly that there's no mode of communication under his control where the rules aren't looser than they were a year ago. Here's a look at what he's done.


Be smart: While some of his deregulation has been bipartisan, his big-ticket proposals have divided the agency and the nation. He's actively courted fans of President Trump's populist rhetoric and inspired scorn on the left.

Why it matters: Many top Republican priorities have been mired in Washington gridlock since Trump took office. Not so at the FCC. Pai swiftly orchestrated the wholesale deregulation of the networks Americans use every day, which will likely alter the way people experience the internet, broadcast TV and even AM radio. Those changes will play out over years — not immediately.
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Ascension and Providence consider mega hospital merger

Ascension CEO Anthony Tersigni is eyeing a large health system merger. Photo: Aijaz Rahi / AP

Ascension and Providence St. Joseph Health are in discussions to merge, which would create the largest hospital system in the U.S., the Wall Street Journal reports citing people familiar with the merger talks. The combined system would have 191 hospitals, numerous clinics and roughly $45 billion in annual revenue.

Why it matters: Although the Ascension-Providence deal is not guaranteed, it shows how health care has turned into the Wild West for mega-mergers. CVS Health is buying Aetna, Catholic Health Initiatives and Dignity Health are merging, and Advocate Health Care and Aurora Health Care are combining, among other deals. Yet, research shows mergers don't lower health care costs or improve care for patients.

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Sneak Peek: Pence to the pyramids

Pence listens as Trump announces his Jerusalem move. Photo: Alex Brandon / AP

With President Trump's announcement on Jerusalem lighting up the Middle East, Vice President Mike Pence embarks Saturday on his first trip to Israel since taking national office.

The vice president will be gone for a week, with stops in Egypt and Germany:

  • Pence takes off from Washington, lands in Tel Aviv and goes straight to Jerusalem for a bilateral meeting with Israeli President Benjamin Netanyahu.
  • Pence then will light a menorah at the Western Wall.
  • An aide said that Pence's message in Israel will be that Trump, as he said in his speech recognizing Jerusalem as the capital, is committed to working for peace between Israelis and Palestinians.
  • Pence will use his meetings with leaders in the region to reaffirm the administration's commitment to work with partners throughout the Middle East and to "defeat radicalism."
  • On Monday, Pence will give the signature speech at the Knesset, the Israeli Parliament. The speech will be aimed at the region overall. Pence will emphasize that he is there on behalf of the president, and detail why Israel is a most cherished ally of the United States.
  • Pence will then fly to Cairo for a bilat with President Abdel Fattah el-Sisi. The two will discuss security and joint efforts to fight ISIS.
  • Pence will visit the pyramids and will talk with media with the ancient wonders as a backdrop.
  • Pence will fly home through Ramstein Air Base in Germany, and will do a meet-and-greet with troops.

The takeaway: A key theme for Pence's remarks and interviews will be U.S. efforts to stop persecution of Christians and other religious minorities in the region.

Go deeper: Palestinians won't meet with Pence.

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Exclusive: Policy official leaving White House

The White House South Portico is adorned with Christmas lights. Photo: Manuel Balce Ceneta / AP

Paul Winfree is leaving the White House, according to a senior administration official with knowledge of the decision. Winfree, who declined to comment, has resigned from his position as Deputy Director of the White House Domestic Policy Council and Director of Budget Policy.

  • Why this matters: Winfree's departure is part of what we've been forecasting will be a wave of White House staff departures after year one of the Trump presidency. His last day in the White House will be Friday.

Winfree, a respected policy wonk with strong ties to the conservative movement, is the second senior official to announce a departure in three days. Deputy National Security Adviser Dina Powell told colleagues she's leaving to return to her family in New York.

What Winfree has been telling friends and colleagues:

  • He and his wife are expecting a second baby boy in a few weeks.
  • He'll return to the Heritage Foundation, where he will run economic policy.
  • He also plans to start his own policy consulting business. -
  • Starting in February, he will teach a seminar on policymaking at a top university, where he will draw on his experiences working in the White House, the U.S. Senate, and with think tanks.