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Good morning and welcome back to Generate! There's a lot happening, so let's just dive right in. Oh, and your feedback and (confidential) tips are welcome at ben@axios.com.

A major new player in energy storage

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Big in business today: Siemens and AES Corp. announced Tuesday they are combining forces to create a major new energy storage industry powerhouse with a joint venture called Fluence.

Why it matters: Growth in battery storage is an important way to enable integration of more renewable energy sources, while it also can aid reliability and curb the need for additional fossil fuel generation and other infrastructure to serve peak demand.

Go deeper: "The unprecedented move marks a preemptive consolidation of power in a young industry — and a new competitor for emerging market leader Tesla," reports Greentech Media.

Synergies: Reuters notes that Siemens technology "focuses more on projects for individual companies and enterprises, such as universities and hospitals, while AES targets larger arrays that are incorporated into a region's electrical grid."

More details: The companies said their joint venture is aimed at a range of utility, commercial and industrial customers worldwide, using what's already a global footprint. The two companies have already completed or been awarded 48 projects, totalling 463 megawatts of battery storage in 13 countries.

Big in oil markets

Price warning: A new Goldman Sachs note says that oil prices could potentially tumble below $40 per barrel absent some changes in underlying market conditions, notably stronger action from OPEC to rein in production.

  • Goldman analysts say that "sustained trends in inventory draws and U.S. rig count declines or evidence of further OPEC actions will be required for prices to rally."
  • They warn that absent the necessary changes, the $40 floor could be breached "as the market tests OPEC's and shale's reaction functions."
  • Bloomberg has more here on the Goldman forecast that was making the rounds overnight.

Spending rebound: A new International Energy Agency report out Tuesday finds that spending on oil-and-gas supply projects has turned the corner this year and "rebounded modestly" after dropping 44% between 2014 and 2016.

  • In their words: "A 53% upswing in U.S. shale investment and resilient spending in large producing regions like the Middle East and the Russia Federation...has driven nominal upstream investment to bounce back by 6% in 2017 (a 3% increase in real terms)."
  • However, IEA also warned of a "two-speed" market, with the U.S. shale spending contrasting with "stagnation" elsewhere in the world.
  • On a related note, the consulting firm Wood Mackenzie said in a short note late Monday night that the number of upstream oil-and-gas projects reaching final investment approvals could double this year.

Breaking Tuesday: Global energy investment drops

International Energy Agency

The big picture: A huge new IEA report on global energy investment trends released Tuesday morning has all kinds of interesting data (not just the oil project spending I mentioned above).

Some topline notes...

  • Total worldwide energy investment fell 12% to $1.7 trillion in 2016 compared to the prior year, largely due to lower oil-and-gas spending.
  • Spending on energy efficiency actually ticked up 9% and spending on electricity networks (think grid modernization infrastructure and transmission) rose too, but that was more than offset by the drop in upstream oil-and-gas and lower power generation spending, led by the drop in coal-plant investment.
  • "The electricity sector edged ahead of the fossil fuel supply sector to become the largest recipient of energy investment in 2016 for the first time ever," IEA said.

A summary is available here.

Green bang for the buck: Investment in new renewable power capacity fell somewhat to $297 billion, but the overall number doesn't tell the whole story. "While renewable investment is also 3% lower compared with five years ago, it will generate 35% more power thanks to cost declines and technology improvements in solar PV and wind," IEA notes.

But glass half-empty on climate: IEA notes that while carbon emissions were again level last year, investment in carbon-free power is not keeping up with global demand growth. "Growth in new wind and solar PV generation growth is almost entirely offset by a slowdown in final investment decisions for new nuclear and hydropower expected in the coming years."

Climate article goes big time — and draws pushback

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Buzzing right now: A deeply reported, deeply pessimistic New York Magazine cover piece on global warming titled "The Uninhabitable Earth" has set the climate policy world buzzing since it went up Sunday night.

David Wallace-Well's piece makes the case that human-induced climate change is on such a dangerous pathway that, absent far more aggressive action, "parts of the Earth will likely become close to uninhabitable, and other parts horrifically inhospitable, as soon as the end of this century."

Yes, but: The piece is getting some pushback in climate science and journalism circles.

  • Penn State's Michael Mann, one of the world's most prominent climate scientists, posted a rebuttal that criticizes the "doomist framing" and says the piece "paints an overly bleak picture by overstating some of the science."
  • Over at Mashable, veteran climate journalist Andrew Freedman writes that in some places, the piece exaggerates evidence or makes mistakes. His verdict? "It's still worth reading, but with a sharp critical eye."

From Amy’s notebook: Grid needs tweaks, not overhaul

My Axios colleague Amy Harder was near Philadelphia on Monday to tour the headquarters of PJM Interconnection, the regional electric transmission organization coordinating the movement of electricity across most of the Eastern seaboard and parts of the Midwest. Here's her dispatch...

Big picture: America's power grid is managing well the vast changes happening in the nation's electricity mix and renewables aren't risking blackouts, Stu Bresler, senior vice president for operations and markets at PJM, told reporters over lunch in one of the headquarters' nondescript office buildings.

"The markets are working very well. They are providing reliable electricity at good costs," Bresler said, adding later he hasn't seen intermittent renewable electricity threaten reliability.

Why it matters: Bresler's comments provide a reality check to the more critical comments about renewables coming from Energy secretary Rick Perry and other Trump administration officials ahead of the Energy Department's study on the electric grid, which is due out within the next week or so.

One level deeper: Bresler said there are ways the government, along with PJM and utilities, can help ensure renewables are integrated safely, along with managing retiring nuclear and coal plants. However, he said, these would call for relatively minor changes, and not a big overhaul like the Trump administration has suggested might be in order.

On my screen

Natural gas: A pair of analysts at Resources For the Future have a new paper that explores options for cutting emissions of the potent greenhouse gas methane from the natural gas sector. The paper arrives as the Trump administration is abandoning Obama-era methane regs.

  • The paper surveys the economics and environmental benefits of various options, but in particular notes that a tax that assumes "default" leakage rates "performs particularly well in terms of economic efficiency and environmental effectiveness. "
  • Why it matters: Natural gas produces far less CO2 emissions than coal when burned for electricity, but methane leaks further up the development chain (notably production and transmission) erode some of those climate benefits.

'Dominance' backlash: The latest analyst to quibble with Trump-world's energy "dominance" mantra is UC Berkeley's Maximilian Auffhammer. In a new blog post, he notes that the U.S. lacks key ingredients for market "dominance" — an appetite for federal supply controls or enough market share to dictate price.

  • If you're on the go: Veteran analyst Kevin Book breaks down the idea of energy "dominance" in the latest podcast from Platts Capitol Crude.

Finance: Researchers at Duke's Nicholas Institute for the Environment looked under the hood of "environmental impact investing" and find there's not much consistency in how the effects are measured, which makes it very tough to see whether it's making a difference.

Utilities: The New York Times has a look at the effort by a hedge fund to block Warren Buffett's bid for Energy Future Holdings.

Latest in lobbying

A few new filings of note in the Lobbying Disclosure Act database...

Utilities: The Edison Electric Institute, which represents for-profit power companies, has brought on Miller & Chevalier to lobby on tax reform.

Cars: The Atlanta-based Center for Transportation and the Environment has tapped David E Schaffer Associates to lobby on promoting the use of zero-emissions vehicles.

Mining: Tahoe Resources has hired the firm Nossaman LLP to lobby on domestic and international issues affecting the mining industry.

Conservation: The Wilderness Society has retained Kasowitz Benson Torres LLP.

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First GOP health care bill fails, with many more votes to come

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The Senate GOP's Affordable Care Act replacement plan did a face plant on Tuesday night, with nine Republicans and all Democrats voting against it. But it was only the first vote of what's sure to be a long process, and its failure wasn't a surprise.

Why this matters: This was the Senate's best attempt at an ACA replacement, after about two and a half months of closed-door meetings attempting to find something that could bridge the caucus' deep divides. Its failure suggests Senate Republicans won't be able to come together on a replacement plan without Democrats in the future, no matter what happens next.

What's next: A vote on a bill that repeals the Affordable Care Act's subsidies, taxes and Medicaid expansion but leaves in place its regulations. It's expected to be tomorrow at noon.

The version of the bill, the Better Care Reconciliation Act, that the Senate voted down tonight included an agreement by Sens. Ted Cruz and Rob Portman that added $100 billion to help low-income people transitioning off of Medicaid, as well as Cruz's proposal to let insurers sell health plans that don't meet ACA requirements as long as they also sell plans that do.

Since neither of these were scored by the Congressional Budget Office, the BCRA amendment needed 60 votes to pass, meaning it was doomed from the start as Democrats were never going to support it.

Republicans who voted against the bill: Mike Lee, Susan Collins, Bob Corker, Lindsey Graham, Rand Paul, Dean Heller, Jerry Moran, Lisa Murkowski, Tom Cotton.

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Trump rallies in Ohio

Carolyn Kaster / AP

President Trump slipped into campaign mode Tuesday evening before an enthusiastic crowd in Youngstown, Ohio. He repeated his claim that he's accomplished more than almost any other president during his first six months in office, getting some of his biggest cheers of the night by comparing himself to the greats:

  • "With the exception of the late great Abraham Lincoln, I can be more presidential than any president that's ever held this office."
  • "I'd ask whether or not you think someday I should be on Mount Rushmore, but here's the problem — if I did it jokingly, having fun, the fake news media would say he believes he should be on Mount Rushmore, so I won't say it, I won't say it."
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Sessions issues new guidelines on sanctuary cities

Andrew Harnik / AP

Attorney General Jeff Sessions rolled out a new strategy to push back against sanctuary cities today, adding two new conditions for cities to obtain popular grants for local law enforcement from the Department of Justice:

  • Federal immigration authorities must be granted access to local detention facilities.
  • The federal government must receive 48 hours notice before a local authority can release an illegal immigrant in custody who is wanted by federal authorities.

Why it matters: Even as Trump hints at firing his attorney general both publicly and privately, Sessions is continuing to implement DOJ policy that's perfect red meat for Trump's base — and, indeed, Trump himself.

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House votes 419-3 for new Russia sanctions

Evan Vucci / AP

The House passed a bill Tuesday that would place new sanctions on Russia, Iran and North Korea by a 419-3 vote. The Senate passed a similar bill in June, by a 98-2 margin.

Speaker Paul Ryan released a statement saying: "The bill we just passed with overwhelming bipartisan support is one of the most expansive sanctions packages in history. It tightens the screws on our most dangerous adversaries in order to keep Americans safe."

The House bill requires congressional review of any actions President Trump wishes to take to relieve the sanctions, and the administration has argued that would limit Trump's ability to deal with Russia. But the wide margins mean Trump will have to either sign the bill, or risk an override of his veto.

What's next: This version of the bill heads to the Senate for approval.

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SEC concludes that "initial coin offerings" may be securities

BTC Keychain / Flickr CC

After an investigation, the Securities and Exchange Commission has concluded that organizations offering or selling digital assets using blockchains or distributed ledgers may be subject to securities laws, depending on the circumstances. This includes "initial coin offerings" (ICOs), a recently popularized crowdfunding method by which an organization issues virtual currencies or tokens.

Why it matters: ICOs are becoming increasingly popular among some circles of technologists. So far, hundreds of millions of dollars have been raised through ICOs, including the most recent record-breaker, Tezos, which brought in $232 million earlier this month.

Top concern: The SEC says that its main concern is ensuring that investors partake in these offerings and sales with full knowledge of the risks. By making these sales subject to securities laws, organizations will have to comply with disclosure requirements.

"Investors need the essential facts behind any investment opportunity so they can make fully informed decisions, and today's report confirms that sponsors of offerings conducted through the use of distributed ledger or blockchain technology must comply with the securities laws," said William Hinman, director of the division of corporation finance, in a statement.

Origin: The SEC's investigation stems from an inquiry into The DAO, a decentralized organization that intended to operate as an investment fund managed by shareholders and raised its funds through an ICO. However, in June 2016, it was hacked and some of its funds were syphoned. The SEC has concluded that it doesn't qualify as a broker-dealer or crowdfunding portal, though the commission won't pursue charges in this case — instead choosing to simply issue guidance to the industry.

More investor info: The SEC also issued an investors' guide in handling ICOs and similar digital asset sales.

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Trump promises three new "big, big, big" Apple plants in U.S.

Trump is seated between Apple CEO Tim Cook and Microsoft CEO Satya Nadella, in the State Dinning Room during yesterday's tech summit (AP's Alex Brandon)

Apple is declining to comment on any plans to expand domestic manufacturing after President Trump told the Wall Street Journal that the iPhone maker was planning three "big, beautiful plants" in the U.S.

Trump didn't say where the plants would be, but did add that they would be "big, big, big."

Worth noting: Apple uses contract manufacturers, mostly in Asia, to assemble nearly all its products, while a number of its suppliers have operations in the U.S. Thus, any domestic expansion is likely to come in conjunction with a supplier or contract manufacturer. Apple has also committed to investing another $1 billion in US manufacturers through an advanced manufacturing fund and is taking a $1 billion stake in SoftBank's $100 billion Vision Fund, which plans to make investments in US-based manufacturing.

Trump's hand: In the interview, Trump said he told Apple CEO Tim Cook that he wouldn't consider his administration's economic efforts a success if Apple didn't shift some work to the U.S.

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Timeline shortens on North Korea's nuclear strike capabilities

Wong Maye-E / AP

North Korea is on the course to be able to field a reliable, nuclear-capable intercontinental ballistic missile (ICBM) as early as next year, according to a confidential report from the Defense Intelligence Agency, per The Washington Post. This prediction now matches more closely the revised estimations coming from South Korea.

Why it matters: That jumps the timeline forward by two full years and ramps up the pressure on the U.S. and regional allies to halt North Korean progress. Kent Boydston, a research analyst at the Petersen Institute for International Economics, told Axios this will likely make the U.S. calls for isolating North Korea financially stronger. Boydston added that this will "make any kind of South Korea to North Korea engagement increasingly unlikely."

Why the change: As Tom Karako, senior fellow on the Missile Defense Project at CSIS, told Axios, "the activity of the last few years has been especially intense. It's not really a surprise that they're getting a closer to no-kidding ICBM deployment." Pyongyang has advanced its fuel and missile capabilities beyond what experts anticipated was possible, and its July 4 test of a missile capable of hitting parts of Alaska showed U.S. officials just how close the North Korean threat is according to Scott Bray, ODNI manager for East Asia.

What to watch:

  • North Korea does not yet have the capability to use reentry vehicles, which would allow warheads to survive reentry into the atmosphere despite high pressures and speeds. The Washington Post reports North Korea might be testing a new reentry vehicle around this Thursday, a North Korean national holiday. U.S. spy agencies have detected activity indicating a test is in the works.
  • There is also a submarine making erratic maneuvers, which could foreshadow a test launch from a sub, which would also indicate an important technological development, given how complex it is to launch a missile through layers of water.
  • "This is why we have long had operational plans to strike, defeat, and defend against missile threats like this, of both longer and shorter range varieties," Karako said. Read more on Axios about whether the U.S. is ready for an attack, here.

The DIA and ODNI declined to comment on classified assessments.

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More Senate health bill provisions violate budget rules

J. Scott Applewhite / AP

The Senate parliamentarian has ruled that more provisions of the Better Care Reconciliation Act — the Senate's Affordable Care Act replacement bill — don't comply with budget rules, meaning they'd need 60 votes to pass. These include a provision allowing insurers to charge older people more in premiums than under current law — the provision AARP has called an "age tax" — and the provision allowing small businesses to sell "association health plans," an important GOP priority.

However, the provision allowing states to choose to receive a Medicaid block grant, rather than a per-person funding cap, does comply with budget rules, meaning it only needs 50 votes like the rest of the bill. A provision broadening the ACA's state innovation waivers to include more of the law's regulations is still pending review.

Why it matters: The Senate bill was already struggling to win support among enough Republicans, and shedding more big pieces isn't going to help.

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AT&T's Internet TV service nears 500K users as traditional video business weakens

Mike Mozart / Flickr Creative Commons

AT&T said Tuesday that it now has nearly 500,000 subscribers in its Internet-based DirecTV Now video service. That comes amid continued losses in its traditional DirecTV video service.

DirecTV Now also faces a host of Internet-based competition, including Hulu, Dish Networks' Sling, Sony's PlayStation Vue and Google's YouTube TV. Sling leads the back, according to Ad Age, with an estimated 1.7 million subscribers, while Sony has around 450,000. Nielsen said earlier today it plans to start counting Hulu and YouTube TV along with the other leading TV services.

Earnings up, Revenue down: Overall, AT&T posted per-share earnings 79 cents, a nickel ahead of expectation and up nearly 10 percent from the prior year. Revenues, though were down a bit from a year-ago, to $39.8 billion amid weakness in both wireline and consumer wireless.

Phone business tough: AT&T said it added 2.3 million wireless customers in the U.S., but as has been the case for a couple years now, nearly all the gains came from connected cars and other non-phone devices.