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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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Graham-Cassidy could delay tax reform rollout

Sen. Lindsey Graham speaks at the Capitol last week. Photo: Andrew Harnik / AP

Administration officials have been debating whether to delay the tax rollout until the first week of October to clear space for the Graham-Cassidy health care bill. Sources with direct knowledge tell me no final decisions have been made as of Wednesday afternoon, but Trump has been impatient for tax reform to begin so he may not tolerate any more delays.

Why it matters: Sources involved say the plan is still to roll out tax reform next week, but some officials are wringing their hands about the health care bill — the Senate could vote as early as Wednesday — ruining tax reform's launch week by sucking all of the attention away from tax.

Why it's happening: Trump wants tax reform on schedule, but the Senate is running out of days to use reconciliation to change elements of the Affordable Care Act. Meanwhile, there is concern of potential leaks from the upcoming House Ways and Means Committee retreat, and the "Big Six" that's negotiating the plan has yet to decide what to put in the document that will guide tax reform.

The "Big Six": House Ways and Means Committee chairman Kevin Brady, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Senate Finance Committee chairman Orrin Hatch, Treasury secretary Steven Mnuchin and White House economic adviser Gary Cohn.
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Mueller's probe shifts to Trump's presidency

Robert Mueller testifies on Capitol Hill in 2013. Photo: J. Scott Applewhite / AP

Special Counsel Robert Mueller has sent the White House a request for documents pertaining to some of President Trump's most controversial moves in office, per a report from The New York Times. The news suggests that at least part of the Russia probe is focused directly on Trump's time as president.

What Mueller wants: Trump's meeting with high-ranking Russian officials in the Oval Office the day after Comey's firing; the events leading to the firing of Michael Flynn; and the White House's response to questions from NYT about Donald Trump Jr.'s Trump Tower meeting with Russian officials.

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Artificial intelligence pioneer calls for the breakup of Big Tech

Illustration: Lazaro Gamio / Axios

Yoshua Bengio, the artificial intelligence pioneer, says the centralization of wealth, power and capability in Big Tech is "dangerous for democracy" and that the companies should be broken up.

Why it matters: Bengio is a professor at the University of Montreal and a member of the three-man "Canadian Mafia" that pioneered machine learning, the leading method used in AI. His remarks are notable because of his influence in the AI community and because he or his peers all either directly lead or consult for Big Tech's AI programs. Says Bengio: "Concentration of wealth leads to concentration of power. That's one reason why monopoly is dangerous. It's dangerous for democracy."

The AI pioneers: Bengio consults for IBM and his colleagues Geoffrey Hinton consults for Google and Yann LeCun for Facebook. Ruslan Salakhutdinov, a protege of Hinton's, runs Apple's AI research effort.

Benigo said the concentration of resources, talent and knowledge among giant tech companies is only increasing and governments must act. "We need to create a more level playing field for people and companies," Bengio told Axios at an AI conference in Toronto last week.

In recent years, Apple, Facebook, Google and Microsoft have amassed a towering lead in AI research. But now, they are subject to growing scrutiny because of their outsized influence on society, politics and the economy. I asked Bengio if the companies should be broken up. He harrumphed and responded that anti-trust laws should be enforced. "Governments have become so meek in front of companies," he said.

"AI is a technology that naturally lends itself to a winner take all," Bengio said. "The country and company that dominates the technology will gain more power with time. More data and a larger customer base gives you an advantage that is hard to dislodge. Scientists want to go to the best places. The company with the best research labs will attract the best talent. It becomes a concentration of wealth and power."

When some of the young people gathered around him looked a bit dejected, Bengio responded, "Don't despair — fight."

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After summer of historic lows, Trump's popularity improves

Photo: Carolyn Kaster / AP

After several months of reaching record-lows in approval, new polls are showing President Trump's ratings beginning to climb upwards, according to Politico.

  • POLITICO/Morning Consult: 39% last month vs. 43% this week
  • Gallup: 35% last month vs. 38% last week
  • RealClearPolitics average: 37.4% August 14 vs. 39.9% September 20

How it happened: Politico reports Trump's responses to hurricanes Irma and Harvey helped his approval, after his ratings taking a over Charlottesville. Also, while his decision to end DACA was unpopular, he gained momentum from his negotiation with Sen. Schumer and Rep. Pelosi. But, his "popularity still remains historically low for a first-year president."

Other findings: Trump's upward trend over the past month is bigger with independents (+5%) than Republicans or Democrats (both +2%).

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Howard Schultz: Companies need to balance profit and conscience

AP

Howard Schultz, who rose from the projects in Brooklyn to create Starbucks, is making it a personal mission to find jobs for some of the least-advantaged and, in his view, most deserving in the United States: veterans and their families, refugees, and, with a job fair today, young people who are neither going to school nor working.

Why it matters: Schultz and his partners are attempting to pull a much-overlooked segment of U.S. society into the work force at a time that public hostility is driven in large part by low and stagnant salaries, and deep pockets of joblessness in inner cities and rust belts.

We caught up with Schultz at the Convention Center in downtown Washington, DC, where Starbucks and about a dozen other companies were conducting interviews with some 1,800 job-seekers aged 16 to 24 years old, seeking to hire as many as possible on the spot, and others over the coming months.

The background: The official national unemployment rate is just 4.4%, but we all know that statistic camouflages a world of misery: Among it is an 11.7% jobless rate for people 16 to 24 — those trying to just get started — and worse for black youths (14.6%) and Latinos (11.9%). Between the lines are young people who have dropped out of school, are jobless, have a criminal record, or are a parent.

Schultz's organization is attempting to attack the whole crippling system. Downstairs from where we spoke, there was a place for job applicants to leave their child while they were interviewed; a place to type up a quick resume; a place to put on a tie and jacket; and one for makeup. For those hired on the spot, there was advice for finding a place to stay, for public transportation, and child care. Companies, Schultz said, need to find "a balance between profit and conscience."

A need for "truthfulness": Regardless of what I asked in our quick, 15-minute chat, Schultz kept returning to what he said the country sorely needs — civility and respect toward one another. "There is a need for more truth and more transparency, not only because of Donald Trump becoming president," he said. "We've needed that for some time. There is a great need for servant leadership and truthfulness."

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Fed to begin reversing its huge stimulus program

Federal Reserve Chair Janet Yellen testifies before Congress. Photo: Pablo Martinez / AP

The Federal Reserve will begin selling off the government debt and mortgage bonds it amassed to help drive down interest rates and stabilize the housing market in the aftermath of the financial crisis, a move that signals the central bank's growing confidence in the U.S. economy.

Steady as she goes: The Fed will shrink the value of its portfolio of bonds by just $10 billion per month, a fraction of its $4.5 trillion stockpile. The modest nature of the move reflects the Fed's recognition that despite historically low unemployment rates, wage growth has been tame and inflation remains below the bank's 2% annual target.

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Obama: ACA is the reason "people are alive today"

Barack Obama delivers his speech during the 4th Congress of Indonesian Diaspora Network in Jakarta, Indonesia this July. Achmad Ibrahim / AP

While speaking at an event sponsored by the Bill and Melinda Gates Foundation today, former President Barack Obama said "people are alive today because of" the Affordable Care Act, "and when I see people trying to undo that hard-won progress…it is aggravating."

Obama ripped into the Graham-Cassidy bill, which proposes block grant funding to be distributed among the states. Obama said it would "raise costs, reduce coverage and roll back protections for older Americans, and people with pre-existing conditions." Based on current projections from consulting firm Avalere Health, health care cuts could top $4 trillion under this bill.

Other key quotes:

  • "Nationalist thought, xenophobic sentiment ... a politics that threatens to turn good people away from the kind of collective action that has always driven human progress."
  • On climate change: It's the "threat that may define the contours of this century more than any other."
  • On the future of the internet: "I don't think we can count on conventional media to spread the word [of progress]. This is where the power of the internet has not been harnessed the way it needs to be, particularly when you think of young people and young audiences.
Watch Obama speak:

Obama is speaking across town from Trump's UN appearance.

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Trump tells leaders his friends are going to Africa "to get rich"

President Trump addressed African leaders at a UN luncheon, and discussed the "tremendous potential" of Africa, particularly economically. He also said he was disturbed by violence in South Sudan and the Congo, and planned to send UN Ambassador Nikki Haley to Africa.

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Amazon reportedly talking to pharmacy benefit managers

Amazon may be trying to start building pharmacy contracts. Photo: Richard Drew / AP

Amazon may be talking with some middle-market pharmacy benefit managers "in an effort to get into various contract arrangements," according to analysts at investment bank Leerink Partners who spoke with pharmacy executives. Amazon may pursue a mail-order pharmacy that initially targets uninsured customers or people who have high deductibles and pay cash for most of their prescription drugs.

Reality check: The country is still a long way from Amazon handling people's prescriptions, if that time even comes. But conservations with prescription drug middlemen make it appear "that this is the direction Amazon is moving in," Leerink said in a report. Pharmacy executives who spoke with Leerink said it would take at least 18 to 24 months for Amazon to get proper drug licenses in 50 states. Amazon didn't immediately respond.

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Ransomware hack targeting 2 million an hour

This photo shows fingers on a laptop keyboard in North Andover, Mass. Elise Amendola / AP

A ransomware attack sweeping the globe right now is launching about 8,000 different versions of the virus script at Barracuda's customers, Eugene Weiss, lead platform architect at Barracuda, told Axios, and it's hitting at a steady rate of about 2 million attacks per hour.

Weiss' gut reaction on this hack: "What's remarkable about this one is just the sheer volume of it."

Here's what you need to know on the latest:

  • Automated hacking: "Nobody actually sat there and made 8,000 digital modifications," Weiss said. The way they do it is by using a kit that essentially automates code variations.
  • What to watch out for: An incoming email spoofing the destination host, with a subject about "Herbalife" or a "copier" file delivery. Two of the latest variants Barracuda has detected include a paragraph about legalese to make it seem official, or a line about how a "payment is attached," which tricks you to click since, as Weiss puts it, "everyone wants a payment."
  • The hackers are using social engineering to get people to click. That's increasingly becoming a trend, per Weiss. It's "less pure technical hacks" and instead using psychological tactics "get someone to click on something they shouldn't be."
  • If you remember one thing: "Don't click the link that is absolutely the most essential thing."
  • The targets: Email addresses at businesses or institutional groups in the U.S. or Canada.
  • It's likely not a nation-state perpetrating the hack, since the hackers' motives are financial. Instead it's a small, sophisticated group of criminals. The attacks are originating in Vietnam for the most part, as well as India, Colombia, Turkey, Greece, and a few other countries.
  • The future of global hacks: "At some point in the future you may see multilingual internationalized" hacks, Weiss said. In other words, they could be language-targeted. While the messages from these particular hackers are all in English so far, the virus programs are assessing the target computers' language settings.