Jun 23, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning. Today's Smart Brevity count: 1,176 words, 4.5 minutes.

Worthy of your time: In partnership with No Kid Hungry, Axios will host a conversation on ending child hunger in America amidst a pandemic.

  • Join Axios CEO Jim VandeHei and executive editor Sara Kehaulani Goo for conversations with chef and founder of Fieldtrip Harlem JJ Johnson and national policy advisor at Share Our Strength Dorothy McAuliffe.
  • Register here for the event on Wednesday, June 24, at 12:30pm ET.

🎵 And finally let's mark the birthday of the late Grateful Dead lyricist Robert Hunter, who penned today's beautiful intro tune...

1 big thing: The persistent racial disparities in energy expenses
Data: Energy Institute at HAAS; Chart: Danielle Alberti/Axios

Black renters and homeowners face substantially higher residential energy costs than white residents, and these persistent differences are present almost throughout the income scale, a new working paper shows.

Why it matters: The research "contributes to a broad set of evidence that Black Americans bear a disproportionate burden of the current energy system" evident in both pollution exposure and cost, writes Eva Lyubich, a UC Berkeley doctoral candidate in economics.

How it works: The analysis compares residential energy costs by using Census Bureau data and then running an analysis that controls for household size, income and location.

  • It looked at expenses for electricity, natural gas and other home heating fuels.
  • The result? A clear racial gap present in homeowners' and renters' costs, albeit one that has narrowed to some extent.
  • The gap is "fairly stable" across income levels, though it closes at the very top of the income ladder.

By the numbers: "Energy expenditures for both groups are decreasing between 2010–2017, and the conditional gap in annual expenditures decreases by about $150 for the average household, but continues to be economically significant at about $200 for renters and $310 for homeowners in 2017," the paper finds.

Between the lines: Learning precisely why the disparities exist and persist is tricky. Controlling for the type and age of homes does not significantly change the gap, the paper finds. But the paper zeroes in on energy efficiency disparities as a factor in the gap.

  • "Conditional on income, Black households are more likely to report that their home is drafty," the paper notes.
  • "They also report fewer Energy Star qualified appliances and home features, and are less likely to have received a rebate or tax credit for having upgraded an appliance."

The big picture: The new findings arrive amid a wider national reckoning about systemic racism and racial disparities in the wake of the police killing of George Floyd in Minneapolis.

Of note: The paper acknowledges its limitations, pointing out that it relies on self-reported Census data on energy expenses. Lyubich writes that she's planning a follow-up analysis using residential billing data in California.

What they're saying: UC Berkeley economics professor Maximilian Auffhammer writes in a blog post about the findings...

"What we learned from Eva here is that so long as this energy cost inequity persists, any future carbon/energy tax, or other policy that raises energy costs, is likely to increase energy expenditures more for Black households — especially poor ones — than for white households in the same income bin. And that’s just wrong."
2. Breaking: Amazon's big new climate VC fund

Amazon is creating a $2 billion venture fund that will stake companies working on climate-friendly technologies in transportation, storage, food, power generation, waste and more, the tech giant said Tuesday.

Why it matters: The new fund will help Amazon and other companies meet the "climate pledge" that Amazon announced last year to reach net-zero emissions by 2040.

  • Verizon, Infosys, and consumer goods heavyweight Reckitt Benckiser joined the pledge last week, and Amazon said this morning it will look to involve pledge signatories in the venture effort.

How it works: "Companies from around the world of all sizes and stages will be considered, from pre-product startups to well-established enterprises," Amazon founder and CEO Jeff Bezos said in a statement.

What's next: Amazon opened the initial application process this morning, setting up a page to accept "indications of interest."

  • But, as the Wall Street Journal notes, Amazon didn't provide a timeline for distributing what it called the "initial" $2 billion.

The big picture: It's part of a growing move by tech giants into funding climate-friendly companies and technologies — even as they remain under fire over their business deals with oil companies.

Flashback: Microsoft, when it rolled out its January pledge to become "carbon negative" by 2030, said it was creating a $1 billion fund to "accelerate the global development of carbon reduction, capture, and removal technologies."

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Speaking of VCs, BP's venture arm is investing $5 million in the geospatial analytics firm Satelytics in order to help monitor methane emissions, the companies said Tuesday.

  • BP said Satelytics' tech can "be part of BP’s aim to install methane measurement at all major oil and gas processing sites by 2023, publish the data and then drive a 50% reduction in methane intensity of its operations."
3. Big players hunt for EV and battery startups

Illustration: Aïda Amer/Axios

Hyundai Motor Group and the battery heavyweight LG Chem are launching a global competition to find and finance battery and electric vehicle startups.

How it works: The "EV & Battery Challenge" aims to identify up to 10 startups to collaborate with and "develop proof-of-concept projects while leveraging the sponsors’ technical expertise, resources and laboratories."

  • They're targeting startups in areas including EV charging, power electronics, battery systems and materials, and recycling.
  • The nonprofit group New Energy Nexus, which works with clean energy entrepreneurs, will manage the competition.

Why it matters: Monday's announcement underscores how auto companies making big investments in EVs know they need better tech and outside help to make it pay off in the increasingly competitive space.

Where it stands: Hyundai, which sells cars under its eponymous and Kia brands, and LG Chem did not say how much funding they plan to provide.

  • Hyundai plans to have 23 EVs in its lineup by 2025 and, per Reuters, LG Chem will be among the suppliers for the models.

Go deeper: Kia, Hyundai, and LG Chem launch global EV technology competition (Car and Driver)

4. Petro-notes: WTI, Shell, ADNOC, Chesapeake
Data: FactSet; Chart: Axios Visuals

Prices: "While it remains 33% below its price at the start of the year, WTI crude has rebounded an astonishing 255% since the low on April 21, according to FactSet data." (Axios)

Litigation: "Thousands of Nigerians are asking British judges to give them permission to sue Royal Dutch Shell Plc in London over environmental damage caused by oil spills 3,000 miles away in Africa." (Bloomberg)

Deals: "Abu Dhabi National Oil Company (ADNOC) said on Tuesday it had signed a $10 billion gas infrastructure deal with a consortium of investors, while its chief executive told Reuters the company would keep a tight lid on costs amid low oil prices." (Reuters)

Policy: "The Trump administration has allowed struggling oil and gas company Chesapeake Energy Corp to suspend production from more than 100 federal drilling leases without losing ownership of the assets since the outbreak of the coronavirus, according to a federal database." (Reuters)

5. Apple's new iOS courts EV drivers

Apple is adding a feature to its new iOS 14 phone operating system aimed at making easier for EV drivers to find places to plug in.

Driving the news: "Electric vehicle routing adds charging stops along a planned route based on current vehicle charge and charger types," the company announced.

Why it matters: Concerns about running out of battery power — or "range anxiety" — is among the barriers to wider EV adoption.

How it works: "The company previously only allowed users to route to or from certain chargers in Maps, but now it will be able to include or add chargers to a trip, even on the fly," The Verge reports.

  • Their piece points out that drivers will of course need to find chargers compatible with their vehicle model, and that Apple is initially working with Ford and BMW.
  • Per TechCrunch, an Apple official said more vehicle manufacturers will be added soon.
Ben GemanAmy Harder