Axios Generate

We can already draw some conclusions from yesterday's rollout of the "framework" for big climate legislation House Democrats are crafting through the powerful Energy and Commerce Committee.

Driving the news: I'll get to some takeaways in a moment, but first: The planned bill aims to achieve net-zero U.S. greenhouse gas emissions by 2050. Pillars include...

• A "clean electricity standard" that forces utilities to provide 100% zero-carbon power, with escalating requirements beginning almost immediately.
• New requirements for states to submit plans showing how they will meet net-zero emissions targets.
• Requirements for the Federal Energy Regulatory Commission to deeply weave climate into natural gas-related decisions.
• New financial support and requirements for low-carbon buildings codes and infrastructure.
• Vastly stronger vehicle emissions rules and support for EV infrastructure.
• A "buy clean program" aimed at spurring decarbonization of energy-intensive manufacturing.
• Mandates for the oil-and-gas industry to deeply cut methane emissions.
• A "National Climate Bank" to spur more investment in low-carbon tech deployment.

The intrigue: Here are a few takeaways...

1. Energy and Commerce Chairman Frank Pallone signaled how Democrats are seeking to lay the groundwork now for legislation if the party gains control of Washington in the 2020 elections.

• He's pessimistic about GOP support for an aggressive bill. “There’s a fundamental problem here which I would be crazy not to acknowledge, which is most of them are climate deniers,” he said at yesterday's announcement. (Democrats might put something on the floor this year but it's DOA beyond the House.)
• Yesterday's unveiling showed how lawmakers are working with outside groups to get on the same page now. My inbox started filling up with pre-cooked supportive statements from groups including the Center for American Progress to coincide with the release.

2. Carbon pricing is de-emphasized but it's there if you squint. There's no explicit tax or fee in the framework, and it's not a big federal cap-and-trade system. “We think we can get there and achieve this goal without it," Pallone said of pricing.

• But, but, but: The plan notes that power companies, under the "clean electricity standard," could "buy and trade clean energy credits from one another or purchase them via auction."
• And lawmakers name-checked the Regional Greenhouse Gas Initiative, the existing cap-and-trade program among northeastern states when discussing state options.
• Elsewhere, it says that states who don't submit or get approval for net-zero plans are "automatically subject to a backstop carbon fee."

3. Leadership-aligned Democrats will face struggles on their left.

• There's stuff in the bill that the more lefty wing of the green movement won't like, such as crediting nuclear power and fossil generation with carbon capture in the "clean electricity standard."
• And some advocates want an even more accelerated net-zero timeframe. The upstart Sunrise Movement, which is aligned with the Alexandria Ocasio-Cortez wing of the party and backs the Green New Deal, called the plan a step in the right direction but also attacked it.
• Sunrise's Lauren Maunus said it "falls short of the scale and scope of action the U.S. must take to tackle the dual crises of climate change and skyrocketing inequality.” The group Friends of the Earth bashed the plan, too.

Yesterday brought fresh evidence that oil markets aren't massively spooked by the Iran crisis, especially now that things appear to be cooling off.

Driving the news: Brent crude oil prices fell below the levels they were trading at before the U.S. airstrike last week that killed Iranian Gen. Qasem Soleimani.

What's next: Who knows, but a Eurasia Group note yesterday argues the most likely of several scenarios now is de-escalation. One aspect would be "Iran will continue to harass commercial shipping and oil infrastructure at a low level."

• "Even with the receding threat of US/Iran conflict, a broad host of supply and demand factors, coupled with some [the Middle East and North Africa] geopolitical risk premium, means that Brent oil prices will now be in the USD 65-75 range," they predict.

Where it stands: Brent crude was trading at $65.46 as we sent this newsletter.

Reminder: Axios' Amy Harder looked more deeply at this dynamic in a piece yesterday, and chatted about oil markets and the Iran crisis on the Axios Pro Rata podcast.

Go deeper: Five reasons oil prices failed to soar on US-Iran tensions (Financial Times)

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Speaking of oil, Bloomberg fact-checks President Trump, noting that while U.S. crude oil imports from the Persian Gulf are at a 30-year low, Trump nonetheless mischaracterized the state of play.

"President Donald Trump said during an address from the White House Wednesday that the U.S. no longer needs oil from the Middle East, but American refineries still use the kind of oil that region produces," they report.

Tom Donohue, the longtime CEO of the U.S. Chamber of Commerce, will deliver a speech Thursday urging bipartisan support for issues that Democrats hold dear — like climate change and infrastructure investment, Axios' Dion Rabouin reports.

Why it matters: The Chamber is the largest business organization in the U.S., and some of Donohue's remarks will be a departure for a group that has, under his leadership, "battled environmental regulations, restrictions on cigarette packaging, workplace anti-discrimination rules and minimum-wage requirements," as WSJ put it.

The big picture: The remarks Donohue plans to deliver today — provided first to Axios — will call for the passing of "35 bipartisan bills that can help address climate change through innovation and investment."

Go deeper

Renewables: Via Greentech Media, "Google and Nevada utility NV Energy have joined up on an energy supply agreement to power an under-construction data center outside Las Vegas, with future capacity that rivals the largest corporate solar power-purchase agreement announced to date in the U.S."

Electric cars: Per Reuters, "Zhejiang Geely Holding Group Co Ltd and Mercedes-Benz on Wednesday said they would each invest 2.7 billion yuan ($388.77 million) in a China-based venture to build 'premium and intelligent electrified' vehicles under the smart brand."

Venture capital: BP said this morning that its VC arm is investing $3.6 million in the Chinese firm R&B, marking what BP calls its "first venture into artificial intelligence (AI) technology in China."

"R&B’s energy management systems are designed to predict, control and improve a building’s energy use," BP said in a release.

The new merger of big auto industry trade groups to form the Alliance for Automotive Innovation won't end the fault lines in the sector's approach to emissions regulations.

Driving the news: The new group says it will not intervene in litigation over the White House move to strip California's power to set emissions rules that exceed federal standards.

“The Alliance for Automotive Innovation does not have a position in the lawsuit,” John Bozzella, head of the new group, said in a statement.

But, but, but: The industry remains deeply divided because a number of automakers in the new group — including GM, Fiat Chrysler, Toyota — are continuing their prior intervention in that lawsuit on the Trump administration's side.

The other side: Remember that a separate ad-hoc coalition of Ford, VW, Honda and BMW last summer reached a preliminary agreement with California to adopt more stringent standards than the White House wants.

The bottom line: It's kind of a mess, and at least for now, the creation of a huge new cross-industry trade group won't change that dynamic.

Go deeper:

• Auto industry splinters in climate fight
• Two U.S. auto trade groups merge as regulatory issues loom