May 7, 2019

Axios Generate

Ben Geman

Welcome back!

Situational awareness: Rep. Alexandria Ocasio-Cortez (AOC) is in talks with documentary filmmaker Rachel Lears about a new project that would chronicle the freshman Democrat's Green New Deal policy movement, per a scoop by Axios' Sara Fischer and Alexi McCammond.

Plus, hat tip to DJ @JakeRudh's Twitter feed that reminded me last weekend marked 40 years since Elvis Costello released the song "Accidents Will Happen," which opens today's edition...

1 big thing: The new climate politics

Illustration: Rebecca Zisser/Axios

I'm declaring the (roughly) half-year mark of a new phase in climate politics that began when Democrats won House control and the party's 2020 primary campaign got rolling in earnest.

Why it matters: Democrats are beginning to shape the ideas that could become actual policy if the 2020 elections open a political window, while some Republicans are scrambling to come up with a response.

The big picture: Here are my early political takeaways (Disclaimer: It's not a comprehensive list!) ...

  • Ambition is in. At least 9 major candidates have endorsed moving the U.S. to net-zero greenhouse gas emissions by 2050, which is a very heavy lift. And we're seeing other aggressive ideas, including calls by Sen. Elizabeth Warren and some other candidates to end new fossil fuel leases on federal lands.
  • But so is realism. No major candidate (known to me) is calling for a 2030 net-zero U.S. emissions target, which has been the goal of some GND backers. Even the aggressive Sunrise Movement most recently said the U.S. has a responsibility to get there faster than 2050, but did not repeat their 2030 deadline.
  • Climate has arrived in national politics. A recent CNN poll showed it among the very top priorities for Democratic primary voters, and it's not an isolated result. Presidential hopeful Beto O'Rourke made climate the subject of his first detailed policy proposal, and I'm confident that the days when it's absent from televised debates are gone.
  • It's a mixed bag for carbon pricing. An ostensibly bipartisan House carbon fee bill has just 1 GOP backer so far. Nor is pricing — via a tax or permit trading — a priority for key GND advocates, though they do see some role. Via NYT, several major candidates support pricing as part of wider climate policies. But it has not been the central pillar of discussion on the stump thus far.
  • GND also has mixed bag. AOC and activists — including Sunrise — have pushed the GND to the forefront of the conversation. But backers have made some mistakes, and the Senate version of the resolution has gained just 1 new co-sponsor since its February rollout with 11 supporters (including many 2020 candidates). And the national AFL-CIO has been critical, which matters as Joe Biden — who's atop the early polls — seeks to run as a labor candidate.
  • Republicans need … something. A number have floated ideas of their own or are working on them. Sen. John Cornyn, who's in Republican leadership, tells Bloomberg he's working on an innovation-focused proposal, while Axios' Amy Harder looks at other Republicans here. GOP plans are far less aggressive than Democratic ideas, but the politics have moved away from simple opposition.

Editor's note: This story was updated to clarify that multiple Democratic candidates support an end to new federal fossil fuel leases.

2. Chevron shoved aside (for now) in takeover fight

ICYMI last night, Anadarko Petroleum's board said Occidental Petroleum's revised offer for the company is "superior" to Chevron's bid, a move that gave Chevron 4 days to revise its offer.

  • Chevron has not yet provided comment after yesterday evening's announcement.

Why it matters: It's the latest twist in a high-stakes battle to land the biggest oil megadeal in years — one that will enhance the winner's position in the booming Permian Basin shale fields.

Where it stands: The move follows Occidental's move yesterday to sweeten its offer in a bid to undercut Chevron, its much larger rival. Occidental changed its $76-per-share offer to be 78% cash and 22% stock, compared to the 50-50 split in their prior bid.

The big picture: Late last month, Occidental said its total offer, including debt, was valued in the $57 billion range based on its share price at the time.

  • That's higher than Chevron's mid-April deal to acquire Anadarko at $65-per-share in a deal that would have been 75% stock and 25% cash, with a total value of around $50 billion including debt.
  • Anadarko said Monday that Occidental's offer yesterday was a "superior proposal" under the terms of their merger agreement with Chevron.
  • If Anadarko ends its agreement with Chevron, it will have to pay a $1 billion termination fee.
3. Where it stands: Clean energy targets
Expand chart
Data: Clean Air Task Force; Chart: Chris Canipe/Axios

A slew of states and electricity companies are committing to aggressive targets to reduce greenhouse gas emissions in a trend underway since President Trump took office, Amy reports.

Why it matters: These actions show that substantive efforts — not just rhetoric — are underway across America in the face of Trump's rollback of climate policy at the federal level.

Between the lines: The actions over the past year signal a subtle, but significant, shift away from policies promoting just renewable energy — like wind and solar — toward those that target emissions reductions no matter the technology.

  • This brings into consideration other non-renewable but still clean-burning technologies like nuclear power.

By the numbers:

  • Since last fall, 5 states have enacted standards mandating 100% carbon-free electricity within the coming decades, according to new data compiled by Clean Air Task Force, an environmental group.
  • 4 additional states are actively debating similar measures.
  • More than 20 utilities have committed to carbon reductions of at least 80%, most of which have come since Trump was elected.
  • Added up, these moves represent nearly 40% of U.S. electricity sales and almost a third of national utility carbon dioxide emissions.

Go deeper

4. Lightning round: nuclear, LNG, shale, EVs

Nuclear: Morning Consult writes, "Green New Deal sponsor Alexandria Ocasio-Cortez still has an 'open mind' on nuclear energy and differentiates between the decades-old plants in the United States and more advanced technologies under development."

  • Quick take: One more of my political takeaways I didn't mention above is that a firm "100% renewables" stance is not carrying the day, for now, as even key progressives' policy postures leave room for a broader tech mix.

LNG: "The Oregon Department of Environmental Quality on Monday denied a water quality certification for the proposed Jordan Cove liquefied natural gas (LNG) export terminal and its feeder pipeline, the Pacific Connector pipeline, though the agency left the door open for the company to reapply," The Oregonian reports.

  • The intrigue: State officials denied the project using their considerable authority under Section 401 of the federal Clean Water Act. Trump recently issued an executive order aimed in part at trying to curb states' ability to block energy projects using that section.

Shale: Per Reuters, "Pioneer Natural Resources Co. beat Wall Street estimates for quarterly profit on Monday, and said it sold its Eagle Ford and remaining assets in South Texas to become a pure-play Permian basin producer."

EVs: Via Bloomberg, "With China bent on dominating the future of electric vehicles, President Donald Trump is likely to erect trade barriers targeting that technology in the form of stiff new tariffs that will have staying power, according to a consultant on the country’s auto market."

5. The inherent brakes on EV growth

A new piece in The Conversation puts some eye-opening numbers behind why it will take so long to wring carbon emissions out of the country's car and truck fleet even though EVs are growing fast.

Why it matters: As many Generate readers no doubt know by now, transportation has surpassed electricity as the largest source of U.S. carbon emissions.

  • A number of cities and states are promoting policies to boost adoption of zero-emissions vehicles, which are now a tiny fraction of new car sales.

By the numbers: Here's part of the piece by MIT profs David Keith and Christopher Knittel...

  • "We’ve determined that the average American car, truck and SUV remains in use for 16.6 years with many logging 200,000 miles or more."
  • "When we researched how fast the nation’s entire fleet turns over, we found that even if every U.S. vehicle sold were electric starting today, it would take until 2040 for 90% of vehicles in use to be electric."

What's next: The authors offer several policy ideas — around infrastructure and more — that would go further than current EV purchase tax credits (which are currently capped at 200,000 vehicles per manufacturer).

Ben Geman