Mar 1, 2021

Axios Generate

Good morning. Today's Smart Brevity count is 1,246 words, 4.7 minutes.

🚨 "The largest power generation and transmission cooperative in Texas has filed for bankruptcy protection in the wake of power outages that caused a national energy crisis during the winter freeze last month." (Bloomberg)

🖋️ Old friend Amy Harder's column, the Harder Line, is back! The former Axios reporter is writing monthly as an outside contributor. Check out item #2.

🎶 "Pretty in Pink" turned 35 yesterday, so its iconic soundtrack provides today's intro tune...

1 big thing: The latest move in Exxon's revamp
Data: Yahoo Finance; Chart: Axios Visuals

ExxonMobil this morning announced two additions to its board as the oil giant faces pressure to boost financial performance and do more on climate.

Driving the news: Activist investor Jeffrey Ubben and Michael Angelakis, CEO of the investment company Atairos and a former senior Comcast Corp. official, are the board's two newest members.

Exxon's stock is up around 4% in premarket trading and has generally been on an upward trend in recent months.

What's next: This week should bring even more signs about the company's future.

The Texas-based multinational holds its annual investor day on Wednesday at a time of unusual scrutiny on Exxon and oil majors more broadly.

Why it matters: The pandemic-induced price and demand cuts put the industry in a tailspin last year, but both are now rebounding, with crude prices at their highest level in over a year.

  • Nonetheless, the sector is under pressure to do more on climate change and prepare for a world where a peak in oil demand may not be far off.
  • That's all especially relevant to Exxon, which had extremely aggressive multiyear oil-and-gas investment plans before the crisis; has performed unevenly in recent years; and has not thus far not matched the diversification efforts of its European peers.

Where it stands: Exxon's stock is still only at about half the levels achieved in the mid-2010s.

Exxon, which lost $22 billion last year, has announced a bunch of changes in recent weeks and months, including...

  • Slashing planned capital spending, which is flexible but for now projected at $20-$25 billion annually through 2025, compared to pre-pandemic plans of $30-$35 billion.
  • The company has unveiled new emissions targets recently and a month ago added the former CEO of Malaysian oil-and-gas giant Petronas to its board.

The intrigue: Some activist investors are looking for bigger changes in Exxon's capital spending levels and emissions policies.

They include the investment group Engine No. 1, which has nominated its own slate of four new members to Exxon's board, including clean technology veterans.

  • But CNBC reports D.E. Shaw, another investment group pushing Exxon for changes, is expected to support the new board additions.
  • Their piece this morning also has details on the new board members.

What they're saying: Exxon CEO Darren Woods, in a statement, said Ubben and Angelakis have expertise that has helped companies "navigate complex transitions."

"Their contributions will be valued as ExxonMobil advances plans to increase shareholder value by responsibly providing needed energy while playing a leadership role in the energy transition.” 

2. A revealing power line battle in New England

Illustration: Sarah Grillo/Axios

Axios contributor Amy Harder reports...It wasn't his first choice, but Sean Mahoney isn’t fighting a 150-mile proposed power line sending Canadian hydropower to New England as part of the region’s climate goals.

Why he matters: Mahoney, a senior expert at the nonprofit Conservation Law Foundation who lives in Maine, is seeking compromise in a bitter battle over the proposal.

Expect more fights like this as President Biden and other political leaders pursue zero-carbon economies over the next 30 years.

Catch up fast: Last week, opponents of the $1 billion project got state approval to move forward with a referendum that would effectively kill it, if approved by either the Maine legislature or voters.

What they’re saying: Mahoney said his organization is not opposing the project because the developer made concessions, including financial support for low-income customers, electric-car funding and land conservation.

  • He's also not fighting it because the line would force some closure of natural gas-fired power plants, which are the region’s primary electricity source but also contribute to climate change.

Where it stands: Responding to a request from Massachusetts as part of its climate goals, Avangrid proposed the project that will send existing hydropower from Quebec through Maine into New England’s grid. Construction has begun on parts of it.

  • Controversy is swirling around 53 miles in Maine’s Western forest, which is used for logging but also recreation.
  • Through the public referendum, legislation and lawsuits, some environmental groups and natural-gas companies are — for different reasons — fighting the project.

Read more

Editor's note: Amy Harder is VP of publishing at Breakthrough Energy, where she's launching a new journalism initiative. You can reach her at

3. (Very) early takeaways from the Granholm era

Newly sworn-in Energy Secretary Jennifer Granholm did a burst of interviews and a few things that caught my eye...

Legislative plans: She offered the Washington Post broad info about the economic recovery package the White House will push after the current COVID-19 relief plan.

  • "I fully expect that there will be a significant commitment to investing in the national grid, both expanding the lines for transmission, as well as investing in the resiliency of the grid," Granholm said.
  • She said it would be needed in order to add lots of electric vehicles and clean energy. Grid hardening is also in focus after the Texas catastrophe.

Executive actions: Granholm told the Wall Street Journal that one of her top priorities will be using the department's existing loan program for clean energy projects.

"The program offering federal loans and loan guarantees to start-ups and energy projects has $40 billion authorized by Congress but untouched by the Trump administration," the WSJ reports.

Energy transition message: She's arguing that moving to a much lower carbon economy doesn't mean stranding fossil sector works.

  • Granholm touted the potential for carbon capture and storage tech in remarks to the Post and NPR.
  • And in both interviews, she cited a new Brookings Institution analysis of the potential for more renewables development in areas dense with fossil-related jobs.
4. Joe Biden's new climate math


A Biden administration interagency group has set the "social cost" of carbon emissions at an interim value of $51 per metric ton.

The big picture: The metric estimates future monetary effects of emissions, such as damages from flooding, health problems, farm productivity changes and more.

Why it matters: The Biden team's value, a reversion to Obama-era levels, is vastly higher than the single-digit range under the Trump administration.

The figures unveiled Friday will inform cost-benefit analysis of Biden's plans for new climate regulations and policies.

What's next: A final estimate slated to arrive by early next year could be significantly higher still.

Last month two prominent economists called for officials to use a cost at the upper end of the $50–$100 range.

Go deeper: Biden hikes cost of carbon, easing path for new climate rules (Politico)

5. Rail's big moment may be coming

Illustration: Sarah Grillo/Axios

Axios' Joann Muller reports...Passenger rail could be the big winner if Congress moves ahead with President Biden's ambitious infrastructure plan.

Why it matters: There's long been bipartisan support for rebuilding infrastructure, but under Biden, the focus has shifted to sustainable projects that also fulfill his climate, such as rail transit.

  • Even though many public transit systems are reeling from the pandemic, ridership is expected to return eventually, requiring long-term investment.

Driving the news: Right now, the Biden administration is trying to get his $1.9 trillion COVID stimulus through Congress (including $30.5 billion in emergency funding for public transit). But soon lawmakers will turn to infrastructure.

  • Biden wants to spend $2 trillion, including $50 billion on immediate road and bridge repairs.
  • He also wants to build out transit in high-poverty areas and fund high-speed rail systems, promising "the second great railroad revolution."

Read more

6. Oil-and-gas notes: Markets, SEC, Nord Stream 2

Crude oil: "Oil prices rose on Monday, supported by optimism about COVID-19 vaccinations, a U.S. stimulus package and growing factory activity in Europe despite coronavirus restrictions." (Reuters)

Regulators: "[T]he SEC on Friday denied ExxonMobil’s request to block a shareholder proposal asking the company to report how its political lobbying activities align with climate change concerns." (Financial Times)

Pipelines: "A briefing between the State Department and congressional staff over Vladimir Putin's Russia-Germany gas pipeline got tense [last] week, with Biden officials deflecting questions about why they hadn't moved faster and more aggressively with sanctions to stop its completion." (Axios)

7. Quote of the day
"We planned this grid for 'Ozzie and Harriet' weather and we are now facing 'Mad Max'."

Who said it: Energy consultant Alison Silverstein, speaking to NPR about the need to modernize power grids against extreme weather.