Feb 26, 2021

Axios Generate

Welcome back. Today's Smart Brevity count is 1,336 words, 5 minutes.

🚨On Sunday’s “Axios on HBO”: Reddit CEO Steve Huffman tells Axios’ Erica Pandey how the company changed its salary philosophy during COVID-19, and much more. (See clip and watch at 6pm ET/PT on all HBO platforms.)

🎶 And yesterday marked the 1997 release of the late Elliott Smith's album "Either/Or," which provides today's achingly beautiful intro tune...

1 big thing: Secretary Granholm's biggest challenges

Photo illustration: Aïda Amer/Axios. Photo: Jim Watson/Pool-Getty Images

New Energy Secretary Jennifer Granholm hasn't been especially controversial, but her easy confirmation may not be a prologue of what's to come.

Driving the news: The Senate voted 64–35 Thursday to approve the former Michigan governor for the post after a nomination process devoid of drama.

Why it matters: The DOE is slated to play a big role in President Biden's push to greatly expand R&D and market deployment of clean tech to fight climate change.

But Granholm will have plenty more on her plate too. Here is a preliminary list of five things we're watching...

1) Congress: Biden is asking Congress for extremely large increases in research, development and demonstration funding, and DOE is the main venue for that work.

  • His plan calls for $400 billion over 10 years to bolster research and innovation programs, so Granholm will need to sell it to GOP lawmakers.
  • Capitol Hill Republicans thwarted former President Trump's effort to slash DOE's budget, but what Biden wants greatly exceeds the R&D increases in recent years.

2) Grid modernization: A major build-out of clean power generation will need lots of new infrastructure to carry those electrons.

  • But getting transmission built is notoriously hard, and jurisdiction is fragmented both federally and between the federal government and states.
  • Advocates will be looking to Granholm. "DOE’s transmission authorities are limited but its bully pulpit is strong," Grid Strategies president Rob Gramlich tells me.
  • "The agency has tools to fund grid planning and stakeholder engagement and provide some permitting support where needed," he says.

3) Natural gas: Granholm will face competing pressures here when it comes to the DOE's role in continuing the expansion of LNG exports.

  • She has signaled some support for LNG by saying it can replace global use of higher emissions fuels (read: coal) while also saying domestic gas production has to get cleaner.
  • The industry will be looking for both more export authorizations (though exporters have plenty in-hand) and support in working with allies to strike deals, a role DOE played under Trump.
  • The American Petroleum Institute's statement on her confirmation said it welcomed her endorsement of LNG.
  • But part of the Sierra Club's response warns Granholm against "locking the country into decades of fossil fuel development by supporting infrastructure such as LNG terminals."

4) Cars: The former Michigan governor has plenty of experience with the auto industry.

  • So she's likely to be a point person for Biden administration efforts to speed up deployment of EV production and charging infrastructure.

5) Unions: Swaths of the labor movement are wary of the Biden administration's energy agenda and dislike moves like scuttling the Keystone XL pipeline.

  • Granholm will be under pressure to help fulfill promises to bolster the creation of good jobs in emerging sectors.
  • Her NPR interview this morning touts carbon capture tech as one area of growth.
  • “This is the kind of technology that people who are working right now in the fossil community could absolutely get jobs in,” she said, while also citing new Brookings Institution analysis of potential renewables jobs in fossil fuel regions.
Bonus chart: The state of energy R&D
Data: Information Technology & Innovation Foundation and Harvard's Belfer Center; Chart: Axios Visuals. **Note: Data is in 2020 dollars.

The chart above shows the last few decades of energy-related research, development and demonstration programs at the Energy Department (which, contra its name, is a hub for many kinds of science).

Why it matters: It demonstrates both how investment has fallen from where it was decades ago and how much smaller current levels are than what Biden is seeking.

What we're watching: Granholm's efforts to bolster research and to speed up market penetration of existing and emerging clean energy tech.

  • “Our focus is going to be both on discovery, but also deployment. We’ve got to add, as a nation, a huge amount of clean energy to the grid,” she told MSNBC last night.
2. UN: Paris carbon plans falling far short

Illustration: Sarah Grillo/Axios

Nations' formal emissions-cutting pledges are collectively way too weak to put the world on track to meet the Paris climate deal's temperature-limiting target, a new United Nations tally shows.

Driving the news: This morning the UN released analysis of the most recent nationally determined contributions (NDCs) — that is, countries' medium-term emissions targets submitted under the 2015 pact.

By the numbers: The UN said the combined effects of the targets, if achieved, would lead to a 1% drop in global greenhouse gas emissions by 2030 compared to 2010 levels.

  • Yet a pathway to limiting long-term temperature rise to 1.5°C — the most ambitious goal of the deal — would require a roughly 45% cut by then.

Why it matters: I know, it's no secret that combined efforts are falling short.

  • But the analysis both tallies the gap and highlights the importance of the big UN climate summit in Scotland late this year and nations' actions in the runup.
  • "Today’s interim report ... is a red alert for our planet," UN Secretary-General António Guterres said in a statement.

Yes, but: It's not as grim as the headline numbers suggest. Patricia Espinosa, the UN's top climate official, emphasized in a statement that the analysis is a "snapshot, not a full picture."

  • The report tallies new or revised NDCs from 75 parties that account for about 30% of global emissions.
  • Many large nations, including China, the biggest emitter, have not yet submitted their revised targets.
  • The U.S. plans to unveil a 2030 target ahead of a summit Biden is convening on April 22.
3. Lucid Motors delays EV production

Source: Giphy

Arrival of the first vehicle from the high-profile, soon-to-be public EV startup Lucid Motors will take longer than the company planned.

Driving the news: Lucid CEO Peter Rawlinson said in an open letter that COVID-19 is forcing a delay in production of the luxury Lucid Air sedan.

  • "From testing activities to supplier availability to preparing for sales and service, COVID-19 has affected all workstreams," he said of the delay, which was also acknowledged in a Bloomberg interview this week.
  • He said that despite progress, "we won’t be able to start delivering Lucid Air this spring at the level of quality we insist on providing."
  • The company hopes to start production from its Arizona factory "as early as we can in the second half of 2021."

Why it matters: The Financial Times puts it well, noting the delay "highlighted, for anyone perhaps unfamiliar with Tesla’s own meandering journey to profitability, how timelines can slip in the electric-car business."

Yes, but: "Tesla rival" is a term thrown around too much, but Lucid does appear well-poised to make inroads in the EV market.

  • It's well-capitalized with backing from Saudi Arabia's sovereign wealth fund and the Air boasts some impressive specs, notably a 500-plus mile range.
4. Postal's EV plan is quite limited for now

Speaking of EVs and delays, it looks like U.S. Postal Service deliveries won't be fully electrified for a long time.

Driving the news: While this week's fleet contract rollout says the next vehicles will be a mix of internal combustion and EVs, USPS head Louis DeJoy told lawmakers that right now the EV target is just 10%.

  • Asked at a House hearing why it isn't 90%, he said USPS lacks funding, noting "We don’t have the 3 or 4 extra billion in our plan right now that it would take to do it," per Reuters.

What they're saying: The 10% level drew criticism from EV advocates.

  • "U.S. Postmaster General Louis DeJoy is trying to lock our postal vehicle fleet into decades of carbon-intensive transportation," Zero Emission Transportation Association head Joe Britton said in a statement.
  • He called on Congress to intervene and said the current plan is at odds with Biden's procurement goals.
5. Catch up fast: VC, utilities, White House

Big Oil: "Chevron announced the launch of its new energy fund Thursday with a commitment of $300 million toward low-carbon technology investments." (CNBC)

  • "Future Energy Fund II is the eighth venture fund to come out of Chevron Technology Ventures," they note.

Power: "Exelon Corp. plans to split into two publicly traded companies, one for its regulated electric and gas utilities like ComEd and the other for its power generation assets like its nuclear power plants." (Chicago Tribune)

Aviation: "The chief executives of major U.S. airlines are set to meet virtually with two key White House advisers on Friday about efforts to reduce carbon emissions and use renewable fuels." (Reuters)

6. Number of the day: 44%

That's the share of U.S. adults who say dealing with climate change should be among the top foreign policy goals, per new Pew Research Center polling.

Yes, but: Climate has the biggest partisan gap of all the foreign policy topics surveyed, with 70% of Democrats holding that view compared to 14% of Republicans.