Good morning and welcome back! At this moment 50 years ago, Cream was atop the Billboard album charts with "Wheels of Fire," so they'll play us into today's edition...
Two recent analyses arrive at the same conclusion: U.S. corporate deals to directly purchase renewable power will shatter previous records this year as companies including Facebook and Apple expand their contracting.
Why it matters: Separate data from the nonprofit Rocky Mountain Institute (RMI) and the consultancy Bloomberg New Energy Finance (BNEF) signal how power purchase agreements are emerging as an important driver of wind and solar expansion, even as the White House abandons U.S. climate goals.
Between the lines: Two big forces are driving the increases in direct procurement — corporate environmental pledges and falling renewables costs.
By the numbers:
What they're saying:
"This trend is somewhat inoculated from federal policy. There's no specific federal policy that incentivizes corporates to pursue large-scale renewable energy transactions per se, and companies are largely pursuing these transactions due to their commitments to corporate social responsibility."— Kevin Haley, manager, Business Renewables Center
BNEF's analysis similarly notes that many corporate sustainability plans to cut or offset carbon emissions create incentives for supporting renewables projects.
"Activity would not approach current levels if there were no opportunity for long-term savings," BNEF adds.
To be sure: In the wider climate context, federal policy matters a lot.
Amid all the chatter about whether Saudi Arabia's sovereign wealth fund will bankroll Tesla's take-private plan, a couple items caught my eye that explore whether it should.
Why it matters: Tesla CEO Elon Musk claims that the Saudi Public Investment Fund has signaled readiness to help fund the massive transaction. And it would be a major step in moves by OPEC's dominant producer to diversify its economy.
Yes, but: Two analysts are waving red and yellow flags.
1. Ellen Wald argues in Forbes that the Saudis would be better off investing in battery tech labs in the country, specifically the planned NEOM industrial center, to build an indigenous industry.
2. Brian Johnson, via a Barclays research note yesterday, also argues that sovereign wealth funds from oil-rich states may have better options. He notes that "Tesla is by no means the only way to invest in an electric vehicle (EV) future."
Permian basin player Diamondback Energy announced yesterday that it's buying up Energen Corp., another oil-and-gas producer in the region, in a stock transaction valued at $9.2 billion.
Why it matters: It's the latest of several major deals in the Permian, the epicenter of the U.S. fracking boom that has boosted domestic production to record levels.
The big picture: Reuters explores how the Diamondback deal is a sign of some of the headwinds facing Permian-focused companies despite the massive resource base.
By the numbers: Via The Wall Street Journal...
"The government's been picking winners and losers since government was created. We do it by tax policy, we do it by regulation, we do it by permits. Pick good! Be smart! Use the right kind of technical people to help you decide where to invest and pick the winners, pick them right. Government's going to continue to do that.”— Energy Secretary Rick Perry
The context: That quote comes courtesy of Bloomberg's Catherine Traywick, who was on the scene in Colorado Tuesday where Perry gave remarks at the Energy Department’s National Renewable Energy Lab.
Here's a quick take from Axios' Amy Harder...
Between the lines: Good and smart are subjective, which means it’s all about who is picking and deciding. We’ve reported before that there isn’t much rhyme or reason to President Trump’s energy policy, so for now these words mean little without coordinated policy behind them.
Big picture: Perry has made comments like this before, but this is one of the starkest endorsements of the idea, which Republican administrations have generally opposed in rhetoric yet continued in practice.
What’s next: Per Traywick, Perry also didn’t shed light on when — or if — DOE will propose sweeping changes to America’s electricity markets as a way to bolster economically struggling coal and nuclear power plants.
Behind the auto rule: Bloomberg explains how newly released documents reveal disputes between EPA and the Transportation Department when they jointly crafted the plan to scale-back Obama-era auto emissions and mileage rules.
Climate change: Via Axios' Andrew Freedman ... With some of the largest-ever wildfires on record burning in California and the death toll rising, Interior Secretary Ryan Zinke has blamed the massive fires on environmentalists refusing to allow more logging operations in federal forests.
On tap today: The Interior Department will announce the winners of bidding on new Gulf of Mexico lease blocs, but interest has been modest in recent sales thanks to the wealth of opportunities in other regions.
Check out this cool and informative new Axios video. It explores topics including recycling of plastics, which are made from petrochemicals.
The big picture: For the last 25 years, the U.S. has exported about one-third of its recycling, the majority of it going to China. Yet most Americans recycle without realizing the complex process behind the waste management system.
This year, new regulations from the Chinese government are limiting how much recycling the U.S. can send them. That’s creating financial challenges, especially for local communities who are starting to see the consequences in their own backyards.