Good morning! It's true, it really does rain more on the weekends in D.C.
Speaking of D.C., you're invited to our program here, called Easing America's Pain, tomorrow at 8am.
- Join Axios' Mike Allen for a series of conversations on health care's biggest challenges, including the opioid crisis, and how to tackle them.
- We'll hear from Sens. Bill Cassidy (R-La.) and Joe Manchin (D-W.Va), as well as HHS chief medical officer Vanila Singh and Mayor Steve Williams of Huntington, West Virginia. RSVP here
1 big thing: Oil industry’s Goldilocks problem
Companies are either investing too much or too little in oil and natural gas, depending on whether or not the world takes aggressive action to reduce greenhouse gas emissions, concludes a new International Energy Agency report.
Driving the news: Oil investment — which has dropped since 2014 when oil prices collapsed — would need to fall even more to be consistent with the goals outlined in the 2015 Paris Climate Agreement. But these levels also “fall well short of what would be needed in a world of continued strong oil demand,” the report adds.
Where it stands: The above chart shows how conventional oil and gas discoveries are at record lows, creating risk in the coming years of either not enough oil for current demand or too much oil in a carbon-constrained world.
- The report says investment in exploration is set to rise to $60 billion this year, an increase of 18% compared to 2018, which “would be the first one since 2010.”
- “Nonetheless, the share of exploration in total upstream investment remains almost half the level in 2010.”
Of note: In this chart, IEA excludes unconventional resources, like the ones found in shale rock formations driving America’s oil and gas boom.
- That’s because shale resources aren’t “discovered” the same way conventional kinds are. Plus, the latter remain the dominant channel for investment (about two-thirds).
What they’re saying: Government uncertainty on climate policy is leading oil and gas companies to focus on more profitable projects with shorter lead times — like shale resources — that expose them less to long-term uncertainty, according to IEA expert Michael Waldron.
“Governments have not clearly committed nor have they clearly not committed to reaching the Paris Agreement targets.”— Michael Waldron, in a teleconference
2. Breaking: "Act of terrorism" vs. Saudi stations with drones
Breaking this morning: Drones have attacked oil pump stations in eastern Saudi Arabia, in what Saudi Energy Minister Khalid Al Falih is calling "an act of terrorism," according to Gulf News.
- Driving the news: "Yemen's Houthi rebels said they had attacked several targets," AFP reports.
- What they're saying: "Saudi energy minister al falih says the kingdom's oil production has not been interrupted by the attack," EnergyIntel's Amena Bakr tweets.
- Details: Here's a map of the installations, via Bloomberg's Javier Blas.
Meanwhile, in response to earlier attacks on oil tankers off the coast of UAE, the U.S. ambassador to Saudi Arabia urges a "thorough investigation" to be followed by a response "short of war," Reuters reports.
- What they're saying: Iran is a prime suspect, but the country has denied involvement, with its foreign ministry calling it "worrisome and dreadful," per Reuters.
3. Trump's tightrope push on natural gas
President Trump is heading to Louisiana today to tout his record supporting natural gas exports right as his administration's trade war with China is making that same thing more difficult.
Driving the news: The higher tariffs China announced Monday include U.S. LNG. The increase from 10% to 25% on a range of goods from Beijing means the trade spat is deepening, and energy will continue to be collateral damage.
The big picture: Via the Houston Chronicle, "U.S. LNG exports are fast rising -- up to almost 3.7 billion cubic feet a day in February, a more than 35% increase over 12 months earlier. Last year China was the fourth largest importer of U.S. LNG, after Japan, South Korea and Mexico, according to the Department of Energy."
By the numbers: "Only four cargoes have been delivered to China from the U.S. since the tariffs have been in effect, compared to 35 cargoes in the prior September through April period," per a report from consultancy Wood Mackenzie out Monday.
- "This is despite over 30% growth in both Chinese LNG imports (32%) and US exports (38%) over the same timeframes," the report states.
Quick take: Expect longer term consequences for LNG from the tariffs, per Reuters.
4. GND rally boasts socialism and chides Biden
I spent last evening at the Green New Deal rally in a packed auditorium at Howard University, where Sens. Edward Markey and Bernie Sanders, Rep. Alexandria Ocasio-Cortez, and several other progressive and activist leaders spoke.
Driving the news: Two big takeaways are...
1. Joe Biden's name came up in several speeches, with many, including AOC, criticizing the former VP and presidential candidate for a "middle ground" climate policy. AOC said:
“[I]f the same politicians who refused to take action then, are going to try to come back today and we need to have a middle of the road approach, that is too much for me."
2. Socialism, however one defines it, was featured positively and prominently. Markey received a standing ovation when he simultaneously likened oil and gas tax breaks to socialism and then endorsed it for clean-technologies. He said:
"Give us some of that socialism that the oil and gas companies have had for so long."
What's next: Activists are planning mass protests urging the Democratic candidates to back the GND during the July primary debates in Michigan, per CNN.
5. Earth's CO2 levels slip past ominous milestone
The concentration of carbon dioxide in Earth's atmosphere has reached new heights, according to scientists at Scripps Institution of Oceanography, Axios' Andrew Freedman reports.
Why it matters: The new reading of 415.26 parts per million (ppm) on May 11 was the first daily baseline at Hawaii's Mauna Loa Observatory to eclipse 415 ppm. That observatory has kept long-term record of carbon dioxide in the atmosphere since 1958.
The big picture: Scientists have warned that if the world is to limit global warming to 1.5°C, or 2.7°F, above pre-industrial levels, then sharp emissions cuts have to begin in the next few years.
What we're watching: Scientists from Scripps and NOAA will likely announce a new carbon dioxide monthly record in early June. A new annual figure will come out in early 2020.
6. One fun thing: celebrities and climate
Voters in Ohio say comedian and TV show host Ellen DeGeneres and astrophysicist Neil Degrasse Tyson are public figures they would listen to on climate change.
Driving the news: That was one fun outtake from my latest Harder Line column reporting, where I listened to voter focus groups across 3 key battleground states in the Midwest: Ohio, Wisconsin and Iowa.
The bottom line: The actions and rhetoric of high-profile people, such as politicians like AOC or celebrities like DeGeneres, can move move the needle on big policies, so hearing what voters say about this is revealing.