Welcome back! 1 fun thing: AXIOS is coming to your TV screen! Catch us Sundays throughout November at 6:30pm ET/PT on HBO to get smarter faster on what matters.
Situational awareness: The Trump administration is rolling out plans that will enable year-round sales of gasoline with up to 15% ethanol. President Trump plans to speak on the effort as he tours Iowa today. AP has more here.
Onward to music. Happy birthday to the late John Entwistle, the bass player for The Who. One of the songs he wrote for the band is today's intro tune...
1 big thing: Exxon's $1 million carbon tax push
Axios' Amy Harder reports that ExxonMobil, in a big shift, is now helping fund a multi-million dollar political advocacy campaign lobbying Congress for a price on carbon emissions.
Why it matters: This is a significant turning point in Washington’s mostly static climate debate. Exxon officials have said for years they support a carbon tax, but they haven’t backed that up with actual lobbying dollars — until now.
This move increases the odds that Capitol Hill could consider big changes to climate and energy policy in the coming years.
The big picture: A seminal report released earlier this week by a UN scientific body underscored the growing urgency of climate change, the collective lack of will to address it, and how a price on greenhouse gas (GHG) emissions is an essential part of the solution.
Driving the news: Exxon, the world's largest publicly traded oil company, has committed $1 million over 2 years to the political advocacy group, called Americans for Carbon Dividends.
- At $500,000 a year, that represents just over 4% of Exxon’s roughly $12 million annual lobbying budget in recent years, according to the Center for Responsive Politics.
- For a single legislative goal that isn’t articulated or even formally introduced yet, that’s significant.
Reality check: Washington politics don't change overnight. Carbon taxes are politically toxic, particularly among Republicans who control the government at the moment and influential conservative groups like Americans for Tax Reform. Furthermore, climate and energy policy is low on Capitol Hill’s priority list.
Between the lines: Big Oil’s backing of any climate policy, or at the very least its non-opposition, is vital to a bill’s progress in Washington given the industry’s political influence.
- The fact that Exxon is putting money into the group, which launched in June, is likely to prompt other major oil and gas companies to put money into it too, according to multiple people close to the effort.
- The group has so far raised $3.4 million for 2 years, with expectations that it will get $5 million for the first year within 6 months, according to Ted Halstead, CEO of the group.
Go deeper: Read her full story in the Axios stream.
Amy's Harder Line column returns Monday, Oct. 15.
2. Hurricane Michael's energy threat
Situational awareness: Hurricane Michael has prompted evacuation of some Gulf of Mexico offshore oil-and-gas facilities, although it's east of the busiest energy areas. AP reports it has reached a category 2 hurricane with top speeds of 100mph.
Energy response: The Interior Department said that as of midday Monday, 19% of Gulf oil production and 11% of its gas production was shut down.
- But S&P Global Platts, in this helpful primer on energy infrastructure in the region, notes: "That number will likely have risen when reported Tuesday as operators continued to shut down platforms Monday afternoon."
3. What's next after the UN's climate siren
We've got more below on the UN report over the weekend about trying to limit warming to 1.5 °C above preindustrial levels and the energy stakes involved.
But let's start with a couple lines from an HSBC research note that landed in my inbox this morning...
The big picture: "We think the report will ramp up the public and societal pressure on governments and businesses to raise climate ambition levels," the HSBC analysts said. Per the note:
What's next: Procedurally, HSBC writes, the report will help inform discussions at the next round of high-level UN climate talks in Poland in December. "[I]t is hoped it will add to the sense of urgency in finalising the operational guidelines (rulebook) of the Paris Agreement in December."
4. A sobering weekend for a hot planet...
As mentioned earlier, there's been a burst of big climate news since our last edition, so let's continue...
Trend: Carbon dioxide emissions are on track to rise in 2018 for the second straight year following a plateau in 2014–2016, International Energy Agency director Fatih Birol tweeted yesterday.
- Why it matters: IEA's finding arrived as a UN science panel unveiled a major report concluding that large emissions cuts are needed in coming years to hold global warming to 1.5°C above preindustrial levels.
By the numbers: Per UN, staying within the 1.5°C target — a benchmark for avoiding far more severe consequences than are already occurring — means human-induced CO2 emissions must fall by 45% by 2030 and reach "net zero" by mid-century.
- The 45% cut is relative to 2010 levels, which in effect means even deeper reductions are needed.
The big picture: Separate analyses in recent months have shown that energy-related CO2 emissions — that is, the vast majority of global CO2 — ticked up again in 2017 after a multi-year plateau.
- IEA's new 2018 projection underscores how the global energy system is far, far off track from the gigantic and rapid transformation that the UN's deeply researched analysis calls needed to stay within the 1.5°C target.
Go deeper: On Sunday night, I wrote about how difficult and probably unlikely that level of transition will be.
5. ...and the massive stakes of 1.5 degrees
Axios' Andrew Freedman has what you need to know about the UN report on the predicted effects of 1.5°C of warming vs. higher levels. He writes...
The UN report warns that global warming can still be held to 1.5°C relative to preindustrial levels, but only if countries take "unprecedented" steps to rein in GHG emissions and change how we live.
Why it matters: Global warming will have far more severe consequences if temperatures are allowed to creep past 1.5°C, or 2.7°F, of warming, scientists concluded.
- They noted that there are already deadly impacts from the 1°C, or 1.8°F, of warming so far.
- These include more severe and longer lasting heat waves, more heavy precipitation events, and ocean warming that is killing many of the planet's coral reefs.
The special report was requested by world governments in 2018, following the adoption of the Paris Climate Agreement. That agreement calls for countries to limit global warming to "well below 2°C" of warming, relative to preindustrial levels, with an aspirational target of 1.5°C of warming.
The details: A team of 91 scientists from around the world reviewed over 6,000 studies and 42,000 peer review comments to produce this report.
- The report found that the effects of global warming are already being felt around the world, particularly by poor and vulnerable populations, and that these impacts will only grow.
- For nearly every global warming impact, from droughts to sea level rise, the report finds that adhering to just 1.5°C of warming would make a major, concrete difference for millions of people and hundreds, if not thousands, of species.
Go deeper: Read Andrew's full story in the Axios stream.
6. Lime vows carbon-neutral electric scooting
Lime announced Tuesday that all rides on its electric scooters and bikes worldwide will be "carbon neutral." It's the first part of a wider, newly announced initiative called "Lime Green."
Why it matters: There's growing attention to the environmental impact of shared mobility services — notably ride-hailing, but other forms as well — that are altering the shape of urban transit.
- Bike and scooter companies tout themselves as greener alternatives to cars, and steps to make up for the emissions from electricity used to charge the vehicles can help Lime make that case.
- Lime's move also comes as players in the growing dockless transit market try to differentiate themselves from their competitors.
What they're doing: Lime said it's partnering with NativeEnergy, a firm that provides carbon offset and renewable energy credit services.
- "[Lime] will purchase renewable energy credits from both new and existing projects for the electricity used to charge its fleet of bikes and electric scooters," the company said.
- Lime also said it will buy carbon offsets — that is, help fund climate-friendly projects — to displace the emissions from company operations, including the fossil fuels used by fleet management vehicles.
What's next: The company said a subsequent phase of the Lime Green effort will involve purchasing "clean energy" directly from power companies, exploring use of on-site solar power, and making its operations more efficient.
The details: Lime said its work with NativeEnergy will include investments in an Iowa solar project and buying power from the Capricorn Ridge, an existing wind farm in Texas, in order to "green our fleet in Austin, Dallas and San Antonio."
- The company did not provide information about the costs of the new initiatives, but said they will not raise prices for consumers.
7. Danish wind giant makes big U.S. move
Denmark-based Orsted yesterday announced it's buying the U.S. firm Deepwater Wind for $510 million, giving the world's largest offshore wind company a much bigger foothold in the emerging Atlantic coast market.
Why it matters: The deal announced Monday is another sign of the emergence of offshore wind in the U.S., which lags far behind the older and much larger European market, but is increasingly a hotbed of activity.
How it works: Deepwater Wind, which is currently owned by the hedge fund D.E. Shaw, has the only currently operating U.S. offshore wind farm — a 30-megawatt project off Rhode Island.
- But it has a vastly larger portfolio of planned or potential projects — over 3 gigawatts worth. Meanwhile, Orsted also has development rights for several regions in the U.S., according to the announcement.
The intrigue, via the New York Times: "The Deepwater purchase appears to be an attempt by Orsted to acquire a company that can better navigate the regulatory and political systems of the United States."
- Reuters notes that Orsted "has so far lost out on auctions in the nascent market" while Deepwater Wind has been more successful.
The details: The merged company will be called Orsted US Offshore Wind and the deal is expected to be completed by year's end. Orsted's Thomas Brostrom will be CEO, while Deepwater Wind's Jeff Grybowski will be co-CEO.
- Orsted offshore wind chief Martin Neubert said in a statement that the companies are a good fit, because Deepwater Wind has "longstanding expertise in originating, developing and permitting" U.S. projects, while Orsted brings its track record of engineering, building, and operating large offshore wind farms.
8. More biz and finance: Aramco, BP, GE
Petrochemicals: Per Reuters, "French energy group Total and Saudi Aramco signed an agreement on Monday to start engineering studies for the $5 billion (4 billion pounds) construction of a petrochemical complex at the Jubail Satorp refinery on the eastern coast of Saudi Arabia."
GE's latest: Via CNN Money, "In the first deal under new CEO Larry Culp, GE (GE) said on Monday it's unloading a $1 billion portfolio of energy investments to private-equity firm Apollo Global Management."
More Aramco: Saudi Crown Prince Mohammed bin Salman said delayed IPO plans for state oil giant Aramco will go forward in late 2020 or early 2021, according to an interview with Bloomberg.
- Why it matters: The massive listing — initially slated for late 2018 — is designed to raise tens of billions of dollars to fund the kingdom's economic diversification plans. But it's been repeatedly pushed back, and a few weeks ago looked dead, or at least in a deep freeze.
- Reality check: As I wrote Friday in the Axios stream, there's still plenty of reason for skepticism.
Libya: Per the Financial Times, "Italian energy major Eni has agreed to acquire half of BP’s oil and gas license in Libya, the companies said on Monday, aiming to resume exploration activities next year."