Good morning. And happy birthday to John Kay of Steppenwolf, who provide today's intro tune . . .
New warning: The think tank Third Way just published an interesting look at the effect of planned and potential nuclear plant closures on carbon emissions in the U.S. power sector.
Why it matters: Even if just some early retirements come to pass, it will knock the country further from a target set under former President Obama to cut greenhouse emissions by 80% below 2005 levels by 2050.
Check out the chart above: The top black line shows how much zero-carbon power — from renewables and nuclear plants — is needed to support the economy-wide 2050 goal (based on analysis underlying a 2016 White House report).
One level deeper: Much of this generation will likely be replaced by gas, which means more emissions, and even if it's all replaced by renewables, that's still a setback.
State of the market: Geopolitical tension including the prospect of U.S. strikes against Syria helped to send crude oil prices to their highest levels in over three years during trading yesterday.
What they're saying: In a note Thursday, a Barclays analyst predicted that geopolitical events could keep Brent prices above $70 over the next couple of months, though they see a downward trend in the second half of the year.
One level deeper: Flashpoints and events affecting the market included President Trump's tweet warning Russia that missiles "will be coming" in Syria in response to the apparent chemical attack, and reports that Yemen's Houthi rebels fired more missiles into Saudi Arabia.
What might be next: In a note late last night, RBC Capital Markets analysts raised the prospect of the Syrian conflict spreading beyond the country's borders, and also said the conflict in Yemen "presents a clear risk to regional energy supplies given attempted attacks on Saudi targets."
Where things stand this morning: Per MarketWatch, "oil futures wavered Thursday, holding near three-year highs as investors kept a nervous watch on Middle Eastern events."
Out today: Royal Dutch Shell published a big new report on the company's strategy in a world transitioning to climate-friendly energy sources.
One big takeaway: The oil-and-gas behemoth, which is investing a small but growing amount in green areas like electric vehicle charging, concludes there's little risk of being left with "stranded" oil-and-gas reserves in the medium term — looking out to 2030 — that it can't economically produce in a lower-carbon world.
One level deeper: Via The Financial Times story on the report...
Why it matters: Major energy companies are increasingly laying out long-term approaches to their business in the context of climate change. Oil-and-gas companies are seeking to reassure investors that a future climate-constrained energy system isn't an existential threat to their business.
Looking well beyond 2030, Shell said achieving the goals of the Paris agreement will require net zero additional CO2 emissions from energy by 2070, and that it plans to "keep pace."
A couple of energy-related things of note in Congress on Thursday...
State Department: Mike Pompeo, the CIA chief nominated to run the State Department, will appear before the Senate Foreign Relations Committee this morning.
Out today: On Thursday the Rhodium Group published a new analysis that concludes the power loss in Puerto Rico and the Virgin Islands from Hurricane Maria makes it the second-largest blackout in world history.
Why it matters: Their tally underscores the magnitude of suffering faced by U.S. citizens from the storm that hit last September. By early this week, it had had caused the loss of 3.4 billion customer hours of service in Puerto Rico and the Virgin Islands.
Bottom line: The report takes stock of power loss from disasters and other disruptions, while also noting the need for electrification for the over 1 billion people globally who have never had power.
Still possible: A new HSBC note says China can meet its goal under the Paris climate agreement of peaking its emissions around 2030 — but it won't be a cakewalk.
Why it matters: China is by far the world's largest greenhouse gas emitter, so its future is key to staving off runaway global warming.
Focus on governance: The wide-ranging report on China's deep environmental problems and climate efforts sizes up the newly created Ministry of Ecology and Environment.
"We think this is a positive move because it centralises many environmental issues which were previously everyone’s yet no one’s responsibility as multiple departments and divisions were involved," it states.
Big picture: The report cites progress in several areas, such as cutting terrible air pollution via reductions in fine particulates, sulphur dioxide and other pollutants. But, it adds, there's a long way to go:
"It will take time — many years — before businesses think that polluting is not a corner to be cut in the name of profit; before local authorities find the right balance between the local economy and the local environment; before data can be independently verified and used to inform investment decisions."
Need more: Via my Axios colleague Khorri Atkinson, House Oversight chairman Trey Gowdy (R) sent a letter Wednesday asking the Environmental Protection Agency to disclose additional records concerning administrator Scott Pruitt’s frequent first-class travel trips and a controversial condo rental agreement.
In the Senate: Per CNN, "The Senate is set to vote on Andrew Wheeler to be the number two official at the Environmental Protection Agency amid ethics concerns plaguing EPA chief Scott Pruitt and calls from Democrats for him to resign."
If Pruitt is forced out, Wheeler could run the agency until the Senate confirms a new administrator, the story notes.