May 04, 2017
Good morning and welcome back! Today's edition brings you from Washington to Europe to Silicon Valley. Whew! Please send some coffee, not to mention confidential tips and feedback, to [email protected] Let's go . . .
Shell is making lots of money
Royal Dutch Shell reported surging first-quarter profits Thursday morning on the strength of higher oil prices and cost-cutting moves, more than doubling its earnings from the same period last year.
- Shell is the latest of several huge oil-and-gas companies to report a jump in earnings.
- The company reported a first quarter profit of $3.4 billion.
- Its cash flow for the period was $9.5 billion.
Big picture: "The top five oil 'supermajors' — Shell, ExxonMobil, Chevron, Total and BP — have all beaten expectations with their quarterly results in the past week, marking the clearest sign so far of the industry's gradual recovery from a two-year slump," the Financial Times notes.
Wait, there's more: Norway's Statoil saw a huge surge in earnings, posting $1.1 billion in net income for the first quarter compared to $122 million in the same period last year.
The big Spanish international oil company Repsol also saw a jump in earnings.
Paris climate news
What we're hearing: White House economic advisor Gary Cohn is emerging as a focal point for outreach by pro-Paris business officials and other advocates.
European pressure: Reuters reports that EU officials are "scrambling" to convince the White House to stay in the agreement after reports that the "withdraw" camp gained the upper hand.
- "If the biggest economy in the world dumps the whole thing ... we all have to worry," an unnamed EU source told the news service.
- NATO's top official made what Reuters called his strongest comments yet from the alliance about upholding the accord.
On K Street: While the buzz lately has been about internal anti-Paris momentum, one industry source isn't buying it, telling Axios:
- "[T]the lobbying echo chamber is supremely doubtful of a pullout. Consensus at this point is no pull out, but new conditions and modifications that mitigate some of the most harmful aspects."
In Congress: Senate Foreign Relations chairman Bob Corker said bailing on Paris isn't useful, per this tweet from an E&E News reporter with a strong emoji game.Meanwhile, GOP Sen. Susan Collins joined Sen. Ben Cardin, the top Democrat on the Foreign Relations Committee, in a letter supporting U.S. engagement.
Two things with Senator Lisa Murkowski
I caught up with the Alaska Republican, who chairs the Energy and Natural Resources Committee and the Appropriations subcommittee that writes EPA and Interior budgets.
Alaskan drilling: She's unconvinced by arguments that President Donald Trump's moves to open federal Arctic waters and speed up permitting won't matter much because companies just won't be interested in the hugely expensive and complex projects, given price forecasts and easier options.
- "It is all about the signals that we put out there. But the first signal that we need to put out is, move that sign on the door that says 'closed' to 'open,' and then people can start looking in the window and seeing if what's there is going to be worth bringing their wallet into."
- Murkowski highlighted industry buzz around big onshore and near-offshore discoveries in state waters by companies including Caelus, Repsol and ConocoPhillips (we covered that here), arguing it could translate into industry interest in federal waters again. "These are finds that are capturing the attention of producers all over," she said on Capitol Hill.
EPA: Murkowski suggested that EPA administrator Scott Pruitt should keep steering clear of moves to upend the 2009 "endangerment finding" that greenhouse gases threaten human health, a key foundation of climate regulation.
Pruitt hasn't gone there yet, but some conservative activists are pushing for it. "I think it would be very complicated, very complex. The EPA has got a lot on its plate," she said.
A few notes on Silicon Valley electric automaker Tesla, which saw a jump in revenue but posted a first quarter net loss of $330 million.
Big picture: The loss isn't what's important, it's how Tesla navigates a slew of upcoming projects, notably the launch of the Model 3 sedan later this year.
- "Few expect the electric car and alternative energy company to make a profit for some time. Its future now depends on the Model 3, which unlike the Tesla Model S and Model X luxury cars is aimed at a wider consumer base, with a stated entry price of $35,000," the Los Angeles Times reports.
No superfriends for now: Via Business Insider, CEO Elon Musk said Apple — which is reportedly working on autonomous car technology — isn't interested in collaboration with Tesla. "Yeah I don't think they want to have that conversation," Musk said.
Setting expectations: Musk appeared concerned that expectations for the Model 3 are too high, according to Bloomberg.
- "We're doing our best to clear up that confusion so people do not think that Model 3 is somehow superior to Model S," he said. "Model S will be better than Model 3, as it should be because it's a more expensive car."
From Amy’s notebook: Obama official gives Trump climate idea
The Trump administration has reportedly expressed interest in a proposal for a public forum on climate change science that a former top official in President Obama's administration has suggested.
The details: Steven Koonin, who served as the Energy Department's under secretary for science during two years of Obama's first term, presented the idea in a recent Wall Street Journal opinion piece. He suggests a format where experts take turns critiquing each other's work on climate science in a competitive and public way. The system, called the "Red Team" methodology, is used in the national-security realm, Koonin writes.
For the record: "I can tell you that's found some resonance within the administration," Koonin tells Axios. "I'm just going to say people seem to be interested."
The other side:
Environmental groups are not on board, not surprisingly. Kelly Levin, a senior associate at the World Resources Institute, said such a format is an unnecessary distraction because the "validity of climate science has been confirmed and reconfirmed countless times."
Electricity news on my screen
FERC: Utility Dive has a detailed look at the Federal Energy Regulatory Commission's two-day technical conference that saw state regulators grappling with how to integrate climate policies into power markets.
- "Anxiety over the state policies for renewables and decarbonization was a common theme, but stakeholders were largely unable to agree on any concrete plans for reforms," the story notes.
- But..."one noteworthy area of consensus emerged from nearly every corner of the diverse stakeholder group — the need to price carbon in wholesale power markets."
Nuclear: The Wall Street Journal reports that utility giant Southern Company isn't certain it can finish two half-built reactors in light of the Westinghouse collapse.
- "We are working with [Westinghouse parent] Toshiba to receive complete assurance as to the $3.7 billion guarantee that they owe us, whether we finish the project or not," Southern CEO Thomas Fanning told the paper.
DOE and states: Greentech Media dives into a topic that's big in the green energy world these days — whether the Trump administration might seek to limit state-based renewable energy policies in the name of shoring up big baseload sources like coal and nuclear.
- The Energy Department has options under the Federal Power Act, the Fast Act, working through FERC, or the administration could even seek new powers from Congress.
- "It's possible the Trump administration could work with Congress to introduce new reliability requirements that are difficult or impossible for renewable resources to meet," their piece notes.
Thanks for reading! We'll see you back here tomorrow.