Good morning, hope you enjoyed that extra hour sleeping or taking in the morning light.
My latest Harder Line column tackles a topic that I sometimes hear is of interest from you: my personal carbon footprint. I'll share a glimpse of that, and click here to read about my own habits. Then, Ben Geman will get you up to speed on other news.
Today's Smart Brevity count: 1,391 words, ~ 5 minutes.
1 big thing: My own C02 footprint
I cover energy and climate change, and yet even I do little to reduce my own environmental footprint.
Why it matters: Because most people don’t take action! Recent polling and research show that most of us don’t act virtuously to lessen our impact on the planet, beyond turning off lights when we’re not using them.
Driving the news: Individuals are facing more societal pressure to take action on climate change as federal inaction persists. Swedish teenage activist Greta Thunberg, who refuses to fly because of its carbon impact, embodies this trend.
- Rare, a nonprofit focused on conservation and behavioral change, recently sought to quantify the aggregate impact that voluntary, individual steps to cut emissions could have.
- The group concluded that if approximately 10% of the U.S. population adopted seven behavioral changes — including reducing air travel and purchasing an electric car — it could cut total domestic emissions by 8% within the next six years.
Yes, but: Research suggests it would be difficult to get people to take such voluntary steps despite that being a surprisingly big number.
- People are unlikely to stick with energy-conserving behavior when facing moral persuasion, according to this 2018 University of Chicago study.
- People are more likely to be persuaded by economic incentives because higher costs drive more energy conservation for longer.
The intrigue: Readers ask me what I do to lower my own carbon footprint, suggesting that because I cover this topic I should stake out a higher moral ground. Spoiler alert: I don’t! Like most people, I’m driven mostly by economic incentives.
- Thunberg is the exception, not the norm in our society. I thought it would be instructive to share my habits, not because they’re noteworthy but because they’re mainstream.
- Flying: I'm probably one of the 40 million Americans identified by the New York Times as frequent fliers taking more than six roundtrip flights annually.
- Eating: I eat beef, the most carbon-intensive food, a couple times a week at most, usually at restaurants. However, when I’m home on my family's cattle ranch in Washington State, I eat beef almost daily.
- Electricity: I really try to conserve with my electricity and thermostat — but to save money, not the planet.
- Mobility: I don’t own a car and I’m among the 18% of Americans who use public transport. If I got one, it would probably be electric or hybrid mainly to hedge against high gasoline prices.
The bottom line: Voluntary action can be helpful and inspiring. But ultimately most experts agree systemic change on a global scale — led by governments implementing economic policies — is necessary.
2. Here comes the Aramco IPO
Saudi Aramco's IPO really seems to be happening — but not at the scale that Crown Prince Mohammed bin Salman (MBS) wanted.
Driving the news: Saudi officials formally announced plans Sunday to proceed with floating a small slice of Aramco on the kingdom's domestic exchange.
Why it matters: It's by far the strongest step yet toward the oft-delayed plan that's aimed at raising tens of billions of dollars to fund Saudi economic diversification.
- It could also be the largest IPO in history.
What's next: The company plans to release a prospectus on Nov. 9 and begin trading on the domestic exchange, called the Tadawul, in December.
- The Saudis are eyeing a subsequent listing on an as-yet-unnamed international exchange in the future.
- The overall goal is to float 5% of the world's largest oil production company.
But, but, but: Saudi officials concede the desired $2 trillion valuation isn't realistic, and are instead aiming for $1.6 trillion–$1.8 trillion, Bloomberg reports.
- The news outlet reports that major banks working on the deal have also offered estimates far below $2 trillion (for instance BNP sizes it up at $1.42 trillion).
The big picture: "At a $1.5 trillion valuation, a 3% listing would raise about $45 billion, far higher than the $25 billion Chinese e-commerce giant Alibaba Group Holding Ltd. raised in the biggest IPO to date five years ago," per WSJ.
Bonus: A little more on Aramco
Are we really, really, really sure it's happening? I put that question to analyst Ellen Wald, an expert in all things Saudi oil.
What they're saying: "Yes, it could still be pulled, just like any other IPO can be walked back, but this [announcement] is a significant step," she tells me.
- "They could decide not to go forward with the offering if they aren’t satisfied with the subscription. That wouldn’t necessarily be a positive sign, but these things do happen," Wald says.
- "Given all of the back and forth on the IPO so far, however, the image of pulling back the IPO again wouldn’t be good for Saudi Arabia."
- Go deeper: She writes more in Forbes.
3. Global energy efficiency gains are slowing
Ruh-roh. New International Energy Agency data out Monday shows just paltry advances in global energy efficiency last year.
What they found: Primary energy intensity — that is, amount of energy needed per unit of GDP — improved by just 1.2% in 2018.
- That's the third consecutive year of declining gains and the slowest improvement since 2010, the agency said.
Where it stands: IEA lists several reasons for the slowdown, including...
- Big structural forces, like consumer preferences for bigger cars and growth in average per-capita residential floor area.
- Higher 2018 production from energy-thirsty industries in the U.S. and China.
- Slowdown in the toughening of mandatory efficiency policies.
- Weather, with a hot U.S. summer and a cold winter, driving up energy use.
Why it matters: Improvements in efficiency are an important tool for fighting climate change.
- But IEA says the global pace is nowhere close to what's needed to help get the world on a pathway consistent with the goals of the Paris agreement.
What they're saying: “We can improve energy efficiency by 3% per year simply through the use of existing technologies and cost-effective investments," IEA executive director Fatih Birol said in a statement.
- "Ambitious policies need to be put in place to spur investment and put the necessary technologies to work on a global scale," he adds.
Separately, today is the first day the U.S. can formally begin the process of withdrawing from the Paris climate agreement. AP has more.
4. PG&E's moment of truth
California Gov. Gavin Newsom said he's convening PG&E execs, creditors, wildfire victims and others in order to have the utility emerge from bankruptcy in a way that will "advance massive safety transformations beginning before next fire season."
Why it matters: Newsom's Friday announcement of the meetings slated for this week threatens a state takeover of the embattled power company.
- "If the parties fail to reach an agreement quickly to begin this process of transformation, the state will not hesitate to step in and restructure the utility," he said.
Where it stands: Newsom's office did not have any more info about the planned gathering when I asked Sunday.
Go deeper: California wildfires: What you need to know
5. The U.S. shale boom's local risks
Axios' Orion Rummler reports ... The federal government should take new steps to help oil-producing regions navigate boom-and-bust cycles and diversify their economies, two nonpartisan think tanks say in a new report.
Why it matters: The decade-long oil boom has transformed the U.S. into the world’s largest producer. But that growth has increased the number of communities vulnerable to market volatility.
What they found: The report from Resources for the Future and a Columbia University energy think tank suggests two main policies.
- Congress should instruct the Department of Commerce’s Economic Development Administration to provide grants to oil producing communities and fund economic diversification for those regions.
- The government should create an Oil Volatility Advisory Board to connect oil producing regions with experts from departments like Commerce and Energy, and help those areas take advantage of existing funding opportunities. The authors say this is more politically feasible since it could be implemented by the executive branch alone.
Where it stands: The biggest risk to oil-heavy communities in places like eastern New Mexico and west Texas is becoming overly dependent on oil production, which can crowd out investment in other sectors — leading to a non-diverse economy that doesn't do well long-term.
- Oil and gas producers shed one-third of their labor force in the three years after prices crashed in 2014, as seen in the above charts.
- "[In] my personal experience, local officials are not looking to the federal government as a resource to help them navigate these new challenges related to volatility," Resources for the Future analyst Daniel Raimi tells Axios — adding that "a modest effort" at the federal level could make a difference.
Between the lines: "I don’t know if either of those options are likely to be adopted, but given Washington’s celebration of the oil boom, it seems like there may be some appetite," Raimi says. "Our main goal is to simply put the issue on the table."