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Oct 8, 2020

Axios Generate

Welcome back! Today's Smart Brevity count: 1,173 words, 4.4 minutes.

🎧 The think tank Resources for the Future's latest podcast episode features Axios' Amy Harder discussing the post-election energy policy landscape. Listen here.

🎶 And today marks 40 years since Talking Heads released the album "Remain in Light," which provides today's intro tune...

1 big thing: Pence looks to fracture Biden's lead

Photo illustration: Aïda Amer/Axios. Getty Images photos: Eric Baradat/AFP and Alex Wong

The exchanges on climate and energy in last night's VP debate broke no new policy ground but did offer a window onto the campaigns' political strategies as Joe Biden leads heading into the final weeks.

Why it matters: The topics are getting prime-time love in the debates in sharp contrast to prior cycles, and the chasm between the platforms is immense.

Here are a few takeaways...

1. Fracking, fracking, fracking! Mike Pence said five times by my count that the Joe Biden-Kamala Harris team wants to ban fracking, the oil-and-gas extraction method that has enabled the U.S. production surge.

  • Reality check: Harris indeed called for a nationwide ban during her primary campaign. But it's not part of Biden's platform, and Harris said last night: "Joe Biden will not ban fracking. That is a fact."
  • Quick take: Pence’s decision to hit Harris on fracking, again and again, has plenty to do with the specifics of the political map as opposed to a broad-based appeal.
  • Fracking-enabled gas production is a big industry in Pennsylvania, a critical swing state, and also important in nearby Ohio — another large and competitive state that’s rich in electoral votes.
  • Trump carried both in 2016. And Texas, the heart of the U.S. oil boom, has also emerged as a potential pickup for Democrats despite being reliably Republican for a long time.
  • Catch up fast: A nationwide ban would require legislation that would be extraordinarily unlikely anyway. Biden's plan does call for ending permitting for new oil-and-gas projects on federal lands.
  • Of note: It's not clear at all from polling that Pence's position is a political winner in the crucial Pennsylvania contest, but clearly, the Trump campaign has decided that raising it repeatedly is the way to go. Anyway, this Generate edition last month tallied some of the polling.

2. It's all about the economy. The debate showed how energy and climate are deeply woven into the fabric of the campaigns' economic platforms, albeit in very different ways.

  • Harris repeatedly touted the ticket's proposal to invest in renewables as part of the wider, infrastructure-focused economic plans they want to move quickly.
  • Pence, meanwhile, repeatedly looked to tether Harris to the Green New Deal, which she co-sponsored in the Senate but Biden has not outright embraced, calling it an onerous plan. He also said Biden's energy plans would cost large numbers of jobs in fossil fuels.

3. Pence demurred on accepting climate science. He declined to answer moderator Susan Page's question about whether he accepts the science on the way climate change is making wildfires and hurricanes stronger and more dangerous.

He also suggested that the cause of climate change is an open question, contra the scientific consensus on the dominant human influence.

One more debate thing

Last night also offered a glimpse of tensions within the Democratic coalition.

Driving the news: The high-profile progressive Rep. Alexandria Ocasio-Cortez responded to the fracking debate by tweeting: "Fracking is bad, actually."

Why it matters: Right now the left is giving Biden plenty of space despite some differences — including over fracking, which many activists strongly oppose.

But if Biden wins, intra-Democratic tensions over policy will reemerge.

2. The corporate solar surge
Reproduced from an SEIA report; Chart: Axios Visuals

U.S. corporate installations of new solar power capacity grew last year by the second-largest amount on record (2017 was tops), per newly released industry data.

Driving the news: The Solar Energy Industries Association's report shows that commercial solar installations grew by another 1,286 megawatts in 2019, and the report notes they don't capture everything.

The big picture: The chart above shows the companies with the 10 largest cumulative amount of combined on-site and off-site solar capacity as of the end of 2019.

"With more than 8 gigawatts (GW) installed across 38,000 installations, corporate solar deployment is 15 times larger today than it was a decade ago," the report notes.

3. Biden mulls new White House climate role

Joe Biden is considering a special new White House office to coordinate and elevate global warming initiatives if he wins, Bloomberg reports (and a h/t to @CarbonBrief for flagging).

Why it matters: The story, and a similar Politico piece, show how Biden's team is thinking about how to organize his plans that would span a suite of agencies.

What they're saying: People who could lead it include former secretary of state John Kerry, Washington State Gov. Jay Inslee, and John Podesta, who worked on climate in Obama's White House and was also Bill Clinton's chief of staff, Bloomberg reports.

Flashback: The idea is hardly new. Carol Browner, who ran Bill Clinton's EPA, served as White House climate "czar" for the first couple years of Obama's tenure.

The big picture: There are several ideas in circulation for how the White House should structure its efforts.

"Another option...is whether to appoint someone to the White House National Security Council whose sole focus would be climate matters," Politico notes.

4. Renewables giant surpasses Exxon's market cap
Expand chart
Data: FactSet; Chart: Axios Visuals

NextEra Energy, the world’s largest solar and wind power generator, has surpassed ExxonMobil in market value, jumping from a $32 billion valuation in October 2010 to more than $145 billion on Wednesday, Axios' Dion Rabouin reports.

Why it matters: The crash in Exxon shares reflects a similar crash in oil — in price and standing — over the past decade and investors' increasing bets on renewable energy.

  • Once the world's most valuable company, ExxonMobil has lost more than half its value since the start of the year.
  • Its market cap has dwindled from a peak of more than $500 billion in 2007.

But, but, but: NextEra isn't only a renewables company by a longshot. The Florida-based utility and power producer describes itself as "one of the largest generators from natural gas in the U.S." and also has coal, nuclear and oil-fired assets.

Of note: Exxon also was passed in market value by Chevron for the first time in the history of the companies. However, at $142 billion, Chevron is still worth less than NextEra.

5. The (potential) price tag for China's carbon plan

China's recently announced plan to reach carbon neutrality by 2060 would require investments of over $5 trillion, per new analysis from the consultancy Wood Mackenzie.

Why it matters: The estimate released Thursday shows how analysts are beginning to grapple with how China, by far the world's largest carbon emitter, might take steps to implement aspects of its ambitious but still-vague pledge.

  • "The hefty bill is the total sum required for additional power generation capacity to accommodate the growth in electrification by 2050," the consultancy said.

What they're saying: “It is definitely a colossal task for a country using 90% hydrocarbons in its energy mix and annually producing more than 10 billion tonnes of [carbon dioxide-equivalent], and in addition, accounting for 28% of global total emissions," said Prakash Sharma, a senior Woodmac analyst, in a statement.

The big picture: The scale of transformation needed is simply immense.

  • For instance, Woodmac estimates that China's wind, solar and storage capacity would have to increase elevenfold to 5,040 gigawatts (GW) by 2050 compared to 2020 levels.
  • "Total new stock of electric vehicles would hit 325 million units by 2050, compared to 4 million units today."

Go deeper: China's 2060 carbon neutral goal bill could hit over $5 trillion (Reuters)

6. Catch up fast: Pipelines, EVs, Big Oil

Nord Stream 2: "Russia’s controversial effort to build a natural gas pipeline to Germany plunged into a deeper freeze with Poland’s decision to impose a $7.6 billion fine on its sponsor." (Bloomberg)

Cars: "Mercedes-Benz unveiled a lineup of new electric vehicles built on a scalable architecture that will enable the automaker to tailor its production to a variety of vehicle types and shapes." (The Verge)

Energy transition: "French oil group Total is launching the sale of its resins business as it streamlines activities to free up cash to invest in renewable energy, people close to the matter said." (Reuters)