Oct 14, 2021

Axios Generate

Hi readers and thanks for being readers! Today's Smart Brevity count is 1,405 words, 5.5 minutes.

📊 Data point of the day: $62 million, the latest capital raised by hydrogen aviation startup Universal Hydrogen. The FT explores their plans.

🛢️ Situational awareness: "Acute" gas and coal shortages and high prices in Europe and Asia are spurring a "massive switch" to oil, IEA said this morning. Go deeper

🎶 The late Prince's album "Controversy" arrived exactly 40 years ago and provides today's irresistible intro tune...

1 big thing: Biden's winter energy chill

Illustration: Shoshana Gordon/Axios

Higher home energy prices heading into the chilly months are the latest energy-related problem facing Joe Biden at a sensitive time in his young presidency, Ben writes.

Driving the news: The Energy Department's independent stats arm projects heating bills this winter will rise thanks to higher commodity prices and predictions of a colder winter (more on that in item 2).

  • The White House is already grappling with rising gasoline prices, which per AAA now average $3.30 per gallon, a seven-year high.
  • Bloomberg reports that several Cabinet secretaries and top White House aides gathered Tuesday night to discuss rising gasoline and natural gas prices.
  • Meanwhile, per Reuters and Politico, the administration has been speaking with the industry about ways to curb prices.

Why it matters: Higher oil, gasoline and natural gas prices have political and policy ramifications.

  • They come as President Biden's approval ratings have been trending generally downward in recent months, and Democrats face a high risk of losing one or both chambers of Congress in 2022.
  • Meanwhile, the oil industry is arguing that climate provisions Democrats hope to move through Congress — like a new fee on methane emissions — would raise consumer costs (whether this would be significant is hardly clear).
  • The global energy price and supply crunch might complicate efforts to spur new climate policies at or after the looming UN climate summit. Or it could have the opposite effect, who knows!

Reality check: Presidents have little sway over energy prices, which are largely set by market forces and have risen for several reasons.

They include the global economic return from the pandemic, OPEC's production restraint, and U.S. oil-and-gas output that remains far below pre-COVID levels.

Bonus: A perfect storm for energy markets

Illustration: Annelise Capossela/Axios

An energy crisis around the world is hitting households and manufacturers that were already struggling to recover from the global pandemic, Andrew and Axios' Felix Salmon write.

Why it matters: This is a perfect storm. It features supply shortages, especially from China; inflation; slowing growth; labor shortages; Russia’s geopolitical muscle-flexing and climate change.

Keep reading

2. A closer look at the winter ahead
Expand chart
Data: U.S. Energy Information Administration; Chart: Jared Whalen/Axios

Because of higher fuel prices, the Energy Information Administration is forecasting that U.S. households will spend more to heat their homes this winter, Andrew writes.

When looking at winter forecasts, there are reasons to be concerned that parts of the U.S. — not to mention Europe, which is fully in the grips of an energy crisis, will see significant cold snaps, Andrew writes.

The big picture: This winter is likely to be another La Niña winter, which will feature colder-than-average sea surface temperatures in the equatorial Pacific Ocean.

  • Such winters tend to be wetter and cooler than average in the Pacific Northwest, colder than usual in the Northern Plains and parts of the Midwest, wetter in the Ohio Valley, and drier in the South.

Yes, but: They also tend to be highly volatile from one week to the next.

  • Matt Rogers, co-founder of Commodity Weather Group, told Axios they are forecasting a colder-than-average winter in the U.S. and Europe compared to last year.
  • Rogers' group is forecasting about 0.5% higher energy demand for the U.S. this winter, compared to 7% higher energy demand in Europe year over year.

Meanwhile, Paul Pastelok, AccuWeather's top long-range forecaster, has his eyes on the polar vortex, the high-level swirl of frigid, low pressure above the Arctic. So too does Judah Cohen, a meteorologist at AER.

  • There are signs, Pastelok told Axios, that the vortex could start the winter weaker than average, which would favor Arctic cold slipping southward into the U.S. and Europe.
  • Cohen says this may not hold for the rest of winter, however.
3. Kerry plays down COP26, knocks Congress

John Kerry. Photo: Christopher Goodney/Bloomberg via Getty Images

U.S. climate envoy John Kerry says COP26 may not get all the results he has been working toward, in part because Congress has yet to act on President Biden's ambitious climate agenda, Andrew writes.

Driving the news: In an interview with the Associated Press, Kerry says negotiations may fall short of securing commitments from major emitters to stop burning coal and commit to aggressive near-term emissions cuts.

Details: “By the time Glasgow’s over, we’re going to know who is doing their fair share, and who isn’t,” he said. “It would be wonderful if everybody came and everybody hit the 1.5 degrees mark now,” he said.

Our thought bubble: A key quote shows Kerry's frustration with Congress, where major legislation to address the climate crisis is stalled. This could damage U.S. credibility and leverage in Glasgow.

  • Failure to pass such legislation, he said, “Would be like President Trump pulling out of the Paris Agreement, again."
  • He did say, though, that he thinks Congress will ultimately pass some form of climate legislation.

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4. NOAA is raising its climate profile, its head says

The Nation Hurricane Center in Miami. Photo: Eva Marie Uzcategui/Getty Images

Richard W. Spinrad is the first Senate-confirmed administrator of NOAA in five years, which has its advantages in Washington.

  • “That immediately gets doors open and gets me access,” Spinrad told Andrew in an interview following an interagency climate and equity roundtable in Detroit on Tuesday.

What's happening: Spinrad, who previously served as the agency's chief scientist, said he's been quietly working to raise his agency's profile in the Biden administration, which has an all-hands-on-deck approach to climate change and other topics of interest to the agency.

  • “I have had in the last three months close to 30 meaningful meetings with the heads of probably 20 different agencies,” he said.
  • “You may not be seeing that immediately in the public eye. But we are positioning NOAA for a much, much more visible and influential role in the federal government.”

Context: Spinrad is also organizing multiple offices within his agency that touch on climate to form a NOAA Climate Council.

The goal is to avoid information getting stove-piped within the National Ocean Service, Office of Atmospheric and Oceanic Research, and other entities, each of which has its own functions and subcultures.

The intrigue: NOAA is just one of at least 13 federal agencies dealing with climate science from NASA to the Energy Department.

  • Spinrad said since he took the helm in June, he’s become convinced that the federal government should determine which agency has the lead role in providing certain types of climate information.
  • “Our nation needs some clarity on who's got the con, who is responsible, who is that authoritative source for climate information?” he said.
5. Catch up fast on policy: Wind, risk, investing

Axios' Ivana Saric reports: The Biden administration plans to identify and lease federal waters along seven coastal areas to offshore wind power developers over the next few years, Interior Secretary Deb Haaland announced Wednesday.

Why it matters: The new plan constitutes an aggressive push by the federal government to reach its goal of 30 gigawatts of offshore wind-generating capacity in U.S. waters by 2030. Go deeper

Finance: The Treasury Department said it's studying how climate change is bringing new financial risks to households and communities, especially the low-income and "historically disadvantaged."

  • What's next: Treasury offered few details but said the multi-agency Financial Literacy and Education Commission it leads hopes to better understand how to map risks and identify tools and practices to address them.

Investing: "The Department of Labor on Wednesday proposed a rule to explicitly permit plan fiduciaries to consider climate change and other environmental, social and governance factors when selecting investments and exercising shareholder rights." (Pensions & Investments)

6. The climate crisis has arrived for Pacific Islanders

Photo illustration: Aïda Amer/Axios. Photos: Courtesy of MCCA and the Office of the Lieutenant Governor of Guam

Decades after Pacific Islanders first raised the alarm, the rest of the world is finally catching up: The climate crisis is here, and it's accelerating, Axios' Shawna Chen reports.

Why it matters: Pacific Islanders, whose nations face an existential threat from climate change, were a major force behind the Paris Agreement.

Heading into the UN climate summit, they are calling for greater urgency in meeting the goals of the accord, and more direct action from world leaders — especially President Biden.

The big picture: Pacific Islanders have suffered some of the world's most serious climate impacts to date, with sea level rise caused by the burning of fossil fuels posing an existential risk.

What we're watching: Pacific Island nations and activists have repeatedly pushed for a bigger seat at the table, especially with the U.S.

Biden’s election gave them hope, but his climate plan fails to center the hardest-hit Indigenous communities, said Moñeka De Oro, a Chamoru climate organizer based in Guam and the Northern Mariana Islands.

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