May 24, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Happy Friday! We'll be off for Memorial Day, so the next edition arrives Tuesday.

Smart Brevity count: 936 words/< 4 min read.

Finally, at this moment 30 years ago, De La Soul was atop Billboard's rap charts with an infectious tune that brings us into the summer...

1 big thing: Trump's cheap summer win
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Data: U.S. Energy Information Administration, Bureau of Labor Statistics; Chart: Harry Stevens/Axios

Gasoline prices heading into Memorial Day weekend — the start of the summer driving season — are fairly modest by historical standards and lower than last year's levels too.

Why it matters: It's a break for people who need to, or choose to, drive long distances.

  • That's also good news for President Trump. Energy prices are politically ominous for presidents when they're high.
  • This isn't lost on Trump, who tried to take credit for gasoline prices when they were falling early in the year and in general likes to highlight the topic.
  • He also makes a public show of leaning on OPEC.

Check out the chart above, which shows prices heading into the holiday weekend over the last quarter century (for data consistency, it shows prices 2 weeks ahead of Memorial Day).

But, but, but: Here's where I'm contractually obligated to say that U.S. presidents have limited and indirect influence on pump prices. Instead, they're most directly tethered to oil prices set on global markets that respond to all kinds of global economic and geopolitical forces.

  • Most recently, trade disputes are putting downward pressure on prices (more on that below).
  • Overall, the White House faces a tricky balancing act as it toughens sanctions against Iranian exports while trying to avoid political blowback over how that could put upward pressure on crude prices.

Where it stands: Gasoline prices have been rising for much of the year but dipped in recent weeks. Per AAA, the nationwide average price is $2.85 per gallon for regular gasoline today, roughly 12 cents below last year at this time. AAA says...

"For the 37.6 million motorists hitting the road for Memorial Day they can expect gas prices to be cheaper than last year with the exception of a few states in the West Coast and Rockies region."

Safe travels all!

2. Crude oil's wild week

Oil prices are inching upward Friday but that's after a week of steep losses, including the year's biggest one-day decline on Thursday.

Why it matters: The declines signal jitters about economic headwinds, notably the trade dispute between the U.S. and China, slowing demand growth.

What they're saying: "The uncertainty around trade negotiations is adversely impacting financial markets of all sorts including equities and certainly oil futures," Marshall Steeves of Informa Economics tells MarketWatch.

  • And via Reuters, the London Capital Group's Jasper Lawler said: "Without a resolution to the ongoing trade dispute quickly, which now looks very unlikely, oil could struggle to push higher."

Where it stands: Crude prices are at their lowest levels in roughly 2 months, with WTI trading around $58.55 and Brent at $67.39.

3. Pressure grows for Dem climate debate
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We know Democrats are debating how to tackle climate change. But now there's growing pressure to have them do it on the actual debate stage.

Driving the news: 3 Democratic senators yesterday wrote to NBC, host of the first primary debate in late June, urging them to devote a "significant" amount of time to climate.

  • "There are many ways to address the climate crisis, and voters want to know what policies each candidate supports," Sens. Brian Schatz, Sheldon Whitehouse and Martin Heinrich wrote.
  • The letter cites polls showing high primary voter interest.

Quick take: NBC did not provide comment. And I don't really expect the network to say, "Sure, no problem, we'll let 3 senators dictate how we run our debate."

  • But I think NBC is likely to include questions on the topic. And I bet we see more than just glancing discussion in other debates too, a turnaround from past elections when it was largely absent.

The intrigue: 2020 hopeful Gov. Jay Inslee is pushing the Democratic National Committee to set up a debate focused solely on climate. Sen. Elizabeth Warren backs the idea of a climate debate too. But the DNC has not endorsed it.

4. The growth of Earth's heat-trapping power
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Adapted from a NOAA Earth System Research Laboratory report; Chart: Axios Visuals

A little-known index is key to understanding how the Earth's climate continues to build up heat in the air and oceans, resulting in sweeping changes across the globe, Axios' Andrew Freedman reports.

Why it matters: Known as the Annual Greenhouse Gas Index (AGGI), which NOAA produces, it clearly shows that despite numerous agreements and goals for cutting emissions, the atmosphere's ability to trap extra heat keeps growing.

Threat level: This year the AGGI rose to a value of 1.43, meaning that the increase in the atmosphere’s heat-trapping capacity attributable to human activity has risen 43% since 1990. James Butler, who directs NOAA's air monitoring program, tells Axios that growth in the AGGI is accelerating.

  • "It’s a measure of what we’ve already committed towards causing climate to change,” Butler says. "Since 1990, we’ve added 43% more long-lived greenhouse gases than in the previous 240 years.”
Bonus: the methane mystery
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Adapted from a NOAA Earth System Research Laboratory report; Chart: Axios Visuals

The AGGI data noted in the item above shows that methane, a more powerful but shorter-lived greenhouse gas compared to carbon dioxide, has rapidly increased during the past 5 years, Andrew reports.

The rate of methane increase has jumped 50% since 2007–2013, NOAA says.

The intrigue: Scientists have been trying to explain this increase. Experts tell Axios it's clear the long-term growth in methane concentrations is related to human activities, from cattle farming to gas drilling.

  • "I think we are confident that part of the recent increase is due to greater extraction and use of natural gas, especially in the U.S.," says Drew Shindell of Duke University.
  • "Even if leak rates were constant, when we use more, we leak more," he adds.

What's next: But scientists still need a better understanding of how much of the recent methane rise is natural, how much could be a climate change feedback, such as melting permafrost, or other sources. New monitoring networks or satellites could solve this, Shindell says.

Quick take: Regardless of the source, the surge could put more pressure on regulators and the oil-and-gas industry to curb leakage.

Ben GemanAmy Harder