Good morning and welcome back!
Thirty years ago, the late George Michael was atop the Billboard album charts with "Faith," so one of those well-crafted tunes is today's intro track...
Since President Trump's tweet on OPEC landed just as we were sending out Generate yesterday, I'd like to revisit the topic ... I discussed the topic with some experts who said his tweet is timed to message the cartel to boost their production and to divert attention from a Democratic offensive on pump prices.
Why it matters now: The tweet comes ahead of next week's critical OPEC meeting in Vienna, where oil ministers will discuss their production-cutting agreement with Russia.
Between the lines: I emailed with two veteran energy consultants to get their perspectives on Trump's tweet...
"I suspect that with Brent three dollars higher than his first tweet on April 20, average retail pump prices within whiskers of $3, and given recent pushback from Iran on increasing supply, President Trump wants to keep the pressure up on Riyadh to swat oil prices back this summer by signaling and delivering more barrels next week in Vienna."— Bob McNally, president, Rapidan Energy Group
"My reading of it is that with summer here and gasoline prices still relatively high President Trump is looking to shift the blame from government and 'big oil' companies to everyone's favorite villain — OPEC."— Ellen Wald, president, Transversal Consulting
"It also has the added benefit of taking the narrative on gas prices back from the Democrats," adds Wald, referring to how Democrats have recently been attacking Trump over pump prices.
My thought bubble: Given the strong signals that OPEC and Russia will agree to higher output next week, it's possible that Trump's comment is a Twitter-age example of an age-old Washington tactic — taking political credit for something that's going to happen anyway.
An ally has doubts: Sen. James Inhofe (R-Okla.) warned embattled EPA Administrator Scott Pruitt Wednesday that he may have to resign citing mounting ethics scandals, Axios' Khorri Atkinson reports.
What's happening: Speaking on Wednesday in a radio interview with conservative pundit Laura Ingraham, who herself has called for Pruitt to step down, Inhofe said the administrator "has really done some things that surprised me." An option for him to fix things, Inhofe said, "would be for him to leave that job."
New call to step down: The editors at conservative magazine National Review on Wednesday urged embattled Pruitt to resign, citing his "bizarre" and "venal" behavior, amid a slew of ethics controversies surrounding his spending and management decisions at the agency.
OPEC and soccer: per Bloomberg, "Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman will discuss how to boost oil production while maintaining their petro-alliance when they meet in Moscow on Thursday to watch the soccer World Cup’s opening match between the two countries."
Possible futures: In a note this morning, Barclays' analyst Michael Cohen says he expects an agreement to raise output at next week's meeting. But that said, he floats another possibility.
Sanctions and trade: via S&P Global Platts, "China, Iran's top oil consumer, will likely attempt to evade sanctions that the US has promised to reimpose in November, but ongoing trade disputes and sensitive diplomatic talks could motivate Beijing into limited compliance."
Venezuela: A Reuters exclusive says Venezuela — despite having one of the world's largest crude reserves — is considering using foreign oil to produce fuels to meet its contractual obligations.
Axios' Henrietta Reily writes ... Increased use of electric space and hot water heating can steeply cut carbon emissions from U.S. homes and buildings, a major source of greenhouse gases (GHG), a new analysis from the nonprofit Rocky Mountain Institute concludes.
Why it matters: The report underscores how achieving extremely steep emissions cuts in the coming decades will require far more than just increased use of low-carbon power generation sources.
The details: The analysis concludes that in new construction, and existing buildings that currently use propane or oil, it's already cost-effective to use electricity instead. It may be economical for some homes already running on natural gas, but the results are less decisive.
Big picture: Even a wholly carbon-free power system would only cut U.S. emissions by 30%, RMI notes. This is far from enough for the 14 states with official plans to cut emissions by 75% or more by 2050. But, electrification could play a key role in closing that gap.
Go deeper: Read the full post in the Axios stream.
Rising: Financing from big multilateral development banks (MDBs) to help developing and emerging economies cut emissions and adapt to global warming rose in 2017 to $35.2 billion, according to a new report released via the World Bank.
Why it matters: It's another data point in the ongoing mix of very sobering and somewhat hopeful news about worldwide efforts to prevent runaway global warming. (Check out the item below for something in the "sobering" camp.)
One level deeper: A World Bank summary notes that the MBD money is just part of the global finance picture: "[T]he same adaptation and mitigation projects attracted an additional $51.7 billion from other sources of financing last year."
The big picture: Andrew Light of the World Resources Institute called the data "unambiguously good news."
Global carbon dioxide emissions and coal consumption both rose in 2017, and the fuel mix in the electric power sector has changed little in 20 years, according to a newly released BP report on worldwide energy data.
Why it matters: The findings underscore how, despite gains in low-carbon energy technologies, the world is nowhere near an emissions-cutting pathway that avoids highly dangerous levels of warming.
Trend-spotting: The report shows a 1.6% rise in energy-related emissions — the overwhelming majority — and follows two other recent analyses showing an uptick in CO2 emissions after a three-year hiatus.
The big picture: BP chief economist Spencer Dale cautioned against being "too alarmed" by what the data says about the global shift toward a lower-carbon energy system.
Axios' Amy Harder reports ... Top executives from nearly three dozen mostly manufacturing companies are urging Trump to back a policy achieved under former President Obama that they say would create American jobs.
Why it matters: This is a classic example of how an industry works to ensure it benefits from regulations. These companies are poised to make a profit as consumers buy new appliances, like air conditioners, with new, climate-friendly refrigerants. To them, it isn’t really about climate change.
The details: The policy at issue is an amendment to a global environmental treaty, the Montreal Protocol, that phases down refrigerants in appliances that emit powerful GHG emissions.
As in, 5.4 million barrels per day of oil production. That's how much oil the consultancy IHS Markit projects will be coming from the booming Permian Basin in 2023.
Background: The region, which spans a wide part of Texas and part of New Mexico, is the epicenter of the shale boom. Oil production in the Permian last month was around 3.2 mbd, according to federal data.
Why it matters: It signals that the group sees room for a huge output expansion at a time when some others have raised concerns about declining productivity of new development and other problems.
By the numbers: The consultancy, which includes prominent oil analyst Dan Yergin, projects $308 billion in investment and almost 41,000 new wells between 2018 and 2023.
Factoid: 5.4 mbd is more output than any OPEC member except Saudi Arabia, IHS notes.
Go deeper: Jim Burkhard, IHS VP of research, explains the analysis here.