Axios Generate

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April 13, 2017

Good morning and welcome back to Generate, where today brings a whirlwind tour that includes Alaska, Brooklyn, and Paris. Whew. Let's get started . . .

Alaska’s Mr. Right Now

The Trump administration is poised to begin upending President Obama's moves to forever ban drilling in potentially vast oil-and-gas bounties in federal Arctic waters.

But Arctic offshore drilling in federal waters isn't a U.S. industry priority and happening anytime soon, no matter what. A nearer-term priority for advocates of halting the state's oil production slide is less splashy, yet far more important in terms of actual development in coming years.

What they're talking about: Industry representatives and lawmakers have already bent Interior secretary Ryan Zinke's ear about faster permitting for projects onshore and in state waters where drilling and production is already possible.

  • That's less about sweeping, high-profile policy upheavals than creating a more permissive culture at agencies industry officials called slow and anti-development under Obama.
  • "I think it is just a matter of attitude and approach," said a well-placed industry source who works on Alaskan oil development.

Why it matters: Alaska's oil production peaked in the late 1980s at over 2 million barrels per day, but has generally declined for decades. In recent years, the state has been the odd man out as the focus of U.S. development has shifted to the shale boom in Texas, North Dakota and elsewhere in the lower 48.

However, companies that operate in Alaska — ConocoPhillips, Repsol and partner Armstrong, and Caelus — have announced big discoveries in recent months, creating more buzz about prospects for a resurgence of production.

  • Whether a company's leases are on state or federal lands, costly projects to bring that oil out of the ground and to the market invariably requires various permission slips from the federal government.
  • "Timely and predictable federal permitting" is how a ConocoPhillips spokeswoman described the company's goals.

One level deeper:


latest podcast

from prominent oil industry consulting and research firm Wood Mackenzie goes into detail about recent discoveries in the state.

Tech corner: Brooklyn

Construction is underway on a combined solar energy and battery storage project at the Marcus Garvey Village apartment complex in Brooklyn.

  • "We're proud to be designing and building the city's first lithium-ion battery-based microgrid," Gregg Patterson, CEO of developer Demand Energy, said in a statement this week.

The details: "The microgrid will comprise a 400-kW solar system and 400-kW fuel cell supported by a 300-kW, 1.2-MWh lithium-ion battery at Marcus Garvey Village, a mixed-income apartment complex owned by L+M Development Partners," Utility Dive reports.

Developers say the microgrid project will cut the apartment complex's power consumption and improve resiliency if there's a power outage in the city, while easing demand on Con Edison.

Why it matters: The combo of renewable power and storage can play a key part in the evolution of the U.S. power system.

From Amy’s notebook: On Paris, distilling the meaning of ‘withdraw’

Below, my colleague Amy Harder looks at how a big White House climate policy battle may be shifting....

The big question: Chatter is building on whether the Trump administration will stay or withdraw from a global climate accord, struck in 2015 by nearly 200 nations, ahead of an anticipated decision by the administration by the end of next month.

Driving the news: George David Banks, a top advisor in the Trump White House for global climate and energy issues, is working to keep the U.S. government in the deal while throwing out the Obama administration's pledge to cut U.S. greenhouse gas emissions specific levels.

The other side: Myron Ebell, a top expert at the Competitive Enterprise Institute and former transition advisor for Trump's EPA, represents the right flank of the GOP that wants America out of the climate deal altogether. He says he prefers the administration pull out entirely, but his rhetoric is softening oh so slightly, and he's saying now that no matter what decision is made, it'll be portrayed as withdrawal.

"I'm pretty sure whatever they do they're going to say it's withdrawal," Ebell told Axios. "There are different ways to withdraw."

What that means: Ebell says the Trump administration could withdraw President Obama's pledge, which is the current leading possibility.

Reality check: During the campaign, Trump said he would "cancel" the Paris deal, which is technically impossible. Dropping Obama's pledge is also not technically withdrawing from the deal, but it's a nuanced detail that can easily be overlooked and massaged as necessary in rallies and meetings when appropriate by administration officials.

What’s happening and not happening at EPA

Happening: Today EPA boss Scott Pruitt will speak to coal miners in Sycamore, Pennsylvania. He'll tout the Trump administration's moves to start unwinding Obama-era carbon emissions rules.

Not happening: The New York Times reports that Pruitt has decided against revisiting the endangerment finding. It's the 2009 conclusion that greenhouse gases are a threat to humans, and provides a key legal underpinning for EPA's emissions regulation.

  • "Mr. Pruitt has told the White House and Congress that he will not try to reverse the finding, saying that such a move would almost certainly be overturned by the courts," the paper reports in their piece on criticism of Pruitt from the right.

Quick take: Pruitt had previously cracked the door open to revisiting the finding, so his stand is a blow to conservatives. The Competitive Enterprise Institute recently filed a petition with EPA to reconsider the endangerment finding.

Happening: The conservative group Judicial Watch has sued EPA to gain access to messages that officials may have exchanged using the encryption app Signal. Tom Fitton, the group's president, said the suit "could expose how the anti-Trump 'deep state' embedded in EPA is working to undermine the rule of law."

  • But Wired reports that the group faces an uphill battle trying to unearth back-channel resistance to Trump's agenda at the agency.
  • "Encryption and forensics experts say Judicial Watch may have picked a tough fight. Delete Signal's texts, or the app itself, and virtually no trace of the conversation remains," their piece notes.

Lightning round: Carbon capture, electric cars, and more

Oil markets: Via Reuters, the International Energy Agency said Thursday that the global oil market is "close to balance" after three years of excess supply.

Uber and EVs: In Oregon, the Portland Business Journal reports that Uber is making Portland its first U.S. site for a program to adds lots of electric vehicles to its fleet.

  • The website Electrek has a good summary of the various elements of the program here.

Coal and climate: Vox has a good look at prospects for long-stalled progress on carbon capture and storage from coal-fired power and other industrial plants. A few takeaways from their piece...

  • There have been "intriguing developments" of late, including the recent opening of the Petra Nova project in Texas. (Editor's note: Energy secretary Rick Perry will be there for a ribbon-cutting today.)
  • But costs would need to come way down before large-scale adoption takes hold, and incentives are needed too.
  • There's a bipartisan push in Congress to make CCS more attractive.

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