Jun 27, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

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Today's Smart Brevity count: 1,213 words/< 5 minutes read.

Tomorrow will mark exactly 31 years since Public Enemy released "It Takes a Nation of Millions to Hold Us Back," so that pioneering act has today's intro tune...

1 big thing: Dems touch on climate in debate

A Greenpeace rally June 12 in front of DNC headquarters calls for a presidential campaign climate debate. Photo: Sarah Silbiger/Getty Images

Here are a few takeaways from the first Democratic primary debate last night in Miami, which is baking under record heat for this time of year.

1. The wide lens: A number of Democrats wove the topic into broader economic and industrial policy messages. Sen. Elizabeth Warren, who's jockeying with Sen. Bernie Sanders for second in recent polls behind Joe Biden, went there fast during a wide-ranging answer to the night's first question on her economic plans.

  • She noted the economy is "doing great for giant oil companies that want to drill everywhere just not for the rest of us who are watching climate change bear down upon us."
  • Later Warren, who has made climate-friendly tech central to her industrial policy, said the U.S. should lead in the "$23 trillion market coming for green products."
  • Warren wasn't alone. "We need an industrial policy saying we're going to dominate building electric vehicles, there’s going to be 30 million made in the next 10 years," Tim Ryan said.

2. A glass half-empty: Climate also got its own round of specific questions at the 82-minute mark — a departure from its near-total absence in recent cycles.

3. A big deal: The most prominent mentions were the briefest. A lightning round at the end asked candidates to name the greatest geopolitical threat to the U.S.

  • Warren and Beto O'Rourke said climate change; Sen. Cory Booker said nuclear proliferation and climate; Julian Castro said China and climate.
  • Why it matters: If you wanted a simple sign that the topic has broken through in Democratic politics, that was it.
  • The intrigue: One notable thing didn't come up. Politico's Gavin Bade points out that nobody name-checked the Green New Deal.

4. Jay Inslee goes broader: The Washington State governor used some early sections to show that his candidacy, while climate-focused, isn't climate-exclusive.

  • He passed up chance to bring back his answers back to climate change when commenting on immigration and reproductive rights.
  • And unlike several others, he did not list climate change in response to the geopolitical threat question, instead saying it's President Trump.
  • But, but, but: Inslee did use his closing statement to point out he's the only candidate to make climate change his top priority.

5. Beto's case: He made a pitch to Iowa voters, bringing his answer in the climate segment back to his visit to Pacific Junction, Iowa, which has been hit by major flooding.

  • He also talked up ways to "put farmers and ranchers in the drivers seat" on climate solutions.
2. New tech moves from Exxon and BP

ExxonMobil is looking to scale up technology that takes carbon dioxide out of the sky by partnering with one of the startups pursuing that tech, Axios' Amy Harder reports.

Driving the news: Exxon, the world’s biggest publicly traded oil company, announced a joint development agreement Thursday with Global Thermostat, a company co-founded in 2010 by a former Exxon scientist, Peter Eisenberger.

Why it matters: Large oil companies, including Chevron and Occidental Petroleum, are pursuing carbon removal amid shareholder pressure to adopt more climate-friendly strategies.

  • This technology, costly and unproven on a massive scale, is a way to do that without getting off oil and gas that producers have made big profits on for decades.

Go deeper: Read Amy's full story.

Separately, BP's venture arm is investing $30 million in the alternative protein startup Calysta, which the companies said will "use BP’s natural gas to produce protein for fish, livestock and pet feeds."

  • How it works: Per today's announcement, "a naturally occurring bacteria is grown in a proprietary fermenter using methane as its carbon and energy source. This creates a single cell protein that is harvested and dried prior to being pelletised."
  • Go deeper: BP gets back into animal feed with $30 million Calysta investment (Reuters).
3. Sign of the times in power sector
Expand chart
Reproduced from EIA; Chart: Axios Visuals

U.S. power generation from renewables was higher than coal in April for the first time, new Energy Information Administration data shows.

Why it matters: It's a milestone that shows the sweeping changes underway in the country's electricity sector.

By the numbers: Renewables provided 23% of total generation in April while coal, which has been steadily losing market share to gas and renewables for years, slipped to 20%.

But, but, but: It's likely to flip back soon. Overall power demand is lowest in the spring and fall when heating and cooling demand are relatively low.

  • "[G]eneration from ... gas, coal, and nuclear is often at its lowest point during these months as some generators undergo maintenance," EIA said.
  • EIA projects that on an annual basis, coal will still generate more than renewables this year and next year.

The bottom line: Absent some unlikely reversal of current trends, April's dynamic will become the norm in the years ahead.

  • The central scenario in EIA's Annual Energy Outlook sees renewables overtaking coal for good on an annual basis in the mid-2020s.
  • Yes, but: Don't forget they've underestimated renewables' growth in the past.
4. Catch up fast: EPA edition

People: EPA's top air quality regulator William Wehrum, who has faced sharp criticism for his past work with polluting industries, is departing the agency at the end of this month, EPA administrator Andrew Wheeler said Wednesday.

  • Why it matters: Wehrum, an attorney who has represented coal-fired power producers and other industry clients, is a key architect of some major moves to replace Obama-era policies with more modest rules.
  • The intrigue: The departure comes amid an ethics probe by House Democrats. Wehrum has said he was careful not to run afoul of ethics standards.
  • Go deeper: Politico has a detailed look at the ethics controversy.

Policy: Bloomberg reports that EPA is "throwing a lifeline" to a stalled proposal for a huge gold and copper mine that would be located near Alaska's Bristol Bay.

  • "The [EPA] on Wednesday said it was resuming consideration of the proposed water pollution restrictions that have effectively stalled the project since they were outlined in 2014," they report.
  • Why it matters: The area is thought to hold huge mineral deposits. But the Pebble Mine would be in an ecologically sensitive region that's home to major sockeye salmon runs. Environmentalists and commercial fishers have long opposed it.
5. Visiting the EV "profit desert"

Axios' Joann Muller reports ... Auto industry profits are going to be squeezed for the foreseeable future as companies spend heavily on electric and autonomous vehicles amid stagnating global sales, per new research from Alix Partners.

Why it matters: The high cost of battery electric vehicles (BEVs) means there's a near-term "profit desert" the industry must cross until consumer demand grows, Alix forecasts.

  • In the meantime, paradoxically, the move toward cleaner cars means automakers will have to keep pushing hard to sell as many high-margin, gas-powered SUVs and pickups as they can.

By the numbers: The global auto industry plans to invest $225 billion on electric vehicles between now and 2023, according to the research unveiled this week.

  • The variable cost of an electric powertrain is about $16,000, Alix says, about 2.5 times more than the $6,500 cost of a gasoline powertrain.
  • Batteries are the biggest factor, at about $10,000 per vehicle. But costs per kilowatt hour are coming down, and are expected to fall below $100 by 2023, from 2018's $176.
  • While consumer interest in EVs is rising, sales per model will be just 14,000 units by 2022, compared to 93,000 average sales per model for gasoline cars, making it hard to amortize those investments.
Ben GemanAmy Harder