Feb 26, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Breaking news: Axios  and HBO have inked a deal for a second season!  Broken into 8 half-hour episodes — 4 this spring and 4 this fall — Axios will cover the big trends, people and ideas shaping the next decade.

  • Bonus:  HBO will also air 4 shorter, interview-driven specials designed to move with the pulse of the news. 
  • Why it matters: Our mission has been, and always will be, to help you, our readers, get smarter faster on the topics that matter most. We do that in our newsletters, on our news stream, social platforms, podcast and now, once again, on HBO.  
  • Tweet @Axios your ideas for content and interviewees and stay tuned for more details.

Onto music and happy birthday (a day late) to George Harrison (RIP), who plays us into today's edition...

1 big thing: Building up Africa's power

Illustration: Aïda Amer/Axios

Todd Moss is a former State Department official leading a small new nonprofit with a big idea: changing what he calls an incomplete conversation about electricity access in Africa and South Asia.

Why it matters: The Energy for Growth Hub wants to help enable access to power levels needed to build and sustain manufacturing and business development — not just power homes and charge phones.

The big picture: "In thinking about the future of energy in Africa, I’ve been amazed at how many people immediately go to the visual of a rural hut that doesn’t have lights," Moss tells Axios.

  • Residential power is a vital problem to solve, he said, but just part of the equation, and far from enough to seriously attack poverty.

By the numbers: The International Energy Agency says that the number of people worldwide without electricity access fell below 1 billion in 2017.

  • But Moss's organization estimates that a vastly larger number — 3 billion — live in economies that can't supply reliable and affordable power to businesses and industries.
  • He's concerned that discussions about power access focused on, say, rural rooftop solar often miss the scale of what's needed for widespread job growth.
  • In a recent interview, he was keen to show a scatterplot he made of World Bank data on income and per-capita power consumption, which pointed out, "There's no such thing as a low-energy, high-income country."

What's next: In the near term, Moss sees the hub providing data and analysis that form a bridge between experts in places like MIT and Stanford, and policymakers like those at the World Bank, U.S. finance agencies and African nations' institutions.

  • “I was amazed at how much incredible high quality work was going on in energy policy and how little of it was actually having an effect on important decisions. So we are trying to fill that gap,” he said.

Moss says a range of energy sources will be needed to both fuel widespread economic development and build resilience to climate change.

  • Natural gas and hydro — of the large-scale and "micro" variety — are two of them.
  • “I am also a very big fan of the full range of solar advancement, wind advancement, even some of the advanced nuclear looks really promising for certain applications in Africa," he said, noting that countries will make their own decisions.

Details: Moss was deputy assistant secretary of state for African affairs in the George W. Bush administration and later COO at the Center for Global Development.

  • The nonprofit, which Moss calls in "startup mode," formally launched late last year. It has a handful of paid staff and works with a wider constellation of experts in the U.S., Africa and Asia.
  • The group has funding from several foundations including the Rockefeller Foundation, as well as Chevron and GE.

Go deeper

2. SEC vs. Elon Musk battle flares
Illustration: Sarah Grillo/Axios

ICYMI yesterday evening, the Securities and Exchange Commission has asked a federal judge to hold Tesla CEO Elon Musk in contempt for violating a settlement reached last year with the agency.

Details: The SEC claims Musk violated the settlement when he wrote in a Feb. 19 tweet: "Tesla made 0 cars in 2011, but will make around 500k in 2019."

  • The SEC wrote in court papers: "[Musk] once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with Internet access."
  • Of note: Musk sought to clarify later on the 19th that "Meant to say annualized production rate at end of 2019 probably around 500k."

What's new: Late last night Musk struck back at the regulators via Twitter (of course), writing, "SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing."

Our thought bubble, via Axios' Felix Salmon: Musk has made it abundantly clear that he respects neither the SEC nor the accord he signed with the agency. His inability to comply with the terms of the deal came as no surprise — and neither does the SEC’s response.

Threat level: New York Law School professor Rebecca Roiphe tells the New York Times that while the SEC's move was a "fairly extreme step," that the contempt motion could set the stage for the SEC to seek Musk's removal as CEO if he further violates the settlement.

3. Kasich to GOP: Stop denying climate change

Axios' Amy Harder reports ... Republicans should stop denying humans’ impact on climate change and start putting forth policies to address it, former Republican Ohio Gov. John Kasich is set to say at a speech Tuesday night in British Columbia, Canada.

Why it matters: Kasich is a potential 2020 opponent of President Trump — and he represents the leading edge of a Republican Party slowly evolving away from a decade-long position denying that climate change is a real problem.

“This is like a call to arms. Let’s have conservatives have a discussion instead of being in denial that this is a problem. You can’t just be a science denier.”
— John Kasich

Flashback: Kasich himself has evolved on climate from when he was running in the 2016 GOP presidential primary. He said then that the overall human impact on climate change is unclear and that “we don’t want to destroy people’s job, based on some theory that is not proven.”

Details: In his speech at the University of British Columbia, Kasich will lay out what he is describing as a “centrist” climate policy, including...

  • A price for carbon dioxide emissions, possibly through a cap-and-trade system.
  • Subsidies for certain technologies, including electric vehicles and renewables.

Go deeper

4. The filibuster and the Green New Deal

Washington Gov. Jay Inslee (D), who could launch a climate-focused White House bid very soon, told the HuffPost that the Senate filibuster, which requires 60 votes to pass most bills instead of a majority rule, should be eliminated.

What he said: "It was an artifact of a bygone era that is not in the U.S. Constitution and somehow it got grafted on in this culture of the Senate."

Why it matters: Axios' Khorri Atkinson notes that as the race heats up, big progressive proposals like the Green New Deal are likely dead on arrival in the Senate under the current rules — even if Democrats manage to take back the majority in 2020.

The big picture: Khorri runs down where some other hopefuls stand on filibusters...

  • Sen. Bernie Sanders (I-Vt.), who has among the most progressive policy proposals in the current Democratic field, told CBS News last week: "I’m not crazy about getting rid of the filibuster. ... The real issue is that you have in Washington a system which is dominated by wealthy campaign contributors."
  • Sen. Kamala Harris (D-Calif) told reporters over the weekend that she's "conflicted."
  • Sen. Elizabeth Warren (D-Mass.) told Politico last month it should be "on the table" if Democrats retake the Senate and White House.
  • Sens. Cory Booker (D-N.J.) and Kristen Gillibrand (D-N.Y.). have expressed concerns about ending the filibuster.
5. "Amazon for energy" startup nabs $8M

GoExpedi, a Houston-based supply chain company for the oil-and-gas sector that's aiming to be "Amazon for the energy industry" has raised $8 million in Series A funding.

Why it matters: The e-commerce company for maintenance, repair and operations — and their new cash — is a sign of how business practices in the booming shale sector are evolving as U.S. production surges.

Details: Crosslink Capital, alongside Bowery Capital, Blue Bear Capital, Hack VC, and SaaS Ventures led the funding round.

  • It comes after a smaller seed round last July for the company, which started 2 years ago and now has roughly 20 customers including a major drilling contractor.

What's next: In addition to expanding its business, the company says the money will allow it to enhance its platform and analytics abilities by "creating a real time dashboard to do predictive work in addition to reactive maintenance."

  • While the company's business is now largely focused on the shale patch, CEO Tim Neal told Axios they're looking to expand in multiple directions — geographically and to other sectors like wind.

What they're saying: “The energy logistics industry is a $1.7 trillion market worldwide, yet still operates from old school catalogues and phone orders,” Crosslink partner Matt Bigge said in a statement. He said GoExpedi's tech and expertise can help modernize the sector.

6. A new wrinkle for Nord Stream 2
Pipes for the Nord Stream 2 natural gas pipeline in Germany. Photo: Danny Gohlke/picture alliance via Getty Images

Axios Expert Voices contributors Anna Mikulska and Wojciech Jakobik write ...

In a surprising move after months of inaction, the EU tentatively approved a compromise version of the European Commission (EC) proposal to extend provisions of a legislative framework for the EU's gas and electricity market to pipelines to and from non-EU countries.

Why it matters: Under the framework, called the Third Energy Package (TEP), energy generation and supply need to be separate from transmission networks.

  • If the compromise secures final approval, that stipulation could affect the Nord Stream 2 (NS2) offshore pipeline currently under construction, as it's owned and operated entirely by Russia's state-owned Gazprom.

Background: Many Central and Eastern European (CEE) countries have advocated applying the TEP to NS2, which they see as Russia’s attempt to expand its influence by dominating the European gas market.

  • But some Western EU members strongly support NS2. Germany — where the pipeline would land — sees the investment as a way to facilitate its energy transition goals with natural gas backing up its renewable power.

The intrigue: The compromise leaves the EC 2 options: negotiate directly with Russia on how EU laws apply to the stretch of the pipeline in German waters, or allow Germany to negotiate while keeping supervisory power and the ability to step in or take over if needed.

Read more of the full piece by Mikulska, a nonresident fellow at the Baker Institute and senior fellow at the Kleinman Center, and Jakobik, an analyst at the Jagiellonian Institute.

Ben GemanAmy Harder