Dec 11, 2018

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning and welcome back!

D.C. readers: You're invited! Join Axios' Mike Allen tomorrow morning for a look into what 2019 holds for health care policy as a new split-Congress takes the hill. RSVP here

  • HHS Secretary Alex Azar will be joining the program, adding to the lineup of: Sen. Tim Kaine (D-Va.), Sen. Lamar Alexander (R-Tenn.), and Rep. Seth Moulton (D-Mass.). 

And happy birthday to Joan Armatrading (it was Sunday). She's got today's beautiful intro tune...

1 big thing: Energy fault lines at UN talks
Giphy

Axios' Amy Harder reports from Poland on the U.S. position at UN climate talks, where a senior Trump official said the White House posture is gaining support from other countries.

Driving the news: Australia's environment ambassador joined a U.S. event Monday focused on nuclear power and a continued-but-cleaner use of fossil fuels. Afterwards senior White House energy adviser Wells Griffith told reporters:

“There was a lot of interest [in the event]. We had a lot of people [from other countries] reach out, some gauging interest, asking about what it was, looking to participate. We’re happy to engage in these realistic conversations about global energy systems.”

Why it matters: The U.S. stance is much friendlier to coal and oil than nations calling for very steep emissions cuts to stave off high levels of warming.

The big picture: Griffith wouldn’t name countries expressing interest in the U.S. position. But a few data points suggest more support for this perspective compared to last year, when the administration held a near identical event.

  • The new inclusion of Australia's Patrick Suckling indicates support by that nation, which is a big fossil fuel producer like the U.S.
  • The conference was thrown into disarray last weekend after the U.S. joined Russia, Saudi Arabia and Kuwait in refusing to officially "welcome" a recent landmark UN scientific report on climate change. The U.S., Russia and Saudi Arabia are the world's 3 largest oil producers.

What they're saying: The New York Times reports that the U.S. alignment with those nations "injected a new dynamic that several diplomats said they found worrisome."

“The U.S. along with Saudi Arabia are playing a clear and calculated spoiling role in the climate change negotiations,” Ian Fry, a top diplomat for the island nation Tuvalu, tells NYT.

Threat level: The ambition around the world for the 2015 Paris Climate Agreement is lessening, fueled by nationalistic leaders like President Trump and Brazil’s President-elect Jair Bolsonaro, who has criticized the deal and withdrew from hosting this same conference next year.

Reality check: The current administration supports technologies that capture and store carbon dioxide from emitting facilities like coal and cement plants.

  • But most of its policies are loosening — not tightening — standards that would make fossil fuels cleaner.
  • Trump also doesn’t acknowledge that climate change is a problem at all, casting doubt on his administration’s efforts to genuinely push a technology that exists solely because of said problem.

What's next: "National leaders and ministers are preparing for the final stretch of U.N. climate talks, with just days left to break through thorny issues that diplomats have struggled to resolve," AP reports.

2. OPEC's cut barely moves prices — yet

If the new OPEC+ deal to cut production is going to send prices sharply upward, it's stumbling out of the gate. But the race just started.

Where it stands: "Oil edged higher on Tuesday, clawing back some of the previous day’s hefty losses as a modest show of strength in global stocks, a slightly weaker dollar and an unplanned supply outage in OPEC member Libya lent support," Reuters reports.

  • Brent crude was trading this morning at roughly $60.48 this morning.

The big picture: Oil prices had slipped on Monday, basically wiping out the gains made on Friday after there was an agreement between OPEC and Russia to curb output by 1.2 million barrels per day starting next year.

Analysts I spoke with caution that the stagnant prices are rooted in several factors like trade squabbles, Brexit, wider market woes, and concerns about soft demand growth.

What they're saying, part 1: Roger Diwan of IHS Markit says it's "way too early" to render a verdict on the efficacy of the OPEC+ decision based on yesterday's oil trading.

“These daily moves are very much linked to what’s happening more broadly in the market.”
— Roger Diwan

What they're saying, part 2: Remember when I mentioned in yesterday's Generate that several commodities analysts see Brent eventually moving back into the $70 range on the strength of OPEC's move?

Don't count veteran Citi analyst Ed Morse among them. CNBC reports:

"Citi believes international oil prices will average $60 a barrel in 2019, remaining near current levels as OPEC-led production cuts encourage U.S. drillers to put more crude on the market."
— Ed Morse in a note, per CNBC
3. "Green New Deal" gains backer and changes a bit
Screenshot from McGovern's Twitter feed

Rep. Jim McGovern, a senior Democrat, has thrown his support behind the "Green New Deal" committee proposed by Rep.-elect Alexandria Ocasio-Cortez and backed by a movement of young activists.

Between the lines: Vigorous outside pressure can affect inside baseball in Congress.

  • McGovern, the incoming House Rules Committee chair, voiced support in comments to Sunrise Movement demonstrators who poured into Capitol Hill, and later confirmed it on Twitter.
  • It came on a day when scores of young activists were arrested in demonstrations on Capitol Hill, where they targeted offices of lawmakers including House Democratic leader Nancy Pelosi.

Why it matters: The Rules Committee will play an important nuts and bolts role in shaping the select committee on the topic.

  • Ocasio-Cortez and supporters envision the select committee to be a vehicle for crafting a sweeping energy, jobs and climate plan that's ready for launch in 2020.

But, but, but: It's unclear exactly how the proposed Select Committee for a Green New Deal would function. Some veteran Democrats — notably incoming Energy and Commerce Chairman Frank Pallone — criticize calls for a new committee. McGovern says he wants to balance the new panel with existing committees' turf.

  • "We’re saying this select committee can come up with ideas, but it will go through the committees of jurisdiction. There’s nothing wrong with that, this is how this process works," he told demonstrators on Capitol Hill Monday.

The intrigue: Ocasio-Cortez's proposal has changed slightly in a way that could help to ease territorial tensions.

  • Under the current version, the panel would prepare a detailed plan and draft bill. However, it would not have "legislative jurisdiction" and "no authority to take legislative action on any bill or resolution."
  • The initial version of her proposed resolution would have given the committee full legislative power.
  • A Sunrise spokesman told Axios last night that the change occurred a week and a half ago.

My thought bubble: Momentum behind the "Green New Deal" is certainly growing — roughly two dozen House Democrats support it.

But the true level of support won't become fully known for quite some time, because the "Green New Deal" is really at least 3 things right now:

  • A slogan that captures the demand for very aggressive policies.
  • A set of broad policy proposals, including relatively quick movement to 100% renewable electricity.
  • A set of process ideas around how the committee should function, including the power to craft a detailed draft bill.

Go deeper:

4. Mum's increasingly the GOP word on climate
Expand chart
Adapted from Quorum; Note: Online includes Tweets and Facebook posts; Chart: Axios Visuals

Axios' Neal Rothschild writes ... Republican lawmakers in the Trump era are talking about climate change far less than they used to, while Democratic mentions have spiked to new highs, according to a study by the public affairs software company Quorum.

Why it matters: There's always been a divide between Republicans and Democrats on the issue, but this data — measured by the number of floor statements, press releases and social media posts that mentioned climate change — shows that the chasm is growing.

  • And it's happening as new scientific reports and extreme weather events are drawing new attention to the topic.

Likely reasons GOP acknowledgement is declining:

  • Republicans have less incentive to address the topic, partly due to the position Trump has taken. With Trump's refusals to accept the findings of recent climate reports — even from his own administration — he has moved the party further from the scientific consensus and has taken away cover for members who want to address the issue.
  • The occurrence of extreme weather events and the release of new climate forecasts prompts media coverage, and politicians are asked to respond. Forced into immediate answers, Republicans have retreated where they might otherwise acknowledge the science at a more gradual pace.

Likely reasons Democratic discussion is increasing:

  • The extreme weather events — hurricanes, wildfires, extreme heat — have added new urgency to the discussion.
  • Alarming new reports describing the damage that climate change may inflict on the planet in the future have contributed to the urgency.
  • Trump's denials have put Democrats in the politically advantageous position of defending the conclusions of the country's top scientists.
5. Chart of the day
Map from DOE Vehicle Technologies Office's latest "Fact of the Week"

This new Energy Department chart provides a helpful way of seeing how electric vehicle adoption in California is far ahead of other states.

By the numbers: Per DOE's Vehicle Technologies Office...

  • "California had 8.64 plug-in vehicle (PEV) registrations per 1,000 people in 2017, followed by Hawaii with 5.12, and Washington state with 4.06."
  • "Other states with PEV registrations per 1,000 people greater than two were Oregon, Vermont, Colorado, Arizona, and Maryland."

The big picture: Cumulative electric vehicle sales in the U.S. recently topped 1 million. According to the pro-EV coalition Veloz, over 500,000 of them were in California, which is by far the nation's largest auto market.

6. On my screen: Russia, Tesla, wetlands

Geopolitics: Via S&P Global Platts, "The US Congress appears increasingly interested in legislation targeting Russian energy exports to counter Moscow's aggression against Ukraine since the Sea of Azov incident, a top State Department official said Monday."

Climate policy: The head of the Climate Leadership Council, a group pushing for a revenue-neutral carbon tax, penned an op-ed in the Washington Post to push back against the idea that events in France and Washington State are nails in the coffin.

Ted Halstead writes in WashPost:

"As long as the public perceives a carbon tax as an increase in its energy costs and, therefore, a reduction in its living standards, chances of success are low."
"By contrast, a winning carbon tax strategy would return all the money raised directly to citizens, making the majority of families better off."

Tesla: Business Insider reports that "Even as Tesla remains the most shorted US-listed stock, it's beating the broader market by a mile."

  • "Tesla has soared 45% since putting in its 2018 closing low of $250.56 in early October. The S&P 500 has fallen 8% over the same time. Shares are now trading near $366, about 6.6% below their all-time high hit in June 2017," they report.

Regulations: Via the New York Times, "The Trump administration is expected on Tuesday to unveil a plan that would weaken federal clean water rules designed to protect millions of acres of wetlands and thousands of miles of streams nationwide from pesticide runoff and other pollutants."

Ben GemanAmy Harder