Good morning! Today's Smart Brevity count: 1,056 words, 4 minutes.
Situational awareness: President Trump this morning tweeted, "I have just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran!"
BTW, I snuck a classic line from the movie "Glengarry Glen Ross" into this newsletter. Can you spot it? And, this week marks 25 years since Liz Phair released "Whip-Smart," which provides today's burst of an intro tune...
1 big thing: The fast-morphing battle over auto rules
The battle between the Trump administration and California over vehicle carbon emissions and mileage is getting hotter — and yesterday brought fresh evidence that it's squarely on the radar of Capitol Hill Democrats too.
Where it stands: EPA is imminently expected to revoke California's waiver under the Clean Air Act that enables the state to set CO2 emissions rules that exceed federal standards, per Bloomberg and other outlets.
- Reports initially suggested the move would come today, but the Washington Post reported last night that it has been delayed at least a day.
- EPA did not respond to an Axios inquiry yesterday.
Why it matters: California wants to keep toughening the rules — which by proxy means tougher mileage mandates — in a way that's almost as strict as the national Obama-era standards they were following.
- But the White House is moving ahead with plans to freeze the Obama administration's federal emissions and mileage rules instead of allowing them to keep tightening.
- California is certain to battle the effort in court once it's finalized.
The big picture: California is the nation's largest auto market and roughly a dozen other states plan to follow California's emissions standards. This all has the auto industry fearful of a split national market.
Quick take: The expected EPA move could snuff out any hope automakers might have of avoiding a bitter legal fight between the administration and California that ensures ongoing uncertainty about standards — one where they're caught in the middle.
The bottom line: "This will be the biggest fight in environmental law since the Clean Power Plan. Maybe bigger," Nathan Richardson of the University of South Carolina School of Law, said via Twitter.
The intrigue: The political landscape could shift quickly if a Democrat wins the White House, but that's hardly a guarantee of smooth sailing for the industry either.
- That's because several leading Democratic 2020 hopefuls want to go beyond former President Obama's rules that automakers called unworkable.
2. Democrats scuffle with DOJ over auto probe
A Senate Judiciary Committee hearing yesterday became another public venue for the fight over 4 big automakers' recent pact with California to keep toughening emissions standards for their nationwide fleets.
Where it stands: Multiple Democrats criticized a top Justice Department official over the department's recently revealed antitrust probe of the companies — Ford, VW, Honda and BMW — which struck the July deal with California regulators.
Why it matters: Transportation is the biggest source of U.S. greenhouse gas emissions, and the antitrust probe could deter more automakers from joining the deal. And yesterday's hearing was the first time I've heard DOJ publicly defend the inquiry.
What they're saying: DOJ's top antitrust official, Makan Delrahim, said the inquiry was not undertaken for "political" reasons and stressed that no conclusion has been reached.
- He said DOJ, which has contacted the companies, wants to understand why the automakers are acting together on the matter.
- “They could tomorrow disband the agreement and say ‘you know what, I’m going to agree to higher emissions standards.’ We don’t have a problem with that. We would encourage that,” he told the panel in response to a question from Democratic Sen. Richard Blumenthal.
The other side: Democratic Sen. Sheldon Whitehouse strongly attacked the inquiry, telling Delrahim:
“It’s just bizarre that of all the different political schemes that are going on right now to harm competition, the one that you pick out ... is the one in which the White House has gotten itself enraged because its scheme on behalf of the oil industry to bust up the CAFE standards got disrupted by the auto industry going to a different government and agreeing to a different rule.”
Go deeper: Making sense of automakers' Trump pushback
3. Catch up fast: The Saudi oil crisis
Secretary of State Mike Pompeo is in Saudi Arabia today meeting with Crown Prince Mohammed bin Salman to discuss the attack on 2 important Saudi oil facilities on Saturday and to "coordinate efforts to counter Iranian aggression in the region," per a statement.
Where it stands: Saudi officials said yesterday that they'll fully restore oil supply capacity by month's end, and that half the 5.7 million barrels per day of production knocked offline in the weekend attacks is back.
Why it matters: The announcement— and an earlier Reuters report of the rough timeline — are putting downward pressure on oil prices, which had soared in the wake of the attacks against a major processing plant and oilfield.
- Prices dropped by several dollars per barrel yesterday, though they remain above pre-attack levels.
What they're saying: The Eurasia Group's Ayham Kamel said in a note...
- "The announcement will temper bullish sentiment and probably sets a short-term price ceiling at $70 for Brent crude."
- "However, geopolitical risks remain high and a level of premium will probably be built in to integrate risks associated with US-Iran and Saudi-Iran tensions."
4. Where things stand ahead of the UN climate summit
A few pieces of news emerged ahead of Monday's big UN meeting in New York...
Coffee's for closers: That's another way of saying not everyone is welcome at the podium, according to the Financial Times.
- They report that major economies including Japan and Australia won't be invited to speak because "their continued support for coal clashes with the demands of the organisation’s secretary-general as he sounds the alarm on climate change."
- "Also excluded will be the US, which has said it intends to withdraw from the Paris climate agreement, as well as Brazil and Saudi Arabia, which have criticised the climate pact."
- But, but, but: China and India, which are both building new coal facilities, are on the draft agenda viewed by the FT.
Finance: "China and India demanded rich countries provide financial support for them to increase their climate plans, as leaders prepared to meet at a UN summit in New York," Climate Home News reports.
Policy: "China said it will try to persuade other countries to support 'nature-based solutions' to tackle the root causes of climate change, the country said in a position paper published ahead of a United Nations summit in New York," per Reuters.
- However, Tuesday's notice "stopped short of making any fresh pledges to curb carbon dioxide emissions."
5. Chart of the day: Permian wells
A chart in a recent Barclays' note nicely captures something well known but important: The decline rate of fracked oil wells is steep!
The big picture: The chart shows oil output in the Permian Basin, the surging shale region, based on the year that wells began producing. It's why so much activity is needed to grow production.
Why it matters: Fracking is part of the election cycle as 2 top-tier candidates — Sens. Elizabeth Warren and Bernie Sanders — have called for a nationwide ban.
- That can't happen without Congress (which means it probably won't happen). But it's in the political bloodstream as 2020 hopefuls call for aggressive climate policies. And sometimes political plates shift quickly.
Go deeper: Imagining a fracking ban