Jul 8, 2020

Axios Generate

Good morning. Today's Smart Brevity count: 1,245 words, < 5 minutes.

🚨Situational awareness: "The European Commission on Wednesday unveiled a strategy to scale up renewable hydrogen projects across polluting sectors from chemicals to steel and push for clean fuels and energy efficiency to meet the EU’s net-zero emissions goal by 2050." (Reuters)

🎵 And 45 years ago, the Isley Brothers were a week away from hitting #1 on Billboard's R&B charts (and would later hit #4 on the Hot 100) with today's intro tune...

1 big thing: Why climate policy is go big or go home

Illustration: Aïda Amer/Axios

The burst of energy infrastructure news over the last 72 hours highlights the gains of activists pushing to block fossil fuel projects — and why efforts to curb supply are a small piece of the climate puzzle.

Catch up fast: Over the last three days...

  • Dominion Energy and Duke Energy scrapped plans for a big gas pipeline.
  • Dominion Energy sold its gas transmission and storage assets to Warren Buffett's Berkshire Hathaway Energy.
  • A federal judge ordered the shut down of the Dakota Access Pipeline.
  • The Supreme Court declined, for now, to allow Keystone XL pipeline construction.

Yes, but: There’s an important point in a new note about Dakota Access from the research arm of the investment bank UBS, which shows why climate advocates, even the "keep it in the ground" wing, know that wider-ranging policy is essential.

  • Halting the pipeline raises shipping costs for oil producers in the Bakken region, but will bring "positive market share benefit to other oil producing basins" in Texas, Canada and elsewhere, UBS notes.
  • In other words, yanking Dakota Access offline (if challenges to the decision fail) may change where some oil production ultimately happens — but not if.

In the same vein, Moody's analysts, in a new note, say that selling its gas assets will help Dominion meet its climate change goals.

  • "It will immediately reduce the company’s carbon and methane exposure," they write.
  • But, needless to say, that does not affect overall use of the fuels on its own. It just means the assets are changing hands.

Why it matters: The burst of news underscores why tackling climate change will require far more than thwarting development.

  • It's why big policy proposals, like Joe Biden's plan or the recent proposal from House Democrats, are such a grab bag of policies.
  • They encompass some supply restrictions — such as thwarting new oil-and-gas development on public lands — coupled with lots of provisions on efficiency, vehicle electrification, decarbonizing industrial sectors, and a lot more.

My thought bubble: It's an obvious point, I guess, but one worth making in the great pipeline freakout of July 2020.

Go deeper: I talk a bit on this in the middle of this morning's "Axios Today" podcast. Listen here.

Bonus: Warren Buffett's big bet
"If Berkshire Hathaway believed that natural gas will be outlawed across the United States in the foreseeable future, I'm sure this would be the last way to invest its capital."

Who said it: That's Raymond James analyst Pavel Molchanov, quoted in E&E News.

Why it matters: It explores how Buffett's roughly $10 billion deal with Dominion something of a bet that climate policy won't curtail the gas industry anytime soon.

2. How COVID-19 changed mobility in different states
Data: Descartes Labs Economic Activities Signal; Chart: Sara Wise/Axios

Americans in most states are moving at nearly the same level as, and sometimes even more than, before the pandemic-compelled lockdowns across the U.S., Axios' Sara Wise and Amy Harder report.

Driving the news: Mobility data from Descartes Labs shows the vast swing in American movement over the last four months.

Why it matters: Tracking mobility habits sheds light on many aspects of our society, including economic indicators like gasoline demand and levels of local pollution.

By the numbers: Gas prices averaged $2.18 a gallon, the cheapest for Independence Day weekend in at least a decade, per an RBC Capital Markets note Tuesday.

The intrigue: People in largely rural, Western states — including Montana, the Dakotas and Wyoming — are actually moving around more than they did right before lockdowns, data shows.

  • Of note: That's to be expected in the summer months, but given the coronavirus, it also shows the relative increase compared to other states.
  • Meanwhile, mobility in Southern states and some in the West didn’t drop nearly as much as their coastal counterparts, reflecting a political trend with liberal-leaning states locking down more aggressively and earlier than conservative-leaning ones.

How it works: Descartes Labs, a data sciences firm based in Sante Fe, New Mexico, uses what it calls “de-identified commercially available geolocation data” to develop its mobility index, which is what we’ve charted here.

  • They receive data from commercial data partners regarding mobile phone applications that maintain appropriate consents, approvals and/or opt-ins.

Yes, but: As the virus increases its spread in numerous states and governors consider partially locking down again, mobility could tick back down.

What we’re watching: RBC Capital Markets said its real-time indicators “suggest a slowing degree of traffic activity this past weekend.”

3. Volvo stakes blockchain firm for battery work

Volvo’s VC arm is investing in the blockchain tech firm Circulor as the company looks to expand its work on tracing the cobalt used in electric car batteries to include other materials too, Volvo said Wednesday.

Why it matters: Extraction of cobalt and other materials in the battery supply chain is linked to human rights abuses, so ethical sourcing of materials is important.

What's next: "The investment in Circulor by Volvo Cars allows both companies to expand their focus beyond cobalt, for example by looking at increasing traceability of mica, a mineral used as isolation material in the battery pack of electric Volvos," the announcement states.

Where it stands: It's part of a wider funding round for Circulor, which specializes in raw materials tracking.

  • Other investors in the new round are SYSTEMIQ, Total Carbon Neutrality Ventures and Plug & Play, Volvo said. Circulor declined to disclose the total size of the funding round

* * *

Speaking of auto-related VC, Bloomberg reports: "Karma Automotive, maker of the Revero plug-in hybrid luxury car, has raised $100 million from outside investors as the company and its parent seek to tap into an electric-car stock surge by seeking an additional $300 million."

4. Dem climate panel boss defends nuclear inclusion

Illustration: Rebecca Zisser/Axios

The head of House Democrats' climate change panel has a simple reason why their wide-ranging plan includes nuclear power despite misgivings in some corner of the left.

What they're saying: “That’s what the scientists advised as we listened across the spectrum, that’s where we landed — that nuclear power needs to be part of the portfolio going forward,” Rep. Kathy Castor said on the new episode of the Columbia Energy Exchange podcast.

  • The plan credits existing nuclear output in its proposed clean electricity mandate and also backs R&D into next-generation nuclear tech.

Why it matters: The interview provides a window into how Castor — and by extension House Democratic leaders — will navigate fault lines on the left if a political window opens to move climate legislation in 2021 or beyond.

  • Host Bill Loveless also asks about concern among unions over some provisions and about groups on the left flank of the environmental movement who want an even more aggressive template.

Listen here

Go deeper:

5. Electric scooter racing is coming

Image courtesy of the eSkootr Championship series

There's a new sports league with an EV twist: Tuesday brought rollout of the "eSkootr Championship," which aims to start holding high-speed electric scooter races in major cities starting in 2021.

Why it matters: Organizers say there's a serious message behind the new sport as they promote electric scooters and other emerging mobility services.

  • "In a post-COVID urban landscape, micromobility offers an escape from congestion, an escape from pollution, and an escape from car dependency," the announcement states.
  • "Conceived as an all-new electric sporting category, the series will ... promote the cost, convenience and sustainability benefits of micromobility within the rapidly changing electric mobility landscape."

The state of play: The people launching the series are motorsports entrepreneur Hrag Sarkissian and Khalil Beschir, a Formula One broadcaster and former driver.

  • They're working with Lucas di Grassi, an environmentalist and driver in the Formula E electric race car series who will be the new venture's "sustainability ambassador," and former F1 driver Alex Wurz, who is the "safety ambassador."

How it works: The announcement says professional riders will use "high-speed, purpose-built race scooters" that can reach 60 miles-per-hour.

  • They hope to recruit competitors from the ranks of race car drivers, cyclists, skaters, snowboarders, motorcyclists and more, they said.

What we don't know: A lot, as The Verge reports, noting absence of information about funding and specific competitors.

6. Numbers of the day: 23% and 38%

That's how much the stock prices of big residential solar players Sunrun and Vivint Solar respectively soared yesterday as the market absorbed news of Sunrun's $3.2 billion deal to acquire its competitor.