Good morning, and thank you for reading! Let's get to it.
My latest Harder Line column seeks to reality check just how pivotal Elon Musk's Tesla is from a climate change standpoint. I'll share that, and then Ben Geman will get you up to speed on the rest of the news.
1 big thing: Putting Tesla into climate context
Elon Musk and Tesla offer a gripping corporate tale and coveted electric cars, but when it comes to climate change, they are a rather minor subplot.
Why it matters: Numerous other factors and technologies influence whether electric cars are actually green. And no matter how green they are, they’re still just one, relatively small part of a many-sided, global problem.
Background: Let's put aside the whiplash news of Musk mulling via Twitter about taking Tesla private and then deciding not to over the weekend. A key number to remember is Tesla announced last month it had passed the 200,000 mark for total vehicles sold in the U.S.
Between the lines: Third Way, a centrist think tank, crunched some numbers for me to put that figure into context. To think of the carbon dioxide emissions avoided by Teslas versus clean sources of electricity, here's some comparisons:
- A nuclear reactor replacing coal = 541,353 Teslas.
- Natural gas replacing one coal plant = 98,940 Teslas.
- 100-megawatt wind farm replacing natural gas = 8,267 Teslas.
The bottom line: It takes a lot of Teslas to equal the emissions savings of a carbon-free nuclear reactor, and to a lesser extent other clean energy sources.
For the record, a Tesla spokesperson said in a statement: “Tesla exists for one reason: to accelerate the world’s transition to sustainable energy."
- The spokesperson’s statement continued: "It would be a shame if anyone reading this article came away with the false impression that driving an electric vehicle or owning energy storage or solar products doesn’t have a meaningful effect on climate change."
Electric vehicles have a green reputation, but an important reminder is that they are only as green as the electricity they are using.
- The International Energy Agency has found wide ranges in electric cars’ net climate benefits over internal combustion engines, according to its 2018 outlook.
- That's after factoring in how carbon-intensive a country’s electricity is, as well as the emissions associated with batteries and other manufacturing of electric cars.
Go deeper: Read the whole column in the Axios stream.
2. John McCain's climate history
RIP John McCain. We've got several pieces in the Axios stream about his life and legacy. But let's zoom in on McCain's work on global warming.
Why it matters: McCain explored and embraced the science and co-authored early versions of cap-and-trade legislation, working across the aisle.
- Those measures failed in 2003 and 2005 (though the 2003 version got 55 votes).
Flashback: Via Bloomberg BNA, "When McCain won the Republican Party’s presidential nomination in 2008 to face off against Obama, it was the first time both candidates for the presidency backed legislation to cap U.S. emissions."
Yes, but: McCain grew less involved with the topic as the years went on.
- This detailed story from Inside Climate News yesterday points out that he didn't work on efforts to craft a Senate bill in 2010, when the Senate's political window to get a bill across the finish line had opened (though its debatable by how much).
- And Bloomberg's story reminds me that he voted for an unsuccessful measure that year to thwart the Obama administration's regulatory authority over greenhouse gases.
The intrigue: However, in 2017 he cast the decisive vote when the Senate very narrowly rejected a GOP-led move to kill Obama-era regulations to curb methane emissions from oil-and-gas development on public lands.
"McCain can be seen on the floor facing off heatedly against a half-dozen GOP senators who surround and block him before he gestures thumbs-down, a foreshadowing of his later decisive vote against the Obamacare repeal," Inside Climate News reports.
3. Around the oil majors: Exxon, Aramco, Equinor
Saudi intrigue: The Financial Times breaks some interesting news this morning about Saudi Aramco...
- "Saudi Arabia has cut the length of time that its state energy company has exclusive rights to the kingdom’s vast oil and gasfields, raising questions about Saudi Aramco’s long-term production and revealing a power struggle between the company and the government," they report.
- Why it matters: While the story notes that the move to limit the companies' concession to 40 years instead of perpetuity was part of planning for the now-shelved IPO, it also suggests other motivations could be at play — including a crude oil demand peak in the "coming decades."
- “Often for oil companies, the shorter the concession, the sooner you must produce the resources,” Texas A&M University professor John Lee tells FT.
Discoveries: Per Reuters, "Norway’s Equinor on Monday increased its resource estimate for the Johan Sverdrup oilfield, the North Sea’s largest discovery in more than three decades, while cutting the cost of development."
Exxon: Via Bloomberg, Exxon is seeking solar and wind suppliers for purchase agreements in Texas that could total over 250 megawatts.
- Why it matters: It underscores the growth of direct corporate procurement of renewables, which is increasingly driving new projects.
- Bloomberg NEF analyst Kyle Harrison says: “I have never seen an oil and gas company doing a corporate [power purchase agreement] anywhere near that size."
- Go deeper: The corporate renewables surge.
4. Making sense of Elon Musk's stunning flip-flop
ICYMI over the weekend, we explored the aftershocks of Elon Musk's stunning Friday night announcement that he's abandoning his planning to take Tesla private.
Situational awareness: Tesla stock is down this morning in pre-market trading.
Quick take: Axios' Steve LeVine explains that one nagging question about the buyout plan's demise is whether Musk was ever really serious, or whether he was impulsively trolling the shorts but then had to put on this theater because of the fallout.
Why you'll be hearing about this again: Here are some takeaways, questions and things to watch now that the plan is dead after a head-spinning two weeks...
1. What's next for Musk: Tesla's board, in a statement Friday night, said that "we fully support Elon as he continues to lead the company moving forward."
- But the take-private plan's brief life revealed — via this viral New York Times piece where Musk discussed his exhaustion and 120-hour weeks — that board members are concerned about his workload and use of Ambien.
- The NYT and Bloomberg later reported that they're looking for high-level talent to help Musk. Whether they can successfully add senior personnel that he trusts and will delegate to is looking increasingly critical.
2. The abrupt end to the plan won't halt concerns about Musk's judgement.
- But presumably much of the difficulty in pulling off the transaction could have been determined before his surprising, maverick announcement of the plan via Twitter on August 7.
Go deeper: Read the full story in the Axios stream.
What they're saying:
- This NYT story has some interesting nuggets about what led Musk to reconsider, including mixed feelings about the prospect of Saudi backing.
- The "cognitive dissonance" of an EV maker backed by an oil giant was "pointed out to Mr. Musk several times," NYT reports.
- They also point out that "several" major automakers were potential funders, while this new Wall Street Journal post-mortem says "one of the investors his bankers had lined up was Volkswagen AG."
5. Earbuds in: venture capital and electric buses
The latest episode of the Experts Only podcast from CleanCapital is an interesting chat with Nancy Pfund, a veteran investor in clean energy companies.
The big picture: The interview ranges from her background in the industry to opportunities for applying advanced grid technologies in Africa.
At one point, Pfund, a founder of DBL Partners, muses about the intersection of clean energy startups and U.S. policy:
"Most entrepreneurs, especially 10 years ago, weren’t really interested in policy. In fact, many of them don’t like it. They are entrepreneurs for a reason — to be unfettered, and go after that marketplace opportunity."
"However, what I have seen and been encouraged by is that the smart entrepreneurs, as soon as they realize that, oh, there is a public utility commission or there is the investment tax credit that gets voted on in Washington, they are quick learners."
"Even though many of them still don’t like it, the best of them embraced it, or hired people that would embrace it, and so it has been an education for many, and for all of us really. We had no idea how politicized this field would become."
Another good listen is this Greentech Media interview with Ryan Popple, CEO of the major electric bus manufacturer Proterra, who was previously with the heavyweight VC firm Kleiner Perkins Caufield & Byers.
Read more about these podcasts in the Axios stream.