Jun 25, 2018

Axios Generate

Good morning, I'm still California dreamin' but we have a packed week here in Washington, including the world's largest gas conference, so let's get to it. 

My latest column builds off our deep dive on climate change we hope you read on Saturday. I look at how climate change is vulnerable to false and inaccurate information and news. I'll share that, and Ben Geman will you get you up to speed on the rest of the news.

1 big thing: Why it's easy to fake climate news

Illustration: Lazaro Gamio/Axios

Climate change is intangible and complicated, which makes it an easy target for our era of fake news.

Why it matters: Addressing climate change, whether through government or private action, requires acknowledging a problem exists. Misinformation about the science, including inaccurate statements and articles, make that harder. Concern about climate change has dropped over the past year among Republicans and independents, according to Gallup polling released in March.

When Trump said his inauguration crowd size was the largest ever, it was easy to show a photo disproving his false claim. With climate change, there's nothing simple about the subject — so it's harder to cut through the barrage of misinformation.

“There isn’t necessarily a good intuitive comparison like ‘the crowd in this photo looks a lot bigger than the crowd in this one.' Even if you are looking at lines on a chart, you are comparing abstractions of real phenomena like temperature change.”
— Joseph Majkut, climate science expert, libertarian think tank Niskanen Center

One non-science thing that could change the debate, in the view of a new bipartisan group, is convincing people to acknowledge the problem without getting stuck debating how serious it is.

Last week, a political group funded by energy companies and supported by a bipartisan pair of former congressional leaders launched a campaign to push for a carbon tax, including former Republican Senate Majority Leader Trent Lott of Mississippi.

“I’m not going to debate liberals and Democrats about the icebergs melting. I’m not going to argue how imminent a threat this is. I’m just going to say: ‘It is a problem. This is one way to address it. Let’s talk about it.’”
— Former Sen. Trent Lott (R-Miss.)

Go deeper: Read the full column.

2. Fallout from OPEC's big weekend

A few notes following up the weekend decision by OPEC and allied producers — notably Russia — to boost crude oil production . . .

Big picture: Wood Mackenzie analyst Ann-Louise Hittle, in a weekend note, said markets "should expect less oil price volatility and risk to economic growth."

  • The plan marks a "compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies."

The politics: Via the Wall Street Journal, "On Saturday, both Saudi Arabia and Russia said pressure from [President] Trump hadn’t influenced their decision to raise output."

  • "Twitter is not one of the instruments we base our decisions on," Russian Energy Minister Alexander Novak said, according to WSJ and other reports from Vienna.

Why it matters: The weekend agreement signals how crude markets have reached a fundamentally new place since the OPEC-Russia deal was struck in late 2016. Compliance with the pact, global demand increases, Venezuela’s collapse and other forces have erased the supply glut and raised prices from their doldrums.

The context: The rise of U.S. shale is helping to push the key petro-states of Saudi Arabia and Russia into a new era of cooperation that could last a long time. They’re planning a long-term market alliance even as the current iteration of the supply agreement is eased.

3. More OPEC notes

One big question: The amount of additional barrels coming onto market later this year is kind of vague, thanks to constraints among some producers and other forces.

What they're saying: The Saudis and Russians say around a million total barrels per day are on the way, but others are cautioning it could be less.

  • "We think the actual number will be ultimately lower in the 500,000 to 600,000 b/d range. Over the last 24 hours several ministers have described their interpretation of the agreement as increasing production from anywhere from 400,000 to 800,000 b/d," Hedgeye Risk Management's Joe McMonigle said in a weekend note.
  • Yes, but: "The only country that can increase production is Saudi Arabia, so its interpretation of the deal is the one that matters," Hittle said in her note.
  • Go deeper: Bloomberg looks at the Saudi plans and market power here.

State of the market today: The global benchmark Brent crude is trading lower in the wake of the deal. However, WTI, the U.S. standard, is up slightly.

  • That appears to be at least partly due to a power outage that's stymieing supplies from the big Canadian oil sands producer Syncrude, which is having a spillover effect that tightens the U.S. market, Goldman Sachs said in a note.
  • That problem will "exacerbate the current global deficit, making the increase in OPEC production all the more required," they said.
  • Reuters has more on the price movements.
4. 30 years since our climate wake-up call
Expand chart
Data: NASA's Goddard Institute for Space Studies; Graphic: Harry Stevens/Axios

Axios' Harry Stevens and Andrew Freedman report ... Three decades have passed since then-NASA scientist James Hansen testified before the Senate Energy committee and alerted the country to the arrival of global warming.

Why it matters: The predictions of the world's leading climate scientists have come true, with dire consequence for the planet.

  • In the 30-year period prior to Hansen’s testimony, the Earth’s surface was, on average, less than 0.2°F warmer than the 20th-century average. In the 30 years since, the planet’s surface has, on average, undergone a six-fold temperature increase.
  • Hansen's temperature projections weren't exactly on target, since he projected a slightly higher amount of warming than what has occurred, but about two-dozen climate scientists told Axios that overall, his main conclusions were right.

Go deeper: Read the report in the Axios stream.

5. Making digitization a win for low-carbon energy

A Baidu apollo self-driving vehicle at the June 2018 Consumer Electronics Show Asia in Shanghai. Photo: VCG/VCG via Getty Images

Over in our Expert Voices section, Varun Sivaram writes ... The digital revolution sweeping the energy sector would seem poised to help reduce the greenhouse gas emissions that cause climate change. Progress in artificial intelligence and computing power, the plunging cost of sensors and other digital equipment, and rising connectivity could all make it easier to use clean energy sources and cut wasteful energy use.

Yes, but: Digitalization is a double-edged sword. Unless policymakers around the world act quickly, it could make the global energy system dirtier. Policies such as carbon pricing are needed to steer the energy industry toward digital technologies that reduce emissions rather than raise them.

One level deeper: Take self-driving cars, for example — a technology that could transform the transportation sector. Robot taxis could cut emissions in half by ferrying people to mass transit, facilitating carpooling, and running on clean electricity rather than petroleum.

But the same study warns that they could also jack up demand for vehicle travel by making it cheaper and more convenient. For self-driving cars that aren't electric, those extra miles could cause transportation emissions to balloon. Left on autopilot, the spread of self-driving technology could actually lead to a doubling of transportation-sector emissions.

Go deeper: Read more in the Axios stream.

Sivaram is the Philip D. Reed Fellow for Science and Technology at the Council on Foreign Relations, the author of "Taming the Sun: Innovations to Harness Solar Energy and Power the Planet" and the editor of "Digital Decarbonization: Promoting Digital Innovations to Advance Clean Energy Systems" (out today).

6. Five transformative energy techs to watch
Illustration: Sarah Grillo/Axios

International Energy Agency Executive Director Fatih Birol writes, as part of our deep dive on climate change ... Global greenhouse emissions rose last year, an unwelcome development after they'd leveled off the 3 previous years and a clear call to action for the world’s long-term energy goals.

What’s next: Unprecedented advances in a broad range of clean and renewable energy technologies will be critical. Although some key technologies have seen widespread adoption, other areas like negative emission technologies and low-carbon industrial processes remain in need of sustained, targeted innovation.

The following technologies are among the most important, based on recent performance or potential contribution to climate goals:

1. Carbon capture, storage and utilization (CCUS): This technology is promising but still getting off the ground. There are 15 large-scale CCUS projects operating across the industrial sector and only 2 power-generation projects. Another 20 are in development, but more than 10 times as many will be needed to track toward emissions reduction goals. The recent 45Q tax credit in the U.S. is an important and encouraging step in supporting new investment.

Click here for Birol's thoughts on four other key technologies: cooling, solar power, electric vehicles and nuclear power.

7. Axios video: renewable power in Trump country
Illustration: Sarah Grillo/Axios

Check out this cool Axios video.

Here's what it's about...

In Texas — the heart of Trump country — the city of Georgetown runs on 100% renewable energy. Republican Mayor Dale Ross told Axios that the decision was “a no-brainer economically.”

Why it matters: President Trump and many Republican leaders are rolling back environmental measures related to climate change. But in Georgetown, “We put these silly national partisan politics aside,” Ross says.

My thought bubble: Climate change is one of the most divisive political topics, but cities like Georgetown are finding that renewable energy sources like hydropower, wind and solar may provide more financial stability than fossil fuels.

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ICYMI: Here's more from our weekend deep dive...