Mar 3, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! Today's Smart Brevity count: 1,102 words, 4 minutes.

🎸  Yesterday marked the 1984 release date of the movie "This Is Spinal Tap," so Nigel Tufnel's virtuoso guitar brings us into the news...

1 big thing: The super energy stakes of Bernie vs. Biden

Photo Illustration: Sarah Grillo/Axios; Photos: Ethan Miller and Brian Blanco/Getty Images

Super Tuesday means it's the first primaries in the oil patch, so it's a good time to compare Joe Biden and Bernie Sanders, who are battling for front-runner status in the Democratic primary.

Why it matters: They have important differences on energy and climate policy, although both would restrict development and take a more adversarial posture toward fossil fuel industries than President Trump.

Driving the news: A rapid-fire burst of developments shows why it's increasingly a two-person race, even though Elizabeth Warren and Michael Bloomberg are still competing.

  • Amy Klobuchar dropped out yesterday and endorsed Joe Biden, while Pete Buttigieg, who quit Sunday, also endorsed the former VP.
  • More broadly, the party establishment is coalescing around Biden, making him Sanders' main rival heading into today's 14-state showdown.

Where it stands: I won't even try and capture all the similarities and differences in this item. The Washington Post has a detailed policy breakdown. Mic compares spending targets and more. But here are some top-line points...

  • Zoom out and they both have very ambitious (and very hard to reach) goals. Biden calls for achieving net-zero U.S. emissions by 2050 and Sanders wants "complete decarbonization of the economy" by that date.
  • Both want to impose new restrictions on oil-and-gas development and regulate the industry more, vastly speed up transition to electric cars and renewables, and expand R&D.
  • Neither emphasize carbon pricing, with Biden backing an as-yet-undefined program and Sanders largely avoiding it too, though his campaign just told Emily Atkin of the lefty Heated newsletter that taxing carbon "could be a valuable tool in specific circumstances."

But, but, but: While both would go further than former President Obama (to say nothing of Trump), Sanders goes further left in his proposals, posture and emphasis. He wants...

  • A complete nationwide ban on fracking, which isn't in Biden's plan.
  • To end "all new and existing fossil fuel extraction" on federal lands, while Biden wants to end "new oil and gas permitting" on those lands.
  • To reimpose the ban on crude oil exports and block other fossil fuel exports too. Biden has nodded in the direction of thwarting exports but hasn't included it in his detailed written plan and his campaign declined to answer questions yesterday.
  • To bring federal lawsuits against fossil fuel producers over climate change (though Biden hasn't ruled it out).

Plus, Sanders' wider Green New Deal plan has a $16 trillion price tag, which is vastly more than Biden wants to spend.

  • It also has more aggressive targets, including the moon-shot ambition to reach 100% renewables for power and transportation by 2030.

The intrigue: One caveat — and it's a big one! — is that differences between the plans shrink a lot if you consider what has any chance of getting through Congress and the courts.

  • But it's also true that Sanders has signaled his intent to use executive powers and discretion more aggressively than Biden, so the stakes are high today.
Bonus: Oil and the Super Tuesday states
Expand chart
Data: EIA; Chart: Andrew Witherspoon/Axios

Several important oil- and gas-producing states vote today, none bigger than Texas, which produces vastly more crude than any other state (and nearly all countries for that matter).

  • But it also includes states like Colorado and Utah, which — unlike Texas — have lots of activity on federal lands that would be most affected by more restrictive policies.

What they're saying: A note from the research firm ClearView Energy Partners this morning points out that the oil-and-gas sector could "face stark regulatory reversals if any of the remaining Democrats won."

What I'm watching: I'll be looking for entrance and exit polls showing how voters in the different states weigh climate and energy — and whether any of them provide fresh data on voters' views on fracking.

2. Crude markets reverse course ahead of OPEC+ meeting

Oil prices regained ground Monday and this morning amid signs that OPEC and Russia will coalesce around deeper production cuts when the OPEC+ group meets this week.

  • And as CNBC and Bloomberg note, there's also hope that central banks and finance ministers in major economies will act to blunt the economic hit from the novel coronavirus.

Why it matters: Falling consumption from the coronavirus' travel and economic toll is the latest hurdle for the sector, which was already grappling with soft demand growth and prices.

Where it stands: Brent crude oil is trading at roughly $52.99 after falling below $50 at times in recent days.

But, but, but: Via Reuters, "The Kremlin told reporters on Tuesday it would not say whether Moscow was ready to make additional oil output cuts as part of the cooperation between OPEC and non-OPEC countries and said it was necessary to wait for their meeting later this week."

3. VW teases its upcoming electric SUV

Image of Volkswagen ID.4 SUV. Courtesy of Volkswagen

Volkswagen today shared more information and images of a small electric SUV that the automaker announced will be called the ID.4.

Why it matters: Via Car and Driver this morning, "The electric crossover will be the first vehicle on VW's MEB electric platform to make its way to the United States and will initially launch in Europe later in 2020."

The big picture: CNET reports,"So, apart from its name and its platform, what do we know about ID 4?"

  • "Well, VW claims that it's got an especially slippery shape, which will help it to eke out a claimed range of up to 310 miles (though that range is likely to drop significantly once we get EPA range estimates) and we know it'll be out later this year."

Go deeper: VW chief defies sceptics with ambitious plans to overtake Tesla (Financial Times)

4. Alternative palm oil startup nabs new cash

Forest fire in Riau Province, Indonesia, on March 1. Indonesia's fires have been an annual problem for decades, much of it human-made for more palm oil plantations. Photo: Afrianto Silalahi/NurPhoto via Getty Images

C16 Biosciences, a company seeking to commercialize a manufactured alternative to palm oil, announced yesterday that it has raised $20 million in Series A funding from backers including the Bill Gates-led Breakthrough Energy Ventures.

Why it matters: Palm oil is used in a massive array of products — from shampoo to foods to biofuels.

  • Palm plantations are fueling deforestation that releases CO2 and erodes wildlife habitat in multiple countries.

How it works: The New York-based startup has a fermentation-based "bio-manufacturing" process for "brewing palm oil like beer."

What they're saying: “Consumers want to buy the products they love, but they don’t want to buy products that are directly responsible for climate change," CEO Shara Ticku said.

The intrigue: They're not alone in this space. Per Bloomberg...

  • "California-based startup Kiverdi Inc. is using microbes to convert carbon dioxide into an alternative to palm oil. Scottish startup Revive Eco is extracting useful oils from coffee waste and Indonesian startup Biteback is finding those oils in insects."
5. Catch up fast: Chevron, Arctic, climate

Climate: "Scientists say that half of the world’s sandy beaches could disappear by the end of the century if climate change continues unchecked." (Associated Press)

Big Oil: "Chevron Corp. said Tuesday it plans to return $75 billion to $80 billion to shareholder over the next five years. In a statement released ahead of its annual Security Analyst Meeting, the oil giant said the returns will be achieved by reining in capital spending, improving cost efficiency and cash flow growth." (MarketWatch)

Arctic drilling: "Three big U.S. banks have publicly announced break-ups with Arctic drilling in recent months, reflecting Wall Street's increasing desire to cast itself as environmentally friendly amid a political firestorm in Alaska." (Reuters)

Ben GemanAmy Harder