Good morning, can you believe we're halfway through 2018? How are those resolutions coming? (Remember those?)
My latest Harder Line column builds on our scoop Friday about the Pope's meeting at the Vatican later this week with Big Oil CEOs and investors. I look at the role oil companies fill in our climate debate: adversaries, allies or frenemies. I'll share that, and then Ben will get you up to speed on the rest of the news.
1 big thing: Big Oil's place in climate debates
The new flashpoint in the climate change debate is over the role of oil companies — whether they're culprits, allies, or something of a frenemy.
Why it matters: The burning of fossil fuels these companies produce is a big reason Earth’s temperature is rising, yet their products are also foundations of the global economy. Whether you love or hate them, what role these companies play is inherent to addressing climate change, particularly in the absence of presidential leadership on the issue.
Driving the news: The Vatican meeting later this week comes as Big Oil faces pressure from investors and lawsuits.
Royal Dutch Shell CEO Ben van Beurden told me recently he’s hoping for a truce, but doesn’t see it happening soon. He said:
“What I find really problematic and disappointing in this point of time is we want to spent the entire bandwidth that we have in society on disagreeing, whereas we should spend that bandwidth on actually working together.”
— van Beurden
One point made by the industry’s critics: Oil executives say they support putting a price on carbon emissions, but they're not actively lobbying Congress for it.
Democratic Sen. Sheldon Whitehouse of Rhode Island, who has sponsored one of the only bills in the last few years putting a price on carbon, says oil companies aren’t being honest and are continuing to support trade associations that have traditionally opposed such policies.
What to watch: Exxon, Shell and BP are among corporations backing an effort led by leaders of earlier Republican administrations to get Washington to back a plan pricing carbon emissions. The companies announced their support almost a year ago. The group, the Climate Leadership Council, hasn’t made any big public moves since then.
Axios' Steve LeVine reports ... The world's most accomplished battery inventor says he has a new cell aimed at electric cars that delivers double the energy density of existing lithium-ion, and, in a first, actually achieves an increase in capacity when it's charged and discharged.
Quick take: The claims, among the most ambitious by any major researcher in recent memory, come in a paper co-authored by John Goodenough, a celebrated 95-year-old professor at the University of Texas who invented the battery used by almost every cellphone on the planet. It was published in the prestigious Journal of the American Chemical Society with co-authors Maria Helena Braga and two other researchers.
In addition to its assertions on energy density and capacity, the paper's main claims include:
It is a solid state battery, using no liquid electrolyte, the main cause of lithium-ion battery fires.
It uses no cobalt, an expensive metal contained in almost all commercial lithium-ion batteries. In recent months, China has all-but cornered the market for cobalt, whose price has sky-rocketed.
It can be cycled more than 23,000 times, while the typical electric car battery cycles 1,000 times.
Two China things: Some news on the world's largest crude oil importer...
Demand: The Wall Street Journal connects the dots to conclude that China's oil demand growth is poised to slow, which could hold prices in check. Noting global crude supply growth, Nathaniel Taplin writes, "If Chinese demand goes pop, oil prices and shares could be in for a rocky second half."
U.S. supplies: Meanwhile, a new Reuters analysis finds that while the wide price spread between WTI and Brent is pushing higher U.S. crude flows to Asia, "they will probably be limited by both infrastructure constraints and a weakening of the economics."
Two Permian things: Some items on the country's hottest oil-producing region...
Labor: A deeply reported Houston Chronicle story explores the workforce problems in the region that's struggling with expensive and scarce housing, overcrowded schools and other challenges.
OPEC intrigue:Via S&P Global Platts, "With less than three weeks to go before a pivotal OPEC meeting, Gulf ministers emerged Saturday from a hastily arranged meeting tight-lipped on whether they would seek to increase crude oil output in the second half of the year to make up for potential shortfalls from Iran and Venezuela."
Spillover effects: A major airline industry trade group said Monday that higher oil prices are a key reason behind a downward revision in estimated 2018 profits to $33.8 billion from $38.4 billion in a prior forecast.
Fuel costs now account for nearly a quarter of total operating costs, the International Air Transport Association said. CNN has more.
4. The global battle over coal's future
Here's the latest on the global and domestic battles over coal...
The global picture:Via Reuters, "Institutional investors with $26 trillion in assets under management called on Group of Seven leaders on Monday to phase out the use of coal in power generation to help limit climate change, despite strong opposition from Washington."
ICYMI: The big domestic development since our last edition was the White House ordering DOE on Friday to "prepare immediate steps" to prevent the closure of economically struggling coal-fired and nuclear power plants.
The context: The statement arrived after emergence of an internal memo revealing that DOE might attempt to mandate a two-year program under which grid managers must purchase power or power capacity from these facilities.
Why it matters: The White House statement is the strongest sign yet that the Trump administration is readying an aggressive intervention in power markets — one sure to draw heavy legal and political pushback.
Shade: "It is simply absurd that the Trump administration is contemplating using Cold War-era provisions to bail out unprofitable power plants in the name of security, particularly as its own Energy Department and FERC see little evidence of an emergency," writes Bloomberg columnist Liam Denning.
Axios' Andrew Freedman reports ... It's long been said that climate change will be felt earliest and most severely in the poor nations of the world that contributed the least to the problem. A recent study, along with illuminating data from a new World Bank Report, shows how this is the case.
Why this matters: Solving climate change involves a fundamental mismatch between the countries that emit the most greenhouse gases, and those that stand to suffer the earliest and most from the problem. This is part of the reason of why addressing climate change has been so difficult to solve.
A new study, published in Geophysical Research Letters, introduces a way of understanding why a global average temperature increase above 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared with preindustrial levels would be tough for poor, tropical nations to adapt to.
Outside the tropics, places have greater year-to-year variability in temperatures, and are more adapted to a wide range of temperatures — from cold conditions to sizzling heat.
But in the equatorial regions, where poorer nations tend to be located, society is accustomed to a higher average temperature that has little variability associated with it. Therefore, it wouldn't take much warming to tip the climate outside of the accustomed range, making warming more noticeable.
The big picture: Separate World Bank data released May 24 (see chart above) shows what would happen with heat extremes if there were about 2 degrees Celsius of global warming, and an emissions scenario more consistent with greater than 4 degrees Celsius of warming.
The Pope meets Big Oil: As Amy first reported and mentions above, a June 8–9 Vatican conference on climate change will include discussion between Pope Francis, major oil executives, the CEO of investment powerhouse BlackRock and others.
Tesla meets investors: The Silicon Valley electric automaker will hold its annual meeting Tuesday, where CEO Elon Musk is expected to take questions.
Why it matters: The meeting comes amid intense scrutiny of the Model 3 scale-up, the safety of Tesla's semi-autonomous driving system, and more.
Congress: The House will debate a fiscal year 2019 spending bill for the Energy Department (among other agencies).
Of note: The bill rejects a White House proposal to slash renewable energy and efficiency programs by roughly two-thirds.
Wonks: The Energy Information Administration's annual two-day conference begins today.
Speakers include Federal Energy Regulatory Commission Chairman Kevin McIntyre.