November 16, 2021
🍳 Good morning! Today's Smart Brevity count is 1,169 words, 4.5 minutes.
🚨 Situational awareness: "Natural gas prices in Europe soared on Tuesday after Germany confirmed that it has suspended the process of certifying a controversial new Russian gas pipeline called Nord Stream 2." (CNN)
🎸 Blues guitar great Robert Cray's album "Strong Persuader" turns 35 this week and provides today's intro tune...
1 big thing: The long road to phasing down coal
Let's leave to history to see whether the COP26 deal to "phase down" coal instead of "phase out" makes any real-world difference, but what's clear is that any meaningful "phasing" at all is hard, Ben writes.
Why it matters: Coal is the most carbon-intensive fuel. Any pathway to meeting the Paris Agreement goals will require huge reductions in global demand that are nowhere in evidence yet.
The big picture: Global coal consumption fell in 2020 due to the pandemic, but it's rebounding this year amid the recovery.
The International Energy Agency's flagship outlook in October projected that under nations' existing policies at the time, global demand doesn't begin falling again for several years.
Then it declines — but it's still around 70% of today's levels in 2050. Compare that to IEA's roadmap for reaching net-zero global emissions by midcentury, which requires a 55% decline by 2030.
We're talking about long-term projections here so take it all with chunks of salt, but still, that's a big gap.
Yes, but: The United Nations climate summit — and the runup to it —brought a burst of pledges and initiatives that could alter the current trajectory if countries follow through.
One of them was a pledge by 45 nations and the EU to phase out coal-fired power in the 2030s in "major" economies and in the 2040s globally. However, it did not include China, India, Japan or the U.S.
Still, some other large users did sign-on, and more broadly it was among a suite of overlapping, ad-hoc efforts at the summit that could help speed up the transition away from coal in power and industry.
What they're saying: Nikos Tsafos of the Center for Strategic and International Studies has a helpful look at both the challenges and possibilities around accelerating the shift to alternatives.
I won't capture it all here, but this section gets to the challenge side of things in emerging economies, where power demand is rising.
- "Even if coal is more expensive to operate than competing sources, and even if it is cheaper to build a new wind farm or solar array than it is to run an existing coal plant, it is hard to shut down coal facilities because few countries have sufficient spare capacity in their electricity systems to be able to do so."
2. Lowering the pressure on oil markets
The global oil market remains tight but "a reprieve from the price rally could be on the horizon" as U.S. production rises, the International Energy Agency said this morning, Ben writes.
Why it matters: Its latest monthly analysis comes as elevated oil — and hence gasoline — prices are another political headache for President Biden amid broader inflation.
Driving the news: IEA's report doesn't change its global demand growth forecasts for 2021 and 2022 but notes significantly rising supplies despite OPEC+ sticking with modest production increases.
- Global supplies "leapt" by 1.4 million barrels per day (mbd) in October as production rebounded from Hurricane Ida, and another 1.5 mbd is expected over November and December, IEA said. The U.S. is providing the biggest supply boost.
- IEA has raised its U.S. production outlook for the balance of this year and 2022 "as current prices provide a strong incentive to boost activity even as operators stick to capital discipline pledges."
- It sees the U.S. returning to pre-COVID production levels by the end of 2022.
What's next: On a related note, Reuters reports: "Crude oil production from the Permian Basin, the largest U.S. oil field, is set to surpass its pre-pandemic record in December, a swift turnaround that has not been replicated in the country's other oil regions."
3. EV notes: Rivian, Lucid, Tesla
Factories: "Electric truck and SUV maker Rivian Automotive is in late-stage discussions to open a vehicle manufacturing and battery plant east of Atlanta along Interstate 20, according to people with knowledge of the deal." (Atlanta Journal-Constitution)
Orders: Lucid Motors, in its first earnings report as a public company, said Monday it now has over 17,000 orders for its Lucid Air luxury sedan and ended the third quarter with $4.8 billion in cash. The vehicle also just won Motor Trend's Car of the Year award. TechCrunch has more
Litigation: "JPMorgan Chase filed a lawsuit against Tesla Monday, accusing the electric car firm of "breach of contract action" over stock warrants following CEO Elon Musk's 2018 tweet that he might take his firm private," Axios' Rebecca Falconer reports. Go deeper
4. PR giant vows climate focus and defends work with oil giants
Edelman, the world's largest PR firm, is vowing to make climate change a bedrock focus even as it rejects activist pressure to sever ties with Big Oil, Ben writes.
Driving the news: The company on Monday unveiled new principles and plans, along with new hires to guide the efforts.
- Edelman said it's committed to working with clients focused on "accelerating action" and vowed to "put science and facts first" in its output.
- They're doing a 60-day review of their portfolio and also plan to "formalize clear criteria for climate communications."
What they're saying: CEO Richard Edelman, in an interview, said this year's disasters — including flooding in Bangladesh and Germany and the California wildfires — helped spur the new efforts.
Edelman also said he's motivated by "disappointment" with the just-concluded UN climate summit. "I think the private sector is going to have to lead now," he said.
- An open letter last week with over 100 signatures from actors, advocates and others called on Edelman to drop those clients. Advocates bashed Edelman yesterday because their new plan does not call for severing ties with Exxon and others.
- Ayana Elizabeth Johnson, a climate expert who corralled signatures, said "the only reason not to drop them is greed — and lack of respect for our shared future on this planet."
The other side: "We work with oil majors. I'm proud of our work. I think that bigger question over time is, how we can help them express their transitions," Edelman said.
5. 2021 likely among the 10 warmest on record
This year is almost certain to go down among the 10 hottest in temperature records that date back to 1880, per the National Oceanic and Atmospheric Administration (NOAA), Ben writes.
Driving the news: Its latest monthly climate report finds the January-October average global surface temperature was the sixth-warmest in those records.
The agency sees a greater than 99% chance that 2021 will be in the top 10. This year is the dotted line in the chart above.
Why it matters: It's the latest sign of global warming's march. Every year in the top 10 has occurred this century, and the top five have all been in 2015 or later, with 2016 the warmest (though the differences are small).
Zoom in: October was 0.89°C (1.60°F) above the 20th-century average, per NOAA, the fourth-warmest in the roughly 140-year record.
"Record-warm October temperatures were present across parts of North America, South America, northern Africa, southern Asia, as well as across parts of the Atlantic and the Pacific oceans," it notes.