Tomorrow will mark the 1975 release date of the Neil Young & Crazy Horse album "Zuma." So let's burn off all the fog...
1 big thing: After the carbon tax fail
The defeat of a high-profile carbon tax initiative in Washington state is focusing attention on what's next for carbon pricing in the U.S. — something that's moribund at the federal level right now.
Where it stands: Reuters has some good reporting on how the focus is now on legislative efforts as lawmakers in several states plan moves next year. From their analysis...
- Lawmakers in several states aim to introduce carbon pricing legislation, including carbon taxes and carbon cap-and-trade measures, according to Michael Green of the Boston-based carbon pricing think tank Climate XChange.
- This includes New York, Pennsylvania, Connecticut, Maryland, Massachusetts, New Jersey, Rhode Island and Vermont, per Green.
What they're saying: The high-profile economist Tyler Cowen penned a column in Bloomberg that argues the lack of traction for CO2 taxes can't be explained only by the influence of special interests.
- Instead he puts the Washington state result in the context of the failure of a big federal cap-and-trade bill in 2009 and other hurdles to carbon pricing in North America.
- Cowen supports taxing carbon, but writes:
"The American people apparently feel that government ought to be able to solve this problem without imposing a new tax burden on them."
"Economists should not give up our analytical arguments for a carbon tax. But maybe it’s time for a change in tactics."
"These new approaches might start with the notion that we can address climate change without transferring more money from voters to politicians."
But, but, but: I suspect the expensive oil industry campaign against Washington's initiative — reportedly a $30 million effort — was likely quite influential.
Meanwhile, for Carnegie Mellon University energy expert Costa Samaras, the Washington loss shows the need to keep focusing on other policies.
- "Progress on GHG reduction/internalizing externalities will have to come from standards, tax credits, tax replacements, fleet purchases, loan guarantees, R&D, infrastructure choices, & other non-carbon tax policies. It's sub-optimal but so are most sandwiches and I still eat them," he said via Twitter the morning after Election Day.
What's next: Over at Climatewire, Benjamin Storrow writes that low-carbon energy advocates, pivoting from the tax defeat, are buoyed by election of several new governors who are pushing for ambitious renewable power targets.
- "Democratic gubernatorial victors in Colorado, Maine and Illinois campaigned on 100 percent renewable pledges, while the winners in Nevada and New Mexico voiced support for 50 percent renewable portfolio standards by 2030," he reports.
- However, as the story notes, renewable power targets don't address other big emissions sources, notably transportation.
2. Judge deals Trump a defeat on Keystone
A federal district court judge in Montana thwarted construction of the proposed Keystone XL pipeline late Thursday, ruling that the Trump administration must first provide an updated environmental analysis.
Why it matters: The ruling is a setback for White House efforts to enable construction of the pipeline — first proposed a decade ago — that would carry hundreds of thousands of barrels per day from Alberta's oil sands to U.S. markets.
- It adds another layer of uncertainty for developer TransCanada, which has yet to make a final decision about proceeding with the project that has been the focus of intense, years-long battles between oil interests and environmentalists.
Details, per New York Times:
- "The judge, Brian M. Morris of the District of Montana, criticized the Trump administration for its failure to provide a 'reasoned explanation' for its position about the pipeline’s impact on the climate."
- But the ruling goes further than just climate. As the Washington Post notes, the ruling demands a "more complete review of potential adverse impacts related to climate change, cultural resources and endangered species."
The bottom line: Morris' ruling prevents the Trump administration and TransCanada from "engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the updated environmental review is complete.
- However, the administration could appeal the ruling, so stay tuned.
3. New renewables pull ahead of coal in cost race
The cost of building and operating renewable electricity plants has dropped below the expense of keeping coal-fired plants running under some circumstances, according to a new analysis.
Why it matters: The financial advisory firm Lazard's report is another data point showing that wind and solar are increasingly competitive with traditional power sources without tax subsidies, which widen the edge but expire in coming years.
- As the Financial Times' Ed Crooks points out, "The calculations suggest that closures of coal-fired plants are likely to continue, eroding US demand for coal and jeopardising [President] Trump’s ambition to 'put our coal miners back to work.'"
Where it stands: The latest data on falling renewables costs released yesterday solidifies what started becoming apparent in last year's data from the firm.
- In their latest report, they find the average so-called levelized cost of energy of utility-scale solar voltaic projects fell another 13% and the costs for onshore wind dropped another 7%.
- The low end of the unsubsidized costs for onshore wind are now $29 per megawatt hour, while "the levelized cost of utility-scale solar is nearly identical to the illustrative marginal cost of coal, at $36/MWh," a summary notes.
Details: The levelized cost is basically an all-in comparison of the costs of building, running, supplying and maintaining different types of facilities over time.
But, but, but: Lazard cautions that the analysis does not include certain costs, such as transmission and grid integration for new projects. Nonetheless, Lazard's George Bilicic, who leads the firm's power, energy and infrastructure group, said in a statement:
"Although diversified energy resources are still required for a modern grid, we have reached an inflection point where, in some cases, it is more cost effective to build and operate new alternative energy projects than to maintain existing conventional generation plants.”
4. On my screen: OPEC, EVs, Interior
OPEC: The Wall Street Journal broke some interesting news yesterday...
"Saudi Arabia’s top government-funded think tank is studying the possible effects on oil markets of a breakup of OPEC, a remarkable research effort for a country that has dominated the oil cartel for nearly 60 years."
- Why it matters: The story shows how the kingdom is grappling with its long-term future in a world where oil demand might peak within a couple decades and as the country haltingly seeks to diversify its oil-dependent economy in the long run.
- "The report is part of a wider rethinking among senior government officials in Saudi Arabia about OPEC, according to the people familiar with the matter. Officials are grappling with the assumption — shared increasingly in the oil industry — that oil demand will one day peak, the senior Saudi adviser said," the paper reports.
- But, but, but: The WSJ piece cautions that the research does not reflect an "active debate" within the Saudi regime about bailing on OPEC.
Electric cars: Via Bloomberg, "Volkswagen AG plans to add a subcompact crossover costing about 18,000 euros ($21,000) to its all-electric I.D. range, expanding its lineup of zero-emissions vehicles that are more affordable than those of Tesla Inc., according to people familiar with the matter."
Zinke's future: Per Politico, "Interior Secretary Ryan Zinke has been exploring potential roles with Fox News, the energy industry or other businesses amid growing signs that he will leave President Donald Trump's Cabinet as he faces investigations into his ethics, according to people knowledgeable about the discussions."
5. GM and Ford have a 2-wheeled plan
America's two largest automakers are branching out beyond their traditional businesses: GM plans to launch a lineup of electrified bicycles and Ford just bought an electric scooter company, Axios' Joann Muller reports.
Why it matters: By 2030, 60% of the world's population will live in urban areas, per the UN's World's Cities in 2016 report. As cities get more crowded, commuters are looking for alternative ways to complete their journeys, from ride-hailing to e-bikes to scooter-sharing — sometimes combining all three in a single trip.
What's new: Ford just paid close to $100 million to acquire Spin, an electric scooter-sharing company based in San Francisco with operations in 13 cities and campuses across the U.S.
- GM will launch the e-bikes in 2019 under a new, as yet unnamed, brand.
What to watch: Amid a massive shift in transportation, automakers like GM and Ford will likely introduce more of these micro-mobility services as a way to hang on to customers who no longer feel the need to own a personal automobile.
6. One fun thing: lots of hot sauce
Apropos of nothing, I recommend this delightful Atlas Obscura story about an Arizona hot sauce connoisseur with what's believed to be the world's largest collection.
Here's a snippet of their reporting on Vic Clinco's collection...
- "[O]ne reason that Clinco’s collection has ballooned is due to his egalitarian taste. When it comes to hot sauce, he wants 'the 79-cent ones I find at Hispanic grocery just as much as I do the $350 reserve bottle.'"
- He’s also absorbed 6 other sauce collections along the way, and currently has his eye on a large reserve in Ohio.