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🧭 The compass is pointing due weekend. Today we've got 1,287 words, 5 minutes.

🎢 This month marks 35 years since 10,000 Maniacs released the album Blind Man's Zoo, which provides today's exquisite intro tune...

1 big thing: Putin, Xi, and a fraught meeting

A grouped bar chart showing the change in natural gas exports from Russia from 2021 to 2023. While the most of the world, especially the EU, has seen a drop in exports, China has increased supply from Russia
Data: Columbia Center on Global Energy Policy;Β Chart: Rahul Mukherjee/Axios

All eyes are turned eastward as Russia tries to convince China to back the long-proposed Power of Siberia 2 gas pipeline.

Why it matters: As Russian President Vladimir Putin meets with Chinese leader Xi Jinping during a two-day state visit, the market and geopolitical stakes are huge β€” especially following the massive decline in Russian gas flows to Europe since the invasion of Ukraine (see above).

State of play: Initial reports from the visit show no explicit progress on winning Xi's endorsement of the project, but vows of deeper energy ties.

  • The New York Times reports that Putin said the "leaders discussed working more closely in energy and nuclear power research, though made no mention of a proposed natural gas pipeline to China that Moscow would like to see built."

The big picture: A new commentary from analysts with Columbia's Center on Global Energy Policy explores why it's so vital for Putin.

  • PS-2 would be a geopolitical "coup" for Moscow, not just a revenue stream, because it tightens its strategic alliance with China.
  • It would mean "demonstrating to the West and the Global South that it is able to deepen its energy relationship with China despite the war."

Friction point: "One reason China is in no hurry to finalize an agreement for PS-2 is that the country is unlikely to need the gas before the mid-2030," CGEP's analysts write. That gives it leverage on price and more.

Yes, but: While Xi is likely to continue what have been years of playing hard to get, his posture could change, they add.

  • "[I]f China can secure an attractive price for PS-2 gas, and if China's relations with the United States continue to deteriorate, Beijing could be motivated to reverse course."

Zoom out: A 2030 link to supply what's now 50 billion cubic meters of stranded Russian gas would displace a chunk of China's liquefied natural gas imports, adding to an expected LNG glut as more projects come online this decade.

The bottom line: If there's ever a deal, the market and geopolitical implications are global.

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2. A zombie problem up north

Smoke rises from a wildfire in western Canada on Tuesday. Photo: Cheyenne Berreault/Anadolu via Getty Images.

Smoldering combustion beneath northwest Canada's boreal forests has emerged onto the dry surface, re-igniting into fast-moving flames amid unusually warm, dry and windy conditions.

Why it matters: The fires that have emerged this month are a threat to homes and businesses and show how a wildfire season worsened by climate change can defy a clear end date.

  • Thousands of people have fled their homes as a variety of blazes advance toward communities, including Fort Nelson and Fort McMurray.

The intrigue: Climate scientists and wildfire specialists had suspected some overwintering ("zombie") fires might reappear, following the country's worst wildfire season on record last year.

  • More than twice the acreage of the previous record-holder burned in 2023, fire expert Mike Flannigan told Axios.

What they're saying: "We are certainly seeing a lag effect of last year's severe fire season, continuing to play out in real time this spring," Merritt Turetsky, a climate researcher at the University of Colorado at Boulder, told Axios in an email.

  • "While persistent drought conditions certainly are at play, many dozens of overwintering fires that continued to smoulder through the winter are providing additional ignition sources," she said via email.

Between the lines: Turetsky said overwintering fires are not a new phenomenon, since they are similar to coal fires that can burn for years in some cases.

  • But they are especially prominent this year.

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3. Catching up on data centers' climate risk

Illustration: Natalie Peeples/Axios

Two developments highlight how the rise of artificial intelligence is changing the landscape for tech firms and energy companies.

State of play: Microsoft divulged yesterday that its 2023 emissions were 29.1% above 2020 levels.

  • That's primarily from data center construction and "associated embodied carbon" in building materials and hardware.
  • The tech giant said it's boosting efforts to use "greener steel, concrete, and fuels."

The big picture: Microsoft's situation is "one of the first concrete examples of how the pursuit of AI is colliding with efforts to cut emissions," Bloomberg notes.

  • While construction of new data centers fueled Microsoft's emissions jump, existing and new facilities require lots of electricity.
  • The software big is a major renewables buyer and plans to match 100% of its corporate operations with them by 2025 on an aggregate basis. By 2030, it wants to meet its needs with zero-carbon sources 24/7.

Yes, but: More broadly, data centers for AI and cloud computing could boost use of natural gas.

  • A separate note from the consultancy East Daley Analytics explains why data center growth is bullish for pipeline companies like Energy Transfer and Kinder Morgan.

The bottom line: It's a pretty fluid and uncertain situation, and there's a lot of interest in ensuring low-carbon sources shoulder the weight.

  • But here's a snapshot: CNBC cites a recent Goldman Sachs estimate that gas will meet 60% of data center power demand growth by 2030.

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4. πŸ‘€ Biden's newest solar trade move

Illustration: Megan Robinson/Axios

The Biden administration is ending a key solar tariff exemption in a move long sought by domestic manufacturers.

Why it matters: It's another front in the ongoing solar trade wars that could bolster nascent efforts to make solar panels in the U.S. β€” and divide the industry.

Driving the news: Officials this morning said they're removing a tariff exemption for bifacial panels.

  • Those two-sided panels are the main technology used in large solar installations.
  • Biden had extended the exemption from the "section 201" levies in 2022, with support from renewables developers and trade groups. Manufacturers and some lawmakers had been lobbying to nix it.
  • "This will be an important measure in leveling the playing field around what is an increasing share of the deployment market," said White House climate adviser Ali Zaidi.

Context: Administration officials cited an International Trade Commission report from February that found bifacial panel imports doubled between 2020 and 2022.

5. πŸƒπŸ½β€β™€οΈCatch up quick on tech finance

Illustration: Annelise Capossela/Axios

πŸ›« CNX Resources and KeyState Energy hope to build a major hydrogen and sustainable aviation fuel plant on Pittsburgh International Airport property β€” but there's a big asterisk.

  • State of play: They announced a letter of intent to "advance" the $1.5 billion project but caution it depends on how the Treasury Department structures hydrogen tax credits in the 2022 climate law.
  • Why it matters: It underscores the high stakes of Treasury's looming decisions. Axios Pro's Jael Holzman recently reported that Fortescue's projects are in doubt, absent changes in renewables provisions in Treasury's draft plan.
  • What we're watching: CNX and KeyState are watching if the implementing rule "enables a pathway" for using "ultra-low carbon intensity fugitive coal mine methane" as a hydrogen feedstock. AP has more.

πŸ’΅ Via the Financial Times, "Calpers, the US's biggest public pension plan, will pour more than $25bn into green-related private market investments, in one of the largest commitments by a major fund to unlisted climate assets."

6. Study: $1T in the balance on election day

Illustration: Brendan Lynch/Axios

A new analysis sees much lower investment in U.S. low-carbon projects if Donald Trump beats Joe Biden.

Why it matters: Wood Mackenzie has taken a stab at putting numbers around the election outcomes.

The big picture: Their "base case" sees $7.7 trillion in capital investment from 2023-2050, a tally that includes fossil fuels and low-carbon sources alike.

  • But power changing hands informs a "delayed transition" that sees $1 trillion less on the low-carbon side β€” even though an outright repeal of the 2022 climate law is highly unlikely.

How it works: Trump policy changes would directly and indirectly deter some climate-friendly energy investments.

  • For instance, backing off EPA emissions rules, less DOE loan office support, and new corporate tax cuts that result in less monetization of IRA incentives, to name just a few.

The bottom line: Energy transition will continue. But the pace β€” already too slow for "net zero" goals β€” will be dictated in no small part by November's result.

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πŸ™ Thanks to Chris Speckhard and Javier E. David for edits to today's edition, along with the talented Axios Visuals team.