November 03, 2020
Good morning. Today's Smart Brevity count: 1,140 words, 4.5 minutes.
🚨Here are two easy ways to follow the election in the hours ahead:
- The Axios app: All of our reporting, graphics and results — neatly packaged. (App Store, Google Play Store)
- Our "Axios Today" and "Axios Re:Cap" podcasts will team up with a burst of special 5-minute episodes today and tomorrow.
🔎 Axios' Amy Harder joined the media company ATTN: to discuss fracking and why it's relevant in today's election. Watch the video on Twitter, Facebook and Instagram.
🎶And at this moment 20 years ago, Erykah Badu was atop Billboard's R&B charts with today's terrific intro tune...
1 big thing: Making sense of Trump's energy era
OK, while we're all waiting for election results, here's a whirlwind trip through what did and didn't happen with U.S. energy during the Trump era so far.
The big picture: Market forces have been in the driver's seat during President Trump’s first term, which means oil-and-gas kept growing (until the pandemic), he couldn’t revive coal, and the country stayed far away from policies that would drive steep future carbon cuts.
Where it stands: The administration launched a big deregulatory push to scuttle Obama-era climate policies and support coal, oil and gas. Here are a few snapshots of what happened over the last four years...
- Carbon emissions haven't moved greatly in either direction, as the chart above shows. (Of note: It doesn’t show this year, which would display a steep decline due to the pandemic's effect on travel and economic activity.)
- Oil production kept soaring to new records until the pandemic crushed demand and prices, reaching about 13 million barrels per day by the end of 2019.
- Petroleum exports, especially crude, soared too. But, to underscore the way markets and policy both play a role, the crude export boom was enabled by a late 2015 law that lifted extremely heavy restrictions, which set the stage to ship surging U.S. supplies abroad.
- Natural gas production, already at record levels when Trump arrived, generally climbed even faster until COVID-19.
But, but, but: Natural gas and renewables have kept squeezing coal out of power markets, despite Trump's pro-coal push, and don't look for that to change.
Between the lines: This serves to show how market conditions hold a lot of sway. That's also true of the oil-and-gas production boom, which began over a decade ago.
- Coal production last year fell to its lowest levels since the 1970s, and is falling again this year.
- The fuel's share of the power mix has kept dropping under Trump, and is now less than a fourth of U.S. generation.
- Wind has continued its upward march under Trump, despite his anti-wind sentiment, while solar has grown even more sharply, albeit from a smaller baseline.
What they're saying: The Rhodium Group's Trevor Houser notes market developments in clean energy, like the decline of solar and wind costs, meant those sectors were "mature enough" that their trajectory continued despite Trump's pro-coal efforts.
- The research firm's modeling shows that Trump's policies around vehicles, power, and oil-and-gas sites means future emissions will be higher than if former President Obama's policies had continued.
Yes, but: That's less important than what didn't happen under Trump, Houser says in an email.
"While those regulatory rollbacks had a measurable impact on U.S. emissions ... the real climate impact of the Trump Administration was the lost four years of additional federal policy action."
What we're watching: I mean, come on.
2. Trump's closing frack attack...
Trump's tweeting habits are one sign of how much the president hopes his strong support for fossil fuels will help get him over the top today.
Where it stands: Check out the chart above, which shows how Trump's tweets about oil, gas and fracking have soared of late.
- And it's already a little out of date, because it goes through noon yesterday so does not capture tweets including this one.
Why it matters: Pennsylvania, a state critical to Trump's re-election chances, is the nation's second-largest natural gas producer.
- And polls show Texas, which is at the top in oil and gas production, is also in play this year.
What we don't know: Whether Trump's attacks will work.
- A New York Times/Siena College poll released Sunday shows that 52% of likely voters in Pennsylvania back fracking, while 27% oppose it.
- However, clean energy and climate initiatives like Joe Biden's plans also tend to poll quite well.
Catch up fast: A centerpiece of Trump's attacks is the claim that Biden wants to "ban" fracking — which Biden has been pushing back hard against.
- The claim inaccurately describes Biden's platform, which aims to end new oil-and-gas permitting on federal lands but doesn't seek a national ban.
- Production in Pennsylvania and Texas is centered on private lands.
- But his position has been unclear or appeared more aggressive multiple times.
Go deeper: Trump reaches for oil lifeline
3. ...and an important point about Biden's plans
Fracking has unleashed production of oil and natural gas alike, but that doesn't mean Biden's posture toward the two fuels will be the same.
What they're saying: Here's a snippet from a new RBC Capital Markets' note on the election...
- "[I]t seems that oil and gas would likely be decoupled when it comes to Biden policy prescriptions. While oil could certainly find itself out of favor, gas will likely continue to receive under the radar support as its development assists with key climate and foreign policy goals."
- "It is our understanding that gas is still viewed as an important transition fuel for facilitating coal displacement for power generation globally and that U.S. exports are seen as helping to weaken Russia’s hold on European gas markets."
Go deeper: Natural gas remains the big question in Biden’s climate change plan
4. What happened to power under Trump
Here's some more EIA data from the three years preceding the Trump era and the first three years of his administration.
- As you can see, coal — the most carbon-intensive fuel — kept declining.
- Zero-carbon wind and solar kept rising, but from a small base so they remain relatively small shares of overall generation.
- Natural gas, which emits much less CO2 than coal, also saw its market share keep rising at coal's expense and is now well over a third of U.S. generation.
Go deeper: Trump made a promise to save coal in 2016. He couldn’t keep it (Bloomberg)
5. The next phase of Volvo's EV push
Volvo said it's making "significant investments" to bring design and development of electric motors in-house as the automaker prepares to expand its electric vehicle lineup.
Why it matters: Volvo's goal is to have EVs account for 50% of its sales by 2025, with the rest hybrids.
- The move will allow its engineers to "further optimize electric motors and the entire electric driveline in new Volvos" to bolster efficiency and performance, Volvo said Monday.
Where it stands: Volvo — which is owned by China's Geely Holding — yesterday announced the opening of a new electric motor lab in Shanghai, which adds to ongoing motor and battery development in Sweden and China.
- The size of the investment in the new Shanghai lab was not disclosed.
6. Catch up fast: Oil prices, Aramco, China
Markets: "Oil gained following the broader risk-on sentiment in markets, and as OPEC+ inches closer to delaying a planned easing of output cuts." (Bloomberg)
Earnings: "Saudi Arabia’s oil and gas giant Aramco announced Tuesday third quarter profits of nearly $12 billion, a significantly higher net income from its dramatically lower second quarter earnings." (AP)
Electric vehicles: "Sales of electric, plug-in hybrid and hydrogen-powered vehicles in China, the world’s biggest auto market, are forecast to rise to 20% of overall new car sales by 2025 from just 5% now, the State Council said on Monday." (Reuters)