Dec 20, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Happy holidays, Generate readers! Today's Smart Brevity count: 1,372 words, ~5 minutes.

Situational awareness:

  • "Royal Dutch Shell said on Friday it expects impairment charges of up to $2.3 billion in the fourth quarter and trimmed its forecast for quarterly oil production sales, as the Anglo-Dutch oil company faces slowing demand for oil and gas," Reuters reports.
  • European ambassador hits U.S. on climate change, Axios' Amy Harder reports.

We'll be on break until Jan. 2. And speaking of our hiatus, we'll miss the birthday of the late Rick Danko of The Band, who bring us into the weekend...

1 big thing: Debate shows climate's reach in Dems' message

Illustration: Sarah Grillo/Axios

Last night's debate nicely encapsulated the way that climate change has become stitched into the fabric of wider Democratic policy and messaging on many topics.

Driving the news: The segment on climate and other answers included the following comments (and this is not a comprehensive list)...

  • Bernie Sanders, after the climate section was over, used a question about the lack of diversity on stage to revisit the topic. "People of color, in fact, are going to be the people suffering most if we do not deal with climate change," he said.
  • Elizabeth Warren used a question about climate change to quickly transition to her wider populist message, noting that "if we don't attack the corruption first, if we don't attack the corruption head-on, then we're not going to be able to make the changes we need" on climate and other topics.
  • Joe Biden was quick to play up job creation from building out climate-friendly infrastructure. I know, I know, green jobs messages are hardly new, but the economic frame around climate is in full flower this cycle.
  • Tom Steyer returned to climate when making the wider argument for treating China as a "frenemy," noting, "if we are going to treat climate as the threat that it is, we are going to have to partner with the Chinese."

Quick take: While a huge Green New Deal-style mobilization lacks legs in Congress, it's all-encompassing conceptual framing — climate as inseparable from industrial policy, human rights and much more — is carrying the day.

Whether that proves to be a political winner in a general election is TBD.

Bonus: Two more debate moments

Warren said that while she's against building new nuclear plants, the need to stem carbon emissions means "we need to keep some of our nuclear in place."

  • Why it matters: As the Washington Examiner's Josh Siegel noticed, it seems like a shift from her comment at the CNN town hall in September when Warren called for "weaning ourselves off nuclear energy."

And a moment of candor from Biden when asked whether he'd sacrifice some U.S. oil-and-gas production growth even knowing it could displace workers in those sectors.

"The answer is yes because the opportunity for those workers to transition to high-paying jobs...is real," he said, talking up jobs in low-carbon infrastructure.

2. Elizabeth Warren's Green New Deal

Elizabeth Warren is making an economically focused push on climate as she seeks to regain momentum after briefly challenging for frontrunner status months ago.

Driving the news: This morning Warren is out with new details and claims about her climate, energy and infrastructure platforms.

  • The campaign is circulating a new analysis from the progressive think tank Data for Progress, which concludes her proposals would yield roughly 10.6 million jobs over 10 years.
  • Warren yesterday rolled out an endorsement from Rhiana Gunn-Wright, an activist who has become prominent over the last year as a key architect of the Green New Deal.
  • Those moves come roughly a week after Warren unveiled the oceans-focused portions of her wider climate platform.

The big picture: Warren's campaign released a document asserting her various plans would provide $10.7 trillion in combined federal and private investment.

  • It's a mashup of her existing proposals and some fleshed-out details in areas such as transport electrification, finance (via "green victory bonds") and more.

The details: The analysis from Data for Progress, a young outfit with growing cachet on the left, looked at potential jobs in energy, water infrastructure, transportation, and buildings.

  • They see 5.4 million jobs stemming from Warren's proposals for direct federal investment in "new and existing clean industries and implementation of green technologies."
  • But that swells to 10.6 million "due to strategic support for U.S. renewable manufacturing and export-oriented economic policy" — a conclusion that assumes each federal dollar "yields an additional 1.5 in exports and induced private-sector activity."
3. Chart of the day: Missed emissions projections
Expand chart
EIA actual and projected data; Chart: Andrew Witherspoon/Axios

The U.S. Energy Information Administration had projected in 2010 that U.S. energy-related carbon dioxide emissions would continue rising, albeit, at a slower pace, Amy reports.

Reality check: In fact, they dropped. Obama administration's environmental rules, combined with plentiful natural gas supplies pushing down coal in the power mix, drove this change. More recently, wind and solar growth are accelerating this trend.

Why it matters: It underscores how predicting the future of energy systems is a fraught and tricky thing. Stay tuned Monday for Amy's Harder Line column, which will assess how other decade-old projections did in the energy space. 

Yes, but: Energy-related CO2 emissions ticked back up last year, but EIA sees them dipping again this year and in 2020.

What’s next: Generate is off until Jan. 2, so read (or sign up for) the Axios AM newsletter to catch Amy’s column.

4. FERC's controversial power move

The Federal Energy Regulatory Commission yesterday issued an instantly controversial order aimed at revising how power providers bid into a key market.

Why it matters: The order affects the PJM Interconnection, the grid operator for Ohio, Pennsylvania and a bunch of other states.

It affects competition to enter the capacity market, which refers to the amount of resources that need to be available to meet demand increases.

Driving the news: Via Reuters, the move would "force state-subsidized solar and wind electricity providers to raise market bids, a move that renewable energy companies and environmental groups blasted as a partisan attempt to protect fossil fuels."

  • In addition to new renewables projects, it would also impact nuclear operators who benefit from state subsidies.

What they're saying: The nuclear industry, environmental and renewables groups attacked the move.

Coal-affiliated groups praised the 2-1 decision in a comment that echoed FERC Chairman Neil Chatterjee, who said it would "safeguard the competitiveness" of the PJM capacity market.

The big picture: "We view today’s order as positive for existing natural gas and coal unit owners and negative for owners of nuclear units eligible for [zero-emissions credits] and developers of new renewable energy, demand response, storage and energy efficiency projects," the research firm ClearView Energy Partners said in a note.

Go deeper: FERC Orders PJM to Restrict State-Backed Renewables in Its Capacity Market (Greentech Media)

5. Why homeowners want to go solar
Expand chart
Data: Pew Research Center; Chart: Axios Visuals

A newly released poll shows that 46 percent of U.S. homeowners say they have seriously considered installing solar panels at their homes, Axios' Orion Rummler reports.

Why it matters: The Pew Research Center poll signals that the residential solar market has lots of room for growth.

The survey notes that only 6% of homeowners polled have already installed systems. (Note: Per the Solar Energy Industries Association, the percent of single-family homes with solar is lower.)

The intrigue: Pew asked what motivates respondents who said they're considering investments in solar systems. The chart above shows what they found.

The big picture: The residential solar market had a record-setting Q3, SEIA's latest market report shows. But the industry is also facing headwinds.

  • The year-end Capitol Hill tax policy deal does not extend tax credits that will begin phasing down next year and won't be available for residential projects installed after 2021.

By the numbers: The survey has a margin of error of plus-or-minus 2.5%. On the question of what's motivating homeowners considering solar, it's 3.5%.

6. Going deeper on the fracking fight

One of the higher-profile energy topics in the primary fight has been a push by several Democrats to ban or restrict fracking (although it didn't surface last night).

Driving the news: A new note from the data analytics firm Kayrros sizes up what a president might actually be able to do — thwart fracking on federal lands.

They account for a relatively small but hardly trivial share of U.S. oil and gas production.

What they found: "Federal-land fracking does not represent an irreplaceable share of U.S. [oil] production, neither is it a footnote — thanks in part to the fact that wells on Federal leases have been punching above their weight," they note.

How it works: Their analysis shows that the New Mexico side of a key section of the booming Permian basin (which is largely in Texas) is the epicenter of fracked oil wells on federal lands.

Wells drilled on the New Mexico side of the Delaware basin, a subsection of the larger Permian, beginning 2018 account for 17% of U.S. production growth since then.

Meanwhile, the U.S. Chamber of Commerce yesterday released a study on the effect of some candidates' calls to ban fracking on all U.S. lands.

It's a goal of Sanders and Warren that would require congressional action that's very unlikely to occur.

What they're saying: The analysis, which looks at oil and natural gas production, argues it would be "catastrophic" for the economy, cost millions of jobs (4 million in 2021 alone); and send heating cost and pump prices skyward.

Go deeper:

  • Catastrophe or short-term dip? Studies look at oil, gas impact of Democrat president (S&P Global Platts)
  • Warren's 2020 ascent sends ripples through oil industry (Axios)
Ben GemanAmy Harder