Good morning from Katowice, Poland, where I'll be covering the big United Nations climate conference for the next week.
My latest Harder Line column the Trump administration's fossil-fuel side event today.
I'll share a glimpse of that, and then Ben Geman will get you up to speed on the rest of the news.
1 big thing: Trump's missed coal opportunity
KATOWICE, Poland — In theory, President Trump could lead hard but necessary negotiations at a climate conference here about the realities of the world’s significant dependence on fossil fuels and their role in warming the planet. But that’s not going to happen.
Driving the news: With Trump and his top advisers not acknowledging that humans are driving global temperatures up, and instead promoting coal and other fossil fuels full stop, a side event they’re hosting today will ring hollow and is likely to deepen the divide over energy and climate change.
“I have long believed that the GOP position on the science undermines its ability to put forward a real climate policy,” said George David Banks, a former top adviser to Trump on these issues.
He hosted a similar event last year at the same conference. That session drew hundreds of protesters who said fossil fuels have no role at a climate summit. Expect the same this year.
The intrigue: Katowice, a small city in the heart of Poland’s coal-mining region, is hosting the big annual UN confab that's seeking to make progress on the 2015 Paris Agreement. Trump has vowed to withdraw the U.S. from that agreement.
Coal’s presence is both palpable and shunned here. An environmental group gave the Polish government a derisive “Fossil of the Day” award, accusing it of not urging more aggressive commitments to the 2015 deal and promoting coal.
Reality check: Deriding fossil fuels, at a climate conference or anywhere, is unlikely to change the status quo. The reality is that oil, natural gas and coal provide all of us huge benefits by fueling our global economy. And yes, they also have a big negative impact on the environment. Those two things aren’t mutually exclusive.
The big picture: The ambition around the world for the Paris deal is lessening, fueled by nationalistic leaders like Trump and Brazil’s President-elect Jair Bolsonaro, who has criticized the deal and withdrew from hosting this same conference next year. As the political support for the agreement is waning, carbon dioxide emissions are rising.
What’s next: One expert speaking at today’s event, Rich Powell, hopes progress can still be made reducing emissions even though the administration doesn't acknowledge climate change as a problem. As executive director of the nonprofit ClearPath Foundation, Powell works on cleaner energy technologies from a conservative perspective.
2. OPEC deal's sugar high
The big energy market news since our last edition was OPEC+ agreeing in Vienna Friday to curb output by 1.2 million barrels per day compared to October levels.
Why it matters: The decision to curb output starting in January quickly boosted prices a bit, though they remain far below where they were 2 months ago.
- The global benchmark Brent crude initially shot up by $3 per barrel Friday before giving back about half that ground.
- Prices are heading back down again on Monday morning to roughly $61, and are still far below the $86 reached in early October.
What they're saying: A number of analysts see the cut tightening the market enough to send prices back up next year by roughly $10-per-barrel from where they were before the deal.
- "We think the OPEC+ deal sets a platform for prices to recover towards USD70/b. While we can’t rule out downside from here we think it now looks far less likely, and we would expect continued OPEC intervention if it were the case," HSBC analysts said in a note Monday.
But, but, but: There are all kinds of caveats here. Bloomberg writes this morning, "Oil’s gains risk being quelled by uncertainty over how the OPEC+ coalition will implement its deal to cut output, according to Goldman Sachs Group Inc. and Morgan Stanley."
A couple of experts are warning that OPEC and Russia's new deal is simply triage, and that the cartel is facing much larger and existential challenges.
1. Nick Butler of King's College London writes in the Financial Times that Qatar's recent decision to abandon OPEC is a sign of fundamental problems and loss of influence.
- "Wisdom begins with a cold-eyed acceptance of reality. Opec is not the power it once was," writes Butler, a former BP executive.
- "For Qatar, and several other countries, the implication is that they will have to look after themselves in a world where the old methods of controlling prices by restricting production no longer work," he adds.
2. Council on Foreign Relations' Amy Myers Jaffe has a post that looks at OPEC's position in light of the rise of U.S. shale, and emergence of alternative technologies that have put peak oil demand on the eventual horizon.
- Her piece covers a lot of ground and I won't try and capture it all here, but overall argues that the "OPEC’s mission is starting to look increasingly anachronistic."
3. Musk: I decide which tweets get reviewed
Tesla CEO Elon Musk gets to decide when his tweets may contain information material to the company or its shareholders, and thus be subject to internal review, based on comments he made on Sunday to "60 Minutes."
Why it matters: Per Axios' Dan Primack, Musk and Tesla recently reached settlements with the U.S. Securities and Exchange Commission, after Musk falsely tweeted that he had "funding secured" for a potential buyout of the company, through which new oversight was supposed to be implemented.
- But Musk told "60 Minutes," "I want to be clear. I do not respect the SEC."
The settlements included a requirement whereby Tesla would employ a securities lawyer to review communications made by company executives via Twitter and other social media.
- Moreover, the company would "implement mandatory procedures and controls to oversee all of Elon Musk's communications regarding [Tesla] made in any format ... and to pre-approve any such written communications that contain, or reasonably could contain, information material to the Company of its shareholders."
But, but, but: It appears that Musk, not the company, determines when to submit such communications for pre-approval. And if any tweets have been submitted, they have not yet been rejected.
- Tesla and Musk technically have until Jan. 14 to implement the oversight rules, so it's possible that things could change at that point. "60 Minutes" didn't ask, Musk didn't volunteer it, and a Tesla spokesman declined comment.
P.S. Another interesting "60 Minutes" tidbit, per the Dayton Daily News, is that "Tesla may be interested in buying some of the factories General Motors plans to close, including in Ohio."
4. Petro-notes: LNG, Mexico, climate pressure
LNG: Per Reuters, "Australia overtook Qatar as the world’s largest exporter of liquefied natural gas (LNG) for the first time in November, data from Refinitiv Eikon showed on Monday."
Mexico: Per the Associated Press, "Mexico's new government detailed plans Sunday to build an $8 billion oil refinery in the home state of President Andres Manuel Lopez Obrador and to renovate six others as the oil-producing country attempts to lower its dependence on imported fuel."
Climate: Via The Guardian, "BP, Chevron and ExxonMobil face a shareholder challenge to set carbon targets in line with the Paris climate agreement, as a green group seeks to repeat its success in pressuring Shell to set environmental benchmarks."
5. That dire warming report? It might be too rosy
A sobering new commentary in the journal Nature finds that October's dire UN science report about the ongoing and future effects of climate change may have actually underestimated the pace of global warming.
Why it matters: The new analysis, if borne out, widens what's already a huge gulf between the expected human and ecological toll from global warming and governments' failures to make necessary steep cuts to carbon emissions
The big picture: The Nature piece sees a "good chance" that a temperature rise of 1.5 °C, or 2.7°F, above preindustrial levels could arrive by 2030 if emissions continue unchecked.
The big picture: The commentary sees a "good chance" that a temperature rise of 1.5 °C, or 2.7°F, above preindustrial levels could arrive by 2030 if emissions continue unchecked.
- That's a decade earlier than the UN science body envisioned in their report.
- "Policymakers have less time to respond than they thought," writes Texas A&M University atmospheric scientist Yangyang Xu. The other authors are from UC San Diego: climate scientist Veerabhadran Ramanathan and political scientist David Victor.
What they found: The authors see 3 big trends combining over the next 20 years that will make climate change "faster and more furious than anticipated."
- Carbon emissions: They're rising again after a plateau in 2014 to 2016.
- Air pollution: Ironically, governments' success in improving air quality is speeding up the temperature rise. That's because tiny particles known as aerosols in traditional pollutants help to reflect sunlight back into space. This blunts some of the warming due to greenhouse gas emissions.
- Natural climate cycles: The authors point to natural climate fluctuations that favor the increased release of heat from the oceans.
6. Making sense of a climate tussle in Poland
ICMYI over the weekend, a diplomatic tussle broke out at the UN climate talks in Poland because the U.S. joined Russia, Saudi Arabia and Kuwait in refusing to "welcome" a recent landmark UN report on climate change, reports AP.
Why it matters, per Axios science editor Andrew Freedman: In the climate talks, individual words can take on outsized importance.
The alignment of the U.S. with the other countries is striking as it illustrates the extent to which the country has moved away from its leadership position on this issue, and is actually helping to slow progress in the talks.
Threat level: Per AP, "Saturday’s floor fight casts doubt on whether countries will be able to reach consensus on important issues by Friday, including the need to step up national targets to curb carbon emissions."