Sep 24, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! The sci-fi classic "The Matrix" turned 20 this year, so I dropped a reference into today's edition. Can you spot it?

Today's Smart Brevity count: 1,025 words, ~ 4 minutes.

And, happy 70th birthday (a day late) to Bruce Springsteen, who opens the edition with one of my favorites...

1 big thing: A climate divide as big as New York

Photo credits, clockwise from top left: Johannes Eisele/AFP/Getty Images; Amy Harder/Axios; Stephanie Keith/Getty Images; Viewpress

Dueling plotlines dominated the UN climate summit: Newly revealed ambition from countries and companies, and palpable anguish — distilled in teen activist Greta Thunberg's speech — that it's not nearly enough, Axios' Amy Harder and I report.

What's new: At midnight, President Trump mocked Thunberg in a tweet that puts a highlighter pen over the split between the U.S. government — which offered no pledges — and advocates.

The big picture: The summit brought a burst of new commitments and initiatives.

  • These include dozens of nations pledging to strengthen their plans under the Paris deal, new commitments to the multilateral Green Climate Fund, and asset managers committing to carbon neutral portfolios by 2050.
  • Reuters has a tally here, and the UN's summary is here.

But, but, but: Several of the world's largest nations either did not bring new pledges — including China, by far the world's largest carbon emitter — or didn't go as far as advocates hoped.

  • The Union of Concerned Scientists' Alden Meyer accused most large nations of "dodging their responsibility to step up action as is essential to address the climate emergency we now face."
  • "Advocates and diplomats who have been following climate talks for years said they were disappointed," the New York Times reports.

The intrigue: The chasm between the summit and advocates' goals was apparent when Big Oil CEOs defended their strategies at a rare, invite-only forum on the event's sidelines.

Driving the news: The CEOs of ExxonMobil, Shell, BP, Chevron and others gathered under the umbrella of the Oil and Gas Climate Initiative, an industry group investing in emissions-cutting tech. 

  • A common theme at the nearly 3-hour event: Tackling climate change is more complicated and slower than the urgent message radiating from activists and world leaders nearby at UN headquarters.
  • Exxon CEO Darren Woods typified the industry's steady-as-she-goes view of energy transition that activists call wholly at odds with the seismic changes needed. “I don’t see [the transition] as a threat,” Woods said. “It’s an evolution of the industry."

Between the lines: The execs largely agreed natural gas will play a key role for decades to come, which is increasingly at odds with what climate scientists say is needed to aggressively curb emissions.

  • “It’s likely to play an even larger role in the future,” Chevron CEO Michael Wirth said. “For the foreseeable future the realistic scalable and affordable way to build out a reliable grid growing renewable power is likely to be with natural gas.”
2. A $10.7 billion carbon removal kickstart
Expand chart
Reproduced from Energy Futures Initiative; Chart: Axios Visuals

The nonprofit Energy Futures Initiative — led by former Energy Secretary Ernest Moniz — released a proposed 10-year, $10.7 billion plan for how federal agencies can spur large-scale use of tech that pulls CO2 from the atmosphere.

  • The chart above shows annual proposed funding levels.

Why it matters: Carbon removal, or negative emissions, is getting more attention as the window is quickly closing for CO2 cuts steep enough to avoid high warming levels.

  • "[A]chieving global net-zero emissions is simply not credible without major carbon-negative contributions at considerable scale," the report notes.
  • It floats a multi-agency research, development and demonstration pathway aimed at bringing the technologies to "commercial readiness."

Quick take: This kind of proposal could inform a future White House and Congress, especially because there will be intense pressure for new climate steps if a Democrat wins the presidency next year.

The big picture: The 10-agency plan would explore a suite of methods, including direct air capture, soil and forestry techniques, and ocean absorption methods. It states...

"[Carbon dioxide removal] provides optionality and flexibility to compensate for difficult-to-decarbonize sectors and can reduce atmospheric CO2 concentrations from past emissions."
3. BP chief on the "remarkable" oil market

BP CEO Bob Dudley tells Amy that he found it a "remarkable thing that the oil market settled down so quickly" after the aerial attacks against Saudi infrastructure. More via Amy...

Why it matters: His comments, in an interview Monday in New York, are the latest sign of how much has changed in the global oil industry over the last few years partly as a result of America's booming oil production.

Threat level: She asked Dudley if he thought the oil market was adequately pricing in geopolitical tension in the Middle East.

  • “It’s a good question because markets usually get it right broadly,” said Dudley, who went on to cite the “resiliency” of Saudi Aramco, Saudi Arabia's state-owned oil company, and other production and storage around the world.
  • “Tensions still remain, but I think it will play out over months and months here. I can’t fault the market," he said.
  • Read Amy's full story here.

Where it stands: "Saudi Arabia has restored more than 75% of crude output lost after attacks on its facilities and will return to full volumes by early next week, a source briefed on the latest developments told Reuters on Monday," per Reuters.

What they're saying: "If the attacks on Abqaiq had occurred 10 years ago, prices would have shot far higher and not fallen back so quickly," writes the University of Washington's Scott L. Montgomery in The Conversation.

  • "Today, there is enough oil sloshing around in the world for the Saudis even to buy some from their neighbor, Iraq, to maintain their exports, with little effect on prices," he says.
4. What's new in electric vehicles

Supply chains: "Volkswagen will expand on its €1bn investment into homegrown battery technology by pursuing more partnerships with external manufacturers, as the carmaker strives to meet its target of launching up to 70 new electric vehicles over the next 10 years," per FT.

  • Why it matters: It shows how automakers are keenly aware of the need to lay the groundwork for the supplies needed to compete as EVs begin growing from a niche to a mainstream market.

Maybe not "the one": Via Bloomberg, "NIO Inc. reported a worse-than-expected quarterly loss, prompting the struggling Chinese electric-vehicle maker to pursue thousands of job cuts by the end of this month and the spinoff of some businesses by year-end."

5. A snapshot of public views on fracking

An NBC News/WSJ poll shows majority support among Democratic voters for a ban on fracking — but it's far from a slam dunk.

Why it matters: Multiple Democrats including Sens. Elizabeth Warren and Bernie Sanders have endorsed a nationwide ban. Frontrunner Joe Biden has not.

Of note: A national ban can't happen without Congress (which is highly unlikely).

What they found: The poll released Sunday found 58% support among 506 Democratic primary voters, in a sample with a margin of error of ±4.4%.

But, but, but: A wider sample of 900 voters from both parties showed 45% support, with a MOE of ±3.3%.

Go deeper: Imagining a fracking ban (Axios Generate, Sept. 12)

Ben GemanAmy Harder