May 10, 2017

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning and welcome back to Generate! Needless to say a lot of important stuff has happened in D.C. since the last newsletter. Please check out the Axios stream for informative coverage of the Comey firing and its aftermath and all other news. Ok, let's dive in . . .

Al Gore chats with Trump about Paris climate deal

Exclusive: Former Vice President Al Gore personally urged President Donald Trump not to abandon the Paris climate accord in a phone conversation on Tuesday morning, Axios has learned.

Why it matters: The chat between Gore, the world's best-known climate activist, and Trump occurred as the divided administration nears a decision about whether to abandon the 2015 international pact that's aimed at preventing runaway global warming.

What Gore said: "Mr. Gore made the case for why the U.S. should stay in the agreement and meet our commitments," said a source close to the former VP, who has praised the Paris accord while calling for it to be strengthened over time.

I've got more on this in the Axios stream.

Oil price headwinds for OPEC

Crystal ball: The latest monthly Energy Information Administration forecast out yesterday has, once again, boosted estimates for U.S. oil production — EIA now predicts an average of 9.3 million barrels per day this year and nearly 10 million in 2018.

That's a slight uptick from last month's estimates and the latest in a string of upward revisions of their forecast.

OPEC's challenge: The EIA prediction brings me to this Bloomberg piece with an analysis from the big oil trading company Vitol Group, which looks at why OPEC and its allies will have a tough time boosting prices even if they extend their production-cutting deal as expected.

The bottom line, per Bloomberg: "Demand isn't expanding as much as expected, and U.S. shale output is growing faster than forecast, according to Vitol Group. That's increasing the burden on the world's biggest producers, who need to stick to their pledges to cut supply just to keep prices from falling, said Kho Hui Meng, the head of the company's Asian arm."

The high stakes of the ARPA-E fight

A note on the brewing fight between Congress and Trump over fiscal year 2018 funding for the Energy Department's Advanced Research Projects Agency-Energy (ARPA-E), which funds research into cutting-edge, breakthrough tech. The agency that Trump wants to end.

Making the case: A piece in the IEEE Spectrum offers the view of William Bonvillian, an MIT expert on ARPA-E, about the consequences for battery technologies that are key to utility-level storage and electric cars.

From their story, Bonvillian says:

  • No other federal agency comes close to ARPA-E in supporting high-risk, breakthrough energy research that enables U.S. companies to compete with the best storage technologies from other nations like China, Germany, Korea, and Brazil.
  • ARPA-E sits on a niche for breakthrough R&D that may affect whether or not those American batteries will be commercialized.
The effect of Trump’s Paris decision delay

Let's return to Paris and explore the ramifications of the White House announcement Tuesday that it's delaying a decision on the pact until after the May 26-27 G-7 summit in Italy.

Prime lobbying opportunity: The new timing ensures that foreign leaders who support the accord will have Trump's ear in Italy late this month.

Why it matters: As we wrote about here, backers of the accord want Trump to hear directly from heads of state because they're hoping Trump will alter his position, as he has done before. Recall that Trump went from a "withdraw" to "renegotiate" stance on NAFTA after direct lobbying from the heads of Mexico and Canada, and he ditched his claim on China's currency manipulation after meeting with President Xi Jinping.

Behind the scenes: My Axios colleague Jonathan Swan has a piece in the Axios stream about the reasons behind delaying the decision. Here's Swan...

The delay in Trump's decision-making has as much to with process as it does with the genuine disagreement between the Steve Bannon/Scott Pruitt camp (that is urging Trump to withdraw from the deal) and the Ivanka camp (that's inclined towards remaining).

  • As senior advisors to the President, Ivanka Trump and Jared Kushner have told associates that a big part of their job is making sure Trump has all the information he needs to make decisions.
  • That means showing him all the potential downsides of his actions. A White House official tells us Ivanka helped put in place a process with the Paris conversations to ensure the President hears from all sides and from people in both the public and private sectors.
More Paris, via Capitol Hill

Sen. Lisa Murkowski is one of the most important lawmakers when it comes to all things energy on Congress. But that doesn't mean the chairwoman of the Senate's Energy Committee has a strong opinion about whether to stay in the Paris climate accord — or if she does, the Alaska Republican is keeping it to herself.

On the record: "I have been somewhat agnostic on whether you stay in or stay out," Murkowski told reporters in the Capitol on Tuesday afternoon. "There are considerations on both sides and I think that is what they are wrestling with right now."

Pressed on whether she has a recommendation, Murkowski added:

  • "I think that it is important that we continue to ensure that we have a role in the discussions as to how we face our economic and our environmental issues. How this administration best feels that they can advance that — that's what they are wrestling with right now."

One level deeper: Murkowski isn't alone in avoiding a strong stance on the topic as many lawmakers apparently see little upside making a public case. At the House, recent competing GOP sign-on letters to the Trump administration received very few signatures.

To be sure:

But that said, in the Senate a number of committee chairs have weighed in. Environment and Public Works chairman John Barrasso is a strong advocate of bailing on Paris. But Foreign Relations chairman Bob Corker and Armed Services chairman John McCain have argued in favor of staying.

On my screen: Tesla, Exxon, gas taxes and more

Earnings: The Italian oil giant Eni reported a rise in first quarter profit, becoming the latest in a string of major oil-and-gas producers to post strong quarterly results, Reuters reports.

Solar: Tesla CEO Elon Musk announced Wednesday morning that Tesla will begin taking orders for its solar roof tiles today.

  • "Solar roof can be ordered for almost any country. Deployment this year in the US and overseas next year," Musk said on Twitter.
  • CNBC has more here.

Lobbying: Exxon has added Williams & Jensen to its stable of outside lobbyists, a newly posted disclosure filing shows.

Congress: The Senate could send a measure to Trump's desk as soon as today that kills an Obama-era Interior Department rule to stem emissions of the potent greenhouse gas methane from oil-and-gas sites on public lands.

  • A close vote is expected but, "I think that we'll be ok and we'll get it passed," GOP Sen. John Hoeven told reporters in the Capitol.
  • Quick take: The move to unwind Interior's rule shows that while the U.S. international climate role is a question mark, Trump and Republicans are aggressively moving to upend Obama's domestic emissions policies.

Taxes: Via The Wall Street Journal, South Carolina is poised to raise its gasoline tax for the first time in 30 years, joining Tennessee and other GOP-led states in touching what used to be seen as a third rail in politics.

Obama:

The former president spoke about climate change and agriculture in Italy on Tuesday. The New York Times has a write-up

here

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Ben GemanAmy Harder

Thanks for reading! Tips and feedback welcome at ben@axios.com.