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1 big thing: The U.S. oil surge takes a breath

Daily U.S. crude oil production
Data:U.S. Energy Information Administration; Chart: Axios Visuals

Analysts see U.S. oil output growth slowing down this year, Ben writes.

Why it matters: The U.S. is by far the world's largest producer and a major exporter, which influences global market balances and prices.

The big picture: Production grew by roughly 1.8 million barrels per day over the past couple of years, Energy Department data shows.

  • But the consultancy Wood Mackenzie and DOE's independent stats arm both see companies collectively slowing their roll in 2024.
  • A Woodmac analysis sees 2024 output showing the effects of last year's inflationary pressures, consolidation, and declining rig activity.

How it works: "Offsetting base declines gets increasingly difficult at higher production levels, resulting in more production needed just to keep production flat," Woodmac's Utkarsh Gupta said in the note.

  • Your mileage may vary β€” Gupta notes that smaller private operators have cut rigs, but publicly traded companies will continue with growth plans.
  • However, public players remain focused on shareholder rewards.

What's next: Woodmac, looking at Lower 48 states onshore production, sees much lower growth this year and beyond.

  • That output surged by 900,000 barrels per day last year, defying expectations, but they see things slowing to 270,000 this year and 330,000 in 2025.
  • DOE's Energy Information Administration, looking at all U.S. output, doesn't see production regaining last December's latest all-time high of 13.3 mbd until February 2025.

What they're saying: "The ease in growth has gone, unless somebody comes up with a very dramatic new technical innovation," said Paul Horsnell, head of commodities research at Standard Chartered Bank, tells the Wall Street Journal, in a piece on the shale boom.

Reality check: Getting these look-aheads right is always dicey.

  • Shale producers can respond relatively quickly to big price swings in either direction, and a supply disruption in the Middle East can't be ruled out, to name just some potential wild cards.
  • For now, however, the market looks well supplied this year as global demand growth appears to be slowing.

The bottom line: American output remains around all-time highs, but 2024 could be something of a gap year when it comes to growth.

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2. πŸ‘€ Report: SEC scales back climate disclosure rule

Illustration: Megan Robinson/Axios

The Securities and Exchange Commission is backing down on the most contentious part of its upcoming corporate climate disclosure mandates, Reuters reports.

State of play: Looming final rules likely won't force U.S.-listed companies to reveal "scope 3" emissions in filings with the regulator, per Reuters.

  • That's wonk-speak for emissions from companies' supply chains and use of their products in the wider economy.
  • Think, for instance, of burning petroleum that oil companies produce.

Why it matters: Scope 3 is often the largest share of a company's total.

But tracking them is dicey, and companies have only indirect sway over how their output filters through the economy.

Behind the scenes: Major business and industry groups have been battling scope 3 requirements the SEC proposed in 2022.

What's next: Eventually, maybe soon, the final version of draft rules the SEC floated two years ago.

3. A double dose of Energy Dept. EV supply chain finance

Illustration: Natalie Peeples/Axios

The Energy Department's loan office plans to pour another $710 million into U.S. projects that feed the electric vehicle supply chain, Ben writes.

Why it matters: It's part of a wider surge in EV-related manufacturing fueled by federal finance and private-sector investment β€” even as automakers tap the brakes on EV growth plans.

  • Biden officials are keen to build up the domestic production base, alongside policies that spur consumers to ditch gasoline for electricity.

What's new: A conditional agreement will provide Korea's SK Siltron CSS $544 million to expand Michigan production of silicon carbide wafers for EV power electronics.

  • Another new preliminary deal would provide $166 million for American Battery Solutions to expand battery pack assembly facilities in Ohio and Michigan.

The bottom line: Team Biden hopes climate and industrial policy can sing in harmony.

4. Ex-Trump official backs Biden's climate law

Illustration: Annelise Capossela/Axios

Former President Donald Trump and many Republicans want to dismantle the Democrats' 2022 climate law, but Trump's former energy secretary is on the other side, E&E News reports.

The intrigue: Edison Electric Institute CEO Dan Brouillette said the powerful group of investor-owned utilities would defend it. From E&E News' report on his Wall Street presentation this week:

  • The IRA and the bipartisan infrastructure law passed early in Biden's term have been "important programs both for the industry and economic development around the country," he said.

Why it matters: EEI is a powerful lobbying group with contacts on both sides of the aisle.

Yes, but: Brouillette doesn't expect major changes to the law, even if Republicans regain the White House and control Capitol Hill, E&E reports.

5. Sign of times: Mercedes alters its EV horizon

Illustration: Natalie Peeples/Axios

Mercedes-Benz is the latest auto giant to publicly recalibrate its EV expectations, Ben writes.

Why it matters: While automakers are still expanding their lineups and manufacturing capacities, demand has not been as strong as envisioned.

  • Consumer concerns about charging access, price disparities with petro-powered models and other friction points remain, even as global sales rise.

What's new: Mercedes sees fully electric and plug-in hybrid models hitting 50% of its overall sales in the second half of this decade, it said in reporting quarterly earnings yesterday.

  • That had previously been its 2025 target.

Catch up quick: The luxury auto giant said in 2021 it would be "ready to go all electric" by 2030 "where market conditions allow," and it tells Axios that remains the goal.

The big picture: "The company plans to be in a position to cater to different customer needs, whether it's an all-electric drivetrain or an electrified combustion engine, until well into the 2030s," Mercedes said yesterday.

What's next: The Germany-based multinational sees electric and plug-in hybrids remaining 19%-21% of its sales this year.

Go deeper: The Verge has more.

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πŸ™ Thanks to Chris Speckhard and Javier E. David for edits to today's edition, along with the brilliant Axios Visuals team.