September 21, 2017

Good morning and welcome back to Generate!

Two quick notes before we get started. The first is that Axios health care reporters are putting out vital news and analysis every day on the latest GOP health care bill. So please keep an eye on the Axios stream, and you can sign up for our free morning health care newsletter here.

The second: Happy birthday to the late and brilliant poet and songwriter Leonard Cohen, who would have been 83 today. RIP. This is beautiful, and for that matter, so is this.

Huge in solar tomorrow: trade verdict

My Axios colleague Amy Harder passes along this primer on the biggest storyline in the solar world...

The solar industry is on edge ahead of tomorrow's vote by the International Trade Commission on whether it finds domestic solar manufacturers have been injured by cheap foreign imports. If it does — and most observers expect it will — President Trump makes the final decision on whether to impose tariffs or other trade remedies.

Driving the news: A Greentech Media article published Wednesday is making waves because it backs up the narrative asserted by the two bankrupt manufacturers, Suniva and SolarWorld: that tariffs would help revive the domestic solar manufacturing sector. The story quotes foreign solar companies weighing opening U.S. facilities as a way to hedge against potential tariffs Trump might impose.

Quoted: "If [new tariffs] come into effect, I think the clear direction that will emerge from this is that manufacturing in the U.S. will be incentivized, or supported by direct or indirect means," Gagan Pal, chief marketing officer of fast-growing Indian photovoltaic manufacturer Adani Solar, told Greentech Media.

Why it matters: This storyline feeds straight into Trump's "America First" manufacturing mantra, fueling the prediction Trump will likely issue tariffs. It also provides a competing narrative to the louder and larger opposition, led by the Solar Energy Industries Association, which has argued tariffs would raise the cost of solar panels and hurt other jobs in the sector.

The meaning of Lindsey Graham’s carbon announcement

Let's spend a little more time with news about GOP Sen. Lindsey Graham that's not about his authorship of the latest GOP move to jettison the Affordable Care Act. Instead it's Graham's announcement, in remarks to a climate change event at Yale Tuesday, that he's working with Democratic Sen. Sheldon Whitehouse on legislation to "put a price on carbon." He didn't get into details, but Whitehouse has for years been pushing a carbon tax.

The big question: Whether Graham's announcement can lead to other sitting GOP senators coming out in support of pricing carbon in some fashion beyond the tiny circle that already has in years past. In the Senate that's...

  • Graham himself, who worked with then-Sens. John Kerry and Joe Lieberman on a cap-and-trade plan in 2010 but ditched the talks, dooming any slim chance of passage.
  • John McCain, who co-sponsored cap-and-trade bills in the 2000s.
  • Susan Collins, who offered a carbon-capping bill with Democrat Maria Cantwell in late 2009.
  • Jeff Flake (sort of), who co-sponsored a carbon tax bill in 2009 as a House member, though he later walked away from the idea, suggesting it had been a tactical move to counter cap-and-trade legislation he opposed.

Why you'll hear about this again: The ecosystem of conservative and free-market groups trying to work with Republicans is larger and better organized than it used to be. A number of groups have emerged in recent times, such as the Niskanen Center and the Alliance for Market Solutions.

  • The highest profile has been the Climate Leadership Council, which launched earlier this year and is led by GOP elder statesmen including James Baker and Hank Paulson. The group is pushing a plan that, among other things, would create a carbon tax with the revenues returned to the public via dividend payments, while scuttling emissions regulations that the group says are no longer needed with the tax in place.
  • Indeed Graham's videotaped remarks to the Yale event were at a session where Baker was the speaker. Founding members of the group include oil-and-gas giants Exxon, Shell, BP and Total, as well other large corporations.

Reality check: I should have cleared the decks already by noting by there's probably zero chance of a carbon tax moving anytime in the next few years — especially under a GOP administration that's dismantling the regulations that may have helped to force tax-curious lawmakers to the table.

Yes, but: Graham's announcement shows the idea has a faint pulse. The question now is whether it gets any stronger. At an American Enterprise Institute event in July, Whitehouse said he and Democratic co-sponsor Brian Schatz have had discussions with six to 10 GOP lawmakers (scroll to the 24-minute mark of the video here).

  • Ted Halstead, the CLC's executive director, said there's a larger appetite among Capitol Hill Republicans to his group's idea than has been made public. He tells Axios: "Behind closed doors there's a lot of interest in what we are proposing."

Puerto Rico has no electricity after Maria

Emergency: Hurricane Maria has left Puerto Rico completely without electricity. Gov. Ricardo Rosselló tells CNN that fully restoring power could take months.

  • From their piece: "Rosselló said officials think some power stations are not badly damaged, but the distribution system is ruined. If transmission lines are in better shape than thought, power outages might be fixed sooner, the governor said."

Useful: NBC provides info and links here to some of the organizations helping with relief efforts and accepting donations.

Electricity notes: hurricanes and the "resilience" conversation

Sunshine state stats: The Energy Information Administration has posted an interesting report about electricity outages and restoration in Florida after Hurricane Irma pummeled the state, knocking out power to roughly two-thirds of the state's customers.

One thing it reveals is how much more quickly electricity was restored compared with Hurricane Wilma 12 years earlier (see the chart above). Via EIA:

  • "Since 2005, Florida Power & Light and other utilities in the state have made significant investments to improve their hurricane preparedness. These utilities have upgraded electric infrastructure, including replacing wooden utility poles with concrete poles. Utilities have also deployed smart grid technologies, which provide more timely and more accurate information about outages and can help utilities better target restoration efforts."

Go deeper: The new episode of the Grid Geeks podcast is a very lucid and helpful discussion grid resilience and reliability, and the differences between them.

An obscure document that matters

Behind the scenes: The White House Office of Information and Regulatory Affairs has been posting records of outside parties coming in to meet with aides about EPA's plan to jettison the Clean Power Plan (CPP), which was a major Obama-era rule to cut carbon emissions from power plants.

What's happening: A newly posted record about a meeting requested by a power industry group called the Coalition for Innovative Climate Solutions highlights an important dynamic in the CPP fight. Here's a key line from the paper they gave to administration aides (emphasis added):

  • "Repealing the rule without promulgating a replacement would create a regulatory vacuum, leading to uncertainty about the requirements that may be imposed in future rulemakings and, potentially, exposing companies to increased risk of citizen suits."
  • The wonky paper from the group, which includes companies with substantial coal-fired generation, is an example of the tension surrounding EPA's plan. Even industries that didn't like the Obama-era rules and that want weaker regulation are worried about the prospect that EPA might just scuttle the CPP without creating a new regime.

Go deeper: A recent story in Politico goes into detail on this topic, noting that the Trump administration is weighing plans to offer a replacement rule, a step that would "would run afoul of demands from some conservative activists, who have pressured EPA Administrator Scott Pruitt to reject the idea that climate change is a problem requiring federal action."

On my screen: EVs, oil, lobbying, climate change

Electric vehicles: Two items to pass along about the global EV market.

Via Reuters, the Chinese automaker BYD offered a prediction about how quickly China, the world's largest auto market, might seek to transition away from traditional fossil-fuel powered cars. From their item: "All vehicles in the country will be 'electrified' by 2030, which could range from full electric cars to mild hybrids, BYD Chairman Wang Chuanfu said on Thursday."

Bloomberg reports: "The only electric-car maker in India says the business case for the clean technology is starting to make sense — and it won't require government subsidies to take off in a big way."

Oil production agreement: On our radar tomorrow is a meeting of officials from OPEC, Russia and other countries in Vienna to review the production limiting agreement. The big question is whether signs will emerge if they will extend the output cuts beyond the first quarter of 2018, when the production agreement is currently scheduled to sunset.

Lobbying: A few new energy-related filings have surfaced.

  • The refiner Valero Energy has tapped Ernst & Young LLP to lobby on tax issues.
  • The Kentucky utility LG&E and KU Energy has retained Akin Gump to lobby on energy legislation.
  • The National Stripper Well Association brought on The Ferguson Group to lobby on federal funding.

Global warming: The Wall Street Journal takes stock of lawsuits filed by the cities of San Francisco and Oakland against five huge oil companies — Exxon, BP, Shell, Chevron and ConocoPhillips — in state court. "The suits...are among the first in which plaintiffs are seeking to force companies to pay for infrastructure to protect coastal cities from potential damages caused by rising sea levels," the paper reports.

More on climate: The New York Times explores how much progress states including California and New York can make toward meeting the U.S. emissions pledge under the Paris climate agreement.