May 31, 2019

Axios Generate

Ben Geman

Happy Friday!

It's happening: Get a sneak peek of the exclusive “Axios on HBO” interview with Jared Kushner here, and tune in for the full interview at 6pm ET/PT on Sunday on HBO.

Smart Brevity count: 1,018 words/< 4 min. read.

We'll head for the weekend by recognizing another recent (May 26) birthday: Stevie Nicks, who beautifully sings us into today's edition...

1 big thing: The state of U.S. emissions
Expand chart

Data: Rhodium Group U.S. Climate Service analysis; Chart: Naema Ahmed/Axios

Economy-wide U.S. greenhouse gas emissions grew by between 1.5% to 2.5% in 2018, according to a just-published estimate from the Rhodium Group consultancy.

Why it matters: The data underscores how the U.S. is off-track for meeting its pledge under the Paris Climate Agreement, which is to cut these emissions by 26%–28% below 2005 levels by 2025.

The intrigue: While President Trump is pulling the U.S. out of the Paris agreement (more on that below), his Democratic challengers for 2020 would reverse that decision. But this new information highlights how difficult it would be to honor the goals.

The big picture: The recent increase leaves total U.S. emissions at 10.7% to 11.6% below 2005 levels in 2018, the consultancy estimates.

  • Their research note also shows that emissions ticked up in all the biggest categories: power (which has largely been declining for years), transportation (the biggest source), industry and buildings.

Read the note

2. Trump's trade fights hit crude prices

Oil prices are sinking Friday morning following Trump's tweet and White House announcement yesterday of new tariffs against Mexico and a smaller-than-expected drop in U.S. stockpiles.

Why it matters: Trade fights have the potential to soften demand. Battles with China were already putting downward pressure on oil, and the opening of another front in Trump's trade fights only adds to that sentiment.

  • Separately, there's growing sentiment that this move against Mexico could decimate the auto industry, Axios' Dion Rabouin reports.

Where it stands: Oil prices dropped to around $55.36 for WTI crude and $63.94 for Brent in trading this morning.

What they're saying: John Driscoll of JTD Energy Services tells Bloomberg that Trump “seems willing to fight trade wars now on multiple fronts.”

  • That's a "genuine worry for global growth and oil demand," the news service reports in summarizing his comments.

The big picture: Trade tensions and high U.S. production are putting oil prices on pace for their biggest monthly drop since November, Reuters reports.

3. Trump's Paris decision 2 years later

Illustration: Sarah Grillo/Axios

Saturday marks 2 years since Trump announced he would pull the U.S. out of the Paris Climate Agreement — and the chasm between scientific findings and political action is only growing, Axios' Andrew Freedman and Amy Harder report.

Why it matters: Science is now clearer than ever about the damage that climate change is causing. But many countries aren’t on track to meet their Paris emissions targets — and now there’s no U.S. federal leadership to push them to try harder.

Where it stands: Scientists tell Axios they now have...

  • More confidence in the observed amounts of global warming, showing the planet has been heating up faster than previously thought, from the poles to the depths of the seas.
  • Clear evidence that virtually all of the observed warming since 1950 is due to human activities.
  • Robust data showing that limiting global warming to the Paris targets of 1.5°C or 2°C would have significant, tangible benefits.

The big picture: Since Trump promised to withdraw from the deal...

What they're saying: Experts say Trump’s vow to withdraw didn't cause this progress, or lack thereof, but...

  • “What’s harder to assess is the degree to which it’s undermining political will in countries to push forward the policies needed to meet their targets,” according to Elliot Diringer, of the nonprofit Center for Climate and Energy Solutions.
  • “I’d say it’s a fair bet that over time continued U.S. inaction will have a corrosive effect on political will globally," he said.

Go deeper

4. Tesla shows more cards on China plan

Tesla said Friday that it's now taking pre-orders for Model 3s in China with a 286-mile range and announced pricing for the vehicles built there, according to published reports.

By the numbers: Per TechCrunch and others, the base price for the Chinese-built Model 3 will be around $47,500, which is "some 13 percent cheaper than its previous entry-level option."

  • In addition, Tesla announced via Twitter that it's now taking orders for Model 3s in Australia, Hong Kong, Japan, New Zealand, Ireland and Macau.

Why it matters: The announcements show how Tesla, which is struggling financially, is seeking to expand sales of the vehicle that's key to its future.

* * *

Speaking of electric vehicles, Axios' Steve LeVine reports that automakers are readying a slew of models in coming years that appeal to Americans' thirst for size.

  • What's next: Tesla and a crowd of other carmakers — Ford, VW, Volvo and a startup called Rivian — are on the verge of releasing a slew of SUVs, crossovers and electric pickup trucks.
  • Read more
5. Tech news: A very big storage project

Mitsubishi Hitachi Power Systems (MHPS) and Magnum Development yesterday announced plans for a big 1,000-megawatt energy storage project in Utah aimed at helping the dispatch of renewable power.

Why it matters: Expanding energy storage is key to bringing ever-larger amounts of renewable electricity onto power grids and enabling it to be dispatched in accordance with ebbs and flows of consumer demand.

Where it stands: It envisions using renewable hydrogen, compressed air energy storage, large scale flow batteries, and solid oxide fuel cells.

  • The proposed project would utilize salt caverns owned and controlled by Magnum.
  • "With five salt caverns already in operation for liquid fuels storage, Magnum is continuing to develop Compressed Air Energy Storage and renewable hydrogen storage options," the announcement states.

The intrigue: Via the Financial Times, which puts the project at $1 billion, "cost-effective large-scale storage using hydrogen or compressed air would be a significant breakthrough for the industry."

What they're saying: "This is the first large-scale, long-duration storage initiative announced in the U.S. in recent years," said Wood Mackenzie Power & Renewables analyst Ravi Manghani in this Greentech Media piece.

6. Catch up fast: litigation, ethanol, LNG

Occidental: "Billionaire Carl Icahn launched a legal attack on Occidental Petroleum on Thursday, arguing the oil company paid way too much money to acquire Anadarko Petroleum," CNN reports.

Ethanol: Via WSJ, "The Trump administration has decided to approve expanded use of ethanol fuel, a move that will help corn farmers hurt by the trade conflict with China — and that might pay political dividends for President Trump in farm-belt states such as Iowa."

Natural gas: "Bulgaria has agreed to buy U.S. natural gas for the first time, signing a deal for a delivery in the second quarter and another in the third, the country’s energy minister said on Friday," Reuters reports.

  • The announcement comes as U.S. officials tout the ability of LNG to provide alternatives to Russian gas in Europe.
Ben Geman