Apr 23, 2020

Axios Generate

Good morning. Today's Smart Brevity count: 1,362 words, 5 minutes.

🎵 And we're a few days past the 20th anniversary of the album "Figure 8" by the late Elliott Smith, whose achingly beautiful songwriting opens today's edition...

1 big thing: How the pandemic is changing power use
Data: Innowatts; Note: Data includes four power grids covering Northeast and Mid-Atlantic, Texas, Midwest and California; Chart: Axios Visuals

Storage units are in and car dealerships are out in our coronavirus-fueled shutdowns, Axios' Amy Harder reports.

Driving the news: Those inferences are from new power data tracked by analytics company Innowatts.

  • Since electricity consumption directly correlates to human activity, it offers a window into how businesses are faring as much of the country is locked down.

How it works: The chart above shows the percentage change between the first full work week of March to the last full work week of March.

  • The data looks at electricity consumption of various different establishments on four different power grids covering the Midwest, lower Northwest and mid-Atlantic, Texas and California.
  • (For the energy wonks among us, we're referring to MISO, PJM, ERCOT and CAISO.)

The intrigue: Many of the changes in electricity consumption are as you would expect — we're drinking more alcohol and hospitals are busy — but a few offer surprising upshots...

  • People really aren't in the mood to buy new cars, even with gasoline prices dirt cheap.
  • Storage unit use is apparently surging. One likely reason is college students leaving en masse around the country, according to an article in the Florida A&M University newspaper.
  • Hotel power use didn't drop as much as one might expect, though that's likely because they're being repurposed for first responders to stay in, according to Innowatts.

One level deeper: Innowatts also shared more granular data for a few of the establishment types, allowing us to compare different parts of the country. The most interesting inference there was with religious activities.

  • Midwesterners are going to church more than their Eastern Seaboard counterparts.
  • In the Midwest, electricity consumption at religious organizations in the last week of March was 75% compared to the earlier week. In the Northeast, that figure was just 37%.

Go deeper: 10 ways coronavirus is changing energy and climate change

2. The real importance of Biden's new climate push

Illustration: Sarah Grillo/Axios

Something Al Gore said in his new endorsement of Joe Biden gets to what really matters about Biden's recent emphasis on climate change — and it's not brewing changes to his platform that are in the works.

Driving the news: Here's part of Gore's interview with the Associated Press yesterday...

  • "He declined to get into the specifics of his policy discussions with Biden or his campaign aides, but he said Biden already has the right focus and has expressed a willingness to make climate action his 'top priority'" (emphasis added).
  • Similarly, yesterday's New York Times piece on Washington State Gov. Jay Inslee's endorsement of Biden says it came after "extensive private conversations in which Mr. Biden signaled he would make fighting climate change a central cause of his administration."

My thought bubble: If he wins, the way Biden deploys his political capital and administrative focus will matter more than how his policy platform might get stronger.

  • That's because Biden's existing plan is already more expansive than what's likely to clear Congress — even if Democrats somehow eke out a narrow Senate majority — or survive an increasingly conservative judiciary.
  • So a bigger thing to watch is how much — and how fast — Biden might muster the strength of his political, diplomatic and administrative apparatus to enact new policies.
  • It's related to what we've noted repeatedly in this newsletter: The much-discussed gap between Biden's climate plan and Bernie Sanders' platform shrinks when you consider what could get through Congress and what executive steps would survive court challenges.

Flashback: In 2009, the Obama administration and Senate Democrats prioritized sweeping health care legislation over trying to pass a big climate bill, which was already a steep climb.

  • Attempts to move emissions-capping legislation collapsed in the Senate in mid-2010 without even coming up for a vote.

Catch up fast: Biden is vowing tougher steps on climate, saying this week that he plans to bolster provisions on environmental justice, medium-term targets and clean energy investments.

  • Gore also said Biden "has asked him to 'engage in an ongoing dialogue' to 'strengthen his climate platform considerably.'"
  • And don't forget that Biden is also forming a joint task force on climate with Sanders.
3. Oil giant cuts dividend in sign of pandemic's bite

The multinational oil giant Equinor said Thursday that it's sharply cutting its first quarter dividend payouts by 67% compared to the prior quarter, citing "unprecedented market conditions and uncertainties."

Why it matters: Norway-based Equinor is the first oil major to cut dividends due to the pandemic-fueled collapse in oil prices and demand.

  • And they may not be the last. PVM Oil Associates analyst Tamas Varga tells CNBC that other oil-and-gas giants might follow suit.
  • “Clearly, suspending share buybacks and cutting capex (capital expenditure) does not do the trick anymore. In these turbulent times cash is king and the battle for remaining financially sound intensifies,” Varga said.

The big picture: Oil majors including Equinor have already been cutting spending and suspending share buybacks due to the crisis.

  • More broadly, oil companies and contractors across the board have been cutting back amid the price collapse.
  • Just this week the oilfield services giant Halliburton posted a $1 billion first-quarter loss and, per the Houston Chronicle, has laid off almost 1,200 people in the U.S. this month.

* * *

Speaking of oil, Bloomberg reports: "The U.S. is investigating whether traders with inside information on Russia’s negotiations with other oil producing nations made hundreds of millions of dollars from illegal wagers on crude price swings, according to two people with direct knowledge of the matter."

4. Google's plan to make data centers cleaner

Google is deploying a new tool in its ongoing quest to eventually run its energy-thirsty data centers on carbon-free power around the clock.

Driving the news: The company said in a blog post yesterday that it's beginning to deploy a "carbon-intelligent computing platform" at its very large data centers. The goal is to align energy use to the time period when the supply is cleanest.

  • It will track at what times renewables generation is the highest for the area where the data center is located.
  • Armed with that info, they will ensure that “non-urgent” tasks — like creating new filter features on Google Photos — occur when that renewables part of the energy mix is high.

How it works: The platform compares two next-day forecasts: how the hourly carbon intensity of the grid will change during the day, and what the hourly power needs of the data center will be.

  • "[W]e use the two forecasts to optimize hour-by-hour guidelines to align compute tasks with times of low-carbon electricity supply," the company said.
  • "Results from our pilot suggest that by shifting compute jobs we can increase the amount of lower-carbon energy we consume."

Why it matters: Data centers suck a lot of power (even though they're not the carbon bomb some think).

  • Google says it already buys enough to renewable power annually to match the company's total power use.
  • But that's not the same thing as never relying on fossil generation to run data centers.
  • As we wrote about here, their data centers are still pulling from grid mixes that contain varying amounts of fossil fuels.

The intrigue: Google hopes to not only align the tasks of specific data centers with the local grid mix, but "move flexible compute tasks between different data centers, so that more work is completed when and where doing so is more environmentally friendly," the post states.

5. Lucid Motors touts winter EV performance

Screenshot of Lucid Motors video showing prototype testing in winter conditions

Lucid Motors is out with a new video showing off the performance of prototypes of the upcoming Lucid Air luxury EV in cold, snowy and icy conditions in northern Minnesota.

What they're saying: "The extreme environment is ideal for validating vehicle dynamics as we test features like antilock braking, traction control, and stability control," a blog post alongside the video states.

Why it matters: Electric vehicle manufacturers are taking pains to show that their products perform as well or better than gasoline-powered cars in tough conditions.

  • Last month Ford released footage of the upcoming Mustang Mach-E moving around the Smithers Winter Test Center in Michigan.
  • Lucid's video also comes as EV makers are looking for ways to get noticed during the pandemic, because events like splashy auto show reveals are canceled and car buying is way down.

The big picture: The company, which is backed by $1 billion from Saudi Arabia's sovereign wealth fund, plans to begin initial production of the vehicle at a factory in Arizona late this year.

  • It has not yet revealed pricing specifics but it won't be cheap. The Arizona Republic reports that initial models will be over $100,000.