Good morning and welcome back!
D.C. readers: There are 2 cool Axios events coming up tomorrow.
1. AI: Join Axios managing editor Kim Hart at 8am for a rescheduled breakfast chat about how AI will affect our economy, jobs and lives. RSVP here.
2. Climate: Join Axios science editor Andrew Freedman at 6pm for a conversation on "Finding Hope and Courage Amidst the Climate Crisis." RSVP here.
Onto music. This month marks 51 years since Leonard Cohen released "Songs of Leonard Cohen," a fine reason to give the late poet today's intro tune...
1 big thing: Oil's inscrutable crystal ball
The Energy Information Administration's new monthly outlook cuts a lot — $11-per-barrel! — from their 2019 average oil price forecast. They now see Brent crude averaging $61 and WTI averaging $54.
Why it matters: Analysts are often playing catch up. And, the big revision is a sign of how quickly the oil market can shift, as OPEC and Russia respond to the rise of U.S. shale and analysts weigh signs of softening global demand and other forces.
- It also signals that EIA, for now, does not see the new OPEC+ production-cutting deal as putting much upward pressure on prices.
What they're saying: "Market uncertainty during November appears to have contributed to levels of price volatility for Brent and West Texas Intermediate crude oils not seen in several years," EIA administrator Linda Capuano said in a statement.
- EIA says the recent big declines in Brent prices stem from record output among the world's largest producers and concerns about weaker demand.
The latest: Crude prices are climbing Wednesday as the market responds to signs of declining inventories.
- "The American Petroleum Institute, an industry group, reported late Tuesday that U.S. stockpiles of crude oil had reduced by 10.2 million barrels last week," the Wall Street Journal reports.
Go deeper: EIA cuts Brent, WTI 2019 forecasts nearly $11/b amid supply glut (S&P Global Platts)
2. Energy R&D pledges are falling short
A new report finds that a key multilateral initiative to scale-up clean energy R&D and demonstration funding, called Mission Innovation (MI), isn't on pace to hit its targets.
What's happening: The Information Technology & Innovation Foundation takes the pulse of the program launched in late 2015, in which a suite of nations, including the U.S., pledged to double the clean energy R&D over 5 years to jointly reach roughly $30 billion.
Where it stands: "Early signs indicate that MI is spurring greater investment in energy R&D, though at the present rate, public RD&D among MI nations will increase by about 50 percent in 5 years, a far cry from doubling," ITIF senior policy analyst Colin Cunliff writes.
- The chart above compares the "baseline" funding from select MI nations and their progress toward the goal of doubling investment.
Why it matters: ITIF's tally comes on the heels of major scientific reports about the dangers of climate change, and fresh evidence that the global emissions trajectory is nowhere near what's needed to hold warming even relatively in check.
- Global CO2 emissions rose in 2017 and this year after a 3-year plateau.
Threat level: While deployment of existing zero-carbon options is expanding rapidly worldwide, Cunliff argues that much more robust investment in technology is badly needed:
ICYMI: The major UN climate science report in October found that to hold global temperature rise to 1.5ºC above pre-industrial levels, net human-caused CO2 emissions must decline by 45% by 2030 compared to 2010 levels, and reach "net zero" by roughly mid-century.
What's next: Cunliff says countries should use the ongoing UN climate talks in Poland to reaffirm their commitment to the 2021 doubling goal.
- He also calls for greater MI focus on economic sectors that are tough to decarbonize, including cement and steel production and transportation.
3. Sizing up Joe Manchin's energy committee rise
Senate Democrats made it official yesterday, elevating West Virginia's Joe Manchin to ranking member of the Energy and Natural Resources Committee.
Why it matters: The decision came over the opposition of some progressive groups, who are upset with Manchin's support for fossil fuel development and political contributions from coal and oil companies.
Groups in the "keep-it-in-the-ground wing" of the environmental movement bashed the move.
The other side: Manchin says...
My thought bubble: I'll return to a point I made recently — this is something of a tempest in a teapot. If Democrats are ever in a position to move a sweeping climate and energy bill, which would likely require controlling both chambers plus the White House, Manchin's role won't be decisive either way.
- Other committees would craft large parts of this hypothetical bill.
- Energy provisions Manchin opposed could be added on the floor.
Of note: And he might not even be chairman after the next election period. A more senior member who passed on chairing the committee could decide it's a better gig in the majority.
4. Voices from Poland: Tom Steyer and the Saudis
Axios' Amy Harder caught up with billionaire Democratic activist and donor Tom Steyer at the big UN climate talks in Katowice, Poland.
Driving the news: Steyer, who is eyeing a presidential bid, criticized the absence of other Democratic officials at the event. “There is a dearth of American leadership here,” he tells Amy.
- He called out 2 of his progressive colleagues, California Gov. Jerry Brown and Washington Gov. Jay Inslee, for not attending. They both came last year.
- Steyer speculates that for them, “it just wasn’t a high enough priority.” Steyer and Inslee are flirting with 2020 White House runs by the way.
The big picture: Steyer, who spent more than $120 million supporting Democratic issues and candidates in the midterm elections, said this conference is essential to ensure countries keep on track with the 2015 Paris climate deal, which President Trump plans to abandon.
The other side: Both Inslee and Brown sent senior officials working for them, including California Air Resources Board chairwoman Mary Nichols, Brown's senior adviser Ken Alex, and Inslee senior adviser Reed Schuler.
Separately, Carbon Brief posted an extensive interview this morning with Saudi Arabia's top negotiator at the UN climate talks, Ayman Shashly.
Why it matters: OPEC's dominant producer is in the spotlight there after it joined with the U.S., Russia and Kuwait in preventing the conference from "welcoming" the recent UN climate science report. Shashly tells Carbon Brief:
The big picture: The UN climate science report, which was extensively peer-reviewed, lays out the damages of allowing global temperatures to rise and the massive emissions cuts needed to hold warming in check.
5. EV notes: Tesla pickup and Daimler batteries
A couple of noteworthy developments in the electric vehicle space...
Batteries: Auto giant Daimler said yesterday that it's ordering $23 billion worth of battery cells by 2030 as it prepares to substantially increase its electrified offerings.
- "We plan a total of 130 electrified variants at Mercedes-Benz Cars by 2022. In addition, we will have electric vans, buses and trucks," the company said.
- Per Reuters, "Stuttgart-based Daimler needs battery cells as it builds a global network of battery assembly plants in Kamenz, Untertuerkheim and Sindelfingen in Germany, as well as in Beijing, Bangkok, and Tuscaloosa, United States."
Tesla: The electric automaker might reveal a pickup truck design in the not-too-distant future. "I’m dying to make a pickup truck so bad … we might have a prototype to unveil next year," CEO Elon Musk said on Twitter yesterday.
- Why it matters: Pickups are a massive market in the U.S. TechCrunch notes that Musk has been publicly talking about the prospect of a Tesla pickup since April of 2017.
- "At the time, Musk tweeted that a pickup truck would be unveiled in 18 to 24 months. That timeline is in sync Musk’s latest tweet," they report.
6. Rapid warming brings huge Arctic changes
Axios' Andrew Freedman reports ... In yet another disconnect between the Trump administration's science findings and its climate policies, a new report finds that rapid Arctic climate change has pushed the region into "uncharted territory," with sweeping changes that are transforming the vast area.
Why it matters: The Arctic contains some of the most productive fisheries in the world, and acts as the Northern Hemisphere's refrigerator, supplying most of the frigid air that invades the U.S., Europe and Asia during winter.
- As the report lays out, some scientists have shown that the rapidly warming Arctic is altering weather patterns in the mid-latitudes, contributing to deadly extreme events.
Details: Known as the Arctic Report Card, it's a peer-reviewed document produced by dozens of researchers. NOAA oversaw the research and the report's release at the annual meeting of the American Geophysical Union in Washington.
What they found: The team finds the Arctic continues to warm at about twice the rate of the rest of the globe, resulting in less snow and ice to reflect incoming sunlight.
- The annual average air temperature across the Arctic from October 2017 through September 2018 was the 2nd warmest such period on record, just behind the same period in 2015–2016.
- All 5 of the hottest years on record in the Arctic have come since 2014. (Records extend back to 1900.)
7. Prepping the grid for extreme weather
Michael Storch, president and CEO of Enel X North America, pens an Expert Voices piece for Axios ... With extreme weather here to stay, from recent heat waves to unseasonable Thanksgiving cold snaps, drastic temperature swings will continue to wreak havoc on the antiquated electricity grid in the U.S.
Why it matters: In 2017 alone, power outages affected more than 36 million Americans — more than double the 17.9 million who were affected in 2016. Blackouts of all magnitudes have been estimated to cost the U.S. economy between $104 billion and $164 billion per year.
Modernizing the grid will require a holistic approach...
1. Generation: While fossil-fuel plants need to be large and central, renewable generation is more flexible and its infrastructure can be placed almost anywhere — from solar panels on rooftops to wind farms on open pastures.
- Smart infrastructure placement can drive generation into the grid where it’s needed most, lessening stress on large and often outdated grids.
2. Storage: Batteries can store excess energy that renewables produce when demand is low and then come online when demand spikes, boosting the reliability of the energy supply and alleviating disruptions.
- To maximize efficiency, new utility-scale generation projects should be paired with storage. While cost has long been the major hurdle for energy storage adoption, lithium-ion battery prices have declined nearly 80% since 2010.
- Progressive states like Massachusetts are offering additional incentives for customers to pair batteries with onsite solar.
3. Consumption: In the same way cellphone customers monitor data usage to stay within plan limits, energy consumers are being made more aware via digital engagement tools throughout the grid.