January 26, 2024
🍺 Yes. Friday. This edition sprints toward the weekend with a Smart Brevity count of 956 words, 3.5 minutes.
🎹 Exactly 20 years ago, OutKast ruled the Billboard Hot 100 with an all-timer that's today's intro tune...
1 big thing: The stakes of Biden's LNG "pause"
The White House just launched a new salvo in an increasingly intense battle over how much U.S. liquefied natural gas exports will rise in the years ahead, Ben writes.
Catch up fast: Officials on Friday announced an indefinite "pause" on approving new exports to major consuming nations.
- They're reevaluating how permit reviews weigh climate change, market needs, and more. Check out Andrew's coverage.
🗳️ It highlights the 2024 election stakes. GOP frontrunner Donald Trump is running on a pro-fossil platform, so there's reason to think he'd resume approvals.
- That said, he's unpredictable. Some industrial gas users oppose shipping the fuel abroad. So the MAGA lens appears cloudy. A campaign spokesman did not respond to an inquiry.
- President Biden's statement signals a political pitch to youthful, climate-focused voters, noting "we will heed the calls" of young people and frontline communities.
🌏 COP28 looms large. White House climate adviser Ali Zaidi, on a call with reporters, emphasized that the latest UN climate summit endorsed transitioning away from fossil fuels.
📷 But the White House also says its lens is wide. It cited the need to understand long-term supply dynamics, and how new export plans affect U.S. consumer costs, among other considerations.
- This is a highly organized lobbying and public relations war on both sides. Remember the "goes-to-11" battle over the Keystone pipeline? We're at that level.
🧠 Don't forget: This immediate fight isn't about immediate cargoes.
- The U.S. recently became the world's largest LNG exporter, and shipments will keep rising for years, thanks to projects already under construction.
- Instead, it's about plans on the drawing boards that will — or won't — come to fruition down the road.
🧪 It's both wonky and political. On the wonky side, officials will weigh an avalanche of competing analyses of LNG's climate effects.
- Backers cite its ability to displace CO2-heavy coal, especially in Asian markets.
- Yet opponents note Paris Agreement targets mean moving away from all fossil fuels and highlight release of the strong warming agent methane in the gas production and supply chain.
- Elsewhere, look for conflicting takes on long-term needs in Europe — a growing U.S. market — amid the loss of Russian supplies.
💬 What they're saying: The American Petroleum Institute called the pause a "broken promise" to U.S. allies.
- But Energy Secretary Jennifer Granholm told reporters it won't affect U.S. ability to supply partners in Europe and Asia, noting it doesn't apply to already authorized exports.
The bottom line: For now at least, Biden is siding with climate hawks inside and outside the administration.
2. Charted: The rise of U.S. LNG
3. Catch up fast on oil and gas: Demand and prices
📈 Global natural gas demand is slated to rise 2.5% in 2024, well above last year's modest 0.5% rise, per new International Energy Agency estimates, Ben writes.
- The big picture: Countries in the Asia Pacific region, Middle East and Africa will drive the uptick. IEA also notes that a return to average winter conditions after a mild 2023 will support Northern Hemisphere demand.
- Threat level: While the market rebalanced last year after 2022's supply and price shocks, IEA's new report warns that geopolitical friction, shipping constraints and more could "renew market tensions and fuel price volatility."
💵 Oil prices climbed to their highest levels of 2024 yesterday before slipping just slightly this morning, as U.S. economic growth data and other forces are providing tailwinds.
- What they're saying: Analysts also pointed to physical risks in the Middle East. "We are finally seeing energy markets wake up to the distinct possibility that these supply chain disruptions will rumble on for months yet," Scope Markets' Joshua Mahony said via Reuters.
4. 🏃🏽♀️ Catch up fast on biz and tech: hydrogen, aviation, EVs, offshore wind
🏭 GM and Honda have launched production of hydrogen fuel cells in Michigan via a joint venture, Ben writes.
- Why it matters: While EVs are lapping hydrogen in the consumer car market, the companies see opportunities in big trucks, generators, construction equipment and other applications.
- The intrigue: That said, Honda is moving ahead with a hydrogen-powered version of its CR-V.
- Go deeper: CNBC has more on the GM-Honda venture.
🛫 LanzaJet, the sustainable aviation fuel maker spun out of LanzaTech, officially unveiled a $200 million plant in rural Soperton, Georgia, this week that will turn ethanol into sustainable aviation fuel, our Axios Pro: Climate Deals colleagues report.
🚗 TechCrunch reports: "Porsche took the wraps off Thursday of the Macan EV, a long-delayed project that will test whether consumers still have the drive to spring for an electric vehicle that costs more than $78,000."
🌊 Via Reuters, "New Jersey's utility regulator on Wednesday approved two offshore wind power projects with a combined capacity of 3,742-megawatts (MW) and whose backers include Invenergy and TotalEnergies."
5. 🧮 One wild stat: 50 million miles+
That's the estimated amount of power transmission and distribution lines that must be added or refurbished — by 2040 —for nations to meet their climate commitments, Ben writes.
The big picture: The tally comes via International Energy Agency analysis that warns of lagging investments in infrastructure to integrate zero-carbon power sources onto grids.
6. 💬 Quote of the day: Tesla edition
"We were dead wrong expecting [Elon] Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand ... instead we got a high level Tesla long term view with another train wreck conference call."— Wedbush Securities' Dan Ives sizing up what was missing on Tesla's Q4 earnings call
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🙏 Thanks to Chris Speckhard and Javier E. David for edits to today's edition, along with the talented Axios Visuals team.