Axios Generate

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January 02, 2020

Welcome to 2020! Hope you had a nice holiday. Today's Smart Brevity count: 1,107 words, ~ 4 minutes.

And exactly 25 years ago, TLC was #1 on Billboard's R&B charts (and would soon top the Hot 100) with this slice of brilliance...

1 big thing: A pivotal and hazy 2020 for EVs

Animated GIF of two sides of a car merging

Illustration: Sarah Grillo/Axios

2020 is shaping up as something of a wildcard for electric vehicle markets as automakers face an uncertain policy landscape.

What's next: The number of models available in the U.S. and worldwide is surging, per BloombergNEF.

  • In North America, 104 electric offerings will be on sale by the fourth quarter, up from 79 in Q4 of 2019. New models available in the U.S. will include the Tesla Model Y, the Ford Mustang Mach-E, the Rivian R1T and the VW I.D. Crozz.
  • In the EU, the number will jump to 165 by the end of next year, compared to 119 in Q4 2019, while China will see a bump too, per BloombergNEF's projection that includes full electrics and plug-in hybrids.

Yes, but: Global sales have been slowing in recent months and more headwinds loom. In the U.S., the biggest wildcard is the 2020 election.

  • Democratic hopefuls want to bolster EVs with tough vehicle emissions rules, ambitious sales targets, and spending on charging infrastructure.
  • President Trump's re-election would be less bullish for EVs. The administration is weakening Obama-era climate rules, and opposes legislation to expand consumer tax credits for EVs.
  • Tesla and GM have already hit the per-manufacturer cap.

The European market looks like a different story, thanks in part to new EU carbon emissions rules for vehicles that take effect this year.

  • BloombergNEF sees European sales growing 32% this year, while The Guardian reports that 2020 "will see the launch of flagship electric models with familiar names, such as the Mini, the Vauxhall Corsa and the Fiat 500."

China, the world's largest EV market, slashed subsidies midway through last year, which has badly crimped worldwide sales levels.

The big picture: Data compiled by InsideEVs show that 2019 sales ran ahead of 2018 for the first half of the year, but then started dropping a lot.

  • They see worldwide sales finishing 2019 at around 2.15 million, just barely ahead of 2018.
  • A Sanford C. Bernstein note last month showed October sales down 31% year-over-year, owing largely to China's policy change, and sales were also sharply lower on a rolling three-month basis.
  • U.S. sales have also slowed, per Bernstein and S&P Global Platts.

The bottom line: "While many are hopeful that EV sales could be poised to rebound in 2020, significant costs associated with buying an EV and limited infrastructure remain a barrier to entry for many," S&P Global Platts president Martin Fraenkel said in a recent note.

2. Looking backwards and looking ahead

EIA actual and projected data; Chart: Andrew Witherspoon/Axios
EIA actual and projected data; Chart: Andrew Witherspoon/Axios

I'm sure your inbox is filled to the brim with retrospectives on the 2010s, but wait! There's a good one you may have missed that won't take a decade to read.

The big picture: During our newsletter hiatus, Axios' Amy Harder and Andrew Witherspoon offered a smart, graphics-rich look at how the evolution of U.S. energy systems blew up expectations.

Why it matters: They note that it underscores how change can happen rapidly and unexpectedly. The chart above, based on Energy Information Administration data, shows just one of those cases.

Go deeper: Check out the full piece here, and look for Amy's Harder Line column on the year ahead on Monday.

3. A hot year and a hot decade

It's almost time to officially conclude that 2019 was the second-hottest year in temperature records that date back to the 1800s.

Driving the news: "It appears nearly certain (>99% likelihood) that 2019 will conclude as the second-warmest year since measurements began in 1850, behind only the exceptional warmth of 2016," the research group Berkeley Earth confirmed a few days ago.

Why it matters: The comment in their analysis of November's temperatures is the latest evidence of the long-term warming trend that stems from human-induced greenhouse gas emissions.

  • It's consistent with other analyses showing that it's likely 2019 will end up as the second-warmest. NASA is slated to announce a similar finding later this month.

The big picture: "With the decade coming to a close, [it's] clear that the period from 2010–2019 was the warmest decade the world has seen since records began in the mid-18o0s. It was around 0.19C warmer than the 2000s, and 1.1C warmer than the preindustrial period," Berkeley Earth's Zeke Hausfather tweeted on New Year's Eve.

Bonus: A split screen on climate

The latest Energy 360° podcast from the Center for Strategic and International Studies is a nice look at 2019 and what's in store this year in energy and climate.

The big picture: CSIS' Sarah Ladislaw points out 2019 saw a surge in huge, youth-led protests on climate change, yet little by way of major new national commitments at UN meetings in September and last month.

Why it matters: She sees a "fundamental question" in 2020, when nations are slated to make new emissions-cutting pledges under the Paris climate agreement.

"Will that dynamic change? Or are we going to just continue to see additional and stronger protests with not a lot of concrete change in terms of the level of ambition we’re seeing delivered.”
— Sarah Ladislaw

4. Following up: The Permian's gas-flaring problem

Data: Federal Reserve Bank of Dallas; Note: Survey responses collected Dec. 11-19. Respondents were able to choose more than one answer; Chart: Axios Visuals
Data: Federal Reserve Bank of Dallas; Note: Survey responses collected Dec. 11-19. Respondents were able to choose more than one answer; Chart: Axios Visuals

A new-ish Dallas Fed report helps explain why oil-and-gas producers in the prolific Permian Basin are flaring — or burning — so much natural gas.

What they're saying: Check out the chart above from their survey of executives with companies active in the region. The absence of pipeline infrastructure to move gas that's a byproduct of oil wells is the most commonly cited reason in the report released a few days ago.

Why it matters: Flaring is on the rise, which creates emissions as companies burn up natural gas at the geographical heart of the nation's oil boom.

  • Venting, or direct release of gas, is a related problem due to emissions of the potent planet-warming gas methane.

What's happening: EIA data last month showed that a record amount of gas was released or burned at oil-and-gas well sites in 2018.

  • The consultancy Rystad Energy, in a recent analysis, found that venting and flaring in the Permian, which spans parts of Texas and New Mexico, hit an all-time high in the third quarter of 2019.

Go deeper: A not-so-good milestone for natural gas

5. Catch up fast: crude oil, Australia, solar

Oil markets: Via Reuters, "Oil prices steadied after early gains on Thursday as signs of improving trade relations between the United States and China which eased demand concerns and rising tensions in the Middle East provided support."

Wildfires: "Australian authorities are racing to evacuate thousands of people stranded in the states of New South Wales and Victoria before high temperatures and strong winds return — with the military helping people escape the deadly wildfires by air and sea," Axios' Rebecca Falconer reports.

  • Threat level: Per NYT, "Australia is normally hot and dry in the summer, but climate change, which brings longer and more frequent periods of extreme heat, worsens these conditions and makes vegetation drier and more likely to burn."

Solar power: "Federal officials plan to approve a massive solar farm with energy storage in the desert outside Las Vegas, paving the way for a $1-billion project that will provide electricity to Nevada residents served by billionaire Warren Buffett’s NV Energy," L.A. Times reports.