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Good morning and welcome back!

It's been a little while since I mentioned that Axios produces smart, concise, breezy newsletters on all kinds of topics — ranging from politics to science to the future of work. You can get any or all of them delivered straight to your inbox by signing up here. OK, onward . . .

Shale may give OPEC the holiday blues

New analysis: The commentary atop the International Energy Agency's monthly oil report published Thursday is headlined "Happy New Year?" — and the question mark there matters because IEA says it might not be joyous for OPEC.

Why? Rising U.S. shale production is seen as blunting the efforts by the cartel and Russia to tighten the market by extending their production-limiting agreement through the end of 2018, a decision made last month in Vienna.

  • "2018 may not necessarily be a happy New Year for those who would like to see a tighter market," IEA notes.
  • Their report says there could be a global crude surplus of 200,000 barrels per day in the first half of the year.
  • It raised its forecast for U.S. crude oil production growth to 390,000 barrels per day this year and 870,000 barrels per day next year.

Why it matters: It's another sign of how the shale surge has re-shaped global crude markets and created big challenges for petro-states including Saudi Arabia and Russia.

Read the full story here.

Parsing the World Bank's big oil move

Driving the news: Let's spend some more time with one of the splashiest announcements from this week's One Planet Summit in Paris — the World Bank Group's decision to largely end financing for oil-and-gas exploration and production projects.

Based on conversations with a number of sources and other news reports, here are some observations and conclusions. . .

  • Not much money in play: These kinds of oil and gas projects only represent around 1% of the financing portfolio for the institutions in the World Bank Group.
  • We're talking about something in the neighbohood of $1 billion–$3 billion, while total worldwide industry upstream spending is several hundred billion annually. Simply put, it's a very small part of the worldwide oil-and-gas financing picture.

Yes, but: Opponents of fossil fuel financing by multilateral funding institutions like the World Bank say the number is just part of the story. They note that bank support for oil-and-gas projects has a wider impact by catalyzing investment from other sources for projects in developing countries.

  • "Securing this kind of finance is often the difference between a go or no-go investment decision for the kinds of projects that seek public finance," says Alex Doukas of the anti-fossil fuel group Oil Change International.

A little more from our email exchange . . .

  • "I think it's important not to underestimate the signalling power of the World Bank when it comes to the broader finance universe. If you look at what's happened to the public finance landscape for coal, an early move from the World Bank had a massive knock-on effect, with many other major public (and private!) finance institutions moving out of thermal coal as an indirect result of the World Bank's policy."
Report: Tax deal spares wind and EV credits

State of play: Bloomberg reports that the emerging House-Senate tax compromise excludes House provisions that would have cut the value of wind energy tax credits and killed consumer credits for buying electric vehicle purchases.

  • The provision to kill the $7,500 EV tax credit had drawn pushback from powerful automakers and other interests.

Thought bubble: Cutting the wind credit, meanwhile, was always going to be a heavy lift, given the influence of GOP lawmkers from states where wind is an important industry.

  • Simply put, geography still matters a lot in energy policy fights, even in a hyper-partisan era.

Yes, but: The Bloomberg report notes that another consequential energy question remains unresolved.

  • The renewables industry is freaked out about Senate language — called the "Base Erosion Anti-Abuse Tax" (BEAT) — that's designed to prevent companies from avoiding tax liabilities by shifting payments.
  • Green energy groups say it would have the spillover effect of freezing up tax equity markets for wind and solar projects (the law firm McDermott Will & Emery has a short primer on it here).
  • GOP Sen. John Thune tells Bloomberg that lawmakers are trying to address the issue to ensure renewables projects aren't harmed.

* * *

Speaking of the tax bill, a reminder that it includes provisions to open the coastal plain of the Arctic National Wildlife Refuge to oil drilling. Advocates of drilling there are on the cusp of succeeding after a decades-long push.

Yes, but: The bill is a major victory for pro-drilling interests and a massive setback for environmentalists who have long fought to keep ANWR off-limits.

  • But don't look for the ANWR fight to end anytime soon — it's just going to move to other venues. Leasing and development plans are certain to face litigation.
Solar industry: Trade battle likely slowed Q3 growth

New data: The third quarter of 2017 saw just over 2,000 megawatts of solar energy capacity added, marking a 51% drop from the same period last year, according to new data released Thursday by the Solar Energy Industries Association and GTM Research.

  • Overall, capacity additions in 2017 are expected to decline 21% compared to 2016, SEIA says.

Why it matters: The group says the prospect that the Trump administration could impose tough penalties on panel imports — a move the solar project industry generally opposes — is already having ripple effects.

  • SEIA, in explaining the slowdown in installations, says the market has tightened amid high global demand and prices have risen in part due to potential new import tariffs, because developers are snapping up supplies now in anticipation of the restrictions.
  • The White House is weighing tariffs after a federal panel called the U.S. International Trade Commission concluded in September that cheap imports are hurting domestic panel manufacturers.

Go deeper: The third-quarter report is available here.

Latest in climate and fracking research

Climate science: My Axios colleague Erin Ross writes . . .

At least three instances of extreme weather would not have happened without climate change, according to the American Meterological Society’s annual report on extreme weather and climate change.

  • Past reports found certain weather events were ‘influenced’ or made more frequent by climate change, but the tools researchers used weren’t powerful enough to measure just how much climate change played a role. This is the first time the report has definitively pointed the finger at global warming.

Fracking: My Axios colleague Khorri Atkinson reports . . .

Women living within half a mile from hydraulic fracturing sites are 25% more likely to have babies with low birth weight than mothers who live more than two miles beyond the sites, according to a new study released Wednesday.

One fun thing: anime and electricity

The power of entertainment: This story in Atlas Obscura explores why shots of power lines and other electricity infrastructure are so common in Japanese anime.

In a number of series, writes Eric Grundhauser, "power lines stand out for the detail and complexity required to illustrate them."

Here's a little more from the piece:

  • "Power lines act as a signal of the mundane and the normal in the modern Japanese landscape. They aren’t the only image that appears regularly in anime to signal everyday life, they stand out as both one of the most common and the most visually complex."