Good morning from Seattle, Washington, where I'm here to report on the state's carbon tax initiative. Are you following that topic for this election cycle? What else? Let me know at firstname.lastname@example.org.
My latest Harder Line column looks at six electoral moves I'm watching during these midterms. I'll share that, and then Ben Geman will get you up to speed on some other news.
Illustration: Rebecca Zisser/Axios
The midterm elections are important because they will go a long way in shaping both state-level policies and Washington’s future appetite to consider legislation in this area. Here are six electoral moves on my radar, with a deeper look at each in the Axios stream here.
Moderate Republicans: Climate change is just beginning to re-emerge as an issue some congressional Republicans talk about publicly.
If that leads to defeat for the small handful of moderate, politically vulnerable Republicans who do it — particularly Rep. Carlos Curbelo of Florida — it sets back any prospect for bipartisan climate policy.
Greens’ trickiest test: Environmental groups are prioritizing helping Democrats win back the House, but Curbelo’s race presents a tough call:
Colorado fracking: After two failed efforts to get the initiative on the ballot, Coloradans are set to vote on a proposal that would significantly increase the buffer zone from most new oil and gas drilling.
If it passes, expect it to re-energize efforts to ban fracking elsewhere — and raise big issues for Colorado-based oil companies.
Washington carbon tax: After voting down a carbon tax ballot initiative two years ago, Washington state voters have another chance — and the outcome will reverberate nationally.
California gas tax repeal: This ballot initiative would repeal a recent gasoline tax hike that raised the fuel tax by 12 cents a gallon. Conservative interests and anti-tax advocates are hoping it also rallies conservatives to get out and vote in some close House district races Democrats are hoping to flip.
Southwest renewable energy standards: Two ballot initiatives bankrolled by Tom Steyer’s NextGen America would increase the percentage of renewable electricity mandated in Arizona and Nevada.
Stay tuned for deeper dives on some of these topics in the coming weeks.
A provocative opinion piece in the New York Times made waves over the long weekend. Financial journalist Bethany McLean argues that the U.S. fracking boom rests on a shaky, debt-laden foundation that may be unsustainable.
The bottom line: McLean, who helped uncover the Enron scandal and co-authored the book "The Smartest Guys in the Room," covers a lot of ground.
Key points are that low interest rates have provided relatively easy access to debt financing and that markets are valuing shale producers based on their acreage, not on a proven ability to make money. McLean writes in NYT:
It’s all a bit reminiscent of the dot-com bubble of the late 1990s, when internet companies were valued on the number of eyeballs they attracted, not on the profits they were likely to make.
As long as investors were willing to believe that profits were coming, it all worked — until it didn’t.
Why it matters: Advancements in fracking and horizontal drilling over the last decade have sent U.S. oil and natural gas production surging to record levels, which is increasingly making the U.S. a player in export markets too.
Yes, but: The piece got some weekend pushback from some analysts who argued that it overstates the case, or is at least out of date.
Jason Bordoff, head of a Columbia University energy think tank, responded with this Twitter thread on Monday evening. His points include...
The investment in most shale production is making money now. Shale companies responsible for most production are generating free cash flow. Even if they weren’t, that doesn’t tell us shale will [go] bust.
Let's dip back into election politics for a moment with Eurasia Group CEO Robert Johnston, who writes in an Expert Voices piece...
What's happening now: A key historic pattern that has traditionally shaped dynamics around U.S. energy policy and elections has all but disappeared heading into this year’s midterms.
Why it matters: At the same time as voter focus on energy has declined, the two major parties have also developed a deeply polarized gap on climate policy, with only 18% of Republicans concerned a “great deal” about global warming compared to 66% of Democrats.
The bottom line: This means that while the midterms won’t have a huge impact on the U.S. energy policy outlook, it will be at stake in 2020.
Tesla: The website Electrek reported over the weekend that Tesla missed its goal of producing 6,000 Model 3s per week by late August.
Audi: Via TechCrunch, Volkswagen's Audi unit "began production of its first all-electric SUV on Monday, three years after the German automaker unveiled a concept version of the vehicle at the International Motor Show in Frankfurt."
Big picture: The Financial Times explores how big German automakers — VW, BMW and Daimler — are adopting different production strategies as they pour resources into expanding EV offerings in coming years.
More Tesla: Via the Washington Post, two University of Maryland business professors offer "Five Myths About Tesla."
Steeply cutting global carbon emissions will be tougher without expanding nuclear power, but its future is dim absent project cost reductions and supportive policies, a new MIT study concludes.
Why it matters: Nuclear energy faces very limited long-term prospects in the U.S. and a number of other countries, thanks in part to huge upfront costs to build new plants.
The big picture: The report notes that today nuclear power represents a "meager" 5% of total global energy production and 11% of worldwide electricity.
What's next: It recommends a suite of steps to rein in project costs for new reactors, such completing more detailed design work before construction starts.
Another big takeaway is pricing carbon emissions would "equitably recognize the value to all climate-friendly energy technologies" — and nuclear would benefit.
The bottom line: "Other generation technologies have become cheaper in recent decades, while new nuclear plants have only become costlier," the report states.
A pair of analyses caught my eye that explore how increasing heat, rising sea levels and powerful storms are threats to energy infrastructure.
1. Over at UPenn's Kleinman Center for Energy Policy, Christina Simeone writes that companies with operations along the Gulf Coast energy belt are failing to adequately describe climate-related risks in disclosures to the Securities and Exchange Commission.
2. International Energy Agency analyst Caroline Lee connects the dots on how the brutal summer of 2018 has affected energy systems, such as...
What's next: Lee says governments must play a "central role" in making the energy sector more resilient to climate change.