Oct 23, 2018

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! LA readers — Join Axios' Ina Fried, the Chan Zuckerberg Initiative's David Plouffe, and a lineup of local leaders Thursday for a conversation on California's housing crisis. They'll be discussing the crisis' economic impact and potential affordable housing solutions. RSVP here.

Good listen: Axios' Amy Harder joined our Pro Rata podcast to chat about Washington State's ballot fight over carbon taxes. Listen here and read her latest column here.

Onto music. At this moment in 1976, Stevie Wonder was atop the Billboard album charts with "Songs in the Key of Life," so one of those tracks brings us into the news...

1 big thing: the solid-state battery race
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Two companies today are disclosing a multimillion dollar investment in the solid-state battery startup Solid Power: chemical company Albemarle (a major lithium supplier) and Korean auto supply company Hanon Systems.

What they're doing: Albemarle and Hanon are investing through Volta Energy Technologies, a relatively new venture that has an agreement with Argonne National Laboratory to help develop and validate promising energy storage technologies.

The big picture: This is another sign of the intensifying race to develop solid-state batteries for use in electric vehicles.

  • It's a major technological challenge but holds the promise of developing safer and more energy-dense alternatives to today's lithium-ion batteries that have liquid electrolytes.

Why it matters: The announcement signals interest in Colorado-based Solid Power essentially across the EV supply chain.

  • Heavyweights Hyundai, Samsung and battery company A123 Systems have been previously disclosed as backers in Solid Power's $20 million Series A investment round.
  • “Solid Power’s technical advantages — higher energy, improved safety, and lower cost — make them particularly attractive to Volta’s strategic investors,” Volta's chief technology officer Dave Schroeder said in a statement.
  • Volta did not disclose the amount of their contribution to that $20 million.

The intrigue: A123, Hyundai, Samsung and Volta are also among the backers of a the Massachusetts-based solid state battery startup Ionic Materials, which is using a separate, polymer-based tech.

“They are probably hedging their bets. Although both companies are developing solid state batteries, they are using fundamentally different materials...”
“There is no consensus as to which material will eventually be commercialized first or at the largest scale.”
— Christopher Robinson, senior analyst, Lux Research, tells Axios

What's next: Robinson estimates that solid-state batteries are roughly a decade away from commercial deployment in EVs, but notes "in the battery industry and in the automotive industry, 10 years isn’t really that much time."

  • Solid Power is creating a small manufacturing facility for its lithium-metal batteries in Colorado. It's initially eyeing what the company has called "beachhead" markets.
  • Quartz, in an in-depth item on the company last month, notes they have "secured contracts with companies in the pharma, defense, and oil and gas sectors to test batteries for different applications."

Go deeper:

2. Latest on the Saudi crisis

What's next: Axios' Steve LeVine chatted with several experts about the future of Saudi Crown Prince Mohammad bin Salman, or MBS.

  • The bottom line: At minimum, the future of MBS seems likely to be a significant weakening of his signature policy — a reform of the kingdom's economy.
  • And he will lose many of his hard-won friendships abroad, a casualty of the murder of Saudi journalist Jamal Khashoggi, and the widespread suspicion that he either ordered or was aware it would occur.
  • Steve has more here.

Energy deals: Bloomberg reports that the Saudis are announcing a suite of energy and metals deals at the big Future Investment Initiative conference in Riyadh as they try and keep focus on the event.

  • The conference has become a central flashpoint in the reaction to the killing of Khashoggi as multiple companies and business leaders have pulled out of the event.
  • However, per Bloomberg, "The deals include agreements with French oil giant Total SA, commodities trading house Trafigura Group and several Chinese and South Korean companies."
  • Some of the deals have previously been known, while other announcements herald new steps in existing agreements or new ventures, they report.

Oil execs in Riyadh: Patrick Pouyanné , CEO of the French global oil-and-gas giant Total, released a statement about why he's not joining the long list of execs bailing on the Saudi's big investment conference that began today.

  • "Total believes it is preferable to engage in frank, assertive dialogue, in which we make our values clear, with our partner countries," he said in defending his participation in the Future Investment Initiative.
  • He also cited Total's longtime work with Saudi Aramco, and recent announcement of investment in the Saudi's petrochemical sector.
  • "Total and Saudi Aramco co-own one of the largest refining facilities in the world, the SATORP complex in the eastern Saudi city of Jubail," Reuters notes.
  • As Bloomberg noted in the piece above, CEOs of oilfield service giants Schlumberger and Baker Hughes are also participating.

Go deeper:

3. Shell's Q3 lobbying jumps

Royal Dutch Shell's U.S. arm reported $3.1 million in third-quarter lobbying, a $1.1 million increase over the prior 3 months.

The big picture: It's the oil giant's largest quarterly total since the end of 2012, according to Lobbying Disclosure Act records, but the company did not say what prompted the increase.

Why it matters: The industry's quarterly filings provide a window onto the scope of industry efforts to influence policy.

  • The filings typically note specific bills and policies that companies are lobbying on.
  • Exxon last night reported roughly $2.2 million in Q3 lobbying, about a half-million dollars less than the prior 3 months and well below the $3.1 million in Q1.
  • Chevron reported $2 million in third-quarter lobbying, less than the $2.55 million reported in Q2.
  • BP last night reported $1.1 million in Q3 lobbying.
  • The American Petroleum Institute, the oil industry's largest trade group, reported $1.7 million in Q3, very similar to the prior quarter.
  • Occidental Petroleum, another large U.S.-based multinational, reported $1.3 million for Q3.
4. Dyson plans to build EVs in Singapore

Breaking Tuesday: Dyson has selected Singapore as the location for a factory to build EVs, and plans to begin producing them by 2021, according to multiple reports.

Why it matters: The company's multibillion dollar foray into EVs is a sign of the growing competitiveness in the sector. EVs remain a tiny portion of worldwide vehicle sales but are growing significantly.

  • "The British maker of vacuums and hand dryers said Tuesday that it had selected the city because of its manufacturing expertise, skilled workforce and proximity to high-growth markets in Asia. Construction work will begin in December," per CNN.

Singapore appears to make sense for Dyson for other reasons, as it already has facilities there for building motors.

  • Plus, as The Verge notes, "Singapore also has pending free trade agreement with Japan and existing agreements with China, the world’s largest market for electric cars."
5. The public view of climate science
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Axios' Andrew Freedman reports ... In recent interviews, President Trump falsely claimed that scientists disagree about the causes of global warming. In fact, at least 97% of climate scientists agree that human activities are the dominant cause of global warming since the mid-20th century.

The big picture: Trump is not the only one who thinks that the main causes of global warming are still being debated.

  • According to polling from George Mason University's Center for Climate Change Communication, even those Americans who say they are concerned about climate change tend to significantly underestimate the strength of the scientific consensus.

The details: In an interview with AP on Oct. 15, Trump commented on a recent climate science report from the UN Intergovernmental Panel on Climate Change.

  • The report, released Oct. 8, warned of potentially catastrophic consequences, such as the loss of the entire Greenland Ice Sheet, if warming surpasses 1.5°C, or 2.7°F, above preindustrial levels.

Trump dismissed the findings, saying scientists disagree about the basic conclusion of what is driving global warming.

Reality check: Studies show that the period from 1901 to 2016 "is now the warmest in the history of modern civilization," and human emissions of greenhouse gases are to blame.

Yes, but: Like the president, the American public seems to have a poor understanding of just how wide and deep the scientific consensus is on what is causing climate change.

The bottom line: There is evidence showing that when people gain a better understanding of the consensus, they are more likely to support policies to rein in greenhouse gas emissions.

Go deeper: Read Andrew's full story in the Axios stream.

6. On my screen: Big Oil, coal, solar

Big Oil: The Wall Street Journal reports that while giant oil companies — ExxonMobil, Shell, BP, Equinor, Total and Chevron — are likely to announce higher Q3 profits and excess cash on the strength of higher crude oil prices, investors don't seem impressed.

  • "Yet while the price of the global oil benchmark has surged around 20% so far this year, those six companies have seen their shares rise by an average of roughly just 4%, according to FactSet," they report.

Coal and renewables: Utility Dive looks at an important evolution of Indiana's power market, one that encapsulates broader national trends. A utility in the state announced in a planning document that building new renewables generation is cheaper than keeping existing coal plants open.

  • "Last week, Northern Indiana Public Service Co. (NIPSCO) presented analysis for its 2018 Integrated Resource Plan (IRP), finding it can save customers more than $4 billion over 30 years by moving from 65% coal today to 15% coal in 2023 and eliminating the resource by 2028," they report.
  • Why it matters: Their piece notes that the utility's plan is "more evidence that coal generation is steadily declining in the U.S. despite efforts from the Trump administration to save it."

Solar: Reuters looks at construction of a solar plant in an unusual location. They report that early this month Ukraine "unveiled a solar plant in Chernobyl ... just across from where a power station, now encased in a giant sarcophagus, caused the world’s worst nuclear disaster three decades ago."

Ben GemanAmy Harder