Good morning and welcome back! Two pieces of housekeeping:
And finally, happy birthday (a day early) to Tina Weymouth of the Talking Heads, who has today's oh-so-good intro tune...
Crown Prince Mohammed bin Salman and President Trump. Photo: Bandar Algaloud/Saudi Kingdom Council/Handout/Anadolu Agency/Getty Images
Two countervailing forces that will influence looming OPEC decisions were on prominent display yesterday and today: President Trump's position on Saudi Arabia and prices, which have been largely falling for the past six weeks.
The latest: Trump tweeted this morning...
"Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!"
What's happening: Trump caused a stir yesterday when he issued a statement signaling clear U.S. backing for Saudi Arabia despite the murder of journalist Jamal Khashoggi.
The big question: How Trump's posture toward the Saudis could affect the early December OPEC meeting.
Meanwhile, the 6-week drop in oil prices accelerated Tuesday when Brent and WTI both fell by well over 6% (although they're ticking up somewhat this morning). Overall, both benchmarks have dropped by over a quarter since early October.
What they're saying: Rice University energy and geopolitics expert Jim Krane tells Axios in an email exchange...
"The big plunge in oil prices has been painful for the Saudis and a big win for Trump, who had been haranguing OPEC over Twitter. But at the end of the day, if Trump's support turns out to be the crucial act that allows [Crown Prince Mohammed bin Salman, or MBS] to hang onto power, the crown prince will certainly reciprocate."
"Tweaking oil prices is the quickest way MBS can show his appreciation. The Saudis may still cut production, but we should look for a lower target price than might have otherwise been the case. (Closer to $70 than $80)."
The bottom line: Over at S&P Global Platts, Herman Wang sums things up this way: "Saudi Arabia's desire to placate Trump in the fallout from the killing of journalist Jamal Khashoggi may box in the kingdom, despite [Saudi energy minister Khalid al-] Falih's warnings of a potential oil supply glut in the months ahead that could crash prices further."
The intrigue: Saudi expert Ellen Wald, in a new Forbes piece, argues that Trump's statement actually shows far less than full-throated support for MBS. She also notes Trump's willingness to consider ideas from Congress, where some members are pushing for a harder line.
As for what all this means at the OPEC meeting, Wald tells Axios in an email: "The Saudis would push for production cuts regardless of Trump's rhetoric." She also writes...
"Remember, the low oil prices are most important to Saudi Arabia and Russia because it helps them convince and pressure other OPEC and OPEC+ countries to support production cuts and to adhere to them."
"The low oil prices are an advantage to Saudi Arabia going into OPEC, regardless of what it feels about the President."
What's next: The ride could be bumpy for a while.
"[W]e expect oil prices to trade in a wide and volatile range until the OPEC meeting, with the lack of certainty on a possible cut weighing on prices currently," Goldman Sachs analysts said in a note.
As more electric and autonomous vehicles take to the streets, consumers may soon be able to skip the mundane task of stopping for gas, writes Axios Expert Voices contributor Karthik Kannan.
Threat level: The disruption of other types of retail, like big department stores, suggests this transition could push the multi-billion-dollar market of gas stations and convenience stores toward collapse.
The big picture: Roughly 150,000 stores sell 80% of the fuel consumed in the U.S., as well as $200 billion worth of food and merchandise, according to the National Association of Convenience Stores.
Where it stands: The grocery business is already preparing for automated and autonomous vehicles, with Kroger, Walmart, Whole Foods and others experimenting with new delivery options. But only the biggest gas stations and convenience stores are getting on board.
The bottom line: Technological shifts, especially the rise of e-commerce, have driven many large brick-and-mortar retailers out of business. Unless they're able to adapt, gas stations and convenience stores — mostly run by small business owners — could be left in the same position by autonomous and electric vehicles.
Kannan is the Thomas Howatt Chaired Professor in Management at Purdue University and director of the Business Information and Analytics Center.
The path for Trump's choice to fill an open Federal Energy Regulatory Commission seat may be getting more complicated thanks to newly unveiled comments on renewable energy and fossil fuels.
Driving the news: Utility Dive obtained a video of remarks Bernard McNamee made in February while working for the conservative Texas Public Policy Foundation.
Why it matters: It opens up the nominee to charges that he'll bring an ideological approach to the commission. "FERC is an independent agency whose regulators typically pride themselves on a 'fuel neutral' approach to energy regulation," writes Utility Dive's Gavin Bade.
But, but, but: McNamee, in a statement released to both publications, said: "I recognize the significant role that renewables play in our energy mix, and I stand by my statement that if confirmed as a Commissioner, I would be an independent arbiter basing my decisions on the law and the facts, not politics."
FedEx: The package delivery giant said it's adding 1,000 electric delivery vans to its fleet made by the company Chanje. FedEx is buying 100 directly and leasing 900 from Ryder, and all of them will operate in California and can haul up to 6,000 pounds.
Lime: GreenBiz's Katie Fehrenbacher has a good interview with Lime's Andrew Savage, who is guiding the company's sustainability efforts. Lime recently pledged that all rides on its electric scooters and bikes worldwide will be "carbon neutral," part of the wider "Lime Green" initiative. Their exchange...
British Columbia: Via the Vancouver Sun, "All new light-duty cars and trucks sold in B.C. will be propelled by zero-emission technology by 2040, Premier John Horgan announced Tuesday."
The coal-fired Brandon Shores Power Plant in Baltimore, Maryland. Photo: Mark Wilson/Getty Images
Although Washington state’s proposed carbon tax failed at the ballot box, carbon pricing remains one of the best policy solutions to mitigate the effects of climate changes as the window to keep global warming below 1.5°C continues to narrow, writes Axios Expert Voices contributor Chris Busch.
The big picture: There are stark trade-offs to both a carbon tax, under which companies pay for each ton they emit, and a cap-and-trade system, which requires them to buy permits for emissions. However, a hybrid model could be the sweet spot between practical politics and effective policy.
Details: Both would reduce carbon emissions, but with distinct disadvantages:
A hybrid approach, on the other hand, could reduce emissions through declining caps while ruling out price extremes via ceilings and floors on permit prices.
Read more of the full piece in the Axios stream.
Busch is the director of research at Energy Innovation.
Earth just had its second-warmest October on record, according to NOAA data released Tuesday. NASA reported the same finding last week, Axios' Andrew Freedman reports.
The big picture: The finding extends the planet's hot streak to 406 straight months with temperatures above the 20th century average. Meanwhile, the last colder-than-average month occurred in February 1985. This means that no one under the age of 32 has ever experienced a cooler-than-average month on this planet.
Why it matters: While monthly rankings are often determined by a fraction of a degree, it's the long-term trends that climate scientists pay more attention to when assessing our changing climate.
By the numbers: According to NOAA, October 2018 came in just behind October 2015 in terms of the global average surface temperature anomalies. Notably, the report found:
The bottom line: It's likely that 2018 will be among the top-five warmest years on record, given its year-to-date ranking as the fourth warmest on record. The five warmest January–October periods on Earth have come in the past five years, NOAA reported.