Aug 18, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! Today's Smart Brevity count: 1,267 words, < 5 minutes.

🎵And 28 years ago, TLC was atop Billboard's R&B charts (and #2 on the Hot 100) with today's intro tune...

1 big thing: How Biden could thwart Trump's Arctic push

Photo illustration: Sarah Grillo/Axios. Photos: Bastiaan Slabbers/NurPhoto via Getty Images

The decades-long fight over drilling in the Arctic National Wildlife Refuge is nowhere near over, despite the Interior Department taking a big step Monday toward allowing development.

ICYMI: The Interior Department issued a final plan — called a record of decision (ROD) — to allow exploration in the refuge's 1.6 million acre coastal plain.

Why it matters: There could be billions of barrels of recoverable oil there and backers say it can be tapped with manageable impacts. But it's an ecologically sensitive place, and opponents call safe development a fantasy.

  • Interior could begin selling leases before the end of this year, although any actual production is likely a decade off.

The intrigue: Joe Biden's campaign says it would look to thwart drilling if he's elected. But that's tricky, given that a 2017 law requires leasing in ANWR.

  • Nonetheless, there are several levers Biden could pull to impose lengthy delays or reimpose restrictions, attorneys and others who oppose drilling tell me.

The big picture: One thing to keep in mind is that litigation over Interior's environmental analyses and decisions is a certainty.

  • That means a Biden administration could abandon its predecessor's legal posture in the cases.
  • And tapping oil on federal lands is a multiphase thing, with administrative decisions needed around leasing plans, issuance of drilling permits and more.

How it works: "[P]laintiffs will almost certainly seek a preliminary injunction in court to stop any sale from going forward. And a new administration could decline to defend the ROD in court," Jayni Foley Hein, an adjunct law professor at NYU, tells Axios in an email.

  • "Second, it seems very likely that a Biden administration could seek to reopen the [National Environmental Policy Act] analysis, and it could also decline to issue permits to drill based on flaws in the ROD and underlying analysis," says Hein, who is with the school's lefty Institute for Policy Integrity.
  • Kristen Monsell, a lawyer with the Center for Biological Diversity, offers a similar take, and also notes that a future administration could "order rejection of bids and a cessation of the issuing of relevant permits."

Yes, but: Interior Secretary David Bernhardt, on a call yesterday with reporters, declined to predict what the courts will do.

  • But, Bernhardt, who's also a lawyer, added: "I would not be going forward if I was not very comfortable" with how the agency crafted the plans.

What to watch: There are other fronts in the fight.

  • Hein says it's possible that a new administration could use the Antiquities Act to designate the region as a national monument.
  • And look for legislative efforts to reimpose restrictions if Democrats take control of the Senate.

The bottom line: For supporters and opponents of ANWR development, the election will have big consequences.

  • A Biden White House could do plenty to slow or stop development, while officials in a second Donald Trump term would have considerable power and time to move it much closer to reality.
2. Breaking: EV startup Canoo rides SPAC wave

Image courtesy of Canoo

Canoo is slated to become the latest fledgling electric vehicle player to go public via merger with a special purpose acquisition company (SPAC), it announced this morning.

Why it matters: A number of electric vehicle companies are using that model in place of traditional IPOs to raise money and begin trading.

  • Lordstown Motors and Fisker both announced SPAC deals this summer, while Nikola Motors began trading in June after one of the transactions.

State of play: Los Angeles-based Canoo says it will merge with Hennessy Capital Acquisition Corp. IV.

  • The deal will take Canoo public at a valuation of $2.4 billion, the companies said.
  • It's bringing in investments from funds and accounts managed by BlackRock and others, providing Canoo with about $600 million in new capital.

The backdrop: Canoo is looking to lure consumers with a subscription-based model for an eponymously-named "lifestyle" vehicle it hopes to launch in 2022. It's envisioned as an "urban loft on wheels," Axios' Joann Muller reported last year.

  • "In addition, Canoo has designed a commercial delivery [business-to-business] vehicle with expected availability in 2023 that directly capitalizes on Canoo's core skateboard technology," per the SPAC announcement.
  • The company's skateboard architecture has attracted outside interest too, with Hyundai announcing this year that it plans to develop future vehicles using it.

Go deeper: SPACs are the new IPOs

3. California's searing power crisis

California yesterday avoided a repeat of rolling blackouts imposed Friday and Saturday as the state's grid operator last night cited lower temperatures and conservation.

Yes, but: The state is nowhere near out of the woods in the near-term, and certainly not in the long term as officials scramble to shore up the grid against heat and wildfire threats.

Where it stands: The California Independent System Operator's current "flex alert"calls for conservation steps and warns of outages remains in effect through Wednesday.

What's new: Gov. Gavin Newsom yesterday demanded that state power officials conduct an investigation into the outages Friday and Saturday.

  • "These blackouts, which occurred without prior warning or enough time for preparation, are unacceptable and unbefitting of the nation’s largest and most innovative state," he said in a letter to the state's utilities commission, energy commission and grid operator.

The intrigue: The blackouts show the challenges facing the nation's most populous state as it moves away from fossil fuels and expands use of renewables, notably solar power that wanes late in the day when demand is high.

  • Newsom's letter calls the failure to predict shortages on Aug. 14 and 15 "unacceptable particularly given our state's work to combat climate change." It calls on the grid operator to review its assumptions around solar capacity.
  • "The emergency outages, though brief to date, demonstrate the challenges California faces in making sure its transition to cleaner power doesn’t come at the expense of reliability," the Wall Street Journal reports in a deeper look at the topic.

Go deeper: California power grid operator cancels rolling blackouts (AP)

4. Chart of the day: The jet fuel demand collapse
Data: TSA; Chart: Axios Visuals

Newly released data from the Transportation Security Administration show that U.S. air travel is slowly coming back but remains nowhere near pre-pandemic levels.

Why it matters: The massive global drop-off in air travel is one major reason why oil demand has fallen so much this year.

Go deeper: IEA cuts oil demand forecast, citing "stalling" mobility

5. Ink dries on Big Auto's emissions split

There's no longer any uncertainty: Five huge automakers — including Ford and VW — are just not that into the White House approach to emissions and mileage rules.

Driving the news: Those two — along with Honda, Volvo and BMW — have finalized their deal with California to meet standards for their national fleets that are tougher than Trump administration rules require.

Why it matters: Well, climate for one thing — transportation is the nation's biggest source of greenhouse gases. But it also formalizes a split within the auto industry by locking those five into binding agreements with California.

  • And it's the latest step in an unusually bitter — and just, well, unusual — regulatory battle.
  • Last year the Justice Department opened, then later dropped, an antitrust probe into the four automakers that initially reached a draft deal (the four above minus Volvo) with California.

By the numbers: The agreement requires year-over-year improvements in greenhouse gas performance through the mid-2020s — a metric that's basically a proxy for improvements in mileage. Via Reuters...

"The administration in March finalized a rollback of U.S. vehicle emissions standards to require 1.5% annual increases in efficiency through 2026, well below the 5% annual increases in discarded rules under President Barack Obama."
"The Center for Biological Diversity estimates the deal will improve fuel economy 3.7% year over year between 2022-2026."
6. Catch up fast: Alaska mine, BHP coal, Iraq oil

Influence: "Fox News pundit Tucker Carlson has become the latest influential conservative to voice concern about the proposed Pebble mine in southwest Alaska." (E&E News)

Coal: "BHP, the world’s biggest mining group, has confirmed plans to exit thermal coal as pressure builds from investors to ditch the polluting fossil fuel." (FT)

Oil: "Chevron Corp. is in talks to invest in a major Iraq oil field, according to Iraqi officials, part of a string of prospective deals with U.S. companies signaling confidence in that country’s energy industry despite years of instability and start-and-stop foreign investment." (WSJ)

Ben GemanAmy Harder