Sep 21, 2018

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Happy Friday. We've launched our new weekly Axios Autonomous Vehicles newsletter! Check out the first edition here and subscribe here.

And happy birthday to the late Leonard Cohen, who provides today's intro song...

1 big thing: Why Big Oil's climate club grew

The news that Exxon and Chevron are joining a global industry partnership called the Oil and Gas Climate Initiative could signal a broader pivot under two rather new CEOs, ExxonMobil's Darren Woods and Chevron's Michael Wirth.

The big picture: "I think it's clear that this shift reflects the leadership changes at both Chevron and Exxon," a source familiar with the companies' thinking tells Axios.

  • Occidental Petroleum, another large U.S. player, also joined. The arrivals add heft to the 4-year-old group, which already includes BP, Shell, Saudi Aramco and roughly a half-dozen others.

Where it stands: It's actually the second climate group Exxon has signed onto under Woods. In mid-2017 they joined three Europe-based global majors as founding corporate members of the Climate Leadership Council, a U.S. group pushing a carbon tax proposal.

  • "Exxon has...tended to shy away from joining group efforts, so between joining OGCI and the Climate Leadership Council there appears to be a cultural shift underway under Woods. This is still Exxon, though, so any shift is likely to be both slow and gradual," the source said.

Flashback: Exxon also announced in July that it's abandoning the American Legislative Exchange Council, a conservative group that disputes mainstream climate science.

The intrigue: These moves come at a time when the White House is going in the other direction on climate by scuttling or paring back a suite of Obama-era policies.

  • However, the DOE has actually encouraged U.S. companies to consider joining OGCI during meetings with them in the past year, an administration official said.

What they're saying: One source who works directly with the energy industry called the decisions consistent with Exxon's and Chevron's approach and OGCI's absence of policy positions.

  • "OGCI is squarely focused on technology. Both [Exxon] and [Chevron] are long on innovation and technology," the source said in an email exchange.
  • Exxon and Chevron initially declined to join the group when it formed in 2014.
  • But as Axios' Amy Harder noted when she broke the news yesterday, these decisions are a sign of how pressure from investors and lawsuits are pushing oil companies to do more.

Reality check: It will hardly halt criticism from climate advocates that oil-and-gas companies should be taking much stronger steps.

  • For instance, look for continued pressure on Big Oil to take more aggressive stances, such as setting binding emissions targets and abandoning trade groups — including the U.S. Chamber of Commerce — that support the rollback of U.S. regulations.

Amy contributed to this story.

2. A huge nuclear decision looms

The Wall Street Journal reports about a looming decision concerning the troubled, far over-budget effort to build two new reactors in Georgia.

What's happening now: Per WSJ, "A decision on the expansion of Georgia’s Alvin W. Vogtle Electric Generating Plant is expected by Monday, when its three primary owners are set to vote on whether to continue going ahead."

Why it matters: The Southern Company-led project is the only reactor construction project in the U.S.

  • Its potential demise and lonely status after a South Carolina project fell apart last year signal the foundering hopes for a "renaissance" of large U.S. reactor nuclear projects that the industry was eyeing a decade ago.
  • "If work on it stops, the prospects for new nuclear power in the U.S. would dim considerably and raise the question of whether the country can revitalize its nuclear industry," WSJ notes.

Quick take: Whether or note the Georgia project collapses, the bigger nuclear topics right now are...

  • The potential for next-wave technologies, notably small modular reactors, to become a commercial reality in the years ahead.
  • Efforts in several states to stave off a wave of retirements of existing plants, which climate advocates fear would be a major setback for zero-carbon power.

Go deeper: A pessimistic look at nuclear

3. EV news: a split-screen day for Tesla

Another senior executive has left Tesla, according to Bloomberg, which reports that Liam O'Connor, the VP of global supply management, has resigned. Tesla did not respond to my request for comment.

Why it matters: It's another sign of tumult at the Silicon Valley electric vehicle company, which has seen a string of high level departures in recent months.

Yes, but: On the good news side, per CNBC, "The Tesla Model 3 has earned a perfect five-star safety rating from the National Highway Traffic Safety Administration."

"This means all of Tesla's production vehicles have received a perfect rating from the agency," they report.

* * *

Speaking of EVs, French energy giant Total has bought the French EV charging company G2mobility for an undisclosed sum, the companies announced Thursday. S&P Global Platts has more on the transaction here.

  • Why it matters: It's the latest in a string of moves in the EV charging space among European oil majors. Shell last year bought NewMotion, while BP in June announced the acquisition of Chargemaster.
4. The carbon risk of a housing crisis

UC-Berkeley's Gordon Bauer writes for Axios Expert Voices ... As housing prices in the Bay Area have skyrocketed, more people have moved to peripheral cities and seen their commutes lengthen as a result.

By the numbers: Between 2005 and 2016, the number of people in the region who commute more than 90 minutes per day increased 113%.

The big picture: Once self-driving cars come to market, this issue will only get worse. As spending time in a car becomes less onerous, the tradeoff of moving a few hours away to save money on rent will look increasingly favorable.

Aside from its environmental impact, this shift could also lead to increased income inequality: Recent studies have uncovered an inverse relationship between time spent commuting and economic mobility.

Threat level: Despite the environmental effects of “super commutes,” climate-minded policymakers have paid it little attention. At the Global Climate Action Summit (GCAS) in San Francisco last week, Gov. Jerry Brown signed an array of clean transportation bills, but speakers were almost silent on the issue of housing.

Even as electric and hydrogen fuel-cell vehicles proliferate, California will still have to contend with this central issue: More sprawl equals more miles traveled — and more miles traveled equals more emissions.

Worthy of your time

5. On my screen: climate, efficiency, biofuels

Climate change: Writing for the Houston Chronicle, Rice University's Daniel Cohan takes a clear-eyed look at last week's frenzy of climate commitments by states, cities and other subnational actors.

  • The bottom line, per Cohan: It's going to be extremely difficult, especially given the White House moves, to meet the Obama-era target of cutting U.S. greenhouse gas emissions by 26%–28% below 2005 levels by 2025 — a goal that itself is just a down payment on vastly deeper national and global emissions cuts eventually needed to prevent runaway warming.
  • His piece looks at a report at last week's Global Climate Action Summit on 10 strategies for trying to meet the 2025 target — involving renewables, EVs and much more — that don't rely on federal action.
  • Sobering: "[I]t's hard to imagine all 10 being achieved any time soon, let alone the additional 'enhanced engagement' measures that would still be needed to push down U.S. emissions 'within striking distance' of the 2025 target," he writes.
  • "That's like layering wishful thinking on top of hopes and prayers — and still coming up a little bit short."

Efficiency: Via Utility Dive, "A new paper by the cofounder and chief scientist of the Rocky Mountain Institute (RMI) seeks to challenge conventional wisdom when it comes to energy efficiency, positing that the size and cost of the potential resource base is much larger and cheaper than previously believed."

Policy: Per Reuters, "The U.S. Environmental Protection Agency (EPA) published new data detailing how it drastically expanded a biofuels waiver program for oil refiners since President Donald Trump’s administration took office, responding to pressure from the corn lobby to boost transparency over the opaque program."

6. One amazing thing

This color-coded topographic view shows the relative heights of features in Cerberus Fossae: reds and whites are relatively higher than blues and purples. Image: ESA/DLR/FU Berlin

Via the Axios Science newsletter, the European Space Agency's Mars Express spacecraft took a series of images of tectonic activity that took place long ago — on the order of 10 million years — of a fault system near the planet's equator.

The big picture: Specifically, the image above shows part of the Cerberus Fossae system on the Elysium Planitia region of Mars.

Fossae in Latin means "ditches" or "trenches," according to ESA, and these particular ones can be found in a region that is 620 miles from northwest to southeast.

Go deeper.

Ben GemanAmy Harder