July 11, 2023
🚀 Off we go! Today's newsletter has a Smart Brevity count of 1,242 words, 4.5 minutes.
🚨 Situational Awareness: A season's worth of rain fell in two days across Vermont, causing some of the worst flooding on record and prompting a state of emergency. Read more
🎶 Exactly five years ago, Cardi B, Bad Bunny and J Balvin were #1 on the Billboard Hot 100 with today's intro tune...
1 big thing: Mixed verdict on mineral supplies
A major analysis finds good and bad news about minerals that power climate-friendly energy and transport, Ben writes.
Driving the news: Newly planned projects "indicate that supply is catching up with countries’ clean energy ambitions," according to the International Energy Agency.
Why it matters: Plenty has to break the right way for supplies to meet nations' climate pledges, the IEA said, citing potential delays and cost overruns.
- "The affordability and speed of energy transitions will be heavily influenced by the availability of critical mineral supplies," the agency notes.
State of play: Their inaugural market review shows investment in "critical" minerals grew by 30% in 2022 and gained 20% the prior year.
The big picture: Demand for "clean" applications of minerals like lithium, cobalt and copper — three of many the report explores — is soaring.
- In 2017, clean uses like electric vehicle batteries represented 30% of lithium demand. In 2022, it was 56%.
- For cobalt, those figures are 17% and 40%, respectively.
Threat level: While countries including the U.S. hope to diversify supplies, the market remains heavily concentrated.
- "Compared with the situation three years ago, the share of the top three producers in 2022 either remains unchanged or has increased further, especially for nickel and cobalt."
- The mining pipeline shows a "somewhat improved" picture, but there's less progress on easing refining concentration.
- One snapshot: half the planned lithium chemical refining plants are in China.
The bottom line: "Much more needs to be done to ensure supply chains for critical minerals are secure and sustainable," IEA head Fatih Birol said in a statement.
Bonus: the mineral VC surge
A lot of players are part of the mineral supply chain — including mining and chemical giants — but startups are increasingly important, Ben writes.
The big picture: "Critical minerals" startups raised $1.6 billion last year in early and growth stage finance, a 160% increase, IEA said.
2. Kerry could revive U.S.-China climate cooperation
Why it matters: The U.S. and China are the world's top two emitters of planet-warming greenhouse gases. Joint commitments could help to achieve global climate goals and pave the way for smoother negotiations at the COP28 summit in the United Arab Emirates later this year.
Driving the news: Kerry plans to visit China later this month, a spokesperson told Axios, in what would be the first formal climate talks between the two countries in nearly a year.
- Kerry's visit will come on the heels of Treasury Secretary Janet Yellen's trip, in which she highlighted joint responsibilities around climate change and urged Beijing to contribute more to global climate funds.
The big picture: Finding a way to work together on climate change is "important for the rest" of the U.S.-China relationship, says Thom Woodroofe, a senior fellow at the Asia Society.
- Kerry also has a personal relationship and history with his counterpart in Beijing, Xie Zhenhua, which Woodroofe says could be leveraged for a substantive outcome from the trip.
Flashback: The U.S. and China — led by Kerry and Xie — struck a bilateral agreement on climate action in 2021 at the COP26 climate summit.
- That plan had not been fully implemented when House Speaker Nancy Pelosi traveled to Taiwan last August.
- That prompted Beijing to end cooperation on climate change, among other issues.
What to watch: Whether Kerry can leave with substantive new (or revived) commitments.
3. Off the charts heat from Miami to Death Valley
Extreme heat is scorching the southern tier of the U.S., from Florida to the California desert, with heat alerts in effect for nearly 89 million people, Andrew writes.
- An elongated, persistent area of high pressure aloft, known as a heat dome, is causing records to fall, exacerbated by human-caused climate change.
Threat level: Conditions will worsen before they improve.
- In the Southwest, the extreme heat is cranking up, with Phoenix making a run at their longest streak of days with 110°F high temperatures or greater. Elsewhere, Las Vegas may tie or break its hottest temperature on record.
- California's Death Valley, one of the hottest places on Earth, may reach between 125°F to 130°F this week or next. This is rare, even for that location.
Between the lines: In addition to heat emanating from sinking, drying air within the heat dome itself, a feedback loop is yielding extraordinarily unusually high sea surface temperatures in the Gulf of Mexico, with water temperatures in the low 90s around South Florida.
- Marine heat waves tend to translate to land-based heat.
- Miami has seen 30 straight days with a heat index at or above 100°F, and five straight days at or above 105°F, atmospheric scientist Brian McNoldy tweeted Monday.
Context: A new analysis from Climate Central shows that climate change is likely boosting the odds for the upcoming extreme heat in the Southwest by at least a factor of four.
4. 🏃🏽♀️ Catch up fast on LNG: U.S. exports and Warren Buffett
🤝 U.K. energy giant Centrica inked an $8 billion deal with Delfin Midstream Inc. for LNG supplies from Delfin's planned floating export project off Louisiana's coast, Ben writes.
- Why it matters: The 15-year agreement signals two trends — expanding U.S. exports and European effort to lock down new supplies following Russia's invasion of Ukraine. Exports from Delfin's project are expected to start in 2027.
💵 "Dominion Energy agreed to sell its 50% stake in the Cove Point liquefied natural gas facility in Maryland's Chesapeake Bay to a unit of Warren Buffett's Berkshire Hathaway for $3.3 billion in cash." (Reuters)
5. A fiery VC round for its time
Pano AI, a wildfire detection startup, raised $17 million in growth capital as Canadian blazes and U.S. heat waves highlight extreme events that can be worsened by climate change, Ben writes.
Driving the news: Valor Equity Partners led the round. New investors include Salesforce and T-Mobile.
- Existing backers like Initialized Capital and Congruent Ventures are adding new funds, too.
What they're saying: "Even in an economic downturn, we must act rapidly to cope with these escalating effects of climate change," Pano CEO Sonia Kastner said in a statement.
The big picture: Wildfires have multiple causes, but hotter temperatures and drought can make areas more fire-prone — and make fighting blazes harder.
The intrigue: The young VC firm Convective Capital — a Pano AI backer — is focused solely on wildfires, Axios' Kia Kokalitcheva reported recently.
- Its portfolio includes companies using drones like BurnBot and Rain; vegetation management startups like Overstory; and power pole monitoring startups like Gridware.
6. Why power regulators still need Congress
The Federal Energy Regulatory Commission wants to lower hurdles to building transmission and hooking power projects up to grids, but a shove from Congress may help speed renewables deployment, Axios Pro: Energy Policy's Nick Sobczyk reports.
Why it matters: FERC is a focal point following enactment of the U.S. climate law.
- As Congress debates transmission, the agency could make strides on its own to boost infrastructure that folds renewables into the wider power system.
Yes, but: Much of the legislative discussion involves “giving FERC an affirmative obligation to address things that they already have the authority to do,” said Rep. Sean Casten (D-Ill.).
What's next: FERC is expected to issue a rule soon overhauling interconnection, the process by which energy projects are scrutinized by grid operators and connected to the system.
Yes, but: The rule isn't likely to fully fix the large backlog that's preventing many wind and solar projects from coming online.
📬 Did a friend send you this newsletter? Welcome, please sign up.
🙏 Thanks to Chris Speckhard and Javier David for edits to today's edition, along with the talented Axios Visuals team.