Aug 10, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning from Sun Valley, Idaho!

Situational awareness: EPA is "preparing to adopt new rules that would rescind regulations for methane-gas emissions, including ending requirements that oil-and-gas producers have systems and procedures to detect methane leaks in their systems, senior administration officials said." (WSJ)

Heads up: Join Axios' Joann Muller Tuesday at 12:30pm ET for a conversation on the future of autonomous vehicles. Register here.

My column continues my reporting on unions, clean energy and Joe Biden. I'll share a glimpse, and then Ben Geman will get you up to speed on other news. Today's Smart Brevity count: 1,236 words, < 5 minutes.

1 big thing: Biden vs. Musk over unions

Photo illustration: Annelise Capossela/Axios. Photos: Yasin Ozturk/Anadolu Agency via Getty Images, Joshua Roberts/Getty Images

Joe Biden wants to go big on climate change and big on unions. Elon Musk leads on the former but lags on the latter.

Why it matters: Musk isn’t uniquely averse to unions, but Tesla is considered a leader on the type of new technologies needed to tackle climate change. Musk’s leadership ethos could be in the crosshairs if Biden becomes president and follows through on his campaign vows.

Catch up fast: Biden’s climate-change plan calls for renewable energy to largely replace oil, natural gas and coal and for a huge buildout of electric vehicles. He is also pushing for these clean-energy industries to embrace unions, which they largely have not.

Where it stands: An administrative law judge ruled last fall that Tesla and Musk broke federal labor laws during a series of actions by company officials and tweets by Musk in 2017 and 2018 as workers were trying to form a union.

For the record: Tesla’s press department didn't respond to multiple requests for comment.

  • Musk has defended his record on worker rights several times on Twitter, saying in 2018 that he is not opposed to unions generally, just the United Auto Workers. UAW filed the original complaint with the labor board.

The intrigue: Some experts following Tesla say the firm is missing an opportunity to lead not only on climate, but on worker rights too.

How it works: Biden’s recently expanded climate and energy plan calls for sweeping changes to labor laws, along with aggressive goals to transition away from fossil fuels.

  • Click here to read my earlier column with specifics on Biden’s union plans.

What they're saying: “What Biden is suggesting is that you finally have some teeth in U.S. labor laws,” said Richard Bensinger, a former national organizing director of the AFL-CIO.

  • “This will make a big difference in organizing places like Tesla because it will take these owners and hold them accountable for fighting the right of American workers to organize a union,” Bensinger said.

Yes, but: As with most bold campaign promises, this one relies heavily on Congress supporting Biden’s goals. If the Senate remains in Republican control (a prospect that's looking less certain), a lot of what Biden wants won't happen.

Read more

2. Equinor names new CEO and vows faster green shift

Equinor this morning named company veteran Anders Opedal to replace CEO Eldar Sætre this fall and vowed to accelerate its diversification into climate-friendly energy.

Why it matters: Norway-based Equinor is among the world's largest multinational oil-and-gas companies, though smaller than supermajors like ExxonMobil, Shell and BP.

  • The announcement comes as a bunch of European-based giants are vowing to speed up their push into areas like solar and EV charging.
  • However, fossil fuels remain their dominant business lines and still account for the vast majority of their investments.

What's next: Opedal is slated to take over in November. He's been the company's EVP for technology, projects and drilling since 2018 and joined Equinor as an engineer in 1997.

What we're watching: Whether Opedal will quickly look to roll out new pledges and/or more details on the company's plans to speed up its renewables push.

  • In a statement Monday, he vowed to work with colleagues to "accelerate the development of Equinor as a broad energy company and our growth within renewables."
  • Equinor's current plan, announced early this year, calls for expanding its renewables portfolio to reach up to 6 gigawatts by 2026 — a tenfold rise — and up to 16 GW by 2035.

Where it stands: Sætre, 64, is retiring after 40 years with the company and six as CEO. He signaled months ago that he planned to step down, Equinor said.

  • His tenure included changing the company name from Statoil to Equinor to reflect its diversification efforts and a series of climate pledges.
  • Equinor vowed in February to cut carbon intensity (emissions per unit of output) by at least 50% by 2050 — a plan that includes emissions from use of its fuels in the economy.
3. Hyundai's EV move

Hyundai's Ioniq. Image courtesy of Hyundai

Hyundai Motor is creating a new electric vehicle unit called Ioniq and plans to roll out three new models by 2024.

Why it matters: The announcement Sunday is the latest example of big automakers' strategies to expand market share in the increasingly competitive EV space.

  • Ioniq is the name of the Korean automaker's current EV model rolled out in 2016 but will now be the moniker for its larger branding effort.
  • Hyundai hopes to have a 10% share of the global EV market by 2025 and be the third-largest maker of "eco-friendly" vehicles.

What's next: Hyundai's first Ioniq model will be a crossover coming next year. A sedan will follow in 2022, followed by a large SUV in early 2024.

Go deeper: Hyundai announces plans for three EVs under new Ioniq brand (Car and Driver)

4. Poll: Pennsylvanians oppose fracking at 52%

Fifty-two percent oppose fracking in a CBS News poll of registered voters in Pennsylvania, while 48% favor the oil-and-gas extraction method, a finding within the poll's margin of error.

The big picture: Pennsylvania is a key swing state where natural gas development is a major industry, and President Trump's campaign has sought to turn Biden's energy plans into a political liability.

  • Overall, the poll released over the weekend found that 45% believe Trump would do a better job handling "issues surrounding oil-and-gas exploration," while 42% said Biden would do better.

Where it stands: The Trump campaign has inaccurately said Biden would pursue an outright ban on fracking. However, Biden's platform does call for new restrictions on oil-and-gas development and an accelerated transition away from fossil fuels.

Of note: The poll, which included 1,225 registered voters in Pennsylvania, had a margin of error is ±3.7%.

5. Big this week: Taking oil's pulse

The next few days will bring closely watched, even market-moving data and analyses on the state of the oil market.

Why it matters: The pandemic upended the market by crushing demand and prices, and the pace of recovery remains uncertain amid fresh COVID-19 outbreaks.

What's next: The Energy Information Administration's monthly data and projections arrive tomorrow, while OPEC's monthly report comes out Wednesday.

  • The International Energy Agency's monthly oil market report, the most closely watched of the bunch, arrives Thursday.
6. Pandemic petro-notes: Aramco, asset values, jobs

Write-downs: "The world’s five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand." (Reuters)

Earnings: "Oil giant Saudi Aramco reported a 50% fall in net income for the first half of its financial year, reflecting a devastating year for oil markets and the global economy at large as the world continues to battle the coronavirus pandemic. (CNBC)

Jobs: "Roughneck job cuts accelerated in July and the outlook may worsen as new Covid-19 cases stifle economic activity, according to the Petroleum Equipment and Services Association." (Bloomberg)

7. Pondering GM's possible stand-alone electric car biz
Source: Giphy

GM would love to be counted among the cool kids — Tesla and a crop of EV startups drawing huge valuations — but Wall Street still views GM as yesterday's news despite its huge EV investments, Axios' Joann Muller reports.

Why it matters: Pure plays on electric vehicles are all the rage among investors. One way for GM to get credit for its in-house capability is to spin off its EV operations as a stand-alone business.

Driving the news: GM on Thursday unveiled the Cadillac Lyriq show car, a luxury crossover SUV that will be among the first based on GM's new modular EV platform and Ultium battery propulsion system. It's among 20 EVs that GM plans to launch by 2023.

The intrigue: The reveal came just a week after GM CEO Mary Barra opened the door to a potential EV spinoff in response to a question on a call with analysts.

  • In fact, GM had already floated the idea internally back in 2018, according to Bloomberg.
  • Today, the motivation looks even stronger with aspiring EV makers like Nikola, Fisker and Rivian attracting vast amounts of capital in public and private markets.

Sign up here for Joann's Navigate newsletter.

Ben GemanAmy Harder