Sep 6, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back! Today's Smart Brevity count: 1,098 words, ~ 4 minutes.

Situational awareness: "More than 156,000 homes and businesses in the U.S. Southeast were without power on Friday as Hurricane Dorian lashed the Carolina coast, according to local electric companies," Reuters reports.

And tomorrow will mark the birthday of The Pretenders' Chrissie Hynde, so they'll play us into the weekend...

1 big thing: New twist in the Trump vs. California auto fight

Illustration: Sarah Grillo/Axios

The high-stakes battle between the White House and California over carbon emissions and mileage rules could be on the cusp of its next phase.

Driving the news: The Trump administration could soon move to revoke California's authority to set vehicle pollution rules that are tougher than federal standards, per multiple reports Thursday.

  • Officials could "move within the next few days" on the effort, The Wall Street Journal reports.

Why it matters: It's a key part of the wider White House effort to freeze Obama-era standards, rather than allowing them to get significantly tougher through the mid-2020s.

  • Right now California has a Clean Air Act waiver to set emissions rules (which are largely a proxy for mileage standards) that roughly a dozen other states follow.

The intrigue: The administration has previously proposed yanking California's waiver as part of the complicated — and unfinished — rulemaking to roll back Obama-era mandates.

  • But now, per The New York Times, Bloomberg and others, officials may decouple those plans and move against California's 2009 waiver first.

What we don't know: Why exactly the administration is reportedly separating the waiver revocation from the rule to freeze the Obama-era standards. Possibilities...

  • Timing: The NYT reports the regulation to freeze the standards is "bogged down" as the administration has struggled to document "legal, technical, economic and scientific justifications."
  • Legal strategy: The WSJ notes it could "insulate" the waiver revocation from the standards changes in case the latter are successfully challenged in court.
  • Persuasion: Former Obama aide Jody Freeman tells Bloomberg the White House wants to dissuade more automakers from joining 4 companies — Ford, Honda, VW and BMW — that recently struck a deal with California on increasing standards for their nationwide vehicles.
  • Freeman, now a Harvard law professor, said President Trump is "saying to the auto companies: ‘California has no legal authority in our opinion, so it can’t threaten to set its own standards, so you don’t need to make a deal.' "

The big picture: Automakers have chafed at Obama's rules, arguing they're too strict.

  • They backed Trump's move to weaken them to some degree, but then Trump went much too far for their liking.
  • Now they're desperate to avoid a split U.S. market, with one set of rules for California and a dozen other states and weaker federal standards that others follow.

But, but, but: The White House tells Axios' Alayna Treene that it's "moving forward to finalize" rules that set a "realistic and transparent fuel economy standard," and that "suggestion otherwise is false."

2. The yin-yang of Big Oil and climate
Expand chart
Reproduced from BloombergNEF; Chart: Axios Visuals

New data from the consultancy BloombergNEF shows the growth of low-carbon energy investments by oil-and-gas majors — and underscores how the European-headquartered players are the most active.

Where it stands: Check out the chart above, which shows that 2019 is on pace to be the most active year yet.

Why it matters: The world's largest companies are diversifying into renewable power, home energy services, EV charging and more.

  • “A number of them have expressed an interest in becoming Big Energy instead of just Big Oil,” BloombergNEF analyst Anastacia Dialynas told Axios.
  • But a standing reminder: It remains a very small slice of their budgets.

By the numbers: "Oil companies have done about 70 deals in sectors including solar, wind and biofuels so far this year, already close to surpassing the total for the whole of 2018," Bloomberg reports in a piece on the new analysis.

But, but, but: A new report from the group Carbon Tracker says oil majors have recently moved ahead with tens of billons of dollars' worth of large-scale fossil fuel projects that are inconsistent with the goals of the Paris climate agreement.

  • It concludes that they have sanctioned $50 billion of investment since 2018 in projects that "undermine climate targets and threaten shareholder returns."
  • The report explores projects such as the partnership among BP, Exxon, Total and Equinor on deepwater oil production off Angola and Shell's major LNG investments in Canada.
  • "Every oil major is betting heavily against a 1.5˚C world and investing in projects that are contrary to the Paris goals," report author Andrew Grant said in a statement.
3. Dust settles on the climate talk-fest

A few more notes on the 7-hour CNN climate town hall on Wednesday night...

Elizabeth Warren, who has turned her many policy plans into a brand, kicked up some dust in the wonk-sphere with her statements opposing nuclear power.

  • Why it matters: A lot of experts argue that to deeply decarbonize electricity, nuclear should be kept on the menu of options for new generation and existing fleets should keep running.
  • What they're saying: "I'm not down with @ewarren's plan to phase out nuclear by 2035 or neglect investment in advanced nuclear, which could be a key climate solution," tweeted Jesse Jenkins, a prominent power expert.

Pete Buttigieg's framing of carbon pricing is worth watching, per an interesting wrap-up from the independent research firm ClearView Energy Partners.

  • They note: "Buttigieg appeared to differ from several competitors in his pairing of regulation and a price on carbon in that he did not emphasize highly prescriptive policies, because a carbon tax 'lets a lot of these things get sorted out without anybody in Washington having to figure out all the answers.'"
  • Why it matters: Carbon pricing has lost cachet in activist and some Democratic circles as a central tool for battling climate change, even though it's part of many candidates' plans.

CNN may have received industry acclaim for the event, but it was otherwise a ratings flop, per Axios' Sara Fischer.

  • By the numbers: The network finished third in total viewers behind Fox and MSNBC for the 7 hours (5 p.m. to midnight) that the event aired, according to Nielsen ratings. It experienced a slight bump during the primetime hours.
4. Catch up fast: Oil, renewables, LNG

Oil-and-gas: Reuters explores headwinds facing U.S. companies. "Oil producers and their suppliers are cutting budgets, staffs and production goals amid a growing consensus of forecasts that oil and gas prices will stay low for several years," they report.

Investing: Per the Financial Times, "Redburn, the equity research house, has removed all 'buy' ratings from the biggest integrated oil companies, arguing that the industry faces an 'existential risk' as long-term forecasts for oil demand are up to 30 percent too high."

Renewables: Via Inside Climate News, "Renewable energy capacity quadrupled worldwide over the past 10 years, with an estimated $2.6 trillion invested in its growth, a new report from the United Nations Environment Programme shows."

  • "But the speed of that growth still falls far short of what researchers say is needed to keep global warming in check," their piece adds.

LNG: "Russia's Novatek took a final investment decision on its Arctic LNG 2 project, and signed new LNG cooperation deals with Asian partners during the Eastern Economic Forum in Vladivostok," S&P Global Platts reports.

Ben GemanAmy Harder