Axios Generate

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March 17, 2017

Happy Friday! It's the end of the beginning for Generate as we finish week two of the newsletter. Thanks so much for reading. Your tips and feedback are always welcome at [email protected] And a reminder that you can sign up for all the Axios newsletters, including our cool new tech newsletter Login, by clicking here. Ok, onward . . .

Breaking Friday morning: new global CO2 data

The International Energy Agency has just reported that 2016 global carbon emissions from energy were flat for the third year in a row.

Why it matters: The Paris-based agency calls the latest findings more evidence of the "decoupling" of emissions from global economic growth. IEA executive director Fatih Birol calls it a "cause for optimism" but warns it's too soon to say emissions have peaked.

The IEA findings note that the world still isn't on track to keep the global temperature increase less than 2°C above preindustrial levels, the goal of the Paris climate accord.

The details: U.S. carbon emissions fell 3% thanks to gas and renewables' ongoing displacement of coal in power production. The country's CO2 output is at its lowest level since 1992. Emissions in China, the world's biggest CO2 source, fell by 1% even as the economy grew by 6.7%, IEA said. Renewables, nuclear and gas have an increasing share of electricity generation, and efforts to clean up China's polluted air are driving a shift from coal to gas at industrial plants and buildings, the agency said.

Snapshot from the budget brushoff

That was quick: There are already plenty of signs that Republican lawmakers won't get behind proposals to end or deeply cut energy and environmental programs in the White House budget plan. Thursday brought a slew of super-noncommittal and even critical statements from senior Republicans on the spending committees and elsewhere. Trump's proposed EPA cuts are huge and some of these non-climate EPA and energy programs he attacks are popular with both parties.

Why it matters: Yes, plenty of Republicans dislike climate initiatives and you'll also find backing to trim green energy R&D, but overall it's clear that lawmakers see Trump's proposal as a political wish list, not a guide. For instance, Republican Sen. Lisa Murkowski chairs the Appropriations subcommittee that writes EPA's budget, and she also leads the Energy Committee. She flatly said she "cannot support" many of the proposed cuts.

To be sure: There's indeed some alignment between Trump and congressional Republicans. Kentucky Rep. Hal Rogers, chairman of the spending subcommittee that handles the State Department, was bullish on going after State's international climate funding, which Trump wants to kill outright. "I have not been too happy with those programs," said the coal industry ally.

ARPA-E’s Republican defenders

One more budget item: it's highly unlikely that Trump will succeed in his plan to kill the Advanced Research Projects Agency-Energy, a popular Energy Department program to fund development of breakthrough tech.

  • "I think it has been an effective program and I think they do a good job. Is it something we ought to be funding? That will be a debate we have," GOP Rep. Mike Simpson, head of the Appropriations subcommittee on DOE's budget, told reporters in the Capitol.

Rep. Fred Upton, a senior member of the Energy and Commerce Committee, said the program has done "good things."

Drillers are throwing more cash around

There's more data to back up the optimistic vibe coming from oil producers these days. The prominent consulting firm Wood Mackenzie sifted through the capital spending plans of 119 companies, and 99 of them plan to boost their exploration and production investments in 2017.

Why it matters: The new findings underscore how the oil price recovery is driving new economic activity, especially in the U.S. Overall, the companies plan to spend a combined $25 billion more in 2017 than last year, an 11 percent rise.

Things look even brighter in the U.S. shale patch:

"Those companies focused on the U.S. have booked the largest increase in planned spending, with budgets set to rise 60% year-on-year, accounting for $15 billion of additional investment."

The non-climate case for sticking with Paris

A short new paper is making a Trump-centric case for keeping the U.S in Paris climate change accord. Via the Center for Strategic & International Studies, Paul Bodnar's note called "An America First Climate Policy" (see what he did there?) argues that even if you don't care about climate change, there are plenty of reasons to stay involved.

The basic pitch: "Burning valuable political capital and risking a climate-related trade war seems especially unnecessary when you consider the simple, low-key requirements associated with staying in the agreement," writes Bodnar, a National Security Council energy aide under Obama.

Lowballing oil demand

The Wall Street Journal has an interesting piece that explores how forecasts of the world's oil thirst are consistently revised upward.

  • "The International Energy Agency's closely watched annual estimates of global crude demand have been revised up for the past seven years by an average of 880,000 barrels a day, according to a Wall Street Journal analysis," the paper reports.

The small differences can matter for prices

, even in the nearly 100 million barrel daily global oil market. Per WSJ: "The oversupply that has pressured oil prices for almost three years was estimated at around 1% to 2% of the market in 2016."

Update on the GOP climate resolution

On Thursday I caught up with GOP Rep. Carlos Curbelo, the lead sponsor of the GOP resolution calling for action on climate change that so far has just 16 co-sponsors (we wrote about this upstream swim here).

  • More to come: Curbelo, at the Capitol, said the sponsor list will "very likely" grow quite soon. "We have many colleagues who have contacted us, they are interested, they want to learn more, they want to figure out how they can be a part of this."
  • Hoping to engage leadership—eventually: "The stronger we get, the more attention we are going to be getting from leadership, and from others. … There will be a time to have a concrete discussion with them on how we can advance some policy solutions."

Friday brings the first in-person meeting between President Trump and German chancellor Angela Merkel, who has said she wants to chat about climate change with Trump. And look for more energy coverage in the Axios stream. Generate returns Monday. Have a great weekend.