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1 big thing: Biden's SOTU climate pitch was short but revealing

Illustration: Annelise Capossela/Axios

President Biden's State of the Union speech highlighted the White House political strategy on climate and energy markets as Russia's invasion of Ukraine sends oil prices skyward, Ben writes.

Here are three takeaways...

1. The economic pitch was front and center. That's always been true for Biden when talking about clean power and electric vehicles, but the appeal was especially direct last night.

  • "Cut energy costs for families an average of $500 a year by combating climate change," he said, and also said that lowering EV prices would save drivers "$80 a month because you’ll never have to pay at the gas pump again."
  • That was part of his pitch for the major expansion of renewable electricity tax credits and EV purchase incentives in the wider domestic spending package that has stalled in Congress.
  • Biden also sought some credit, touting jobs stemming from Ford and GM's already announced plans to boost domestic EV production.

2. It was pretty light on climate overall compared with Biden's first speech to a joint session of Congress as president last April.

Biden didn't offer any new proposals or initiatives and, unlike last year's speech, didn't promote the revived White House climate diplomacy efforts.

3. He didn't cede ground on oil-and-gas appeals from the GOP and industry groups.

Advocates are lobbying for scaling back restrictions on leasing and other development and promoting even larger exports to boost energy security here and in Europe (Bloomberg has a good look).

But Biden didn't talk up the U.S. reemergence as a petro-superpower in his remarks on Ukraine, instead, focusing on the newly announced release of more strategic oil reserves from the U.S. and other nations.

Bonus: Charting Russia's U.S. oil sales

Top oil exporters to the U.S.
Data: U.S. Energy Information Administration; Chart: Kavya Beheraj/Axios

Lawmakers from both parties are pushing the White House to impose a ban on U.S. imports of oil and petroleum products from Russia, even as buyers are already steering clear of the country's crude, Ben writes.

Driving the news: Appeals or proposed bills are coming from lawmakers including Senate Energy Chairman Joe Manchin; a number of GOP lawmakers, and liberal Democratic Sen. Ed Markey.

Why it matters: Total U.S. oil and refined product imports have declined greatly since the mid-2000s as the shale boom began a surge in domestic production.

The U.S. remains, however, a significant importer, and Russia is among the largest suppliers (see above).

Yes, but: Russian oil exports are taking a major hit even without new government limits, Reuters and others report as buyers "self-sanction."

  • "U.S. traders in the nation’s largest oil hubs have cautiously put imports from Russian companies on hold, even though the White House has said oil sales are not the target of sanctions," it reports.
  • It's not just the U.S., either. "Demand for Russian oil has collapsed as refineries, banks and shipowners shunned the country’s vast commodities market," the Financial Times reports.

2. Ford creates business unit for electric cars

Illustration: Sarah Grillo/Axios

Ford this morning said it's separating its electric vehicle and internal combustion businesses into separate units, Ben writes.

Why it matters: The creation of distinct business lines — called "Model e" and "Ford Blue" — underscores how auto giants are reorienting around EV development.

How it works: Ford said the two units would be "strategically interdependent" and share relevant tech.

Together with the Ford Pro commercial services line launched last year, Ford said the three units will begin to separately report profits and losses in 2023.

What's next: Ford has recently launched or unveiled electric models, including the Mustang Mach-e that began deliveries last year, and the electric F-150 pickup slated to start reaching customers later in 2022.

It said today that it expects EVs to account for half its global sales by 2030.

Quick take: The move appears to be an effort to woo investors with a pitch around combining Ford's in-house resources and balance sheet with greater agility to better compete with EV startups.

CEO Jim Farley, in a statement, said the new unit will give the automaker "start-up speed and unbridled innovation," that combined with their industrial know-how and other attributes that "start-ups can only dream about."

CNBC has more.

3. Exxon is breaking up with Vladimir Putin

Photo Illustration: Budrul Chukrut via Getty Images

ExxonMobil is ending its role in a major Russian oil-and-gas project and ceasing new investments in the country due to its invasion of Ukraine, Ben writes.

Why it matters: ExxonMobil is among the world's most powerful oil companies and has longstanding investments and operations in Russia.

The move announced Tuesday night, which follows divestment announcements by Shell and BP, signals how Western oil majors are cutting ties with Russia despite its massive hydrocarbon reserves.

Driving the news: Exxon has a 30% stake in the big Sakhalin oil-and-gas project in Russia's far east and operates the development. It's Exxon's only current project in Russia, a spokesperson said.

  • The other partners in the venture are Russian state-controlled oil giant Rosneft as well as Indian and Japanese companies.
  • ExxonMobil said it's "beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture."
  • The company also said that "given the current situation, ExxonMobil will not invest in new developments in Russia."

What they're saying: "We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people," ExxonMobil said in a statement that voices support for the Ukrainian people.

What we don't know: The estimated financial hit to Exxon, but that could come up during the oil giants investor presentation later this morning.

4. Exclusive: Green hydrogen startup raises $11M in Series A

Illustration: Sarah Grillo/Axios

H2U Technologies, a green hydrogen startup, has raised an $11 million Series A funding round led by Jericho Energy Ventures, Andrew writes.

Why it matters: The company aims to avoid using rare and expensive platinum group metals to manufacture hydrogen gas.

  • The firm, headquartered in a new, 25,000-square-foot facility in Chatsworth, California, has developed low-cost electrolyzers it hopes will provide the means to produce green hydrogen at a lower cost than competitors.

How it works: Green hydrogen is powered by renewable energy, and is viewed as a way to power ships and cars, or even use in power plants currently using natural gas.

  • An electrolyzer combines water and electricity, along with a catalyst-coated membrane surface, to separate out the hydrogen and oxygen in water and produce hydrogen gas and oxygen gas, explained H2U Technologies president and CEO Brian McGough, in an interview.
  • H2U’s advantages, he said, center on what it uses as catalysts, which are substances that enhance chemical reactions.
  • The company has also developed an AI system to discover new catalysts that don’t involve Platinum group metals, which are limited in quantity and costly.

Flashback: Last year, H2U inked a strategic partnership with SoCalGas, which announced plans to replace up to 25% of their natural gas with clean hydrogen.

Read more.

5. Benioff-backed NCX nabs $50M for global expansion

Illustration: Aïda Amer/Axios

NCX, the carbon marketplace backed by billionaire Salesforce founder Marc Benioff, raised $50 million in a Series B to help fund international expansion, Axios' Alan Neuhauser reports.

Why it matters: The funding will fuel NCX’s planned drive outside the U.S., likely first with planned pilots in Mexico and Canada, a spokesperson tells Axios.

  • NCX connects buyers of carbon offsets with landowners who grow trees on their property. The company then uses satellites to "measure every acre every year," co-founder Max Nova says.
  • Since its seed round in Thanksgiving 2020, it has grown from 10 to 50 employees and signed corporate buyers such as Microsoft, Cargill and Rubicon.

Zoom in: Energize Ventures led the funding round. It also included J.P. Morgan Asset Management, Intercontinental Exchange, Dalus Capital, Clearvision Ventures, and further funding from existing investors Scribble Ventures and Benioff's TIME Ventures.

What they’re saying: "Ultimately we've got to get to where all the trees are at," Nova tells Axios. "The U.S. has over 600 million acres of forest, but there are billions of acres of forest out there."

Of note: NCX hasn't made public its valuation and declined to speculate on the timing of its push into other countries.