Nov 24, 2021

Axios Generate

Good morning. Today's Smart Brevity count is 1,149 words, 4.5 minutes.

🥧 We'll be off for Thanksgiving break and return to your inboxes Monday. Have a nice holiday!

🎶 Sunday marked the 1980 release of Steely Dan's album "Gaucho," which provides today's intro tune...

1 big thing: Making sense of Biden's push to manage oil markets

Illustration: Rebecca Zisser/Axios

The White House is making a naked attempt to exert control over energy prices at a politically perilous moment for President Biden and his agenda, Ben writes.

Catch up fast: Biden officials said Tuesday the U.S. will release 50 million barrels of oil from the Strategic Petroleum Reserve in a coordinated step with several other countries to unlock crude from their stockpiles.

Our thought bubble: Here are a few takeaways from the announcement...

The news was very stage-managed. The administration didn't miss a chance to try to show it's helping consumers grapple with gas prices in the announcement that arrived just ahead of Thanksgiving.

  • The day unfolded with an early morning White House announcement and press call. Then, President Biden touted the move in his wider afternoon remarks on the economy and consumer prices.
  • And after that, Energy Secretary Jennifer Granholm joined the White House press briefing to promote the move.

It heralds a new coalition — but maybe not a lasting one. The move with Japan, South Korea, India, the U.K. and China comes after OPEC+ has rebuffed White House pressure to increase output more aggressively.

  • "OPEC+ now appears to have an explicit rival in managing oil markets," ClearView Energy Partners said in a note about the ad-hoc group.
  • But they also note the fragility of the coalition (indeed China's posture is a little vague) and that the others "may not be as willing as Washington is to pursue further draws."
  • "If it comes to repeated releases, I think it will pretty much be the U.S. only," Rapidan Energy Group president Bob McNally tells Axios. "I think it would be really difficult to keep this band together."

Market dynamics may be on Biden's side. Crude prices — which largely determine gas prices — have already come down several dollars in recent weeks after climbing for months through late October.

  • That's partly due to officials telegraphing the oil release. “It broke the back of an oil-price run-up that otherwise would have happened,” Columbia University energy expert Jason Bordoff tells the Washington Post.
  • The International Energy Agency and the U.S. Energy Information Administration both see the global supply-demand balance moving to a surplus early in 2022.
  • "Most of us see fundamentals softening up next year and oil prices dropping into the $70s," McNally said, referring to Brent crude.

The move comes at a tricky time for Biden's agenda. Elevated gas prices and wider inflation are hitting consumers as Democrats are struggling to move their big social spending and climate plan through Congress.

  • Bloomberg columnist Liam Denning notes that high energy prices hurt presidents and Biden is "especially vulnerable" due to inflation.
  • "This not only hurts consumers but also provides Senator Joe Manchin a ready excuse to delay or derail the president’s green-tinged spending package," Denning writes.
  • "My effort to combat climate change is not raising the price of gas or [decreasing] its availability," Biden said in remarks.
Bonus: The crude export controversy reawakens
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Data: U.S. Energy Information Administration; Chart: Jared Whalen/Axios

Some Democratic lawmakers have been urging the White House to ban crude oil exports, which have soared since extremely heavy restrictions were lifted in late 2015 legislation.

Where it stands: Administration officials didn't rule it out on a call with reporters yesterday. But they hardly voiced support for the idea either.

It would be an extraordinary step after the U.S. has emerged as a major exporter.

What they're saying: "I don’t know of an oil analyst who thinks it would cause domestic gasoline prices to go down," McNally of Rapidan Energy Group said in an email exchange.

2. COP26 got a lot of coverage but little buzz
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Data: NewsWhip; Chart: Jared Whalen/Axios

COP26 in Glasgow, Scotland, billed as the world's last, best chance to limit global warming below potentially devastating levels, generated far more online attention than other recent milestone climate change news events, Neal Rothschild and Andrew write.

However, this was largely due to the volume of coverage, as individual stories saw a decline in interactions on social media as the summit went on.

Why it matters: The trend speaks to the current state of climate news coverage: The issue is getting much more widespread policy and media attention, but it’s becoming harder to get the public to pay close attention.

Stories published about COP26 over a three-week period generated 6.5 million interactions on social media (likes, comments, shares), according to exclusive data from NewsWhip.

Yes, but: On a per-story basis, interaction for COP26 was much lower — 37 per story versus 247 for COP25 and 1,070 for the 2018 IPCC report. The lack of engagement per story may have been at least partly due to the sheer volume of COP26 content.

Between the lines: Interest in this year’s conference peaked in its first few days (Nov. 1-2) when more than 100 world leaders gathered in Glasgow and President Biden addressed the summit, according to data from Keyhole and Google Trends.

  • It tumbled during the remainder of the conference, as topics got more technical.
  • Not even the final, historic agreement to move away from fossil fuels pushed numbers up on the summit’s last day — the 161,000 interactions were the lowest of the entire event.
3. SoCal faces wildfire risk, power shutoffs over Thanksgiving

Computer model projection of maximum wind gusts on Wednesday into Thanksgiving Day in the Los Angeles area. Darker reds correspond to 70 mph winds. (Weatherbell.com)

Southern California is facing an intense Santa Ana wind event over the Thanksgiving holiday, with "critical" wildfire risk since very little rain has fallen in this region so far this wet season, Andrew writes.

Why it matters: Fire danger is forecast to be highest from Wednesday through Friday, and any wildfire that ignites could become a conflagration that’s difficult to stop.

Details: Red flag warnings are in effect for about 18 million people. The peak winds are expected Wednesday night through Thanksgiving Day.

  • Forecasters measure the intensity of Santa Ana events by the difference in air pressure between Los Angeles International Airport along the coast, and an obscure tower of weather instruments well inland, located in the tiny Mojave Desert community of Daggett.
  • The greater the forecast pressure difference, the stronger that dry, downslope winds are likely to howl through canyons and mountain passes, blowing from high pressure inland toward lower pressure closer to the coast.

Threat level: The forecasted pressure difference during this upcoming event puts it on the higher end of the scale.

  • Peak winds may reach 70 miles per hour at the same time relative humidity plunges into the single digits. Southern California Edison is notifying residents it may cut power to about 150,000 customers in advance of the winds to prevent wildfire ignitions.
  • The National Weather Service is warning residents and visitors who may be in the area for Thanksgiving to have a plan to evacuate on short notice: "Any new fire starts can spread rapidly!"
4. Number of the day: 345.4 miles per hour

That's the speed the Rolls-Royce's "Spirit of Innovation" electric airplane clocked over three kilometers.

It's a world record, by a lot, if certified by the World Air Sports Federation. The plane also reached a max speed of 387.4 mph. Go deeper