| | | | | | | Presented By General Motors | | | | Generate | | By Ben Geman ·Dec 04, 2020 | | Happy Friday. Today's Smart Brevity count: 1,299 words, 5 minutes. 🛢️"Denmark has decided to end to all oil and gas offshore activities in the North Sea by 2050 and has cancelled its latest licensing round, saying the country is 'now putting an end to the fossil fuel era.'" (Associated Press) 🎤And Monday brings the birthday of the great Tom Waits, so he's got today's achingly beautiful intro tune... | | | | | | 1 big thing: OPEC+ does enough to lift the oil market (for now) |  | | | Illustration: Aïda Amer/Axios | | | | Crude prices are trading at nine-month highs after a protracted OPEC+ meeting ended with plans to just slightly boost output and fresh signs emerged of a potential Beltway deal on new stimulus. Driving the news: OPEC+ yesterday avoided a breakdown that would have led to a large output boost in January. - That's helping move prices out of the rather narrow band where they've been stuck for almost six months, but they're still pretty low and hardly soaring.
- While a months-old plan called for easing their joint production curbs by 2 million barrels per day (bpd) in January, the new agreement calls for a smaller 500,000 bpd boost.
- The group of OPEC, Russia and allied producers now plans monthly meetings starting in January, a packed schedule that reflects the uncertain path of the pandemic and vaccines.
- Those monthly meetings will discuss moving production another 500,000 bpd.
Why it matters: The market movement is a proxy for wider optimism about a light at the end of the pandemic tunnel, even as the virus is tragically raging right now. "The market rallied to multi-month highs on demand expectations from the vaccine and stimulus, not from OPEC's management of supply," Mizuho Securities analyst Robert Yawger said in a note. Yes, but: The meeting outcome avoided what would have been a surprise decision to proceed with plans for a larger output boost, which would have put downward pressure on prices. Goldman Sachs analysts, in a note, said the group avoided a "taper tantrum" with plans for the 500,000 bpd rise. The intrigue: While rising prices are certainly welcome for the beleaguered U.S. shale patch, a Rystad Energy analyst said the plan for frequent OPEC+ meetings that could adjust output creates new hurdles, too. - "This development leaves U.S. shale producers and other market participants with less 'certainty' about OPEC+' exact production targets going forward," Rystad's Bjornar Tonhaugen said in a note.
- He also said: "The market euphoria will at some point soon likely fizzle out as the deal is not uniformly bullish, but rather "ok" given the demand and non-OPEC+ supply outlook."
Go deeper: OPEC, Allies Agree to Increase Output by 500,000 Barrels a Day in January (Wall Street Journal) |     | | | | | | 2. The names floating around for Biden's next picks | | Via Bloomberg, "Senate Democratic Leader Chuck Schumer has urged President-elect Joe Biden to nominate Mary Nichols to lead the Environmental Protection Agency, a sign of his confidence the California air pollution regulator could be confirmed by the closely divided chamber." Why it matters: The reported push by Schumer could boost Nichol's chances of leading an agency that will play a pivotal role in Biden's vow to enact aggressive new climate policies — especially because the plan is likely to rest heavily on executive actions. Where it stands: The EPA gig is just one of several important outstanding selections. The New York Times has a nice rundown of names in contention for other energy- and climate-related jobs. Here's just a few... - Mustafa Santiago Ali, a former EPA official, is in contention to head the White House Council on Environmental Quality. He's currently an exec with the National Wildlife Federation.
- Ali A. Zaidi, a top New York State energy official who also served in the Obama administration, "is widely considered the front-runner for the role of domestic climate change coordinator," the NYT reports.
- The NYT and E&E News both report that former Michigan Gov. Jennifer Granholm is a possibility for the White House climate coordinator role, while E&E also lists Washington State Gov. Jay Inslee as an option.
- Michael Connor, an alum of the Obama and Clinton administrations, is among the options for Interior Secretary, per the NYT. He's a citizen of the Taos Pueblo, and the piece notes there's strong interest in nominating a Native American to lead Interior for the first time.
- Rep. Deb Haaland (D-N.M.), one of the first two Native American women elected to Congress, also "remains a contender" for Interior, the NYT reports.
| | | | | | | | 3. Energy efficiency gains stall |  Data: IEA; Chart: Axios Visuals Improvements in energy efficiency on a global basis have slowed to their lowest level in a decade, the International Energy Agency said in a new analysis. Why it matters: The slowdown is another headwind in the fight against climate change, the agency warned. And the same analysis finds that the pandemic is cutting investments in more efficient buildings, vehicles and equipment. Where it stands: The chart above shows trends in energy intensity, or energy consumed per unit of activity. Threat level: IEA called the slowdown "especially worrying" because efficiency gains provide 40% of the emissions cuts over the next 20 years in their "sustainable development" case. That's a long-term model of an energy system consistent with the aims of the Paris climate deal. | | | | | | | | A message from General Motors | | These videos are preparing kids to be future engineers | | |  | | | | Using everyday items, kids can recreate STEM projects in the comfort of their homes. Here's how: Electrifying Engineering, a series of online videos from GM, is helping students learn about electric car motors, autonomous vehicle sensors, electric car charging and more. Get started. | | | | | | 4. Between the lines: A shifting oil company | | Axios' Amy Harder reports...One of America's biggest oil producers, Occidental Petroleum, has a new term to describe how it hopes to evolve in response to climate change. What they're saying: "Ultimately, I don't know how many years from now, Occidental becomes a carbon management company and our oil and gas would be a support business unit for the management of that carbon," Occidental CEO Vicki Hollub told IHS Markit's Daniel Yergin in an interview (emphasis added). Why it matters: It's arguably the most concrete example of how one U.S. oil company plans to (eventually) transform as the world moves to cleaner energy. The intrigue: Occidental is betting on CO2 capture tech, which it uses now to extract oil from the ground, to stay in the oil business by offsetting those emissions. European oil companies are pursuing a different path by investing in technologies outside the core oil and gas space, like renewables and electricity. Driving the news: Occidental last month set a target to cut greenhouse gas emissions from its operations to net-zero by 2040. - In a report this week, the Texas-based producer said it has a 2050 goal of zeroing out virtually all emissions associated with its fuels, including end-use products.
Yes, but: The vague "I don't know how many years from now," indicates Occidental's shift will be very (very) slow. And don't forget that last year it paid tens of billions to buy rival producer Anadarko. * * * Speaking of oil companies' diversification efforts, Reuters reports: "Italy's Eni is buying a 20% stake in the Dogger Bank Wind Farm project from Norway's Equinor and Britain's SSE as it seeks to gain expertise in the sector and cut its greenhouse gas emissions 80% by 2050." | | | | | | | | 5. USPS delays announcement on potential EV fleet deal | | Giphy Axios' Dion Rabouin reports...The U.S. Postal Service is likely to be upgrading its fleet of trucks with electric vehicles soon, but the decision has been pushed back to next year. Driving the news: USPS told automotive website Trucks.com it expects to announce which companies it will select for a potentially $6 billion deal to build up to 180,000 delivery vans in the second fiscal quarter of 2021. - USPS has now delayed the decision multiple times.
What we're hearing: Electric truck maker Workhorse, one of three companies still competing for the bid, was tightlipped about the future of the deal, but revealed it's still in the running and awaiting word from USPS. - "We're under an NDA with the post office. The post office has announced at different times when the award will be made but it's really all in the post office's hands," CFO Steve Schrader told Dion in an interview for the Voices of Wall Street podcast.
- Workhorse also has agreements in place to deliver vehicles to UPS and DHL, Schrader said, and aims to produce 1,800 vehicles next year.
| | | | | | | | 6. ICYMI: The next phase of the Arctic drilling fight |  | | | Photo: Win McNamee/Getty Images | | | | The Interior Department on Thursday said it will auction oil drilling leases in Alaska's Arctic National Wildlife Refuge in early January. Why it matters: The procedural step would make it harder for President-elect Joe Biden to thwart drilling there, even though any actual development is years away. The big picture: The refuge is thought to contain huge oil deposits that proponents say can be tapped with manageable disruption. Environmentalists oppose development, calling it impossible without harming the ecosystem that's home to caribou, polar bears and other species. Where it stands: Drilling advocates finally succeeded in mandating lease sales in late 2017 legislation after a decadeslong battle over whether to open the region. - But the fight is nowhere near over, and there are administrative and legal levers that Biden could pull to stymie drilling.
- And the level of industry interest is uncertain. Companies are facing strained budgets, cloudy future demand and prices, activist pressure and other forces.
Go deeper | | | | | | | | A message from General Motors | | You answered the call | | |  | | | | When America needed ventilators, masks, and face shields, GM and UAW workers answered the call. You delivered 30K critical care ventilators in just 4 months. You used your skills to help save lives. So from GM, from the UAW, and from your nation: thank you. | | | | | | Axios thanks our partners for supporting our newsletters.
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