Categories
Travel News

Oil industry faces a bleak future after murderous year

For much of the past year, investors criticized Exxon and Wall Street was plagued by rumors the company would cut its dividend to preserve cash. The stock price had fallen about half from the start of last January, falling to $ 31 in November, its lowest level in nearly 20 years.

But Exxon’s share price has rebounded to around $ 46, mainly because energy prices have rallied sharply in recent weeks. Oil prices have risen nearly 10% this year, and the snowstorm in the northeast is pushing up natural gas prices because the fuel is used to heat homes and businesses. Exxon’s dividend now looks secure. And write downs aside, Exxon made a small profit in the last three months of the year.

“The industry has gone to hell and back,” said Michael C. Lynch, president of Strategic Energy and Economy Research. “Most of them have survived the worst circumstances they’ve ever faced, and it’s almost certain that things will improve from here in terms of price and demand.”

Goldman Sachs has predicted that oil prices could rise by $ 10 a barrel, up to $ 65 by July. It would be a remarkable recovery from prices which were languishing at less than half of those for much of 2020, even if it would remain well below prices of a decade ago, when a barrel of oil was over $ 140 and the oil companies were making record profits.

The industry has suffered repeated shocks in recent years, with prices falling during the recession that began in December 2007, again in 2015 when OPEC flooded the market with crude to cut US production, and the year last, when the pandemic took hold.

The pain of the industry has forced many companies to lay off employees and cut dividends. Dozens of once-high-flying companies like Chesapeake Energy have declared bankruptcy in recent years.

Even now, as conditions appear to be improving, the outlook for the industry remains uncertain. Due to the emergence of new variants of the coronavirus, it is not clear how quickly the United States, Europe and other major economies will bring the spread of the virus under control. And then there are the big questions about climate change.

Categories
Travel News

In sweeping climate action, Biden ‘suspends’ oil and gas rentals

WASHINGTON – President Biden will sign a set of executive orders on Wednesday elevating climate change at all levels of the federal government, a move the administration says will put the United States on track to reduce its share of emissions that warm the planet.

In an interview on Wednesday morning, Secretary of State John Kerry, Mr Biden’s international climate change envoy, also said he hoped to see the United States announce new, more ambitious emissions targets ” at or before ” a summit Mr. Biden intends to host. April 22, Earth Day, although he declined to give numbers to those targets.

“It’s a pretty high speed,” Mr. Kerry said, adding: “The United States needs to be as ambitious as possible, because our credibility has been tarnished in these four years of absence.”

The series of executive orders signed by Mr. Biden on Wednesday focus on three main themes: job creation, environmental justice and mainstreaming climate change into all facets of government.

Taking the first significant steps towards one of Mr Biden’s most controversial campaign promises, the orders will order the Home Office secretary to “pause on entering into new oil and gas leases on public lands and offshore waters to the extent possible ”while initiating a“ rigorous review ”of all existing fossil fuel leases and licensing practices, according to a backgrounder provided by the White House.

Federal agencies will also be ordered to eliminate fossil fuel subsidies “and identify new opportunities to spur innovation.” Overhauling tax breaks – worth billions of dollars for the oil, coal and gas industries – to help pay for Mr Biden’s $ 2 trillion climate change plan was also a major campaign pledge. Both plans are expected to face strong opposition in Congress.

Wednesday’s decrees also set new foreign policy goals.

They will formalize the role of Mr. Kerry, the former Secretary of State, as Mr. Biden’s new international climate envoy, with a seat on the National Security Council. And the ordinances will make it clear that climate change, for the first time, will be at the heart of all foreign and national security policy decisions.

“We applaud this,” said Erin Sikorsky, who led climate and national security analysis at federal intelligence agencies until last year and is now deputy director of the Center for Climate & Security, a Washington-based think tank. “It moves us beyond what Obama did.”

The United States has struggled to deliver on its promises under the Paris Agreement, the agreement among nations to fight climate change; under these conditions, the country pledged to cut emissions to 28% below 2005 levels by 2020. Nonetheless, Mr Biden’s orders will launch a process to develop new, more ambitious targets. which will be announced before a major United Nations summit. at the end of the year.

First on the international agenda, however, will be a “Climate Leaders Summit” in April which administration officials say will likely include heads of state from major emitting countries and a handful of others who have been important players in the global climate negotiations.

Mr Kerry, in his interview, did not pledge to announce the new goals at that rally, but said, “Our goal would be to try to do it at or before” the leaders’ summit.

“We are coming back after four years of absence. We have to have some humility here, recognizing that the President of the United States, our predecessor, angered a lot of people and created a lot of unhappiness and left a trace of doubt about where America will go, ”he said. Mr. Kerry said.

Energy analysts in the United States have speculated that the Biden administration could reasonably promise to cut emissions 40 to 50 percent below 2005 levels by 2030. Europeans and environmental activists have urged the United States to go further, up to 70%.

Mr Kerry said on Wednesday it was “far too premature” to talk about the numbers, but he said he recognized the United States had to be both ambitious and realistic. “We have to do it in a feasible and reasonable way,” he said.

By committing to a new target, the United States would bind itself to cuts even deeper than what it had promised under the Obama administration. This will increase pressure on the Biden administration to swiftly implement its national policies, including reviving and tightening regulations former President Trump killed to reduce carbon pollution from power plants and pipes. automobile exhaust.

Mr Kerry also dodged questions about how much funding the United States would provide to poor and vulnerable countries hardest hit by climate change. The United States under the Obama administration pledged $ 3 billion to the Green Climate Fund, a pool of international finance to help developing countries. He delivered $ 1 billion before President Trump abandoned the pledge.

Mr Kerry said on Wednesday that the question of how much President Biden will charge in his first budget later this year to begin honoring the $ 2 billion unpaid is “under discussion”, as is whether the United States will increase its commitment. .

Oil and gas industry executives have signaled that many of Biden’s national climate plans will face strong opposition.

“Criminalizing the oil and gas industry is killing well-paying American jobs, hurting our already struggling economy, making our country more dependent on foreign energy sources, and affecting those who depend on affordable and reliable energy,” Anne Bradbury, chair of the American Exploration and Production Council, a trade group that represents oil and gas producers, said in a statement.

Erik Milito, president of the National Ocean Industries Association, a trade group that represents offshore energy companies, hinted at the legal challenges ahead, saying in a statement that the pause on oil and gas leasing in particular “is contrary to the law and puts America on the path to increased imports from foreign countries that have been characterized as pollution havens. “

Environmental groups called for the long overdue changes, especially after four years in which the Trump administration mocked climate science and wiped out virtually every tool the government had at its disposal to fight rising emissions.

“This is the biggest day for climate action in over a decade,” said Gene Karpinski, president of the League of Conservation Voters.

In his campaign, Biden set targets to phase out fossil fuel emissions from the power sector by 2035, protect 30% of land and oceans by 2030, and bring states to United on the road to net zero emissions, that is, to eliminate as much carbon pollution as the country puts into the atmosphere – by 2050.

His plan calls for spending $ 2 trillion over four years to achieve that goal, a tall order in a tightly divided Congress.

In addition to formalizing a new White House office on domestic climate policy headed by Gina McCarthy, who was previously a director of the Environmental Protection Agency under former President Barack Obama, Mr. Biden also intends to create a national climate task force that will include 21-year-old leaders. federal agencies. It is also creating a new White House Interagency Council for Environmental Justice and a separate advisory board to prioritize an understanding of pollution damage to poor and minority communities.

Mr Biden also called on agencies to look for ways to increase the quantity and quality of available climate forecasting information, to help “governments, communities and businesses prepare for and adapt to impacts of climate change ”.

These repercussions extend to the federal government itself. The White House has ordered each agency to create plans that will better protect their facilities against climate change. This reflects a tall order: Even the Washington headquarters of many agencies, including the Department of Justice, the Internal Revenue Service, and the Environmental Protection Agency, are inside the century-old floodplain.

Mr Biden will also issue a memorandum on scientific integrity, asking agencies to make what the White House has called “evidence-based decisions guided by the best available scientific data and data.” Every agency, not just those that do scientific research, must appoint “scientific integrity” officers.

The measures to ensure scientific integrity follow efforts by the administration of former President Donald J. Trump to thwart climate science.

In one of the most obvious examples, senior Trump officials pressured National Oceanic and Atmospheric Administration leaders in 2019 to repudiate their own scientists after a weather station in Birmingham, Alabama, contradicted Mr. Trump’s incorrect statement that Hurricane Dorian would hit the state. .

Categories
Travel News

Biden implements plan to ban new oil and gas drilling on federal lands

WASHINGTON – President Biden will ask federal agencies on Wednesday to determine to what extent the ban on new oil and gas drilling on federal lands should be extended, as part of a series of executive orders that will effectively launch his program to combat climate change, two people with knowledge of the president’s plans said Monday.

A possible ban on new drilling permits would fulfill a campaign promise that has infuriated the oil industry and has become a central theme in the struggle for the critical condition of the Pennsylvania battlefield, where the method of extracting natural gas known as hydraulic fracturing, or hydraulic fracturing, has become important. business.

The move is the most important of several that Mr Biden announced on Wednesday, the two said. The president will also order the government to conserve 30% of all federal land and water by 2030, create a task force to assemble a government-wide action plan to reduce emissions. greenhouse gas emissions, to issue a memorandum making climate change a national security priority. Mr Biden will also create several new commissions and positions in government focused on environmental justice and environmentally responsible job creation, including one to help displaced coal communities.

Programs and proclamations are meant to signal that climate change is back on the government’s agenda, more important than ever. What they will not provide, at least again, is a significant and rapid reduction in greenhouse gas emissions.

“Can this administration do much on its own? Yes, ”said Jonathan H. Adler, professor of law at Case Western Reserve University. “But,” he added, “if the norm, however, is atmospheric stabilization, I’m skeptical that the administration can do anything close enough administratively.

This will require legislation, Mr. Adler said, “especially if a premium is put on achieving emission reductions as soon as possible.

A White House spokesperson declined to comment on the orders, and two people close to the administration noted that final decisions regarding them were still being refined.

The likelihood that Congress could pass large chunks of Mr. Biden’s $ 2 trillion climate change agenda is only slightly greater now that Democrats hold the slimmest possible majority in a 50-50 Senate. There is little hope of adopting a carbon tax or other mechanism to put a price on greenhouse gas pollution, which would cause cost-conscious companies to emit less.

Without legislation, the administration will have to rely on the regulatory process to reduce greenhouse gas emissions from power plants and fireplaces and improve the fuel efficiency of vehicles, but it also takes time. It cannot be done by decree.

“The tons of carbon pollution in the air is what matters in the end,” said Tim Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University and co-chair of a group that provided plans climate policy to the Biden administration.

Profeta said Wednesday’s orders were an important first step.

“The Biden administration can do a lot to start putting the country on the right track with its own authorities,” Profeta said. Wednesday, he said, “start the process.”

The expected crackdown on new oil and gas leases goes beyond Mr. Biden’s actions on inauguration day, which ended the Home Office and other agencies’ power to issue leases or permits drilling for 60 days, while the administration examined the legal and policy implications of the current federal mineral lease program.

The new policy will ask agencies to consider how much federal land and water should be kept from mining and drilling or set aside for renewable energy production, according to two people familiar with the order, who spoke out. on condition of anonymity because they were not authorized to discuss the policy publicly.

Fossil fuel extraction from public lands and waters accounts for nearly a quarter of all carbon dioxide emissions in the United States, and Mr Biden has campaigned to end new drilling as a key to the fight against climate change.

Much of the environmental community applauded the plan, although some said Mr. Biden did not go far enough.

“It is vital that President Biden permanently ban all further extraction of fossil fuels, including fracking, on federal lands and waters,” said Mitch Jones, political director of Food & Water Watch, an environmental group.

Throughout the campaign, the left wing of the Democratic Party has pressed Mr. Biden to call for a nationwide ban on fracking, including on private land, where most fractures are practiced. He refused, but the oil and gas industry remained skeptical. His move on inauguration day led to the condemnation of the sector and some landowners.

“Your order is a direct attack on our economy, our sovereignty and our right to self-determination,” the Ute Indian tribe of Utah wrote to the Home Office in a letter issued by the American Petroleum Institute.

The climate task force that Mr Biden is expected to create will develop a plan for what administration officials like to call a ‘whole-of-government’ approach to climate change, and will focus on two main areas: environmental justice and creation. jobs.

It will ask every agency to factor climate change into government decisions, from federal government procurement and financial settlements to lawsuits, experts said.

It will also create a number of councils and committees to try to ensure that poor and minority communities as well as Americans who live in coal countries see the economic benefits of clean energy policies.

Mr Biden is also expected to revive and strengthen an Obama-era presidential memorandum in 2016 making climate change a national security priority and forcing intelligence agencies to incorporate climate change into their analyzes of threats to national security. He was quickly dismissed by the Trump administration.

Alice Hill, who oversaw climate planning for the National Security Council under the Obama administration, said the president’s leadership was needed because senior politicians calling for this analysis and intelligence officials preparing it don’t often do not have the experience of thinking. climatic risks.

“When I was in the White House, the risks of climate change were rarely discussed,” Ms. Hill said.

She and others have said Mr Biden needs to go further, potentially converting the memorandum into an executive order that has more power to order agencies to take actions such as establishing strategies and policies to cope. climate-related threats.

“The climate reality today is higher temperatures, stronger storms, more destructive forest fires, rising sea levels, acidifying oceans and prolonged drought,” said Sherri Goodman, under -Assist Secretary of Defense for Environmental Security under Obama and now a Senior Fellow in the Wilson Center’s Environmental Change and Security Program.

“We need a climate security plan for America that protects America’s climate infrastructure and puts climate and clean energy innovation at the forefront,” she said.

Christophe Flavelle contribution to reports.

Categories
Travel News

“ A slap in the face ”: the pandemic disrupts the careers of young oil companies

HOUSTON – Sabrina Burns, a senior at the University of Texas at Austin, had thought she would embark on a lucrative career in the oil and gas industry when she graduated in a few months.

But the collapse in demand for oil and gas during the coronavirus pandemic has disrupted her well-established plans and forced her to consider a new path.

“We had a slap in the face, a totally unforeseen situation that shook our whole state of mind,” said Ms. Burns, who studies petroleum engineering. “I applied for every oil and gas job I’ve seen, like all of my classmates, and nothing really happened. I am discouraged.

With fewer people commuting and traveling, the oil and gas industry has taken a hard hit. Oil companies have laid off more than 100,000 workers. Many companies have closed refineries and some have filed for bankruptcy protection.

The industry has attracted thousands of young people in recent years with the promise of secure careers as shale drilling took off and made the United States the world’s largest oil producer. But many students and recent graduates say they are no longer sure there is a place for them in the industry. Even after the pandemic has ended, some of them fear that growing concerns about climate change will lead to the inevitable decline of oil and gas.

These students seek elite positions in an oil and gas industry that employs approximately two million people. Even after recent layoffs, oil companies still employ more people than fast-growing wind and solar companies, which employ at least 370,000 people, according to occupational groups.

Ms Burns, 22, said her choices have narrowed dramatically over the past nine months. With limited opportunities in oil and gas, she recently accepted an internship at a consulting engineering firm specializing in energy conservation, and she could potentially apply for graduate studies in environmental science. She is also considering moving in with her sister after graduation to save money.

“I have the impression that companies are going to be careful enough to get out of this situation, to recruit new employees,” she said.

Ms Burns was drawn to an oil and gas career by the stories her helicopter pilot father told her about the female engineers he had met to maintain offshore rigs in the Gulf of Mexico . But if her teachers have spoken about the future of oil and gas companies, she is worried.

Even before the pandemic, Ms Burns said, she had doubts about the industry she had chosen. Other students and even an Uber driver carrying her with others to an oil industry banquet in 2018 raised questions about the future of oil and gas and why renewables might be a better bet. .

“Have you ever heard of a solar panel?” she remembers the Uber driver asking her and her friends.

“The silent judgment and passionate comments weighed heavily on me,” she added. Her parents persuaded her to stick to her program, and Ms. Burns said she was committed to the industry and working to improve her environmental performance.

“I hope I can eventually put all my skills and knowledge into practice,” she said.

Stephen Zagurski, a geology graduate student at Rice University, said the timing of his graduation in the coming weeks was “not perfect, far from it”.

“You are short of available positions and you have a huge pool of talent and an abundance of graduates coming out of school,” he added. “This will make the opportunities to enter the industry even more difficult.”

But Mr Zagurski, 23, said the oil and gas industry will rebound as it has repeatedly done over the past century, despite the popular idea that the pandemic will permanently reduce consumption patterns in the world. ‘energy. “The demand will come back,” he said. “Let’s be honest here, how many things in our daily lives contain some kind of petroleum product.”

Mr. Zagurski interned at Roxanna Oil, a small company run by his second cousins, and he was given more and more responsibility.

He can probably join Roxanna full time after graduation and is confident that the market for young geoscientists and engineers will eventually pick up. If the oil industry does not rebound, he also plans to work in geothermal or environmental sciences or to do a doctorate. “Everyone is biding their time to see what will happen,” he said.

Myles Hampton Arvie, a senior at the University of Houston studying finance and accounting, wanted to follow his father into the oil and gas industry.

“I am passionate about energy and gas,” he said. “Oil and gas will get nowhere for the next 20 or 30 years, so as we make this transition to cleaner energy, why not be part of it?”

His father was a project manager in the offshore fields of the Gulf of Mexico. Mr. Arvie is interested in a clerical job and has completed two internships at EY, also known as Ernst & Young, where he did financial modeling, auditing and balance sheet development. of several American and Canadian oil companies. He became vice president of the Energy Coalition, a student group that provides education and job fair opportunities for students.

Mr Arvie drew enough attention to land talks with several oil and gas companies, but a job offer proved elusive. “It’s very competitive,” he said, and the downturn has only made it more difficult to get a job.

Prepared to graduate in May, Mr. Arvie, 22, has changed careers and accepted a job with JPMorgan Chase, where he hopes to get involved in derivatives and marketing in the tech industry. One day, however, he says, he might find a place in the energy industry.

“I’m a little disappointed,” he said. “But you have to keep moving.”

Clayton Brown, a University of Houston graduate student studying petroleum geology, recalls finding an article online four years ago that claimed the future couldn’t be brighter for geologists investigating reserves. underground oil and gas.

“I saw the salary that petroleum geologists earn and I was immediately interested,” Mr. Brown said.

From Cape Fear Community College in Wilmington, North Carolina, Mr. Brown continued his geology studies at Western Colorado University. He was fascinated by the science behind seismic testing and rock and sand formations.

Confident in his choice of career, he borrowed tens of thousands of dollars to continue his education.

Now 23, Brown has a student debt of $ 55,000. When he graduates next fall, he will owe approximately $ 70,000. To make matters worse, the small oil company where he was interning recently stopped paying him because it was reducing the costs of managing the downturn.

He returned to North Carolina to live with his parents while taking online classes and sending resumes. “Covid was quite the curve ball,” he says. “No one expects a virus to come and destroy the oil industry.”

Yet, he said, he has no regrets and calls the recession “bad timing”.

Tosa Nehikhuere, the son of Nigerian immigrants, was relatively lucky. Shortly after graduating from the University of Texas at Austin in 2018, he joined a major European oil company, doing various internships and jobs in the field and in the trading room.

But the race has been so volatile that he already has doubts about the direction he has taken at university.

Mr. Nehikhuere’s parents were poor in Nigeria. They moved to New York City, where Mr. Nehikhuere’s father drove a cab. They ended up traveling to Houston, where life was cheaper and her parents pursued a career in nursing.

They embraced the oil industry, which dominates Texas and their home country, and pushed their son to pursue petroleum engineering. It is a common path for immigrants and first and second generation Americans in Texas.

In the middle of Mr. Nehikhuere’s first year, the Saudi Arabia-led Organization of the Petroleum Exporting Countries flooded the global oil market in an attempt to undermine the burgeoning US shale oil drilling industry. , causing prices to fall.

“It was quite scary,” he recalls. “I have seen seniors with three internships in the same company being frozen; juniors, second year students having difficulty obtaining internships. All in all, it was pretty bad in terms of job prospects. “

Mr Nehikhuere thought about changing majors, but he thought oil prices would pick up, as they have done so many times, and they did for most of 2018 and 2019.

But the coronavirus pandemic took hold just as Mr. Nehikhuere’s career was gaining ground, and now he’s worried again.

Mr Nehikhuere, 24, declined to identify his employer, but said he was laying off workers and wondered how far he should switch from oil and gas to renewables.

If the business is moving quickly to cleaner energy, he said, it’s not sure there is a place for it. “To what extent will my skills be transferred?”

“There are going to be a significant number of layoffs, changes and outsourcing,” he added. “To be honest, I don’t know if this is going to affect me or not. It’s really in the air.

Mr. Nehikhuere is already considering a change, perhaps looking for a job with a consulting firm or a company that supplies technology to oil and gas companies.

“As I think about my career more and more, the volatility that comes with working for an oil and gas company can be very unsettling,” he said. “I prefer to have something more stable.”

Categories
Travel News

US Penalizes Venezuelan Officials Involved in Jailing 6 US Oil Leaders

WASHINGTON – The Trump administration on Wednesday imposed sanctions on two Venezuelan officials for their role in sending six U.S. oil executives to jail for corruption.

Among those penalized by the United States government were a judge, Lorena Carolina Cornielles Ruiz, and a prosecutor, Ramon Antonio Torres Espinoza, for their involvement in a legal case that resulted in the convictions of six officials from the oil company based in Houston Citgo to jail for eight to 13 years, the Treasury Department said.

US government officials say the leaders – the so-called Citgo 6s – were “unfairly jailed” in Venezuela and subjected to an unfair trial that was criticized by media and human rights groups. for its lack of transparency.

“The unjust detention and conviction of these six American people further demonstrates how deeply entrenched corruption and abuse of power are in Venezuela’s institutions,” Treasury Secretary Steven Mnuchin said in a statement. “The United States remains committed to protecting its citizens and targeting those who contribute to the usurpation of power by the illegitimate Maduro regime in Venezuela.”

As a result of the sanctions, the United States will freeze all property and assets Judge Corniel and Mr. Torres have in the United States, the Treasury Department said, although it is not known whether any of the ‘they do.

Citgo representatives declined to comment.

The actions of the Treasury Department are the latest turning point in a long saga over the arrest of six Citgo employees. The Houston-based company is owned by the state-controlled oil company of Venezuela, PDVSA.

In 2017, six men – Gustavo Cárdenas, Jorge Toledo, Tomeu Vadell, Jose Luis Zambrano, Alirio Jose Zambrano and Jose Angel Pereira – were summoned to a last-minute business meeting in Caracas, the capital of Venezuela, and shortly arrested. after their arrival by armed and masked security guards.

The men were charged with embezzlement linked to a deal that would have refinanced Citgo bonds worth up to $ 4 billion, which the Venezuelan government said lacked the approval of relevant authorities to the administration of President Nicolás Maduro. The proposal was never carried out and all six declared that they were innocent.

Families of the men told U.S. media that they were being held in inhumane conditions and suffered severe weight loss while in detention. Five of the men are Venezuelan Americans from Texas and Louisiana. One is a permanent resident of the United States, according to press reports.

Two of the men – Mr Cárdenas and Mr Toledo – have been released under house arrest in Caracas since July, after former New Mexico Governor Bill Richardson and a team of negotiators paid a humanitarian visit to Venezuela on their behalf. .

In August, weekly trials began for the six men. In November, Judge Cornielle handed down a ruling finding the men guilty of corruption. Five were sentenced to eight years and 10 months in prison, while another was sentenced to 13 years.

The efforts of the United States government over the years to secure the release of the men have been unsuccessful. The case is just one of many points of tension between Mr. Maduro and the Trump administration, which recognizes opposition leader Juan Guaidó as the legitimate leader of Venezuela.

Secretary of State Mike Pompeo said in a statement Wednesday that Judge Cornielle and Mr Torres “played a vital role in the kangaroo trials of each of the Citgo executives.” He added that their legal proceedings were “marred by a lack of guarantees of a fair trial and based on politically motivated charges”.

In 2017, Mr. Maduro’s administration said the arrests of the six executives were necessary steps to rid the country’s oil industry of corruption. His administration also arrested the PDVSA chief, a former oil minister and a series of others as part of his purge of the country’s once flourishing oil trade.

Categories
Travel News

“Is Exxon a survivor? The oil giant is at a crossroads.

HOUSTON – For the past 135 years, Exxon Mobil has survived hostile governments, unfortunate investments, and the catastrophic Exxon Valdez oil spill. Through it all, the oil company made wads of money.

But suddenly Exxon is slipping badly, its long latent vulnerabilities exposed by the coronavirus pandemic and technological changes that promise to transform the energy world amid growing concerns about climate change.

The company, for decades one of America’s most profitable and valuable companies, lost $ 2.4 billion in the first nine months of the year, and its share price fell by about 35% this year. In August, Exxon was excluded from the Dow Jones Industrial Average, replaced by Salesforce, a software company. The change symbolized the shift from Big Oil to an increasingly dominant tech industry.

“Is Exxon a survivor?” asked Jennifer Rowland, energy analyst at Edward Jones. “Of course, they are, with great global assets, great people, great technical know-how. But the question really is: can they prosper? There is a lot of skepticism about this right now.

Exxon is under increasing pressure from investors. DE Shaw, a long-time shareholder who recently increased his stake in Exxon, is asking the company to cut costs and improve its environmental record, according to a person briefed on the matter. Another activist investor, Engine No. 1, is pushing for similar changes in an effort supported by the California State Teachers Retirement System and the Church of England. And on Wednesday, New York State Comptroller Thomas P. DiNapoli said the state’s $ 226 billion pension fund would sell shares in oil and gas companies that have not acted fast enough to reduce their emissions.

Of course, every oil company is grappling with the collapse in energy demand this year and as world leaders, including President-elect Joseph R. Biden Jr., are committed to tackling climate change. In addition, many utilities, automakers and other companies have made commitments to significantly reduce or eliminate the use of fossil fuels, the largest source of greenhouse gas emissions, and have embraced wind power. and solar and electric vehicles.

European companies like Royal Dutch Shell and BP have already started to move away from fossil fuels. But Exxon, like most US oil companies, has doubled its commitment to oil and gas and made relatively modest investments in technologies that could help slow climate change.

As recently as last month, Exxon reaffirmed its intention to increase production of fossil fuels, but at a slower pace. The company is investing billions of dollars to produce oil and gas in the Permian Basin, which straddles Texas and New Mexico, and offshore fields in Guyana, Brazil and Mozambique.

Exxon embarked on its strategy while acknowledging that one of its previous big bets had not gone well. Exxon has said it will reduce the value of its natural gas assets, most of which were purchased around 2010, to as much as $ 20 billion. The company is also laying off around 14,000 workers, or 15% of its total, over the next year as it seeks to cut costs and protect a dividend it had raised every year for nearly four decades until to this year.

But if this crisis is an existential threat, there has been no acknowledgment from the management of Exxon, still known in the company as “God Pod”.

“Despite the current volatility and near-term uncertainty, the long-term fundamentals that drive our business remain strong and unchanged,” said Darren W. Woods, president and CEO of the company since 2017, during the a recent shareholders meeting.

Exxon is known in the oil world as an island company with a rigid culture that slows adoptive and pivotal change. This has been the case since John D. Rockefeller founded the company in the late 19th century as Standard Oil, a monopoly later broken by the government.

An accountant by training, Rockefeller instilled a deep commitment to counting numbers that remains in the company’s DNA. Exxon is primarily run by engineers who generally work in managerial positions. Its leaders project determination into their ability to overcome any obstacle imaginable such as OPEC oil embargoes, war and sanctions. Perhaps such confidence is needed to run a business that does business in dangerous or inhospitable places.

As a qualified electrical engineer and 28-year veteran of the company, Mr. Woods speaks with the same confidence as his most famous predecessors. But he kept a lower profile than Lee R. Raymond, who dismissed concerns about climate change in the 1990s and early 2000s, and Rex W. Hillerson, whose international rotation between 2006 and 2016 l ‘helped become President Trump’s first secretary of state. .

Although Mr. Raymond and Mr. Tillerson were dominant figures in the industry, they left Mr. Woods with many problems that were at least partially obscured by the rise in oil and gas prices.

Mr. Raymond’s public skepticism of climate change has damaged the company’s reputation. Mr. Tillerson was slow to take advantage of the shale drilling, which has uplifted the US oil industry. Its foray into the former Soviet Union and Iraq turned out to be costly failures. When he bought XTO ten years ago for over $ 30 billion to gain expertise in hydraulic fracturing and prized natural gas fields, gas prices were at their peak. As the price of commodities declined over the ensuing years, the company lost money and wrote off much of the investment last month.

“Darren Woods inherited a company that has made huge bets in recent years without success,” said Fadel Gheit, a retired Wall Street analyst who was a research and development engineer at Mobil before its merger with Exxon in 1999.

“Exxon Mobil is like a big cruise ship,” he added. “You can’t change course overnight. They can weather the storm but not go far. They will have to transform to remain relevant. “

Mr. Raymond declined to comment. Mr. Tillerson did not respond to a request for comment. Exxon answered questions primarily by referring to previous public statements by Mr. Woods and the company.

Casey Norton, a spokesperson for the company, said the acquisition of XTO had “brought people and technology in addition to potential resources” that have helped the company succeed in the shale fields of the basin. Permian.

During the first few years of work, Mr. Woods followed the general strategy set out by Mr. Tillerson of borrowing and investing heavily to increase production. The pandemic has forced Mr Woods to change direction. The company now plans to spend a third less on exploration and production until 2025 than it originally planned.

Yet the changes Exxon is making, while huge in absolute terms, appear to be tinkering with what European oil companies are doing. BP said it would increase investment in low-emission companies tenfold over the next decade, to $ 5 billion a year, while cutting oil and gas production by 40%. Royal Dutch Shell, Total of France and other European companies are making similar moves at varying speeds.

The only major US oil company that comes close to European-style target setting is Occidental Petroleum. It recently pledged to achieve zero net carbon emissions from its operations by 2040 and from its fuel use by 2050. It is building a plant in Texas to capture carbon dioxide from the air and using it to push crude oil out of the ground while leaving the greenhouse gas underground in perpetuity.

“We have moved from the era of shale to the era of energy transition, so there is a greater divergence of strategies between companies, the largest ever seen in modern times,” said Daniel Yergin, historian of energy and author of “The New Map: Energy, Climate and Clash of Nations.” “Now is the big debate peak oil in the 2020s, the 2030s or the 2050s?”

Exxon executives said they recognize that an energy transition is underway and necessary. But they also claimed that it wouldn’t make sense for the company to go into solar or wind power. Instead, the company invests in cutting edge technology. One of those projects involves using algae to produce fuel for trucks and planes. Exxon has been talking about this project for years but has not yet started commercial production.

Exxon’s refineries could also someday become major producers of hydrogen, which many experts believe could play an important role in reducing emissions. The company focuses on carbon capture and sequestration. One project involves directing the carbon emitted from industrial operations into a fuel cell that can generate electricity, reducing emissions while producing more energy.

“Breakthroughs in these areas are key to reducing emissions and would make a significant contribution to achieving the goals of the Paris Agreement, which we support,” Woods said in a message to employees in October, referring to the 2016 global climate agreement.

Energy experts said it was possible that Exxon could come up with new uses for carbon dioxide, such as reinforcing concrete or making carbon fibers, that could replace steel and other materials.

“If Exxon and other major players in the oil industry crack these nuts, the whole discussion about hydrocarbons changes,” said Kenneth B. Medlock III, senior director of the Center for Energy Studies at Rice University. “This kind of change is slow until it doesn’t. Think of the wind and the solar, which were slow until they weren’t.

A sharp rise in oil and gas prices could also allay some of the concerns about the company, at least temporarily. In recent weeks, as oil prices have climbed on optimism over a coronavirus vaccine, Exxon’s stock has also risen.

Exxon vice president of research and development Vijay Swarup said in a recent interview that the company understands it needs to cut emissions and is developing better fuels, lubricants and plastics.

“As we develop this path to achieve this, we cannot stop providing affordable and scalable energy,” Mr. Swarup said.

But John Browne, former CEO of BP, said he was uncertain whether Exxon and other large US companies would transform their businesses adequately for a low-carbon future.

“They can decide to just go ahead and harvest and say, ‘Let’s see what happens in the long term,’” he said. “It’s a pretty risky strategy these days.”

Lauren Hirsch contributed reporting.

Categories
Travel News

Sale of Arctic Refuge’s oil and gas leases scheduled for early January

The Trump administration said Thursday it would sell oil and gas leases in Alaska’s Arctic National Wildlife Refuge in early January, further accelerating its latest effort to allow drilling there.

The Bureau of Land Management said the sale would take place on Jan. 6, following the publication of a “notice of sale” in the Federal Register next Monday. This notice requires a 30 day comment period before a sale can take place.

The announcement of a sale date came just 16 days after the bureau announced a “call for nominations,” which allowed oil companies and others to clarify which plots of land were attractive for drilling.

Normally, a call for applications allows 30 days or more for such responses, followed by weeks of analysis by the bureau to ultimately decide which leaflets will be offered. This would have pushed a sale days before or beyond the inauguration of Joseph R. Biden Jr. on January 20, who opposed drilling at the refuge.

The ad, which came from the office in Alaska, did not mention why the schedule has been sped up. But the Trump administration has made no secret of its willingness to sell the rights to drill in the refuge while it is still in power.

Environmental groups denounced the last-minute surge.

“This is a shameful attempt by Donald Trump to give the fossil fuel industry one last document out the door, at the expense of our public lands and our climate,” said Michael Brune, executive director of the Sierra Club , in a statement.

Once the sale is complete, the office must then review and approve the leases, a process that typically takes months. But holding the sale on January 6 potentially gives the office an opportunity to finalize the leases before the opening day. This would make it more difficult for the Biden administration to cancel them.

The Arctic Refuge is a vast expanse of virtually untouched wilderness, almost untouched by people, and home to caribou, polar bears and other migrating wildlife. Of the refuge’s 19 million acres, lease sales are said to be for up to 1.5 million acres of northeast Alaska’s coastal plain.

The refuge has long been protected by environmentalists and Congressional Democrats. But in 2017, with Republicans holding the White House and both houses of Congress, the plan to sell oil and gas leases was approved as part of tax law.

President Trump has said opening part of the safe haven to oil development is one of the most important efforts in his effort to expand domestic production of fossil fuels.

Categories
Travel News

Oil refineries see the benefits of turning cooking grease into diesel

But its chief executive, David Lamp, said the government’s role in funding renewable diesel made it an inherently unstable business. Federal and state incentives could encourage the industry to produce more fuel than needed. On the other hand, he’s worried that Congress or California will abruptly remove the taking of the incentives.

“Take one of those grants and you’re at break-even point,” Lamp said. “Given the federal government’s deficit position, some of these things are going to have to be looked at very carefully.

Another concern is that as more refineries enter this business, it may become more difficult for them to find enough cooking fat and animal fat.

“The real limit of renewable diesel is the availability of the feedstock,” said Kurt Barrow, vice president of energy research and consultancy IHS Markit.

But Jeremy Baines, chairman of Neste US, the US unit of a Finnish energy company, is more optimistic. He expects large companies such as Amazon, Walmart and UPS to increase their fuel use to reduce carbon emissions from their truck fleets.

“Even if you want to go 100% electric, renewable diesel is the only deployable and scalable thing today,” he said.

Neste Oyj supplies its two largest markets, Europe and North America, from refineries in Singapore, the Netherlands and Finland, and is looking to find or build another plant in the United States. The company collects the fat from tens of thousands of restaurants around the world, including the United States, and then mixes it with waste from around the world at its refineries. Once transformed into renewable diesel, the fuel is sent around the world, including California and Oregon. One of its customers is Oakland, which uses fuel from urban vehicles.

Categories
Travel News

Venezuela judge sentences 6 U.S. oil executives for corruption

CARACAS, Venezuela – A Venezuelan judge on Thursday found six U.S. oil executives guilty of a massive corruption scheme and immediately sentenced them to prison.

The so-called Citgo 6 – employees of the Houston-based Citgo refining company, which is owned by Venezuela’s state-owned oil company PDVSA – was lured to Venezuela three years ago for a business meeting and arrested.

The men – Gustavo Cárdenas, Jorge Toledo, Tomeu Vadell, Jose Luis Zambrano, Alirio Jose Zambrano and Jose Angel Pereira – each face more than eight years in prison. Five are Venezuelan Americans with roots in Texas and Louisiana, and one is a permanent resident of the United States, according to media reports.

Corruption has been a chronic and well-known problem for years at PDVSA and has helped reduce its operations and profits. With the arrest of the six men, the government of President Nicolás Maduro began a purge of Venezuela’s once thriving oil industry, built on the world’s largest crude reserves. He later arrested the head of PDVSA, a former oil minister and dozens of others.

Prior to the sentencing, one of the leaders, Mr Vadell, imprisoned in Venezuela for three years, said in a letter provided to The Associated Press that he was just hoping for a fair trial so he could clear his name and leave. . his family’s home in the United States. Mr Vadell’s lawyer argued he was innocent of the charges.

Mr Vadell, 61, said it was particularly painful to be separated during the Thanksgiving season from his wife, three grown children and a newborn grandson whom he never had .

“Before experiencing this tragedy, these celebrations were very special times for our family,” he wrote, claiming he embraced the traditional American holiday after moving in 1999 from Caracas to Lake Charles, Louisiana, for a job with the Venezuelan company Citgo. . “Now they bring me a lot of sadness,” he said.

It was the first time Mr. Vadell, or one of the Citgo 6s, had spoken publicly since his arrest.

Mr Vadell and five other Citgo executives were summoned to the headquarters of Venezuelan state-owned oil company PDVSA, the parent company of Houston-based Citgo, for what they were told to be a budget meeting on November 21, 2017. A corporate jet flew them to Caracas and were told they would be home for Thanksgiving.

Instead, a cadre of military intelligence officers invaded the conference hall, taking them to jail. Their trial began four months ago and closing arguments were held on Thursday.

Mr. Vadell was held in a dreaded Caracas prison called El Helicoide.

Despite his circumstances, he said, he hoped for a better future.

“During the trial, the truth turned out to be undeniable,” he said in the handwritten four-page letter. “It proves that I am innocent.”

Categories
Travel News

Trump plan to sell arctic oil leases will face challenges

Even if in its final days, the Trump administration is successful in selling oil and gas leases in Alaska’s Arctic National Wildlife Refuge, the leases may never be issued, legal and other experts said Tuesday.

The leases would face strong and possibly insurmountable headwinds from two directions: the incoming Biden administration and the courts, they said.

Under new leadership, several federal agencies could reject leases that, even if purchased at an auction a few days before the opening day, would go through a review, a process that typically takes several months. .

During the campaign, Mr. Biden vowed to oppose oil and gas development in the refuge, a vast expanse of virtually untouched land in northeast Alaska that’s home to polar bears, caribou and d ‘other wild animals.

“President-elect Biden has made it clear that it is important for him to protect the Arctic refuge from drilling,” said Brook Brisson, senior counsel at Trustees for Alaska, a public interest law firm in non-profit. “We are confident that this means his administration will use its executive authority to do just that.”

But if, for some reason, after these reviews, the new administration did not reject the leases, they could also be overturned in court. There are already four lawsuits against the Trump administration’s actions related to oil and gas development in the refuge, including one brought by Ms. Brisson’s group on behalf of Alaska’s native and environmental organizations.

“Whoever wins these leases will enter a minefield of litigation,” said Michael Gerrard, founder of the Sabin Center for Climate Change Law at Columbia Law School.

Mr Gerrard said the Trump administration has lost several similar cases involving the leasing of oil and gas in Western states, largely due to its mismanagement of the required legal steps. “The haste with which he is trying to pass these leases could lead to even more mistakes that opponents’ lawyers will jump on,” he said.

With the publication of a “call for nominations” in the Federal Register on Tuesday, the Bureau of Land Management officially launched the shelter’s hire-purchase program. The document seeks comments from oil companies and others on their interest in leasing specific portions of the refuge’s coastal plain, which covers 1.5 million acres along the Arctic Ocean.

The region is believed to have reserves containing billions of gallons of oil. For decades it has been legally protected from drilling, but it was opened up to potential development in 2017 by the administration and the Republican-led Congress.

The decision to launch the hire-purchase program has been hailed by oil industry groups and members of the Alaska Congressional delegation, who have long continued to drill in the refuge for jobs and income. that he could bring. The Home Office, which includes the Bureau of Land Management, said it had “taken an important step in meeting our obligations by determining where and under what conditions the oil and gas development program will take place.”

After the comment period, which ends Dec. 17, the office could quickly announce a sale that could take place 30 days later – or just days before Jan. 20, when Mr. Trump’s term ends.

It’s a very tight deadline, which would likely force the Bureau of Land Management to ignore the comments for the most part and offer rights to all of the coastal plain plots for sale. The rental plan’s environmental impact statement, which was approved by the Home Office in August, recommended that all leaflets be made available.

The auction would take place over a single day, using sealed auctions. The regulations require that successful bids be reviewed by the Bureau of Land Management to determine, among other things, the bidders’ abilities to undertake oil and gas exploration in the field. Winning bids would also be forwarded to the Department of Justice for consideration of possible antitrust issues.

“Usually after an auction, it takes two to three months to fulfill the leases,” said Niel Lawrence, Alaska director for the Natural Resources Defense Council. Even preparing the documents to be signed can be time consuming, he said.

That timeline would push scrutiny into the early months of the Biden administration, he said. Even though the Department of Justice’s review found no antitrust issues, the Bureau of Land Management could reject the leases, he said.

But Mr. Lawrence said there was always the possibility that the Trump administration would flout the rules and accept the leases immediately after the auction.

“No one should underestimate the Trump administration’s desire to cut legal corners,” he said. “It would be unwise to predict that they won’t sign leases between the auction and the grand opening.”

“But that would be downright illegal,” he added, and justifies further legal action.

Numerous legal files have already been filed concerning the administration’s plans for the refuge. The four pending lawsuits were filed after the Home Office approved the final environmental impact statement in August, setting the stage for lease sales.

In addition to that filed by the Alaskan Trustees on behalf of Indigenous groups like the Gwich’in and Alaskan environmental organizations, others have been brought in by national environmental groups including the Audubon Society, the Resource Defense Council and the Center for Biological Diversity, and by state attorneys general.

The various groups claim that the Trump administration’s actions violate a number of laws, including the National Environmental Policy Act, the National Wildlife Sanctuary System Administration Act, and the Administrative Procedures Act , which governs the rules for issuing federal regulations and which prohibits the making of “arbitrary and capricious” rules.

The plaintiffs say the Home Office, the Bureau of Land Management and the Fish and Wildlife Service failed to follow the law to protect the “iconic and sacred” Arctic refuge, as a lawsuit said. The action of the Bureau of Land Management, he said, “threatens the exceptional resources of the Coastal Plain and the sustenance, cultural and spiritual connection between the Gwich’in people and the Coastal Plain.”

“The most glaring legal loophole in this leasing program,” said Mr. Lawrence of the NRDC, “is that Congress has left in place all laws that protect public resources.

“These laws mean that the Bureau of Land Management must minimize the damage it does to the refuge. Instead, they went their way, deciding to lease almost every acre of the Coastal Plain.

Ann Navarro, a former environmental litigator with the law firm Bracewell LLP, said if courts in lease cases decide that the agencies involved are not complying with environmental laws, he could fire the lender. deal with the agency to reconsider the matter, with or without leaving the lease. The agency would have to start the process over.

“I would say this is not a common outcome of litigation, but it certainly can happen,” she said. Once President Biden’s administration begins, she added, they could “even take it upon themselves to reconsider” the leases.

Even if all lawsuits were to fail and the leases became valid, the Biden administration would still have the option of blocking all activity on the coastal plain, experts said.

A lease would give a business the right to explore and extract oil or gas from the land, but the business would still need permits for all activities, like driving trucks across the tundra to survey the land, build a gravel pad for an exploration well. or tap into a water source. And each permit application follows a process that allows an agency, federal or state, to impose requirements or deny the application.