Exxon Mobil, the largest U.S. oil company, posted its first quarterly loss in three decades on Friday as the industry continues to struggle with a glut of oil amid a historic drop in demand.
The oil giant reported a &#8220;market-related&#8221; $2.9 billion hit in the first quarter of 2020 which resulted in a $610 million loss from January to March, according to <a href="https://www.wsj.com/articles/chevron-lowers-outlook-for-capital-spending-by-another-2-billion-11588333062">The Wall Street Journal</a>. Exxon has cut back budgeted spending on acquiring and maintaining assets in 2020 by $10 billion, or 30%.
&#8220;We’ve never seen anything like what the world is facing today,&#8221; said Darren Woods, CEO of Exxon. &#8220;Bottom line: It’s going to be a challenging summer with a pretty sloppy market.&#8221;
Chevron posted profits of $3.6 billion in the first quarter, but officials expect the oil company to suffer losses later in the year because of the oil-price crash in March and April that caused the price of oil futures to dip below zero, the first time ever. Both Exxon and Chevron are cutting their production by hundreds of thousands of barrels a day.
&#8220;The industry and the world are in a tough place right now,&#8221; Chevron CEO Mike Wirth said. &#8220;It feels like we’re bumping along a bottom for energy demand when we look at the data. But it doesn’t say it’s going to snap back.&#8221;
The number of active oil rigs operating around the world is expected to fall by 30%, according to <a href="https://markets.businessinsider.com/commodities/news/oil-rigs-in-use-drops-almost-30-percent-low-demand-2020-5-1029155469">Markets Insider</a>. During April, the number of oil rigs in the United States fell 44% from what it was a year before.
The coronavirus pandemic crashed global demand for fuel as nations began instating emergency stay-at-home orders, drastically reducing travel. In many places, government restriction have forbid people from leaving their homes for weeks at a time except for approved activities such as picking up groceries and medicine or exercising a pet.
Russia and Saudi Arabia engaged in a price war earlier in the year after Moscow pulled out of an agreement to cut its oil production in order to keep prices steady. Both countries responded by ramping up production in an attempt to push the other out of global markets, sending the global price of oil falling and contributing to a massive build up in supply as the virus began to spread.
On April 12, President Trump <a href="https://www.dailywire.com/news/trump-touts-hundreds-of-thousands-of-jobs-saved-with-opec-oil-deal">touted</a> &#8220;hundreds of thousands of energy jobs&#8221; in the United States saved by an international agreement between the 13-member Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and 10 other countries, including Russia, to cut global production and stabilize oil prices.
Though the U.S. is not an active participant in the deal, Trump took steps to ensure it was agreed to. The president worked out a last minute deal between Russia, Saudi Arabia, and Mexico after Mexican President Andrés Manuel López Obrador, unhappy with how much Mexico was asked to cut, threatened to pull out of the deal.
Trump said that if the other signatories to the deal, known as OPEC+, agreed to let Mexico pump more oil, the United States would make up the difference. In announcing the deal to the U.S., Trump promised that Mexico would &#8220;reimburse us at a later date&#8221; for the oil cuts.
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Exxon Mobil

‘A Pretty Sloppy Market’: Oil Giant Posts First Loss In Three Decades

Coronavirus

energy

On Saturday, a new installment of the “Verdict with Ted Cruz” podcast was released on YouTube, and the focus was on energy – not just how oil production has been impacted by the COVID-19 pandemic, but how a play by Russia and Saudi Arabia have disrupted the industry.
Co-host Michael Knowles of The Daily Wire first asked: “I think for most people, the interaction we have with the oil industry is when we fill up our gas tanks, so low oil prices are not necessarily a bad thing when we look at it. What are we missing here?”
Sen. Cruz (R-TX) replied, first noting that as a result of the COVID-19 pandemic, millions of Americans have lost their jobs, and the price of oil per barrel has plummeted.
The senator then explained that this could have a ripple effect leading once again to the United States relying on “foreign countries” for oil:
<blockquote>The consequence of that is it potentially risks bankrupting most, if not every, American energy producer, and particularly in my home state of Texas, that&#8217;s devastating. But if you end up seeing American energy producers driven out of business, that also has massive implications in terms of you and me paying higher prices at the pump in years to come, and also geopolitically making us dependent on foreign countries in a way that we just now managed to get free and independent from.</blockquote>
Cruz continued, saying that a group of senators had a conference call with the Saudi ambassador a couple weeks ago, and that it got “bare-knuckled” and “candid.”
The senator explained in no uncertain terms to Saudi Arabia that they were “taking advantage of a global health pandemic to try to screw and bankrupt people across Texas” and other states. Their excuse was apparently “Russia.” Cruz replied that if they wanted to be treated like Russia, the U.S. could pull troops and Patriot missiles from Saudi Arabia if need be.
The podcast conversation then shifted to include Wil VanLoh, CEO of Quantum Energy Partners.
Sen. Cruz noted that the United States only recently became, for the most part, energy independent, and how it was technological advancements by smaller oil industry players that got us to this point.
When asked if energy companies can get back to where they were prior to the recent price drop, VanLoh explained how American energy independence is critical, and how the Saudis and Russians have attempted to interfere:
<blockquote>Right now, it&#8217;s not looking good. It’s not looking good for two reasons. One was Saudi and Russia have decided they were going to basically launch a market share war on the U.S., and as Senator Cruz said a minute ago, you know, the U.S. went from being a huge energy importer &#8230; we imported more than 12 million barrels a day less than a decade ago to literally over the last six months or so, we, on any given week, we will export or import a few hundred [thousand] &#8230; think about the impact on our economy, that&#8217;s depending on the price of oil, but say at $50 oil – that&#8217;s about $250 billion a year that stays here in the U.S.</blockquote>
Sen. Cruz went on to talk about the impact to the energy sector outside of COVID-19:
<blockquote>Then you&#8217;ve got a second component, which is you have the Saudis and the Russians, right as coronavirus is breaking, deciding this is a great opportunity to screw the Americans, to bankrupt the American energy business – and listen, what you&#8217;re doing, drilling in West Texas shale, the Saudis and Russians have hated it because you pass them up with America as the top producer, and so they&#8217;re sitting there, if I understand this right, they&#8217;re taking this as an opportunity, “Alright, we&#8217;ve got a crisis. Let’s put these guys out of business. Let’s bankrupt them so that when all is said and done, we&#8217;re the only players left in the game.”</blockquote>
VanLoh noted that the rise of the American shale revolution “challenged OPEC supremacy, and it challenged Russia supremacy.”
“So what they&#8217;re doing – it used to be what we would call an antitrust law predatory pricing in that &#8230; when they flooded the market with oil and they announced they were going to do that, and drove the prices way down, they were taking a big hit themselves, but they were doing it to bankrupt their competitors and then sweep in and dominate the market,” Cruz clarified.
Cruz later asked VanLoh about what happens environmentally if “independent energy producers go out of business, the economy gets going again after the crisis, and we&#8217;re dependent once again on on the Middle East for oil.”
The CEO stated that even if U.S. oil and gas are out of business, people will continue to use use oil, be it in cars, planes, or consumer products made using hydrocarbons. All of this would result in dependence on foreign sources, which would cost the U.S. a great deal of money and “significant geopolitical influence.”
“Fueling the Middle East with billions of American dollars is not good for keeping America safe,” Cruz added.
Check out the episode, which contains much more than what was written about above, here:
<iframe src="https://www.youtube.com/embed/HzpcbaoZZUQ" width="720" height="385" frameborder="0" allowfullscreen="allowfullscreen"></iframe>

Ted Cruz and Wil VanLoh

WATCH: Ted Cruz And Wil VanLoh Talk Importance Of American Energy Independence During And After COVID-19

Oil and Gas

Ted Cruz

Verdict with Ted Cruz

As Sen. Elizabeth Warren’s (D-MA) profile was rising, she transferred her royalties earned from oil and gas to her children.
The Wall Street Journal editorial board used its <a href="https://www.wsj.com/articles/elizabeth-warrens-gas-royalties-11580515497?cx_testId=30&amp;cx_testVariant=cx_1&amp;cx_artPos=0#cxrecs_s">latest editorial</a> to remind readers that in 2011, Warren’s husband, Bruce Mann, sold his interest in “all of the oil, gas, and other minerals” throughout properties in Latimer and Pittsburg County in their home state of Oklahoma. The person who purchased the deed to was none other than Warren’s son Alexander. The effective transfer date of the royalties was two weeks before Warren announced her candidacy for senate in Massachusetts.
In 2014, the Journal reported, there were more transfers as Warren’s “political profile was rising.”
“‘We are on the cusp of a climate crisis,’ she told the Senate that March, ‘a point of no return that will threaten our health, our economy and our planet.’ Two months later, deeds dated May 19 say Ms. Warren conveyed to her two children, Alexander and Amelia, her mineral rights for lands in Okfuskee County and Hughes County, amid the Woodford shale field in the state’s southeast,” the Journal reported.
“One of those Hughes County parcels appears on oil-and-gas leases from June and July 2017, signed by Alexander and Amelia, along with Ms. Warren’s three brothers. The agreements allow exploration and drilling on an 80-acre plot in exchange for royalties on any potential output. The leases had an initial term of three years, so they would appear to remain in effect through this summer,” the outlet continued.
The Daily Caller’s Andrew Kerr <a href="https://dailycaller.com/2018/08/24/elizabeth-warren-natural-gas-royalties/">reported</a> in 2018 that one of the companies from which Warren obtained royalties had a history of environmental violations.
“Chesapeake has been hit with over $17 million in fines relating to environmental and leasing violations since 2007, the largest being a $3.2 million fine levied in 2013 after one of its subsidiary companies dumped unauthorized materials into dozens of streams and wetlands in West Virginia,” Kerr reported.
While there is absolutely nothing wrong with receiving royalties from oil and gas companies (and what Warren and her husband received was a mere few hundred dollars a year), it is interesting due to Warren’s stance on climate change and constant attacks against the oil and gas industry. It is especially interesting that she passed the royalties to her children at opportune moments in her political career.
“But back when she was a Harvard law professor, Ms. Warren and her husband cashed those gas checks—or at least they did until the month before she launched her Senate campaign. Once she entered public life, they apparently unloaded the inconvenient assets by transferring them to children, who then endorsed an oil-and-gas lease that would be politically toxic if it carried Ms. Warren’s signature,” the Journal noted.
Legal Insurrection <a href="https://legalinsurrection.com/2020/02/elizabeth-warren-transferred-oil-and-gas-investments-to-her-children-to-protect-her-green-political-profile/">suggested</a> some reporter with access to the candidate should ask her about the transfers.
“Warren rails against oil and gas companies <a href="https://www.theatlantic.com/politics/archive/2015/04/elizabeth-warren-slams-big-oil-says-major-companies-profit-from-pollution/445161/">profiting from “pollution,”</a> but it would appear she has no problem at all doing the same thing, even if it’s on a much smaller scale.  Maybe a reporter should ask her at what financial point profiting from pollution becomes unacceptable?  And in what way she thinks it acceptable for her to try to transfer “pollution” profits to her children just as she’s making a national name for herself as a green justice warrior?” the outlet asked.

Elizabeth Warren

REMINDER: Elizabeth Warren Transferred Oil And Gas Royalties To Children To Maintain Her Green Energy Cred

In case anyone needed another reason to leave California, the chief executive officers of Pacific Gas &amp; Electric Corp. (PG&amp;E) now says the company may have to impose blackouts over the next 10 years.
NPR <a href="https://www.npr.org/2019/10/18/771486828/california-can-expect-blackouts-for-a-decade-says-pg-e-ceo">reported</a> that CEO Bill Johnson told energy regulators at California’s Public Utilities Commission (PUC) the company needed more time to trim trees and update its technology to prevent future forest fires. In the meantime, Johnson said, the company would have to impose blackouts.
PG&amp;E filed for bankruptcy in January. Months later, investigators determined that it was the company’s electrical transmission lines that caused a fire that sparked the raging forest fires in California last November.
Johnson reportedly said at the meeting that it could take 10 years for the power outages to be “ratcheted down significantly.”
Earlier this month, the company <a href="https://www.dailywire.com/news/55522">shut off power</a> for millions of Northern and Central California residents during high winds to avoid another fire. At the time, Johnson “continued to insist the blackout was necessary to prevent wildfires as high winds swept the state; he predicted at 6 p.m. that 98% of the affected customers would have the lights back on by midnight,” <a href="https://www.sacbee.com/news/california/fires/article236031853.html">according to The Sacramento Bee</a>.
During that blackout, which lasted three days but was originally scheduled for six, people faced spoiled food and loss of income due to businesses that would have to shut down. One man died after he was unable to get to his battery-operated backup oxygen machine. The family was aware the power outage was coming, but was not prepared for the power to cut off at 3:30 a.m. The coroner ruled the death was caused by the man’s health issues and not the power outage, but his family disagreed.
KCRA <a href="https://www.kcra.com/article/pge-power-shutoffs-17-counties-northern-california-central-california/29529351">reported</a> that PG&amp;E may shut off powers to residents in parts of 17 California counties due to another round of high winds. The company said a “significantly smaller” number of residents would have their power shut off than the outage earlier this month.
PG&amp;E calls the outages Public Safety Power Shutoff (PSPS) events. Johnson wrote in <a href="https://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/News_Room/NewsUpdates/2019/CPUC%20Letter%20to%20President%20Marybel%20Batjer%2010-17-19.pdf">a letter</a> to the PUC that the company understands how difficult further outages would be for California residents.
“We recognize the hardship that the recent PSPS event caused for millions of people and want to continue working with all key shareholders to lessen this burden going forward,&#8221; Johnson wrote. &#8220;At the same time, we ask our customers, their families, and our local and state leaders to keep in mind that statistic that matters most: there were no catastrophic wildfires.&#8221;
During the last outage, KPFA “UpFront” host Brian Edwards-Tiekert laid out how PG&amp;E was responsible for the ongoing pain for Californians. He reported that the company “neglected” its equipment, which sparked the wildfires. The company told a judge earlier this year that it needed to conduct inspections and maintenance on its equipment, but by October had only completed one-third of what was necessary. This maintenance includes trimming trees near power equipment.
The situation California has found itself in was mostly preventable had PG&amp;E properly maintained its transformers and electrical towers. Now thousands and potentially millions of Californians will have their power shut off throughout the next 10 years.

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Articles tagged with energy

‘A Pretty Sloppy Market’: Oil Giant Posts First Loss In Three Decades

WATCH: Ted Cruz And Wil VanLoh Talk Importance Of American Energy Independence During And After COVID-19

REMINDER: Elizabeth Warren Transferred Oil And Gas Royalties To Children To Maintain Her Green Energy Cred

California Power Company Says It May Have To Impose Blackouts For The Next 10 Years