Today’s Key Takeaways: ConocoPhillips sticks to production target, reduces costs. AK governor says 2026 construction start for gas pipeline possible. Tariffs reshaping EV industry. Reconciliation begins in House Energy and Commerce and Ways and Means – clawing back climate funding.
OIL:
ConocoPhillips trims capex by $500 million but sticks to production target
Geert de Lomaerde, Oil and Gas Journal, May 12, 2025
Efficiency gains are the main driver as executives say they’ll be patient with market trends: “For us, it’s, you know, don’t whipsaw this thing too hard right now,” Ryan Lance told analysts.
Executives of ConocoPhillips Co., Houston, have reiterated their 2025 production targets even though they’ve trimmed their capital spending budget for the year by $500 million and their adjusted operating costs forecast by $200 million. Among the factors driving those moves is an integration of Marathon Oil Corp. that has gone “pretty seamlessly.”
Chairman and chief executive officer Ryan Lance told analysts on a May 8 conference call that his team isn’t looking to make drastic changes to its activity plans even though commodity prices have slumped amid a volatile macroeconomic environment. ConocoPhillips’ mid-cycle planning price for a barrel of West Texas Intermediate is right around $60, which means “you shouldn’t expect a lot of things to change out of our companies” at current prices.
“For us, it’s, you know, don’t whipsaw this thing too hard right now and use some of the strengths that we have as a company because we can—because of the portfolio that we’re investing in and the opportunity set that’s in front of us,” Lance said. “So don’t overreact but don’t put your head in the sand, either.”
That’s why the lowering of capex and opex targets are the result of small efficiency initiatives across ConocoPhillips’ portfolio and not as focused—as spending cuts recently announced by several notable industry players—on specific operations. The company’s new 2025 target for capex is $12.3-12.6 billion and adjusted operating costs are now forecast to be $10.7-10.9 billion.
“We’re finding ways to deliver the same level of production for less capital and less operating cost. So we kind of think we’re taking a pretty measured approach here,” senior vice-president Andy O’Brien (who will soon take over as chief financial officer) told analysts (OGJ Online, May 12, 2025). “We want to take our time to better understand [the] potential depth or duration of any ongoing commodity price weakness before we determine if we really need to make any changes to our program.”
GAS:
Alaska governor says gas pipeline construction may start in 2026
Carlos Anchondo, E & E News, May 13, 2025 (subscription required)
Construction of a long-awaited, 807-mile natural gas pipeline could be underway as soon as next year, Alaska’s Republican governor said Monday.
Gov. Mike Dunleavy said a final investment decision on the pipeline segment of the Alaska LNG project could happen this fall, and “quite possibly you would have potential construction here in a year, year and a half.”
Gas could be flowing through the pipeline as soon as 2028 or 2029 — and exports of liquefied natural gas could leave a proposed terminal two years after that, the governor said at an event hosted by the Hudson Institute, a conservative-leaning think tank. Dunleavy said developing the Alaska LNG project in phases is helping to alleviate concerns about the proposal’s large size.
“Once that pipe is in place and gas is flowing, you de-risk the whole project,” he said, adding that the goal is to see gas flowing under the Trump administration
MINING:
Tariffs are reshaping the EV Industry — and the deals behind It
Mark Williams, Mining.Com, May 13, 2025
New tariffs are changing how electric vehicles (EVs) get built in the US, and fast.
A 25% tariff on imported vehicles took effect earlier this month. Another 25% tariff on imported auto parts kicks in next month. These measures drive up the cost of making EVs—even those assembled in the US—by increasing prices on essential materials.
EVs depend on key resources like graphite, aluminum, and copper. All are now subject to new tariffs. For example, battery cells could cost up to 51% more if graphite prices jump. That adds pressure on manufacturers, leading to higher production costs—and higher sticker prices for consumers.
POLITICS:
RECONCILIATION MARKUPS BEGIN: The House Energy and Commerce and Ways and Means committees began marking up their portions of the reconciliation bill, which include measures to slash funding and tax credits enacted by the Inflation Reduction Act.
The opening of the E&C hearing featured raucous protests that had to be broken up by the Capitol Police – our colleagues Rachel Schilke and Lauren Green have coverage of the spectacle here.
The E&C bill would claw climate funding authorized by the IRA, including from the Greenhouse Gas Reduction Fund. Read our rundown of that portion of the legislation here.
The Ways and Means legislation, meanwhile, would essentially take a sledgehammer, rather than a scalpel, to the IRA’s clean energy tax credits. Our coverage of that text is here.
From the Washington Examiner, Daily on Energy