News of the Day:
From the Washington Examiner Daily on Energy:
EXAMINING EXXON-CHEVRON MERGER TALKS: America’s two largest oil and gas companies have discussed joining forces, according to a blockbuster report from the Wall Street Journal yesterday.
Consolidation has been the name of the game during the pandemic, as companies sought to reduce financial strain associated with reduced oil and gas demand and lower prices.
But the talks between Exxon and Chevron to join forces, which were preliminary and not active, are on another level in that it could be one of the largest corporate mergers ever.
Frederick Lawrence, an oil industry economist formerly with the Independent Petroleum Association of America, told Josh that we shouldn’t be surprised these conversations occurred.
There’s some logic here: Even the largest companies are weighing how to cut costs and maintain operational efficiency during a historic period of low demand, with no certain end date, he noted.
“I am not surprised by the dialogue especially as the pandemic put many companies (even the largest) on defensive footing,” Lawrence said in an email. “There are many companies looking for new strategies in this very challenging macro climate. Given the uncertainties about the energy transition, I think the companies would be interested in collaborating in the areas of how to deal with an evolving climate strategy in regard to emissions, activist investors and regulatory pressure.”
Exxon and Chevron share a similar outlook on how to manage the clean energy transition, with the U.S. majors spitting from the European ones in terms of focusing more specifically on oil and natural gas rather than pivoting towards renewables.
“Chevron and Exxon share a similar business outlook in trying to be the last oil-producing company standing,” Dan Eberhart, CEO of the oil service company Canary, told Josh. “A merger would give the new company a competitive edge and put it on an equal footing with national oil companies like Saudi Aramco and the Russian companies.”
Big caveat: The Journal notes the Biden administration’s Justice Department on antitrust grounds could look skeptically at a merger that would form the world’s second largest oil company, given its interest in reducing fossil fuel dependence.
“They may have missed their window,” Eberhart said. “The time to do it was under the previous administration. This may be a trial balloon to see if a merger is still doable.”
Updated: World’s Largest LNG Supply and Bunkering Vessel Launched
The Maritime Executive, January 30, 2021
The world’s largest dual-purpose, LNG supply and bunkering vessel was launched in China. The vessel is part of the ongoing efforts to build the global LNG supply chain. Increasingly, the maritime industry is viewing LNG as a transitional fuel as shipping moves forward with efforts to meet the goals to reduce emissions.
The Avenir Allegiance was launched on January 27, 2021, at Zhoushan Changhong International Shipyard Co. Due for delivery from CIMC Sinopacific Offshore & Engineering Co. in the third quarter of this year, she will be the first 20,000cbm vessel to join the Avenir LNG fleet and the world’s largest LNG bunkering vessel. Previously, the Gas Agility, operated by TOTAL in Northern Europe, claimed the title of the largest LNG bunker vessel with a capacity of 18,600cbm.
Reddit traders send mining stocks higher as silver futures jump to eight-year high
Steve Goldstein, MarketWatch, February 1, 2021
European-listed miners jumped on Monday, as U.S. retail interest pushed futures on silver up to an eight-year high.
Fresnillo FRES, +8.95%, Mexico’s second-largest silver miner, jumped 17% in London. Anglo-Russian gold and silver miner Polymetal POLY, +5.12% rose 8%, and Polish silver and copper miner KGHM Polska Miedz KGH, +1.70% added 2%.
Silver futures SI00, 9.35% rose as much as 13%.
The gains in silver illustrate the wild moves in certain stocks and assets over the last week, initially fueled by a short squeeze on the U.S. videogames retailer GameStop GME, -26.15% fueled on the Reddit message board that has spread to other assets.
“Influencing the price of silver will not be as easy as a single small or medium sized single equity. Silver’s market cap is in the range of $1.4 trillion to $1.6 trillion as opposed to GameStop’s $1.5 billion before becoming the target of retail investors, and a large proportion of the market is off exchange. However, it will be interesting to see the small players’ power and how much further they can push prices,” said Hussein Sayed, chief market strategist at FXTM.
Kerry’s misleading framing of potential solar and wind jobs
Glenn Kessler, The Washington Post, January 28, 2021
“You look at the consequences of black lung for a miner, for instance, and measure that against the fastest-growing job in the United States before COVID-19 was solar power technician. The same people can do those jobs, but the choice of doing the solar power one now is a better choice. And similarly, you have the second-fastest-growing job pre-COVID-19 was wind turbine technician.”
— John F. Kerry, special presidential envoy for climate, in remarks at the White House, Jan. 27, 2021
“Before COVID-19, the fastest-growing job in the United States of America was solar panel technician, and the second-fastest-growing job was wind turbine technician.”
— Kerry, remarks on MSNBC, Jan. 28
This is clearly the favorite talking point of the former secretary of state, now tasked to spearhead President Biden’s efforts to build international support to mitigate climate change.
But this is also a great example of how some “facts” can be misleading when taken out of context.
Kerry was responding to a question from a reporter about the concerns of workers in the fossil-fuel industries who “are seeing an end to their livelihoods.” He was appropriately careful in noting that he was talking about pre-pandemic statistics. The Bureau of Labor Statistics issued a report on Sept. 1 with employment projections for 2019-2029, with a large note that the numbers were crafted and calculated mostly in a pre-pandemic world.
When we go to the BLS webpage listing the fastest-growing occupations, we find that first place shows “wind turbine service technicians,” with a projected gain of 60.7 percent, second place is “nurse practitioners,” at 52.4 percent, and third place is “solar photovoltaic installers,” at 50.5 percent.
Okay, so Kerry has been bungling his talking point a bit. Wind is before solar, not vice versa, and those professions are projected to be the first- and third-fastest-growing jobs, not first and second. (A State Department spokesman pointed out that in the 2018-2028 projections, solar was first, followed by wind turbine jobs.)
For the purposes of this fact check, we’re more interested in how many jobs are represented by those percentages. After all, at the White House, Kerry mentioned these statistics in the context of coal mining jobs — “The same people can do those jobs” — which before the pandemic amounted to about 50,000 jobs (and about 30,000 below surface). Could these solar and wind jobs match that number?
In sum, no.
Wind turbine jobs are projected to go up by 4,300, from 7,000 to 11,300 in 10 years. The solar installer jobs are projected to go up 6,100, from 12,000 to 18,100. That’s a total increase of just 10,400 jobs — leaving 20,000 coal workers still toiling in the mines. (Oops, we got a bit carried away with our language in an earlier version of this article, so have corrected the previous sentence. The 50,000-figure refers to all workers in the coal-mining industry; there are a little over 30,000 workers who work underground.)
(The category of nurse practitioners, on the other hand, is projected to experience a serious increase — a gain of almost 111,000 jobs, from just over 211,000 to 322,000.)
BLS has a convenient list of the 30 occupations with the most projected job growth. No. 1 is home health and personal-care aides — with a projected gain of nearly 1.2 million jobs. Nurse practitioners show up in 13th place. But wind and solar jobs don’t make the cut at all.
In fact, when we tried to find solar and wind on another BLS list — jobs ranked by projected annual openings through 2029 — we had to scroll past about 600 occupations before we landed on solar installers, with an average of 2,300 openings a year. Wind turbine jobs, with a projected average of 1,300 openings a year, was even further down the list.
But his framing is misleading because, according to the government statistics he relied on, the actual number of jobs is relatively small. The percentage gain is so high because the number of jobs in 2019 for both solar panel installers and wind turbine technicians is relatively small. The projected new jobs in these industries over 10 years amount to just 20 percent of the current number of coal jobs — and they do not pay as well either.
Of course, this might change if the Biden administration succeeds in its green-energy push. But until then, Kerry is offering false hope with a misleading use of statistics.
Judge scraps Trump’s ‘secret science’ rule
Pamela King, E & E News, February 1, 2021
At the request of the Biden administration, a federal court today tossed out a Trump-era rule limiting the use of science to craft EPA regulations.
Today’s order by Chief Judge Brian Morris of the U.S. District Court for the District of Montana follows a plea yesterday by President Biden’s EPA to scrap the rule and send the issue back to the agency for further consideration.
The judge found last week the Trump administration could not speed up the rule’s effective date and expressed “significant doubt” that EPA had properly promulgated the rule.
“Under these circumstances, where EPA lacked the authority to promulgate the Final Rule, remand without vacatur would serve no useful purpose because EPA would not be able to cure that defect on remand,” the Biden team wrote in its motion to the court yesterday.
EPA’s request stemmed from a lawsuit over the “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information” rule, which is the culmination of efforts by the Trump administration to heed calls by conservatives and industry groups to eliminate use of “secret science” — where the underlying data cannot be disclosed or reproduced — in environmental rulemakings. The standard offers difficulty for studies that rely on subjects’ personal medical information.
The rule, finalized last month, instructed EPA to de-emphasize nonpublic scientific studies and to prioritize research that discloses “dose-response data,” or the human health impact of a measured amount of a pollutant.