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In the midst of the biggest bust since 1986, this is a very curious position to take. https://twitter.com/WhiteHouse/status/1288581735752531968
US oil consumption fell 3 million bpd in the first half of 2020; year-on-year, it will fall 2 million bpd. A minor recovery in oil production will be offset by a steeper fall later this year. https://www.eia.gov/outlooks/steo/report/us_oil.php#:~:text=EIA%20forecasts%20that%20U.S.%20consumption,million%20b%2Fd%20from%202019.
Observers are calling this one of the greatest busts in history: bankruptcies are taking out big firms, as production curtails and refinery reduce throughput by as much as 70 percent. https://www.houstonchronicle.com/business/energy/article/Oil-and-gas-industry-facing-one-of-the-15404892.php
Sec. Brouilette is confident the US and Texas can "weather the storm." But the industry was coming under pressure in late 2019 due to low profitability and mounting debt. The party was going to end in 2020 one way or another. https://www.houstonchronicle.com/opinion/outlook/article/Secretary-of-Energy-COVID-19-brought-oil-gas-Trump-15394017.php
Given the size of the collapse, what can the President offer to his donors in West Texas? Promise of support when prices recover...that is, if they ever recover. More generally, he's offering hope for an industry that is often paranoid about the future. https://www.brownsvilleherald.com/2020/07/29/trump-seeks-loyal-donors-west-texas/
Their other option, meanwhile, has rolled out an ambitious (and expensive) energy plan that promises to pump billions into clean energy...while leaving a comfortable nice for natgas and not a word of a fracking or offshore drilling ban. https://joebiden.com/clean-energy/
Reading the tea-leaves: some of the bigger companies have already signaled a pivot away from traditional oil and gas, positioning themselves for a future where "clean" and "net-zero" can co-exist with additional fossil fuel investments. https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bernard-looney-announces-new-ambition-for-bp.html
This is a PR move that echoes the "Beyond Petroleum" and "Global Warming" moves of days past. The difference now, however, is that renewables is a billion-dollar industry that is building institutional investment clout and major state support.
My mentor once told me that after 1980, when they were pushed off their concessions in the Middle East, Exxon stopped being a company that produced oil.
Instead, they became a company that produced money.
And there's a lot of money to be made turning the world green.
Instead, they became a company that produced money.
And there's a lot of money to be made turning the world green.
Which brings me back the President. There's a role for the US, and Texas (the biggest clean energy state in the Union) to play in the global energy revolution. Drilling with question, fracking without thought to future environment impact is not it. https://twitter.com/WhiteHouse/status/1288581735752531968?s=20
