The message behind Chevron's $10 billion write-down

• The decision largely focuses on shale gas holdings in Appalachia, but also the Kitimat LNG project in Canada and other international holdings.
• The company is exploring options including asset sales.
• It also said its revised oil price outlook led to the impairment charge on its Big Foot project.

The intrigue: There's a couple ways of looking at this. One is that it's simply a way to be judicious with capital when there's lots of your product in a competitive market when prices are low and you think they'll stay that way.

• In particular, there's a gas glut in North America that has made the resource very cheap.
• CEO Mike Wirth said in a statement that "capital discipline and a conservative outlook" require "tough choices" to benefit shareholders.

But, but, but: Another view would be that it says something deeper about the industry in a world slowly transitioning to cleaner sources and, in fits and starts, getting more serious about global warming.

This Wall Street Journal piece gets to the second point. They write (emphasis added)...

• "The sobering reappraisal by one of the world’s largest and best-performing oil companies is likely to ripple through the oil-and-gas industry, forcing others to publicly reassess the value of their holdings in the face of a global supply glut and growing investor concerns about the long-term future of fossil fuels."

Bloomberg goes there too, noting:

• "Chevron follows Schlumberger Ltd. and Repsol SA in ascribing a lower value to their assets at a time when the growing adoption of cleaner energy stokes speculation that demand for fossil fuels may peak in a few years, while supplies keep rising."

Go deeper:

• A not-so-good milestone for natural gas
• To fight climate change, California cities look to ban natural gas
• America blows past the world in oil and natural gas