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Happy Friday! Today's Smart Brevity count: 1,270 words, about 5 minutes.

Situational awareness: "Oil headed for its biggest weekly decline since the middle of July as a streak of disappointing economic data added to fears a global recession is coming," Bloomberg reports.

And this week marks 40 years since The Police released "Reggatta de Blanc," so today's intro tune sends an SOS to the world...

1 big thing: Making sense of Chevron's new climate pledge

Illustration: Aïda Amer/Axios

Let's look into something we only had time to graze yesterday: Chevron's pledge to cut emissions intensity — that is, emissions per unit of energy produced — from its oil and gas production.

Why it matters: Chevron hasn't been as aggressive on climate change as European-based oil majors like Shell.

But the company has stepped up its activities in recent years with moves including...

  • Investments through its venture arm in companies like the EV charging player ChargePoint, and the CO2-removal firm Carbon Engineering.
  • Last year joining the Oil and Gas Climate Initiative, a coalition of oil majors working on the topic.

However, as this Financial Times piece points out, Chevron's investment in low-carbon energy is smaller than some rivals.

What they're saying: Advocates pushing the oil majors to do more were lukewarm on Chevron's announcement when I touched base with them yesterday.

  • “It’s a relatively small intensity goal. ... It certainly does not feel like something that has a whole lot of teeth or ambition," said Bruno Sarda of CDP North America (CDP was formerly the Carbon Disclosure Project).
  • He notes that intensity targets allow overall emissions to keep rising, even if production is more efficient.

Indeed, that distinction between intensity and absolute emissions is evident in Chevron's announcement.

“Global demand for energy continues to grow, and we are committed to delivering more energy with less environmental impact,” CEO Michael Wirth said.

By the numbers: Chevron, the second-largest U.S. oil company behind Exxon, said that by 2023, it would cut emissions intensity of its oil production by 5-10% and intensity of natural gas production by 2-5% by then.

Both are relative to 2016 levels, which the Houston Chronicle points out provides the company "a significant head start."

What's next: More pressure on Chevron from activist investors. “The pressure is going to continue until they make a commitment to absolute emissions reductions that align with the science,” Sarda said.

  • One area to watch: Chevron, and several other majors, have not followed a small handful of European players including Shell and Total S.A. in setting goals for reducing emissions from the use of their fuels in the economy.
  • "Investor concern is not focused on operational emissions — which is what this [new Chevron] goal addresses — but on the carbon embedded in the industry's core products," Andrew Logan of the sustainable investment advocacy group Ceres tells me.
2. Weighing the Saudi IPO risks

Illustration: Sarah Grillo/Axios

Axios chief financial correspondent Felix Salmon argues that the Saudi Aramco IPO comes with big red flags for potential investors. Take it away...

The big problem with Aramco is not so much that it's being hit by drone strikes, or that oil prices are unhelpfully low. Rather, it's that it's owned by the Saudi state, which is to say, the Saudi royal family.

Driving the news: Aramco promised this week that it would set a dividend of at least $75 billion through 2024 — or, at the very least, that non-government shareholders would receive at least $750 million in dividends for every 1% of the company that they own, from 2020 through 2024.

Why it matters: Because the Saudi royal family controls Aramco, it doesn't need the company to pay any dividends at all.

  • If they need to extract money from Aramco, they can always raise the company's tax rate, or simply expropriate what they need.
  • Foreign shareholders could be stuck with worthless shares paying zero dividends.

The bull case for Aramco shares is that the Saudi government wants to see a multitrillion-dollar valuation for the company. If that fact ever changes, then it's hard to see foreign shareholders being able to extract much value.

The bottom line: In countries with robust civil societies, shareholders have significant legally enforceable rights, and those rights underpin the value of their shares.

In countries like China and Saudi Arabia, by contrast, foreign shareholders only win insofar as it behooves the local government to keep them happy.

3. BP names new CEO-in-waiting

BP said Friday that Bernard Looney, head of the company's oil and gas exploration and production unit, will take over as CEO in early February.

Why it matters: It adds clarity to the oil giant's succession plans after word emerged recently that current CEO Bob Dudley, 64, is readying to step down after a decade in the role.

Where it stands: The 49-year-old Looney joined BP as an engineer in 1991 and moved through several roles, becoming head of the upstream division in 2016.

  • Per Reuters, "The Irishman’s energetic management style was quickly felt as he spearheaded BP’s drive to improve performance through cost cutting and digitalization."
  • He's been the upstream chief at an active time that included the $10.5 billion acquisition of BHP's U.S. shale assets and BP's recently announced sale of it's Alaska operations.

The big picture: As I noted in this piece about Dudley's career, part of a wider changing of the guard at some of the world's largest oil companies.

  • Exxon CEO Darren Woods took over for Rex Tillerson in 2017 after Tillerson left for what would be a short tenure as secretary of state.
  • Mike Wirth became CEO of Chevron in 2018, replacing John Watson.

One big question: How Looney will address growing pressure on oil giants to take more aggressive steps on climate change.

  • Under Dudley, BP has set emissions-cutting targets for its operations and boosted investments in renewables and other climate-friendly tech.
  • However, alternative energy remains a small share of its business. And BP has rejected activists' calls to set targets for emissions-cutting from use of its fuels in the economy (known as "scope 3" emissions).

What they're saying: BP Chairman Helge Lund, in a statement praising Dudley's tenure, said of Looney: "As the company charts its course through the energy transition this is a logical time for a change."

Go deeper: BP agrees to activists' calls for wider climate disclosure

4. DOE's Perry said to plan exit soon

Energy Secretary Rick Perry is preparing to step down by the end of the year, per several reports Thursday night citing anonymous sources familiar with his plans.

  • The Energy Department pushed back against the stories but stopped short of denying them outright.

Where it stands: Politico reported last night that the former Texas governor is "expected" to announce his resignation by the end of November.

  • A subsequent Washington Post story says the timing is "by the end of the year," while the New York Times reports the timeframe is "by December."

Why it matters: Perry has served far longer than many officials in President Trump's cabinet and avoided the kinds of controversies that forced out ex-EPA chief Scott Pruitt and swirled around former Interior Secretary Ryan Zinke.

The big picture: Perry has been a vocal advocate for U.S. fossil fuel production and exports, in particular, touting the role of U.S. liquefied natural gas in bolstering allies' energy security.

However, his high-profile efforts to create new federal support for coal-fired and nuclear plants at risk of closure never came to fruition.

The intrigue: Perry has also backed DOE's alternative energy programs, a delicate role at a time when White House officials have called for steep cuts that Congress has rejected on a bipartisan basis.

He notably has talked up the Advanced Research Projects Agency — Energy, which White House budget proposals have sought to choke off.

Go deeper

5. Northeast carbon pricing coalition grows

Pennsylvania is preparing to join a coalition of Northeast and mid-Atlantic states that launched a cap-and-trade program for power plants emissions a decade ago.

Where it stands: "Gov. Tom Wolf signed an executive order Thursday directing the Department of Environmental Protection to join the initiative as a step to combat climate change; regulators have through July 2020 to develop proposed rules for Pennsylvania’s sign-on," the Philadelphia Inquirer reports.

Why it matters: The expansion of the Regional Greenhouse Gas Initiative is the latest step in the slow march of carbon pricing in the U.S.

Per E&E News ($), Pennsylvania would be the largest greenhouse gas emitter in RGGI, and "climate advocates say Pennsylvania's move marks an important step in reducing emissions in the Northeast overall."