Good morning. My latest column stems from my interview with the energy secretary, and stay tuned later this week for a bonus Q&A with him. I'll share a glimpse of that, and then Ben Geman will get you up to speed on other news.
Today's Smart Brevity count: 1,304 words, < 5 minutes.
Illustration: Sarah Grillo/Axios
Bank restrictions on the financing of oil and gas drilling in the Arctic are akin to past practices —known as redlining — of not loaning to communities of color, Energy Secretary Dan Brouillette told Axios in an exclusive interview.
The big picture: A decades-long battle over Arctic drilling is suddenly escalating even as the world grapples with a pandemic. Five of America’s six biggest banks have recently announced they won’t finance oil and gas development in the Arctic, prompting conservative and industry backlash.
"For years and years and years, banks would not lend money, insurance companies would not write policies in minority areas in the country. Redlining is the term used all throughout those debates. We didn’t want banks redlining certain parts of the country. We don’t want that here. I do not think banks should be redlining our oil and gas investment across the country." —Dan Brouillette
What they’re saying: Brouillette cited his past work at USAA, a financial services firm. Experts said, though, that the redlining comparison is both inappropriate and inaccurate.
The other side: “Secretary Brouillette has zero tolerance for discrimination of any type, and he was not in any way equating the plight of minority communities to that of energy companies," Department of Energy spokesperson Shaylyn Hynes said of the redlining analogy.
"Accusing him of doing so in order to manufacture a dramatic headline is both disingenuous and not based in any truth."
Catch up fast: Since last December, five of America’s six biggest banks — Goldman Sachs, Wells Fargo, Citi, Morgan Stanley and JPMorgan — have announced they won’t directly finance new oil and gas development in the Arctic.
This includes specifically the Arctic National Wildlife Refuge, newly open to drilling.
Go deeper: Read the whole thing.
U.S. oil prices are above $30-per-barrel for the first time since mid-March as producers cut output while demand continues recovering from its April depths as restrictions are eased.
Why it matters: The increase eases pressure on the industry, but hardly alleviates the distress as prices remain below profitable levels for many producers and analysts caution that the recovery is shaky.
Indeed The Wall Street Journal reports that Gavilan Resources LLC, the oil-and-gas producer formed by the Blackstone Group, cited the price collapse in filing for Chapter 11 bankruptcy protection Friday.
Driving the news: Futures prices for West Texas Intermediate have risen to roughly $32 per barrel since markets reopened Sunday evening, adding to last week's gains. The global benchmark Brent crude is at $34.50, its first foray above $34 since early April.
The big picture: "Producers are significantly throttling back output and, with demand increasing, the market is on a slow path towards recovery," Rystad Energy analyst Paola Rodriguez-Masiu said in a note.
Threat level: This wide-angle New York Times piece notes that despite the modest recovery, the historic collapse in demand and prices will exact a heavy toll as some companies go bankrupt.
It summarizes the views of KPMG analyst Regina Mayor, who "expects a prolonged price slump that will force the American oil industry into a major restructuring."
Go deeper: Oil's risky recovery and the damage done
The number of active U.S. oil rigs fell by another 34 units to 258 last week, compared to over 800 a year ago, per the latest tally by the oilfield service giant Baker Hughes.
Why it matters: While producers are shutting down some existing wells, the rapidly falling drilling rig count is a sign of how companies are also slashing plans for future production.
The big picture: The Energy Information Administration projects U.S. production, which was nearly 13 million barrels per day at the end of 2019 but now falling fast, dropping below 11 million this year and staying there deep into 2021.
Illustration: Eniola Odetunde/Axios
The COVID-19 pandemic has spurred new interest in a movement that wants to reverse the pace of economic growth as a way to fight climate change, Axios' Bryan Walsh reports.
The big picture: Degrowth advocates believe that the only way to save the Earth is to stop focusing on growth at all costs in favor of a more equitable redistribution of resources. The pandemic is providing a crash test of those principles — for better and for worse.
What's happening: On May 13, more than 1,100 experts from around the world released a manifesto calling for a degrowth strategy to tackle the economic and human crisis caused by COVID-19.
How it works: The degrowth movement is a radical response to the challenges of climate change and inequality.
While economic growth of some kind is the stated goal of virtually every policymaker and economist, degrowthers believe that the obsession with economic growth is ruining the planet and leading to human unhappiness on a global scale.
Carbon capture: "A group of European energy companies led by Norway’s Equinor agreed on Friday to develop jointly a facility beneath the North Sea to store carbon dioxide storage, a technology that helps in the fight against climate change." (Reuters)
Renewables: "The U.S. solar sector has lost 65,000 jobs due to the COVID-19 crisis, erasing five years of job gains, according to the Solar Energy Industries Association." (Greentech Media)
Business: "Total SA abandoned a plan to acquire assets from Occidental Petroleum Corp. in Ghana, walking away after a proposal to buy Algerian projects from the U.S. company also collapsed." (Bloomberg)
Tesla is deciding between Austin, Texas, and Tulsa, Oklahoma as the locations for its next U.S. factory, multiple outlets reported in recent days.
Why it matters: The reports, while hedged, add some clarity to the question of where Tesla will build Model Y crossovers for East Coast delivery, as well as the Cybertruck.
Tesla did not provide comment on the reports. And keep this in mind: "It wasn’t clear if there were any other finalists in the mix," AP notes.
Flashback: In March a source familiar with the electric automaker's planning told us and other outlets that Nashville, Tennessee was under serious consideration.
But on Friday TechCrunch, citing an anonymous source, reported that Tesla has informed officials the city is out of the running.