Good morning and welcome back! And happy birthday to Mick Jagger of The Rolling Stones, who bring us today's intro tune...
Shell and Total, two of the world's largest oil-and-gas companies, both posted a sharp increase in second-quarter profits on Thursday as Big Oil's earnings season got underway.
However, Shell's performance fell short of analysts' expectations, and its stock dipped in pre-market trading.
Why it matters: The earnings reflect the strengthening of oil prices, which have been on a largely upward trend over the past two years, even as companies have sought to keep costs restrained.
Shell said it's spreading the wealth to investors, announcing the launch of a $25 billion share buyback in 2018–2020.
Buzz: Per Bloomberg, Shell's repurchase program "should soothe investors who have grown increasingly anxious about when they’ll see the reward for sticking with Shell through the biggest oil-industry downturn in a generation."
By the numbers:
Go deeper: Via the Wall Street Journal, Shell Kicks Off Big Oil Earnings With Growth Spurt.
The energy sector is bucking a corporate trend.
Across all major industries, CEOs running S&P 500 companies cumulatively made $10 billion in 2017 — 44% higher than what is usually reported — when you factor in their actual total compensation, according to an Axios analysis of Securities and Exchange Commission filings.
Yes, but: Many energy stocks did pretty poorly last year. So energy CEOs overall made less than what is normally reported because their stock grant values were higher than the amount of stock they actually cashed out, the analysis by Axios' Bob Herman shows.
Check out the chart above, which shows the energy sector CEO pay data for energy companies in the S&P 500 based on whether it's higher or lower than what's usually reported.
The details: Bob calculated what's known as the actual realized gains (ARG) of CEOs' stock options and awards — shares that were actually exercised and taxed — versus the estimated fair value (EFV) of their stock that predicts future stock value and is prominently featured in the summary compensation tables of SEC filings.
By the numbers:
Driving the news: President Trump emerged from a trade-focused meeting with European Commission President Jean-Claude Juncker and said Europe will become a "massive" buyer of U.S. liquefied natural gas.
Juncker, with Trump in the Rose Garden yesterday, said: "We’ve decided to strengthen our cooperation on energy. The EU will build more terminals to import liquefied natural gas from the U.S."
Reality check: Thus far, Asian countries and Mexico have been the main buyers of U.S. LNG as the industry has emerged in recent years, but there's room for growth in Europe as exports rise and new projects come online.
But while boosting gas exports to Europe is a goal that dates back years, some analysts say there's reason to doubt that the continent will ever become a huge destination for U.S. cargoes, given its closer and less expensive options.
The intrigue: However, LNG from the U.S. and elsewhere can still affect European energy markets and geopolitics. The growth of global LNG trade provides more supply options, giving Europe more commercial leverage with Russia, a huge supplier of gas, and helping to force Gazprom into concessions.
What they're saying: "US LNG is competitive in Europe on the spot market when the price is low, as it is now. In the future it will be hard to compete with piped gas from Russia and closer sources of LNG," David Goldwyn, a former senior State Department energy official, tells Axios.
"[A]s soon as the Russians get greedy, US LNG provides a ready substitute. US LNG has made the global gas market competitive. But it is unlikely we will export vast quantities of LNG to Europe unless the Russians overreach. If they do we will quickly take their market share," adds Goldwyn, now head of the consultancy Goldwyn Global Strategies.
Go deeper: Trump and EU call trade war truce.
Factory emits smoke from Newark, New Jersey. Photo: Kena Betancur/VIEWpress/Corbis via Getty Images
National Grid's Mike Calviou writes for Axios Expert Voices ... New York and all six states in New England have aggressive, long-term, economy-wide CO2 emission reduction targets, with five having set a goal of reducing emissions 80% from 1990 levels by 2050.
According to the most recent data, the Northeast has achieved a 16% economy-wide reduction from that benchmark.
Yes, but: Despite this progress, the current rate of reductions is insufficient to meet the 2050 goals. To do so, northeastern states would have to triple the pace of gains made between 1990 and 2015.
In order to meet interim goals by 2030, emissions would have to be reduced across the three dominant energy sectors that involve CO2 combustion: electricity generation, transportation and heat.
Three ways to guide the transformation, which he describes in his piece in the Axios stream:
Calviou is senior vice president of strategy and regulation at National Grid.
Go deeper: Read National Grid's full report.
State of the market: Per Reuters, "Brent crude prices rose on Thursday after Saudi Arabia suspended its oil shipments through a key Red Sea strait in response to an attack on two of its tankers and as data showed U.S. inventories fell to a 3-1/2 year low."
Blockchain: Via Utility Dive, "Four utilities that serve New York — Avangrid, Con Edison, New York Power Authority and National Grid — announced a collaboration to discover and develop what they call "transformative" ways shared blockchain infrastructure could be used in the energy industry to benefit customers."
Climate lobbying: In a newly posted Lobbying Disclosure Act filing, there's a list of Squire Patton Boggs lobbyists who may be working on behalf of the recently formed Americans for Carbon Dividends.
Climate media: The New York Times announced this morning...
Intrigue: Axios' Dan Primack had an interesting piece yesterday on some questions swirling around fuel cell maker Bloom Energy's IPO.