Good morning, I'll be interviewing Microsoft chief sustainability officer Lucas Joppa in Vancouver on Wednesday morning 10:45 local time as part of the GLOBE conference. Not there? It's one of three that'll be live-streamed.
I'll share a glimpse of my latest Harder Line column, which pulls together various developments weighing on the oil and gas sector. Then, Ben Geman will get you up to speed on other news.
Today's Smart Brevity count: 1,100 words, 4 minutes.
Illustration: Eniola Odetunde/Axios
The world’s oil and natural gas companies are drilling their way into financial and social hell.
Driving the news: The industry’s stocks are in the toilet, and climate change is fast becoming a mainstream investor worry. These problems overlap and neither is going away soon — if ever.
Why it matters: People use products from oil and natural gas, which are heating up the Earth, and many own (perhaps unwittingly) stock in these companies. Whether they love or hate them, the financial and social standing of these companies will likely affect all.
The intrigue: CNBC’s Jim Cramer raised eyebrows by saying recently that he was “done” with fossil fuels and likened them to tobacco. “This has to do with new kinds of money managers, who frankly just want to appease younger people who believe you can’t ever make fossil fuels sustainable,” he said.
“That’s absolutely representative of what a lot of people are thinking in terms of investing,” said Paul Sankey, a veteran oil analyst with the Mizuho Financial Group.
The other side: Cramer’s comments hit a nerve. Chevron CEO Mike Wirth went on CNBC last Friday to push back and say this latest downturn will eventually abate.
Sankey described a negative feedback loop for oil and gas companies where climate change worries are an accomplice, not the main driver:
Energy stocks have dropped from 15% of the S&P 500 in 1990 to just 5% last year, Amy notes.
By the numbers:
Oil: On Thursday the International Energy Agency will release its monthly oil market analysis, while tomorrow the Energy Information Administration will release its monthly short-term energy outlook.
Climate: New BP CEO Bernard Looney will offer the oil giant's updated climate plan on Wednesday.
White House: The fiscal year 2021 budget plan arrives today. I'm not giving this a lot of play because these things are largely symbolic documents that are usually DOA in Congress.
Oil prices are at their lowest levels in a year as coronavirus hits demand, and one side effect of the public health crisis is that it's afflicting the OPEC-Russia relationship.
Driving the news: Russia has yet to endorse recommendations from an OPEC+ technical panel to deepen the groups' production-limiting pact by 600,000 barrels per day.
Where it stands: Brent crude oil is trading at $54.23 as we sent this newsletter, while West Texas Intermediate is at $50.24.
What they're saying: "The real question is whether the Russians and the Saudis are on the same page on the necessity for collective action," RBC Capital Markets' Helima Croft tells the NYT.
The big picture: "[I]f the group doesn’t act soon, it will find the decision taken out of its hands. Having floated the idea of further cuts they now need to deliver. Anything less will likely send prices down again," notes Bloomberg columnist Julian Lee.
Climate: The Justice Department dropped its antitrust inquiry into four automakers — Ford, VW, Honda and BMW — who cut a preliminary deal with California on increasing carbon emissions standards for their nationwide fleets.
Utilities: Pacific Gas and Electric Company told California regulators via plans filed Friday that it's taking steps to ensure that planned power shut-offs to cut fire risks this year will be "smarter, smaller, and shorter."
Coal: "U.S. Energy Secretary Dan Brouillette said on Friday that Canada and Mexico could help export U.S. coal to Asia to get around the blocking of shipments by West Coast states concerned about the impact of the fuel on climate change." (Reuters)