Good morning. Today's Smart Brevity count: 1,283 words, 5 minutes.
🎵 Let's wish happy birthday to Edie Brickell and travel back to 1988 for today's lovely intro tune...
The new oil price war escalated this morning as Saudi state oil giant Aramco announced, per reports in Reuters and elsewhere, that it plans to supply the market with 12.3 million barrels per day starting next month.
Why it matters: The increase underscores how the lunge for market share with the collapse of the OPEC+ agreement is going to create financial pain and problems for producers and governments worldwide.
Driving the news: U.S. shale producers are quickly feeling the effects of Russia's decision to abandon joint supply curbs with OPEC, with their stocks dropping sharply across the industry.
Where it stands: The shale patch has oil majors, big independent companies and smaller operators, with a mix of debt levels and hedging strategies.
But, but, but: While it's a bleak picture, Brookings Institution energy expert Samantha Gross notes that "the U.S. industry is in better shape than it was during the 2015 price collapse."
The big picture: I'm looking at shale today, but it's a much bigger upheaval.
Go deeper: U.S. shale drillers could be casualties of oil-price war (Wall Street Journal)
One reason why oil producers are in for a rough ride is that even aside from this year's demand shock from the coronavirus, a new report sees the growth rate of global oil demand slowing down.
Driving the news: The International Energy Agency's five-year look-ahead, which shows demand actually falling this year for the first time since 2009, also finds...
Following a contraction in 2020 and an expected sharp rebound in 2021, global oil demand growth is set to weaken as consumption of transport fuels increases more slowly.
The big picture: While demand is still slated to grow, there's going to continue to be plenty of new production capacity, the report yesterday notes.
We're seeing the first signs of how the oil price collapse will begin entering U.S. politics.
Driving the news: President Trump called it "good for the consumer" because of falling gasoline prices on Twitter yesterday, and also said the Saudi-Russia split (along with "fake news") is behind the stock market decline.
Reality check: Trump's straight line between the OPEC+ collapse, which cratered prices, and market declines is incomplete at best. A key driver behind the market's retreat is the economic toll of the spreading coronavirus.
What they're saying: "Economic ripple effects from low prices now seem likely to hurt the U.S. economy more than they help it, but President Donald Trump’s low-price, pro-driver bias seems unlikely to change before the election," research firm ClearView Energy Partners said in a note yesterday.
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And speaking of the Trump administration, S&P Global Platts reports that officials are considering delaying the next planned sale of oil from the Strategic Petroleum Reserve.
Bids for that sale are due Tuesday afternoon, but sources said some U.S. Department of Energy officials are debating the logic of holding a sale immediately after a historic drop in oil prices and then releasing up to 12 million barrels of crude onto an already oversupplied market.
A Utah power plant could run at least partially on hydrogen within the next five years, according to a contract awarded today between an energy-technology manufacturer and a Utah power agency, Axios' Amy Harder reports.
Why it matters: Governments, companies and experts around the world are increasingly looking to renewable hydrogen as a long-term pathway away from oil, natural gas and coal while still using infrastructure initially made for them.
Driving the news: The company that won the contract, Mitsubishi Hitachi Power Systems (MHPS), says this indicates approval for the world’s first-ever turbines specifically designed for a plant to eventually use renewable hydrogen to create electricity.
Where it stands: The power plant, owned by the Intermountain Power Agency, a power cooperative of cities in Utah and California, will be operated by the Los Angeles Department of Water and Power and provide power to both L.A. and other parts of the two states.
One level deeper: Renewable hydrogen is generated by “using renewable energy to split water molecules into hydrogen and oxygen, in a process called electrolysis,” per this recent deep dive from the L.A. Times on this subject.
Go deeper: Read IEA's "Future of Hydrogen" report.
Yesterday brought a reminder that if Joe Biden wins the presidency, a lot of his staffing decisions could become battlegrounds over climate policy, not just his picks to run agencies like the EPA and the DOE.
Driving the news: When Axios' Jim VandeHei and Mike Allen reported that Joe Biden confidantes were discussing JPMorgan Chase's Jamie Dimon among several potential Treasury picks, the reaction from some climate activists was severe.
What they're saying: The umbrella group Stop The Money Pipeline, which targets big banks' fossil fuel project lending, said he would be a "disaster" in light of JPMorgan's extensive work with the sector.
Why it matters: While Biden's climate plan would go well beyond Obama-era policies, the left flank of the green movement doesn't trust him and thinks he's too moderate, especially compared to Bernie Sanders.
Legislation: "A mammoth energy policy bill hit a roadblock in the Senate on Monday night with a stalemate over amendments threatening to derail the legislation entirely." (The Hill)
Finance: "While global banks including Goldman Sachs Group Inc. and BNP Paribas SA are withdrawing support for coal mines, others are stepping into the breech." (Bloomberg)
Electric cars: "BMW will not bring the iX3, the automaker’s first electric crossover, to the U.S., the latest automaker to shift its EV strategy to Europe and China." (TechCrunch)