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Data: IEA; Chart: Sara Wise/Axios

The International Energy Agency's very long-term outlook released Tuesday offers useful analyses about the cloudy future of the industry and petro-states.

Why it matters: The pandemic's long-term effects and the prospect of future climate policies are together causing a rethink of the sector's financial future.

  • COVID-19 "sharpens the dilemmas" facing the industry and the pandemic is "prompting a re-evaluation of oil and gas strategies and assets," IEA said.
  • Lately, big companies have jointly written down their asset values by $50 billion, revealing the "shift in perceptions about future income."

The big picture: IEA has slashed its estimates of the future value of oil and gas production.

  • Here's one of the dilemmas IEA is talking about: Even if climate policies and new tech start moving the world away from oil, production declines from existing fields mean a lot of new investment is needed.

However ...

  • "[I]nvestors are looking with increased scepticism at oil and gas projects due to concerns about financial performance and the compatibility of company strategies with environmental goals."
  • "Some of the financial concerns might ease if prices pick up and projects start to offer better returns, but questions about the industry’s contribution to reducing emissions are not going to go away."

The intrigue: Another place these problems are showing up is that, as IEA notes, the market capitalization of publicly traded oil-and-gas companies has dropped about 40% over the last year.

  • This implies that markets have priced in not only the pandemic's effects, but a "significant future tightening of climate policies."

Go deeper

Biden will issue executive order to rescind Keystone XL pipeline permit

Photo: Andrew Burton/Getty Images

President-elect Biden will issue an executive order on Wednesday to rescind permits for the controversial Keystone XL pipeline as one of his first acts on his first day in office.

Why it matters: The move is a major development in a longtime fight over a controversial pipeline that began under the Obama administration. It reverses some of President Trump's own first actions aimed at advancing the project upon taking office in 2017.

Ben Geman, author of Generate
Jan 20, 2021 - Energy & Environment

Biden's plan to upend Trump's environmental legacy

Illustration: Aïda Amer/Axios. Photo by Brendan Smialowski/AFP via Getty Images

President-elect Joe Biden will on Wednesday order a government-wide review of over 100 Trump-era policies and direct agencies to prepare a suite of emissions and energy efficiency rules.

Why it matters: New information from transition officials offers the full scope of Biden's imminent, inauguration-day burst of environmental and energy policy moves.

Ben Geman, author of Generate
Jan 20, 2021 - Energy & Environment

Voters favor Biden's climate policies, but few view issue as top priority

Data: Morning Consult; Chart: Axios Visuals

Several new polls help to show where the public's at on energy and climate as Biden takes office.

Why it matters: People tend to favor emissions-cutting and low-carbon energy initiatives, but it's hardly top of mind.

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