Apr 16, 2018

Reconsidering the "bellwether" Gulf of Mexico lease sale flop

Data: Bureau of Ocean Energy Management; Chart: Chris Canipe/Axios

A top official in Obama's Interior Department has an interesting new essay arguing that last month's Gulf of Mexico lease sale wasn't really the flop that it seemed, despite the low bidding totals.

"The extent to which the lease sale was portrayed as a disappointment appears more a factor of the Administration’s amped-up rhetoric as opposed to anything surprising or negative about the actual results."
— Tommy Beaudreau for Columbia University's Center on Global Energy Policy

One level deeper: Lots of coverage (including pieces by Axios) focused on the small percentage of tracts receiving bids and the bidding totals that were vastly lower than many prior sales.

Yes, but: Beaudreau makes several points about the sale...

  • The industry has just recently begun emerging from a low-price cycle that sapped capital investment.
  • The industry has been "laser-focused" on cutting costs and is now more disciplined and less free-spending.
  • It must be viewed in light of heightened competition from lower-cost areas with shorter development timelines, notably onshore shale.
  • For all these reasons, industry has moved away from bidding speculatively, instead focusing on prospective areas near existing infrastructure.
  • When those circumstances exist, companies still open their wallets in the Gulf — 9 blocs received bids higher than $2 million, and the highest single bid was over $7 million.

Go deeper

Electric vehicles are coming, but no one is sure how fast

Data: Columbia Center on Global Energy Policy; Chart: Axios Visuals

A new study helps to show that experts are all over the map when it comes to gaming out the rise of electric vehicles in the global marketplace.

Why it matters: The speed at which EVs become truly mainstream is one variable affecting the future of oil demand and carbon emissions. Passenger cars account for roughly a fourth of world oil demand.

Health care profits dip, but stocks soar

Data: FactSet; Chart: Axios Visuals

Health care industry earnings fell 18% in the third quarter of this year, compared with the same period in 2018, due in part to the costs associated with opioids litigation, according to the Axios tracker of almost 170 health care companies.

Yes, but: The industry still churned out a 6.1% profit margin, and health care stocks are at the highest they've been all year because Wall Street foresees a very profitable election year.

Go deeperArrowDec 17, 2019

The U.S. shale slowdown hits Texas jobs

Photo: Spencer Platt/Getty Images

A new Dallas Fed report provides the latest evidence of how the slowdown in U.S. oil production growth is rippling through the shale patch.

Driving the news: The latest energy data shows that job losses in Texas — the heart of the U.S. oil boom — are "deeper than initially estimated."

Go deeperArrowDec 18, 2019