Energy

The road to Exxon’s buybacks is paved with billions in asset sales
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Exxon is reviewing its global portfolio for divestment opportunities, and will prune assets that don’t fit its strategic priorities, says Woods. The company will also look for tactical opportunities to offload assets at good value, he added.

But it remains unclear when the divestments will give way to share repurchases, and some investors appear to be growing impatient. Exxon saw its stock price slump on Wednesday, despite the company issuing improved guidance for profits and cash flow during its annual investor day.

Analysts say one reason for the pullback is disappointment that Exxon did not launch a buyback program, even as its peers have begun enriching investors by once again repurchasing stock.

“Exxon has been the only supermajor in recent quarters without an active buyback program,” said Raymond James equity analyst Pavel Molchanov.

“Interestingly enough, a decade ago this company had the largest buyback amounts in the entire S&P 500.”

Exxon spent about $210 billion on share buybacks over a decade before halting share repurchases three years ago, except to offset dilution. Now, Exxon has fallen behind its peers like Chevron, Royal Dutch Shell and BP, who have all restarted their share buyback programs following the punishing 2014-2016 oil price downturn.

Mike Bloomberg says Green New Deal ‘stands no chance’
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But despite catching fire with many liberals and winning the endorsement of several Democratic presidential contenders, the Green New Deal faces significant opposition from within the party. Speaker Nancy Pelosi dismissed Ocasio-Cortez’s call to establish a select committee to develop the Green New Deal and instead installed Rep. Kathy Castor to head a special panel on climate change.

Republicans have dismissed it as a job-killing pipe dream. Senate Majority Leader Mitch McConnell says he’ll schedule a vote on the plan, a move that would force Democrats to publicly support or reject the initiative.

Free from the demands of running a presidential campaign, Bloomberg says he will expand his support for the Beyond Coal campaign, a push to retire all U.S. coal-fired power plants within 11 years.

Apparently channeling Republican barbs, he said, “That’s not a pipe dream. We can do it.”

Bloomberg says he’ll also launch the Beyond Carbon campaign, which will seek to reduce the role of oil and natural gas in the U.S. energy mix and set a course for a “100 percent clean energy economy.”

Some energy researchers and policymakers warn that racing to achieve the Green New Deal’s goals in just 10 years would potentially create unintended consequences, spark public backlash and undermine the transition to clean energy. Its backers say the risks posed by climate change and years of inaction mean the U.S. cannot afford to pursue a more conservative approach.

Saudi Arabia crown prince to invest billions in China, India, Pakistan
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Rather, Beijing’s eye is on economic expansion. “They want to be an energy purchaser, and maybe an energy investor,” Gause said. “But they don’t want to pick sides between Iran and Saudi Arabia.” China was one of eight countries granted a waiver last fall for U.S. sanctions on Iranian oil.

China began building the Middle East’s first armed drone factory in Saudi Arabia last year, and weapons experts now suspect Chinese support for a ballistic missile facility that was spotted by satellite imagery in the Saudi desert, which Riyadh has yet to acknowledge.

But in terms of encroaching on America’s security relationship with the kingdom, “They can’t yet,” said Gause. “They just don’t have the capabilities to project power into the Gulf the way the U.S. does.”

The U.S. military has bases in every single Gulf Cooperation Council country; China has none. China accounted for 1.5 percent of all Saudi arms imports over the last five years; the U.S. accounted for more than half.

“It is too early to describe this as a dash for independence from the U.S.,” Malik said. “However, there is little doubt that Saudi is building alternative sources of support in the event that the U.S. becomes a less reliable ally.”

If oil breaks this level, it’ll fall back to December lows: Kilduff
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Oil prices could fall to the low $40s if they can’t hold above the critical $52 level, and several factors are raising the risk of that occurring, John Kilduff told CNBC on Thursday.

From slowing global growth, especially in Asia, to Saudi Arabia’s push for deeper production cuts, to rising tensions between India and Pakistan, various global triggers are putting pressure on crude oil prices, the Again Capital founding partner said on “Futures Now.”

Despite these triggers, oil is currently having its best start to a year ever since commodity watchers began recording its price data in 1983. The commodity, which slipped by over 2 percent Friday, fell as low as $42.36 amid a marketwide sell-off in December 2018.

“The real critical center for crude oil is Asia and Asian demand, and the economic data out of Asia has been quite poor,” Kilduff said. “And I’m not certain that even striking a trade deal with China is going to improve that country’s fortunes.”

As for India and Pakistan’s nuclear conflict, Kilduff said that “any kind of conflagration in Asia, whether it be limited to India and Pakistan or spread to any degree to the region, would harm the economic activity there and that would only hasten the demand crisis that you could see here for oil prices in the near future.”

Kilduff, whose firm specializes in alternative investments such as energy derivatives, added that Saudi Arabia’s “tough stance” on decreasing its output could “unravel” the bullish thesis for crude. His bull case for the commodity states that if U.S. West Texas Intermediate, or WTI, crude oil futures can break above $58 a barrel, they could run to the mid-$60s.

But all of these global factors are eroding the rally’s durability, and if the world’s top oil producers don’t work together to offset the United States’ record crude production, it could spell trouble for prices, the market-watcher warned.

U.S. dollar strength can also weigh on crude prices, but the Federal Reserve’s pledge to be patient with its interest rate hikes has made that less of a risk, said Kilduff, who is a CNBC contributor.

“The United States is going to remain an island of prosperity here,” he explained. “We’re going to have the only central bank that is just maybe doing nothing, as opposed to some of the other ones that are going to have to be more aggressive. Again, look at the Chinese central bank. I don’t know if they’re in full panic mode or not, but they are doing everything in their power to stimulate their economy including record loan issuances, which don’t always work out well in the longer term. So I think the dollar is going to actually remain attractive, which should help me out a bit, but, again, we’re in a tough spot here.”

Oil prices fell Friday despite a Reuters survey showing that OPEC lowered its production output in the first two months of 2019. Brent crude futures, the international benchmark, traded in the $65 to $67 range, and WTI crude futures hovered around the $55 and $56 levels.

WATCH: Oil prices could fall to low $40s on economic slowdown, says Kilduff

Saudi energy minister responds to Trump’s tweet
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Saudi Energy Minister Khalid al-Falih said OPEC is taking a measured approach to supply cuts, directly responding to comments from President Donald Trump earlier in the week telling the oil producing body to “relax.”

“We’re taking it easy,” he told CNBC’s Dan Murphy while at an OPEC symposium in Riyadh, when asked about the U.S. president’s tweet.

“The 25 countries are taking a very slow and measured approach. Just as the second half last year proved, we are interested in market stability first and foremost.”

On Monday, Trump lobbed the latest of a series of tweets aimed at OPEC’s planned production cuts, agreed upon between the cartel’s members and non-member allies in December of last year to counter a drop in oil prices and soaring inventories.

“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” the president said.

“We listen to the honorable president, and hear his concern about consumers and assure everybody, whether it’s him or developing country leaders, that we are as focused on the interests of the global economy and consumers around the world as we are focused on the interests of producers,” al-Falih said. The U.S. became the world’s largest oil producer in late 2018.

Regulators just removed a barrier to exporting more US natural gas
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LaFleur, who voted to approve the project, said the greenhouse gas disclosure and comparison “provided important context” but said it was only a “first step.”

She criticized the commission’s “failure” to disclose how the project would contribute to the combined effects of LNG infrastructure development. She also said FERC should have made a determination on the significance of the project’s greenhouse gas emissions, an endeavor she called challenging but achievable.

“Indeed, the Commission makes challenging determinations on quantitative and qualitative issues in many other areas of our work, but has simply chosen not to attempt a significance determination in this context,” she wrote on Thursday.

Glick, the sole dissenting member, said FERC failed to embrace “reasoned” decision-making while determining whether Calcasieu Pass is in the public interest. He said it failed to meet FERC’s requirements under the Natural Gas Act and the National Environmental Policy Act.

“Neither the NGA nor NEPA permit the Commission to assume away the climate change implications of constructing and operating an LNG facility that will directly emit large volumes of greenhouse gas (GHG) emissions,” he wrote in his dissent. “Yet that is precisely what is happening today.”

Since FERC is a quasi-judicial body that sets precedent, Chatterjee says he is confident the commission has a way to address the climate question in future applications, now that a majority has determined FERC’s approach is legally viable and durable.

“The reason for my sense of optimism on the pipeline of projects going forward is that from a macro level the biggest sticking point seemed to be how to address this question of considering GHG emissions,” he said.

Tesla begins Model 3 delivery in China ahead of schedule
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A Tesla Model 3 is seen in the general assembly line at the Tesla factory in Fremont, California, on Thursday, July 26, 2018.

Mason Trinca | The Washington Post | Getty Images

A Tesla Model 3 is seen in the general assembly line at the Tesla factory in Fremont, California, on Thursday, July 26, 2018.

Tesla announced Friday during an event in Beijing that it’s beginning delivery of the Model 3 in China, at least a week earlier than expected.

Elon Musk’s electric car company said in January it planned to start deliveries of the vehicle in China in March.

State-funded Chinese news site The Paper also reported Friday that a ship carrying more than 1,600 Model 3 vehicles had arrived in Shanghai.

In January, Tesla broke ground on its factory in Shanghai and production is expected to begin in the second half of this year.

The company has said manufacturing in the world’s largest market for electric cars would help reduce transport and tariff costs. The automaker said in October it operates at a 55 percent to 60 percent cost disadvantage compared with its Chinese peers.

Tesla’s revenues from China fell 13 percent last year to $1.8 billion, the company disclosed in a filing with the U.S. Securities and Exchange Commission on Feb. 19.

US won’t give Saudi Arabia key to nuclear weapon building
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A representative of the United States government said Saturday that it would not help Saudi Arabia develop nuclear technology without guarantees that it would only be used for civilian purposes.

Saudi Arabia has put the U.S. on a shortlist with China, Russia and others to bid for nuclear power projects in the country. Washington sees Saudi Arabia as a big customer of American nuclear expertise and hardware, but lawmakers from both U.S. political parties are demanding a deal be based on tough controls.

Section 123 of the United States Atomic Energy Act of 1954, titled “Cooperation With Other Nations,” sets an agreement for cooperation as a prerequisite for nuclear deals between the U.S. and any other nation. Under a “123 measure,” any U.S. nuclear deal with Saudi Arabia would prohibit routes toward the making of nuclear weapons by banning enrichment of uranium or the reprocessing of plutonium.

Speaking to CNBC’s Hadley Gamble at the Munich Security Conference on Saturday, the U.S. Deputy Energy Secretary Dan Brouillette, said such an agreement was imperative to any nuclear deal with Riyadh.

“We won’t allow them to bypass 123 if they want to have civilian nuclear power that includes U.S. nuclear technologies.”

The senior energy official said as countries pursued more environmentally friendly and emissions-free technologies, nuclear had to be a part of the conversation. And while countries should pursue nuclear energy technologies they must do so under a U.S. regime that prevents the proliferation of nuclear weapons.

“As you know this technology has a dual use and in the wrong hands it becomes a dangerous, dangerous world,” said Brouillette.

The Saudis have so far refused to rule out their right to enrich uranium for nuclear weapons, pointing to neighboring Iran’s ability to do so under the 2015 nuclear agreement that world powers struck with Tehran.

In an interview in March on CBS’s “60 Minutes” Saudi Crown Prince Mohammed bin Salman said the country wasn’t interested in developing weapons but would develop nuclear capability should Iran ever develop a working nuclear bomb.

Keystone XL suffers another setback, judge blocks work on pipeline
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Keystone XL has become a major flash point in the growing war between environmentalists and the oil industry over expanding pipeline infrastructure. The line has now been tangled up in political battles for about a decade.

“It’s been two years since the Trump administration tried to revive this pipeline from the dead, but Keystone XL is still far from being built,” Jackie Prange, senior attorney at Natural Resource Defense Council said in a statement. “Today’s decision is one more victory for the rule of law over this reckless and risky project.”

TransCanada could not immediately be reached for comment.

The Obama administration blocked the cross-border pipeline in 2015, largely over environmental and climate concerns. The line would carry oil sands, a type of crude that former Secretary of State John Kerry called “a particularly dirty source of fuel.”

In one of his first acts as president, Donald Trump signed an executive order to advance Keystone XL and another controversial pipeline, Dakota Access, which started service over a year ago.

In November, Morris ruled that the Trump administration failed to conduct the necessary environmental review when it approved Keystone XL in 2017. The judge blocked construction of the line, and a month later prohibited TransCanada from any activity that advances the project until new environmental reviews have been completed.

US solar workforce shrinks for 2nd straight year as Trump tariffs bite
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The American solar power workforce shrank for a second consecutive year in 2018, as U.S. tariffs prompted developers to delay projects and policy shifts in top solar states slowed renewable energy growth.

The U.S. solar industry shed nearly 8,000 jobs last year, according to an annual survey from the Solar Foundation, a nonprofit that advocates for solar power. The 3.2-percent drop in employment puts the industry’s total headcount at roughly 242,000.

The decline marks a setback for an industry that nearly tripled its workforce in the seven years since the Solar Foundation issued it first National Solar Jobs Census in 2010. U.S. solar employment peaked at roughly 260,000 in 2016.

“Despite two challenging years, the long-term outlook for this industry remains positive as even more Americans turn to low-cost solar energy and storage solutions to power their homes and businesses,” Andrea Luecke, president and executive director at The Solar Foundation, said in a press release.

The drag on 2018 hiring began the previous year, as the market braced for tariffs on imported solar panels and modules after the U.S. Commerce Department determined cheap imports had hurt U.S. manufacturers. President Donald Trump ultimately authorized a 30-percent import tax on imported solar equipment.

Without clarity on pricing, many developers hit pause on projects, especially large solar farms, over the last two years. The solar tariffs, along with the Trump administration’s import taxes on steel and aluminum, have made hardware more expensive. The duties on solar equipment last for four years and drop by 5 percent each year.

Over the last two years, firms that install solar equipment saw the biggest declines, shedding about 10,000 jobs or 6 percent of the workforce.

At the state level, solar power leader California and other parts of the country with mature markets experienced a pullback in employment. California alone lost 9,576 positions, seven times the decline in Massachusetts, the next biggest job cutter.

The Golden State experienced the weakest growth in solar capacity in six years during the third quarter of 2018. The Solar Foundation points to trouble getting community solar projects off the ground and uncertainty over rate structures. But solar deployment also slowed at least in part because utilities face less pressure after brisk progress hitting California’s clean energy goals in recent years.

In Massachusetts, a delayed release of the state’s new solar incentive program curbed new deployments, according to the Solar Foundation.

Still, 29 states added solar power workers in 2018. Florida led the job growers with 1,769 new positions to overtake Massachusetts as the nation’s second biggest solar employer.

This year, the Solar Foundation forecasts hiring will pick up again, rising by about 7 percent to 259,000 jobs, based on responses to the 2018 census. New utility-scale projects are expected to drive the growth, with solar farm construction anticipated in California, Texas, Florida and South Atlantic states.

However, the Solar Foundation warns its forecast could be undercut by economic conditions, barriers to capital and changes in policy. The 2018 census also finds companies in the solar industry are having a harder time hiring as the U.S. labor market tightens.

The census was conducted by BW Research Partnership, a research consulting firm. BW’s results come from a survey of 3,493 solar power companies, out of a universe of 13,945 employers, conducted in September and October 2018.

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