EXTRACTED: Daily News Clips 8/29/22
PIPELINE NEWS
AgWeek: South Dakota farmers don't see Summit carbon dioxide pipeline as a public utility worthy of eminent domain
Law360: Investors Get Certified In Suit Over $3B Pa. Pipeline Project
Reuters: TC Energy's service uninterrupted after incident at Alberta natgas pipeline site
Los Angeles Times: Pipeline operators agree to plead guilty in Orange County oil spill and pay nearly $13 million
Rio Rancho Observer: Pipeline firms operating in NM agree to $1.75M settlement for workplace harassment
WASHINGTON UPDATES
Washington Post: Surrounded by fossil fuels, they fear climate bill leaves them behind
E&E News: Amid permit fight, White House touts money to speed reviews
Politico: Interior, NOAA to revisit species risks after Calif. oil spill
Anchorage Daily News: Environmental groups sue to stop federal approval of exploration at Alaska oil project
Associated Press: 4 states get $560M for high-priority cleanup of wells
STATE UPDATES
San Francisco Chronicle: Why environmentalists say Newsom’s climate push has dangerous strings attached
Politico: A setback for oil in California
Bay Journal: More concerns emerge for Pennsylvania's abandoned oil, gas wells
EXTRACTION
Globe and Mail: Oil sands industry wants tax credit review after U.S. goes big on carbon capture
Reuters: Canada sees west coast LNG revival as world scrambles for gas
InsideClimate News: When an Oil Well Is Your Neighbor
CLIMATE FINANCE
OilPrice.com: Big Oil's $41 Billion Buyback Bonanza
OPINION
Troy Media: Trudeau is wrong about the viability of LNG
PIPELINE NEWS
AgWeek: South Dakota farmers don't see Summit carbon dioxide pipeline as a public utility worthy of eminent domain
Mikkel Pates, 8/29/22
“They are all supporters of ethanol — they sell corn to Glacial Lakes Energy, an ethanol cooperative based in Watertown, South Dakota — but dozens of farmers in the Aberdeen and Leola areas of South Dakota are strong opponents the Summit Carbon Solutions plan to run a carbon dioxide pipeline through their land,” AgWeek reports. “...The Lapkas are worried about impacts of the pipeline crossing on a one-mile-long stretch of native prairie sod, alfalfa and arable cropland… “The Lapkas helped organize a landowner meeting at Leola on Dec. 16, 2021. About 70 attended. “Right off the bat the subject of eminent domain came up,” Mark told AgWeek… “Pirolli flatly told Agweek that if anyone representing them would bring up the concept, they would be fired… “Despite Summit's public declarations, Mark says he is aware of “many circumstances” where land agents told landowners that, “You’d just as well sign up. Over 80% of your neighbors already have, too. You’d just as well, too, because if you don’t we’re going to take it by eminent domain.” (He wasn’t immediately able to provide a name.).. “Mark and Kevin, both lifelong Republicans, emphasize the pipeline issue is not partisan. They say they have 22 friends and relatives who are being sued by Summit after they declined to allow a survey for the pipeline easement. Mark told AgWeek, “It’s not a question of if they’re going to use eminent domain. They already are.” “...Shaunaman doesn’t think the project has the same authority as standard public utilities, such as electrical power or gas and oil pipelines. “I guess that’s where we’re going to probably draw the line,” he told AgWeek. “I don’t think any of this project warrants it. While the public may benefit, it’s not a public utility. The right of eminent domain for surveying, or the right of eminent domain for the taking of the property, for placing it (the pipeline) I don’t think is relevant in this particular project.” The question is whether it benefits the “entire public” as would a natural gas pipeline. “There’s no public use in this pipeline," he told AgWeek. "That’s the difference.” “...The first proposal was about $3,500 per acre. Unsolicited, Summit sent their latest offer, dated March 22, in the mail in May 2022. Now the amount had increased to $4,300 an acre, on just under three acres for the permanent easement. Shaunaman told AgWeek he’ll probably decline easement offers and wait for eminent domain. The way he figures it, with farmland in the area renting for $150 per acre, the land should be worth $5,000 to $7,500 an acre. That’s what they’d have to pay in “raw agricultural value” in his opinion… “In August 2022, landowners in McPherson County, including the Lapkas, filed for an injunction, arguing that this is an eminent domain “taking” of their landowner rights. Later, Brown County farmers did the same. An initial hearing at Leola at the courthouse has been set Sept. 8, 2022.”
Law360: Investors Get Certified In Suit Over $3B Pa. Pipeline Project
Dorothy Atkins, 8/23/22
“A Pennsylvania federal judge certified a group of investors Tuesday who accuse Energy Transfer LP of misleading them about its $3 billion Mariner East 2 and Revolution pipeline projects, appointing Bernstein Litowitz Berger & Grossmann LLP and Barrack Rodos & Bacine as co-lead class counsel,” Law360 reports. “In a 54-page memo supporting his certification order, U.S. District Judge Gerald Austin McHugh Jr. said the parties primarily dispute whether common issues predominate over the investors' individual issues, and the question of predominance turns on whether the investors all relied on the same alleged misstatements to purchase Energy Transfer stock at allegedly inflated prices… “The certification ruling is the latest chapter in a lawsuit investors filed in January 2020, after the company's stock price dropped following an announcement that the FBI was investigating whether bribery or other misconduct affected Pennsylvania's approvals of the cross-state pipeline projects for carrying liquid natural gas from Western Pennsylvania wells to processing facilities outside Philadelphia. The investors claim Energy Transfer also hid serious safety risks and construction setbacks that jeopardized the timely completion of the Mariner East 2 and Revolution pipelines… "The nature and timing of the disclosures here, the lack of transparency, the attempts by Energy Transfer to cast damaging information in a positive light, and the obvious confusion in the market at certain points require a more precise and nuanced analysis of when the market would have absorbed relevant information," the judge's memo says.”
Reuters: TC Energy's service uninterrupted after incident at Alberta natgas pipeline site
8/26/22
“TC Energy )said on Friday it did not expect any interruption to its transportation services after work was halted at its Nova Gas Transmission Line (NGTL) Edson Mainline work site near Caroline, Alberta, following an injury at the site,” Reuters reports. “The NGTL System, which connects most of the natural gas produced in western Canada to domestic and export markets, is undergoing an expansion program to meet growing need for gas in North American and global markets, according to TC Energy's website… “A worker suffered a "non-life-threatening" injury at the construction site on the Edson Mainline Loop 4 Raven River Section of the West Path Delivery 2022 project, near Caroline, Alberta on Aug. 24, TC Energy told Reuters.
Los Angeles Times: Pipeline operators agree to plead guilty in Orange County oil spill and pay nearly $13 million
LAURA J. NELSON, HANNAH FRY, 8/26/22
“Three Texas companies agreed Friday to plead guilty to federal environmental charges and pay nearly $13 million in connection with the crude oil spill that fouled Southern California’s coastline last fall,” the Los Angeles Times reports. “Despite hours of signals that their 17.3-mile oil pipeline may have been leaking, Houston-based Amplify Energy Co. and two subsidiaries continued to negligently pump crude oil into the waters off Huntington Beach in violation of the Clean Water Act, prosecutors wrote in court documents filed Friday. The companies have agreed to pay a $7.1-million criminal fine and reimburse federal agencies for an estimated $5.8 million spent responding to the spill, which sent 25,000 gallons of crude gushing into San Pedro Bay in early October. “This oil spill affected numerous people, businesses and organizations who use the Southern California coastal waters,” acting U.S. Atty. Stephanie Christensen said in a statement. “The companies involved are now accepting their responsibility for criminal conduct and are required to make significant improvements that will help prevent future oil spills.” Amplify Energy and its two subsidiaries — Beta Operating Co. and San Pedro Bay Pipeline Co. — also have agreed to a four-year probationary period during which they will be subject to stricter regulatory scrutiny, according to the plea agreements. The firms would be required to install a new leak detection system in the pipeline, notify regulators of every leak detection alarm, and contract with a group that can detect oil on the surface of the water at night or in low-light conditions.”
Rio Rancho Observer: Pipeline firms operating in NM agree to $1.75M settlement for workplace harassment
MATTHEW NARVAIZ, 8/28/22
“Three subsidiaries of Texas-based Plains All American Pipeline and Oklahoma-based Copperhead Pipeline and Construction Inc. have agreed to a $1.75 million settlement with more than a dozen former employees for workplace harassment in New Mexico,” the Rio Rancho Observer reports. “The settlement was announced by the U.S. Equal Employment Opportunity Commission on Aug. 8, following allegations that the companies subjected the former employees – Jason Copley, Da’Vonta Copley, Albertico Gutierrez Rubio, Adrian Quezada, Shawn Cotton, and Joshua Garcia plus 10 others whose names weren’t listed – to sexual, ethnic and racial harassment at worksites in the state. The former employees were also fired for filing a complaint with EEOC regarding the harassment, according to the suit, which was initially filed in 2019. Three subsidiaries of Plains All American Pipeline – including Plains Pipeline L.P., Plains All American GP LLC and Plains Marketing L.P. – were listed in the complaint as a joint employer alongside Copperhead Pipeline and Construction Inc. In a statement to the Journal, Plains All American Pipeline – which has operations in southeastern New Mexico – distanced itself from Copperhead, and said it agreed with the outcome of the settlement with EEOC and the former employees of the joint companies.”
WASHINGTON UPDATES
Washington Post: Surrounded by fossil fuels, they fear climate bill leaves them behind
Sarah Kaplan, 8/27/22
“On any given day at the Prince Hall apartment complex, the breeze might carry soot and stink of burning tar. Black smoke might billow overhead as excess gas is burned at one of the refineries directly across the road. The fumes make Ariel Watson’s head ache until she can barely think. Jeremy Roy, 9, closes his windows against air that “stinks like farts,” the Washington Post reports. “For the mostly Black and Latino residents of Port Arthur — home to three oil refineries, two liquid natural gas terminals and at least 40 other facilities that release toxins into the air — the burning of fossil fuels is a local health hazard as well as a planetary threat. But as Democrats celebrate the passage of a hard-fought climate deal, with historic investments in clean energy as well as concessions to the fossil fuel industry, locals fear that the legislation may leave their community behind. To secure the vote of Sen. Joe Manchin III (D-W.Va.), party leaders committed to auction off more drilling leases and relax permitting requirements for new projects. Experts say the measures may prolong the environmental damage many Americans now face — especially in areas where petroleum products are produced for export. Now, people in Port Arthur and other industrial communities say they must fight to maintain what power they have left: the ability to comment on — and push back against — polluting infrastructure. “We’re battling for a clean environment, not just for the sake of climate change, but for the sake of the air that we breathe and the water that we drink,” Hilton Kelley, a Port Arthur native and founder of the Community in Power and Development Association, a local environmental justice group, told the Post. “We’re battling for our life.” “...But bundled with these investments was a provision that required the federal government to auction off drilling leases on public lands and waters before it could permit solar and wind projects — tying renewable energy development to fossil fuels… “Environmental groups are rallying against the permitting changes, which Manchin and Senate Majority Leader Charles E. Schumer (D-N.Y.) aim to pass before the end of the fiscal year on Sept. 30. Appalachian activists, concerned about a West Virginia pipeline that would be approved as part of the deal, have planned a demonstration in D.C. next month calling on Democrats to vote against the proposal.”
E&E News: Amid permit fight, White House touts money to speed reviews
Kelsey Brugger, 8/25/22
“Progressives are enraged over a permitting deal that’s expected to get a vote in Congress next month, but at the same time, the White House is promoting money in the new climate law that they say will help rev up environmental reviews,” E&E News reports. “Sprinkled throughout the Inflation Reduction Act, which passed earlier this month, is nearly a billion dollars to goose reviews for major projects… “The looming congressional fight over permitting overhaul has been a focus for many. Just this week, over 650 advocacy groups called on congressional leaders to kill the effort, arguing it would be a boon to the oil industry at the expense of the environment. Progressives like Rep. Raúl Grijalva (D-Ariz.), chair of the House Natural Resources Committee, have denounced the reform. He called it a “dirty side deal” for fossil fuel backers… “In some ways, observers said, the topic boils down to fundamental political disagreements over government spending and regulations. Republicans and developers urge faster reviews and contend that rules under the National Environmental Policy Act and other environmental statutes are too cumbersome. But Democrats, and some conservatives, too, have long asserted that the actual problem is that there simply are not enough experts at federal agencies to do the work. “For years, federal agencies have told us that staff shortages and resource constraints are two of the largest barriers when it comes to improving the environmental review process,” Sen. Tom Carper (D-Del.), chair of the Environment and Public Works Committee, told E&E.”
Politico: Interior, NOAA to revisit species risks after Calif. oil spill
ELLIE BORST, 8/25/22
“Less than a year after a massive oil spill off the California coast, the Interior and Commerce departments agreed to reevaluate the threats offshore drilling may pose to endangered species,” Politico reports. “The settlement, filed yesterday in the U.S. District Court for the Central District of California, settles a lawsuit brought by the Center for Biological Diversity against Interior's Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement, as well as Commerce's NOAA Fisheries, after a pipeline near California's Huntington Beach ruptured and caused the largest oil spill the state has seen in decades. The environmental group claimed the agencies violated the Endangered Species Act because their 2017 assessment found that oil and gas activities "were not likely to adversely affect threatened or endangered species or their designated critical habitat," according to the settlement.
Anchorage Daily News: Environmental groups sue to stop federal approval of exploration at Alaska oil project
Alex DeMarban, 8/25/22
“Environmental groups are suing the Biden administration over its approval of a five-year exploration program at the Peregrine oil field, a potentially huge prospect on Alaska’s North Slope being explored by a small Australian company,” the Anchorage Daily News reports. “The groups assert that the Bureau of Land Management violated federal law because environmental assessments for the project did not consider greenhouse gas emissions that could be burned as the oil is used, according to the 36-page complaint. The agency began approving work at the prospect in 2020, the lawsuit says. Earthjustice filed the complaint on behalf of Sierra Club, Friends of the Earth and Greenpeace USA, in U.S. District Court in Alaska… “The extraction and burning of the oil, if all of it is produced and consumed, would release the carbon equivalent of 173 coal-fired power plants, more than the Willow project, the groups said in a statement Thursday. Conservation groups have also sued to stop Willow, leading to an additional regulatory review for that project that is currently underway. “We are beyond frustrated with Biden’s rubber stamping of Big Oil’s drilling in Alaska’s vulnerable and wild places,” Hallie Templeton, legal director for Friends of the Earth, told ADN. “Unfortunately, the administration failed to see how this unlawful decision throws yet another carbon bomb at our rapidly warming planet.”
Associated Press: 4 states get $560M for high-priority cleanup of wells
JANET McCONNAUGHEY, 8/2522
“The Interior Department is giving 24 states a total of $560 million to start cleaning high-priority derelict oil and gas wells abandoned on state and private land, the department said Thursday,” the Associated Press reports. “It said up to 10,000 wells could be dealt with as the government begins allocating $4.7 billion set aside to create an orphan well cleanup program under the bipartisan infrastructure plan approved late last year. The Environmental Protection Agency estimates there are more than 3 million abandoned oil and gas wells around the nation. The infrastructure law “is enabling us to confront long-standing environmental injustices by making a historic investment to plug orphaned wells throughout the country,” Secretary Deb Haaland said in a news release… “The department said states have identified more than 129,000 orphaned wells on state and private land. The total will rise because infrastructure money will allow more records research and field equipment, improve well location techniques, and increase site inspections and data collection nationwide, the department said.”
STATE UPDATES
San Francisco Chronicle: Why environmentalists say Newsom’s climate push has dangerous strings attached
Dustin Gardiner, 8/25/22
“In a vacuum, Gov. Gavin Newsom’s proposed climate change package is the sort of bold move that many environmentalists would ordinarily cheer because it aims to quickly ramp up California’s efforts to reduce planet-warming emissions,” the San Francisco Chronicle reports. “But the governor’s climate push has received a lukewarm response that could jeopardize his ability to get the landmark plan approved at the state Capitol before legislators must adjourn for the year next Wednesday. Many environmentalists and legislators are skeptical over what they see as two major strings attached to Newsom’s proposal: He wants to delay the closure of California’s last nuclear power plant and carve out a role for carbon capture technology, which activists say could give industry a loophole to avoid cutting emissions… “Many have also been exasperated over what they see as the state’s coziness toward carbon capture and sequestration, a technology that aims to pull carbon from the air and inject it into underground caverns. While many climate experts say some level of carbon removal will be needed to deal with the amount of greenhouse gases already in the atmosphere, they also worry the technology hasn’t been proved on a large scale and that its benefits are often undermined by the amount of energy needed to power such systems… “Environmental groups focused on racial and social inequities have asked Newsom to amend his proposal to ensure that carbon capture sites aren’t concentrated in low-income communities and don’t lead to an increase in other pollutants in those areas. Cesar Aguirre, an organizer with the Central California Environmental Justice Network, lives in Kern County, where the vast majority of oil is drilled in the state. He told the Chronicle he fears carbon capture will become a tool to allow fossil fuel companies and other polluting industries to keep doing business as usual. “Oil and gas (companies) will take any pathway to co-opt efforts and even greenwash for them to hold up their operations,” he told the Chronicle. “Frontline communities are tired of feeling like guinea pigs.”
Politico: A setback for oil in California
CAMILLE VON KAENEL and LARA KORTE, 8/25/22
“State lawmakers behind the latest proposal to ban oil and gas drilling from California neighborhoods are hoping this one will stick,” Politico reports. “A new bill introduced today, at Gov. Gavin Newsom’s last-minute request, would require a 3,200 buffer between new wells and sensitive areas like hospitals and schools. The proposal from State Sens. Lena Gonzalez (D-Long Beach) and Monique Limón (D-Santa Barbara) would also require strict emissions control on existing oil and gas operations in the setback zone. The legislation is already facing opposition, with the Western States Petroleum Association, the California Chamber of Commerce, and other business and energy groups circulating a letter urging lawmakers to vote no on the bill, saying it could cost the state billions and undermine the legislative and regulatory process. Its passage would be significant, as two previous attempts to pass the ban, by Assemblymember Al Muratsuchi (D-Torrance) and Sens. Scott Wiener (D-San Francisco) and Limón, respectively, have fizzled in the state Senate in recent years without Newsom’s explicit support.”
Bay Journal: More concerns emerge for Pennsylvania's abandoned oil, gas wells
Ad Crable, 8/25/22
“In 2020, an employee for the Pennsylvania Department of Environmental Protection smelled crude oil while driving to work in the northwestern part of the state,” the Bay Journal reports. “Trusting his instincts, he asked agency crews to follow their noses. They found an old abandoned well leaking oil within 500 feet of a dozen year-round and seasonal residences. The oil was flowing directly into the South Branch of Tionesta Creek, which the state classifies as a cold-water, high-quality fishery, meaning it is among the most unpolluted in the state. DEP found no record of the well’s owner and had to use emergency funds to stop the oozing pollutant and its nuisance odors. Elsewhere, a well borehole filled with acid mine drainage was spewing poisonous iron-rich water into a tributary of the Susquehanna River. A garage in Armstrong County that was built over an unseen abandoned gas well blew up. These scenarios play out too often, say state environmental officials. The state has more than 200,000 wells that were constructed and abandoned by oil and gas companies — the most of any state in the nation. No one knows for sure just how many because some wells are so old that no records exist. The state did not require notification of wells until 1955… “One overarching issue is that even modern-day drillers in the state sometimes abandon wells without plugging them, a violation of state laws. Research of DEP records by David Hess, a former DEP secretary who publishes an environmental blog, showed that from 2016 through 2022, the agency issued 4,270 notices of violations to 256 oil and gas companies for abandoning wells without plugging them. Some abandoned hundreds of wells, records showed. DEP is working with many of the owners to plug them. If abandoned, the wells must be sealed at taxpayer expense. DEP estimates that it will cost $1.6 billion to plug and stop leaks on the 200,000 abandoned wells identified so far.”
EXTRACTION
Globe and Mail: Oil sands industry wants tax credit review after U.S. goes big on carbon capture
EMMA GRANEY, 8/29/22
“Canada’s oil and gas industry is asking the federal government to increase its planned tax credits for carbon capture projects, so the country is able to keep pace with new credits introduced in the United States as part of the Biden administration’s Inflation Reduction Act,” the Globe and Mail reports. “Failure to do so, industry figures say, could put Canadian companies that want to invest in emissions-reducing technology at a competitive disadvantage… “The act increases the country’s existing carbon capture tax credit, called 45Q, by 70 per cent, to US$85 for every metric ton of carbon emissions captured and stored. Captured carbon can be injected underground in order to prevent it from being released into the atmosphere, where it would contribute to climate change. The U.S. legislation also extends the tax credit to projects that would previously have been too small to qualify. And it offers credits of as much as $180 a ton to direct-air capture projects, which suck up emissions that have already been released into the atmosphere. Mark Cameron, the vice-president of external communications at Pathways Alliance, an industry group that is working toward achieving net-zero emissions in Alberta’s oil sands by 2050, told the Mail Ottawa’s planned tax-credit regime is a significant step forward in federal support for emissions-reducing technology. But he warned that the domestic carbon capture industry could suffer if Canada’s credits aren’t as generous as those in the U.S. “We think the government has to look at what is happening with 45Q and the Inflation Reduction Act to see whether we’re still cost competitive with the United States,” he told the Mail. “It’s just really important for us to remain competitive with our largest trading partner and largest competitor in this space.” Just days before the changes in the U.S., Ottawa released the final details of its impending carbon capture investment tax credits. The Canadian tax credits will cover 50 per cent of capital expenses for most carbon capture and storage (CCS) projects through 2030. The U.S. tax credit, on the other hand, equates to about 85 per cent of project expenses, which is similar to the rate in Norway.
Reuters: Canada sees west coast LNG revival as world scrambles for gas
Nia Williams, 8/29/22
“Canada is taking a second crack at developing a liquefied natural gas (LNG) export industry on its west coast a decade after soaring costs and indigenous opposition derailed a previous wave of proposed LNG terminals,” Reuters reports. “This time, companies are focusing on smaller west coast projects they bet will be cheaper and faster to build. "Smaller project are easier to manage, especially in Canada," Enbridge chief executive Al Monaco told Reuters in an interview. "The need for global LNG is clearer now than it was before, we're getting a second chance and I hope we don't blow it this time. We've got to get on it right away." Environmental and regulatory hurdles to pipeline construction have discouraged new LNG terminals on Canada's Atlantic coast. read more British Columbia's Pacific coast is close to Canada's vast Montney shale field and Asian markets, where LNG prices hit a record high last week. Privately owned Port Edward LNG is raising capital and negotiating off-take agreements with Asian buyers, a Shell-led (SHEL.L) consortium is studying the feasibility of building Phase 2 of the LNG Canada project and last month Enbridge Inc (ENB.TO) outlined a C$1.5 billion investment in Pacific Energy Corp's Woodfibre LNG project… “Developers, keen to avoid past mistakes, are securing support from indigenous people early, Karen Ogen-Toews, CEO of the First Nations LNG Alliance, told Reuters. Companies are also modifying existing infrastructure to avoid lengthy regulatory delays.”
InsideClimate News: When an Oil Well Is Your Neighbor
Liza Gross, 8/29/22
“On a blistering July afternoon, a rusty pumpjack bobs noisily as it sucks up tarry oil in the middle of a residential neighborhood in Arvin, a close-knit farmworker community in the heart of California oil country,” InsideClimate News reports. “To an outsider, it’s a shock to see a pumpjack barely 25 feet from someone’s home. But for Yesinia Martinez, the dilapidated rig beyond her bedroom window is just something that’s always been there. Her health problems, too, have always been there. Every day is a struggle. “I wake up and I have, like, no energy to get up,” she told ICN. “I get headaches often. My memory is horrible.” Martinez personifies California’s failure to protect its residents from the harsh realities of living near fossil fuel extraction. Oil and gas operations have been linked to a growing list of serious health consequences, from birth defects to cancer, while the industry’s wastewater pollutes the state’s dwindling groundwater reserves. Meanwhile, environmental watchdogs armed with state-of-the-art imaging cameras routinely detect toxic emissions from neighborhood oil and gas wells and storage tanks, demonstrating the failure of state and regional regulators to keep communities safe. People like Martinez have paid for that failure with their health… “It’s surprising there hasn’t been much more research on the hazards of living near oil and gas operations, David González, an epidemiologist at the University of California, Berkeley, told ICN. “Particularly in California, where millions live near oil and gas wells.” González suspects part of the reason relates to who’s affected. “We’re finding that people of color are disproportionately exposed to oil and gas wells and have suffered disproportionately,” he told ICN. “And we know that these groups have historically been marginalized and their concerns not taken seriously.”
CLIMATE FINANCE
OilPrice.com: Big Oil's $41 Billion Buyback Bonanza
Alex Kimani, 8/28/22
“Oil and gas supermajors are on course to repurchase their shares at near-record levels this year thanks to soaring oil and gas prices helping them to deliver bumper profits and boost returns for investors,” OilPrice.com reports. “According to data from Bernstein Research, the seven supermajors–including ExxonMobil, Chevron, BP and Shell--are poised to return $38bn to shareholders through buyback programmes this year, with investment bank RBC Capital Markets putting the total figure even higher, at $41bn. In 2014, when oil was trading over $100/barrel, we only saw $21 billion in buybacks. This year’s figure rivals that of 2008. But here’s another interesting thing: Big Oil’s capex and production have remained mostly flat despite reporting record second-quarter profits… “Some oil and gas majors are prefering to return excess cash to shareholders in the form of fat dividends. For instance, ConocoPhillips announced during its second quarter earnings call that it will pay shareholders $1.40 per share in a special dividend on October 14. For perspective, that’s nearly three times its regular quarterly dividend of $0.46… “First off, buybacks effectively reduce a company’s outstanding shares while propping demand for the stock. Consequently, the smaller number of shares automatically increases earnings per share (EPS) since the company’s earnings are distributed among fewer shares. Additionally, there is a tax-efficiency element here. As a method of returning capital to shareholders, buybacks are preferred because there are no additional taxes on the sale process, as opposed to dividends that get taxed up to 20%. For buybacks, the tax applies only to the actual sale of shares. Another big consideration for the oil majors: buybacks deliver more voting leverage back into the hands of companies, something that Exxon shareholders understand only too well when activist investor Engine 1 was able to push for the company to diversify the oil company away from fossil fuel by having three of its members sitting on the board.”
OPINION
Troy Media: Trudeau is wrong about the viability of LNG
Deborah Jaremko is director of content for the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions, 8/28/22
“Even though the chancellor of Germany just came to Canada asking for LNG to help fill the five new import terminals it’s building. And even though companies are ready to invest, if given the right signals,” Deborah Jaremko writes for Troy Media. “For electric vehicles, the “business case” measure appears to be quite different. The federal government is more than happy to spend hundreds of millions of taxpayer dollars to “establish a business case” for EV chargers that private industry will (hopefully) follow… “Meanwhile, Canada is letting down its allies and losing money by not encouraging LNG investment. At today’s high prices, one large plant on the East Coast the size of the LNG Canada project being built in B.C. would add $250 million to the country’s gross domestic product. Not to mention the 96,550 direct, indirect and induced jobs created annually across the country that could be added by growing Canada’s LNG sector, according to the Conference Board of Canada. And the 2,449 coal-fired power plants operating around the world – plus the 189 that are under construction – that could instead be fuelled by low-emissions Canadian LNG. Growing LNG exports is in Canada’s best interest. And the business case doesn’t need any help from the federal government to be established. The industry just needs a supportive regulatory environment without arduous barriers and uncertainty.”