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EPA nominee's hearing on track; Exxon, Chevron likely to post dip in Q4 profits

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


EPA nominee's hearing on track; Exxon, Chevron likely to post dip in Q4 profits

Top News

US EPA nominee's hearing on track despite calls for delay amid shutdown

U.S. Environmental Protection Agency Acting Administrator Andrew Wheeler's Jan. 16 confirmation hearing will occur as planned despite calls from opponents to postpone the proceedings until the partial government shutdown is over.

Streamlined energy pipeline firms can better handle rising rates, analysts say

Major energy pipeline companies that have recently streamlined their operating structures improved their ability to ride out potential interest rate hikes in 2019 after a year of four increases, credit analysts said, but higher borrowing costs could saddle some debt-laden firms with extra risk as planned capital-intensive projects accumulate.

Exxon, Chevron could struggle to replicate prior-quarter success in Q4'18

With global crude oil prices losing their footing at the end of 2018, U.S. integrated oil and natural gas majors Exxon Mobil Corp. and Chevron Corp. are expected to report a sequential drop in earnings for the final quarter of the year, even as production levels likely ticked higher over the three months.

EIA forecasts US coal production will hit 4-decade low in 2020

The federal government trimmed its near-term forecast for U.S. coal production as the sector is expected to shrink even further over the next two years due to coal's "relatively weak competitiveness in the electric power sector compared with natural gas" and lower expected opportunities for coal exports.

Quoted

"There is going to be a mechanism for carbon to be a real market. To be valuable to shareholders, there will be a good margin in it. It'll be another revenue stream for an oil and gas company," said John Gibson, the head of energy investment bank Tudor Pickering Holt & Co.'s energy technology unit, commenting on the potential for oil and gas majors to lead the emerging industry for carbon capture and storage.

Power

* Wells Fargo & Co. executives said the bank's exposure to PG&E Corp. is "absolutely manageable" even as the utility company prepares to file for bankruptcy protection.

* San Francisco Mayor London Breed asked the city Public Utilities Commission to "evaluate all options, including the possibility of acquiring and building electrical infrastructure assets" amid news that PG&E Corp. and its utility Pacific Gas and Electric Co. plan to seek reorganization under Chapter 11, the San Francisco Chronicle reported.

* S&P Dow Jones Indices will remove PG&E Corp. from both S&P 500 index and Dow Jones Utility Average as the company prepares to file for Chapter 11 bankruptcy protection later in January and is no longer eligible for the indexes.

* California's Butte County sued Pacific Gas and Electric to recover damages and "lost taxpayer resources" tied to the fatal November 2018 wildfires that claimed 86 lives and destroyed more than 18,000 structures, the Chico (Calif.) Enterprise-Record reported. The lawsuit was filed in the Butte County Superior Court.

* The Oregon Public Utility Commission indefinitely suspended the procedural schedule for Hydro One Ltd.'s proposed $5.3 billion merger of Avista Corp. after Washington and Idaho state regulators denied Hydro One's purchase of Avista.

* The U.S. Environmental Protection Agency in 2018 generated the fewest new criminal case referrals for prosecution to the U.S. Department of Justice than any year since 1988, according to data released by Public Employees for Environmental Responsibility. Separately, The Hill in Washington, D.C., reports that the Government Accountability Office is probing the agency's declining enforcement actions in pollution cases.

* A Colorado lawmaker who wants to make the state an example of how to transition away from coal could have a clear shot at passing legislation aimed at making an energy transition more financially palatable to ratepayers and power generators.

* A new study published in Environmental Research Letters shows that the Trump administration's Affordable Clean Energy rule could result increased emissions from power plants in 18 state and Washington, D.C., according to The Hill.

* Southern Co. launched cash tender offers to purchase any and all of the $2.1 billion outstanding principal amount of its three series of debt securities. The offers will expire at 5 p.m. ET on Jan. 23.

* NASA and the U.S. National Oceanic and Atmospheric Administration have not been able to release their annual temperature reports as a result of the prolonged partial government shutdown, The New York Times reported.

Natural gas

* The U.S. Energy Information Administration lowered its spot natural gas price forecasts in 2019, predicting that production growth will keep pace with demand and export growth and that underground storage inventory builds will outpace the five-year average.

* Venture Global LNG Inc. has requested the Federal Energy Regulatory Commission to approve the planned Calcasieu Pass LNG export terminal project in Louisiana by Jan. 22, as the developer is ready to begin construction of this multibillion-dollar project as soon as authorized by the commission. The project has 20-year LNG offtake agreements with units of Royal Dutch Shell PLC, Edison SpA, Galp Energia SGPS SA, BP PLC, Repsol SA and Polskie Górnictwo Naftowe i Gazownictwo SA, or PGNiG.

* The U.S. Bureau of Offshore Energy Management is bringing 40 workers back to work during the shutdown amid the Trump administration's plans to expand offshore natural gas and oil drilling in the American waters, The Hill reported.

* Four members of Massachusetts' congressional delegation demanded answers from Columbia Gas of Massachusetts for backdated customer bills sent out months after a deadly series of explosions and fires.

* Colorado regulators approved URSA Resources Group LLC proposal to drill 24 wells and a wastewater injection well near a Battlement Mesa mobile home park, The Associated Press reported.

Oil

* The U.S. EIA offered the first glimpse of its short-term oil price projections for 2020, a year during which it expects oil prices to recover but remain below the levels seen during 2018 despite expected record-level U.S. refinery runs.

* A new poll published by the Angus Reid Institute shows that 65% of Canadians opine that the oil and gas industry is a critical source of energy and about 87% Albertans opine that the lack of new oil pipelines is a crisis. The polls also found that about 53% of Canadians support the Energy East and TransMountain pipeline projects.

* Trans Mountain Corp. would need to create a marine mammal monitoring program before it would be allowed to boost crude shipments through its Westridge Terminal in British Columbia, according to a set of draft conditions the National Energy Board issued.

* California's Kern County officials voted to rescind approval of Alon USA Energy Inc.'s plan to send Bakken crude oil to the county for refining, according to a report from BakersfieldNow.com.

* POTAC LLC, a partnership between Dauphine Midstream LLC and Mercuria Energy Group Ltd., acquired 236 acres of land near its terminal in Corpus Christi to further expand its operating capabilities. The site can accommodate more than 10 million barrels of bulk liquids storage, as well as the construction and operation of a full unit train solution.

Coal

* The U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments Jan. 15 in a case to determine whether the CEO of Murray Energy Corp. interfered with his employees' right to report unsafe working conditions to the federal government.

* Cloud Peak Energy Inc.'s board of directors adopted a stockholder rights plan to protect its tax benefits from risks posed by changes in stock ownership, according to a SEC filing.

ChartWatch

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Benchmark California carbon allowance prices in the secondary market worked lower during the week ended Jan. 14, even as trading activity picked up with the arrival of the new year.

New from RRA

* In a not unexpected announcement, PG&E Corp. on Jan. 13 indicated that it intends to tender a Chapter 11 bankruptcy reorganization filing on or about Jan. 29. The major reason indicated by the company is the anticipated financial liabilities associated with the devastating November 2018 Camp Fire and October 2017 wildfires.

* There is consensus among the Missouri jurisdictional electric, natural gas and water utilities that an "optional, shortened ratemaking procedure" posited by the Missouri Public Service Commission staff on Nov. 27, 2018, could be a worthwhile endeavor.

The day ahead

* The U.S. Senate Committee on Environment and Public Works will hold a hearing today to consider the nomination of Andrew Wheeler to be administrator of the Environmental Protection Agency.

* Early morning futures indicators pointed to a higher opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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