OCI is producing weekly news and resources updates for allies as part of our response to the COVID-19 crisis. These supplement the monthly OilWire editions that we produce with the Global Gas and Oil Network. Subscribe here to get the monthly OilWire bulletin.
OilWire update: 8 May 2020
Oil crash hits Nigeria hard
Africa’s most populous nation is getting almost no money from selling oil now. While Brent crude futures have risen back above USD 30 per barrel, Nigerian oil is still fetching only around USD 20. PwC warn that Nigeria could receive almost nil oil revenue for five years or more. About a quarter of Nigeria’s crude oil cargoes for loading this month still have no buyers.
The Nigerian government’s dependence on oil revenues could lead to real risks for Nigerian people and communities, some of whom have been resisting oil expansion for decades.
Learn more: COVID-19, Climate Justice & Energy Access in Africa
Oil Watch Africa and Oil Change Africa are hosting two online conversations about the triple crisis we face — global pandemic, economic turmoil, and climate change — and the implications for efforts to phase out fossil fuels and expand clean energy access in Africa.
- WATCH Part I on fossil fuels, including panelists Nnimmo Bassey, HOMEF and Oilwatch Africa; Ikal Angelei, Friends of Turkana; and Hamza Hamouchene, Trans National Institute.
- REGISTER for Part II on energy access, Tuesday, May 12 at 1PM GMT. Panelists will include: Makoma Lekalakala, Director, Earthlife Africa; Lorraine Chiponda, Coordinator, Africa Coal Network; and Chibeze Ezekiel, Exec. Coordinator, Strategic Youth Network for Development.
New study: Green stimulus can repair global economy and climate
new Oxford University study has confirmed that stimulus packages targeted at environmental and renewable energy projects can address both economic and climate crises. Sustainable projects create more jobs, deliver higher short-term returns to governments, and lead to increased long-term cost savings. For example, clean energy infrastructure generates twice as many jobs as fossil fuel projects for the same government expenditure.
Australian state opens 7,000 sq km for gas and coal exploration
The state government in Queensland has opened two new areas of land for immediate gas and coal exploration and tenders, and will put up another 6,700 sq km of land for tender later this month. Some land opened up for exploration is currently farmed for food. Even in this moment of crisis, Mines minister Dr Anthony Lynham is still betting on a long-term market for new gas production – at odds with the ambition of the Paris Agreement.
The Lock the Gate Alliance is resisting this fossil fuel expansion, calling instead for investment in rural communities.
Pemex suffers USD 23 bn quarterly loss, keeps pushing output growth
As others slash production and investment, Mexico’s state oil company, Pemex, is continuing to push output, vowing to nearly double refining output in May – even though “not a single field in Pemex’s portfolio … is profitable when you consider costs and taxes…”
Norway proposes tax relief for oil producers
Late last week, Norway’s government proposed tax relief for Big Oil and Gas, in order to slow the decline of Norwegian fossil fuel protection. Here’s an idea: Manage the decline, support affected working people, and commit to a just decline, instead of offering big polluters tax breaks.
Canadian government commits up to CAD 500M to Coastal GasLink pipeline
Canada’s export credit agency, Export Development Canada (EDC), is doubling down on more public finance for oil and gas expansion. EDC revealed on Monday that it will lend up to CAD 500 million to TC Energy to help the company construct the Coastal GasLink pipeline. Na’Moks, a hereditary chief in the Wet’suwet’en First Nation – which continues to resist the pipeline – responded that, “It doesn’t make sense to me to put money into something that is bound to fail because the opposition to this is so high.”
Totally unacceptable: Shareholders not persuaded by Total’s new target
Total has announced a new Europe-only net zero target, in a climate plan riddled with “vague targets with a lot of loopholes”. Last month, 11 institutional investors requested a shareholder resolution, calling for detailed plans and absolute targets, not relative measures like carbon intensity. ShareAction have labelled the new promises “totally insincere”. The shareholder resolution will be considered an AGM scheduled for May 29, 2020.
EU regulators propose ‘ludicrous’ oil and gas loophole in draft disclosure rules
In the latest draft rules for the EU’s sustainable disclosure regime, regulators have proposed omitting oil and gas from the definition of fossil fuels. The rules are supposed to improve transparency on the environmental, social, and governance risks of investment funds. Investors, politicians, and campaigners are pushing back against this “ludicrous” loophole.
Oil production cuts proposed in Papua New Guinea
Oil Search Ltd has announced that it is considering oil production cuts from July. It is the largest oil and gas exploration and production company operating in Papua New Guinea.
Warren Buffett laments USD 10 bn oil investment
This week, multibillionaire Warren Buffett said that he regretted investing USD 10 bn in Occidental Petroleum Corp in April 2019. He says that he now plans to invest more in renewable energy.
However, as recently as March this year, Buffett said that free oil would be good for consumers.
- SIGN AND SHARE: Tell the U.S. Congress to pass the ReWIND Act and stop Big Oil and Gas bailouts.
- SIGN AND SHARE: With Keystone XL construction beginning in the middle of a pandemic, join Indigenous and rural communities in demanding that TC Energy cancel pipeline activity.
- SIGN ON: Open letter:The European Central Bank must not sideline climate risks in its COVID-19 response.
New poll: U.S voters support renewable energy bailouts, oppose fossil fuel bailouts
A new Morning Consult shows that over half of U.S. voters support bailouts for renewable energy. However, only 38% of voters would support a bailout for fossil fuel companies.
J.P. Morgan drops former Exxon CEO Lee Raymond
After a campaign launched on Earth Day, J.P. Morgan has declined to reelect Lee Raymond as lead ‘independent’ director, citing his ties to fossil fuels and climate denial.
European court rules against Shannon LNG terminal in Ireland
Irish activists are celebrating a ruling from the European Court of Justice finding that planning permission for the proposed Shannon LNG terminal has expired, and should never have been extended without a proper environmental impact assessment. Friends of the Irish Environment brought the legal challenge against the EUR 500 million project.
U.S. company pulls back on Permian export pipeline plan
MPLX, a subsidiary of Marathon Petroleum, announced this week it is no longer pursuing a proposed 400-mile pipeline to export natural gas liquids from the Permian Basin through the Gulf Coast of Texas. The company has also deferred plans for a related fractionation and export facility.
New report: It is time to abandon Atlantic Coast Pipeline
Friends of the Earth and NC Warn have released a new report urging Duke Energy and Dominion Energy shareholders to oppose those two companies pouring billions more into the Atlantic Coast Pipeline.
Report calls on churches to divest from fossil fuels
BrightNow have released a new report encouraging churches to urgently divest from fossil fuels.
After the oil crash, we need a managed wind-down of fossil fuel production
Cleo Verkuijl of the Stockholm Environment Institute, Ivetta Gerasimchuk of the International Institute for Sustainable Development, and Niklas Hagelberg of the UN Environment Programme preview the timely focus of this year’s Production Gap Report: “how government bailouts, stimulus measures and strategies are delaying – or accelerating – the transition away from dependence on fossil fuel production.”
Op-ed: It’s time for a fossil fuel non-proliferation treaty
“History teaches us rapid, dramatic transformation is possible when a handful of countries committed to high ambition decide to lead,” writes Tzeporah Berman in a Thompson Reuters op-ed. Instead of going back to “normal,” it’s time now for governments to agree to a global framework for an equitable wind down of fossil fuels.
This Pandemic Proves It: Individual actions alone won’t solve the climate crisis
“The COVID-19 pandemic shows more clearly than ever that individual action to tackle the climate crisis will never be enough without a parallel systemic change focused on emissions reductions,” Amy Westervelt writes in the Huffington Post. Without strong government intervention, “fossil fuel companies will find ways to stay in the carbon business as long as they possibly can.”
Was 2019 the peak of the fossil fuel era?
Kingsmill Bond of Carbon Tracker Initiative analyses the possibility of peak fossil fuel demand and issues this warning governments: “You may be certain that if you try to [build back the fossil fuel system], the companies at the top end of the cost curve will dump their assets on the taxpayer, and you will have to pay to clean them up and close them down.”
Is this Big Oil’s ‘Kodak Moment’?
Oil Change International’s Andy Rowell tracks the impact of the ongoing COVID-19 crisis, arguing that some Big Oil supermajors are already becoming superminors.