RICHMOND, Va. – Oil giant ExxonMobil is in a sharp decline that some are calling irreversible – in part due to deep changes in world energy markets.
Once among the largest companies in the world, Exxon's revenue peaked at nearly $500 billion, but last year, it was less than half that.
Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial Analysis (IEEFA), says the reasons are complex, but one issue is that the company made a huge bet buying up Canadian oil sands.
Sanzillo explains these are expensive reserves to produce, and the company has had to admit they are not worth keeping on the books at current low prices.
"And they just wrote off 3.5 billion barrels of oil, which is almost 20 percent of their size,” he points out. “The company is getting smaller, not larger, and it's likely to continue."
Other analysts say the energy titan is diversified and strong enough to weather the bust.
But Sanzillo points out that the energy market shifts are bigger than a temporary downturn.
He points out ExxonMobil once funded climate change denial, but is now urging the Trump administration to stay in the Paris climate accord.
Exxon isn't alone, and Sanzillo says the company is holding its own better than some of the other huge petroleum companies that used to sit at the top of the global economy.
"In the late 80s, early 1990s, Standard and Poor's 500 Index – the top 10 companies, six or seven of them were oil companies,” he states. “Today, there's only one and that's Exxon, and it isn't doing very well."
Sanzillo says part of Exxon's problem is fracking – unconventional drilling is bringing so much oil and natural gas to market that it's driven down prices.
At the same time, he says, the OPEC countries are unable or unwilling to cut back production. And the position of all kinds of fossil fuels has been gradually eroding – so much that it's starting to impact investments.
"No fiduciary can claim to be doing their jobs without contemplating what their portfolio will look like with substantially diminished or no fossil fuels," he states.
ExxonMobil's stock price peaked near $104 a share in 2014. Now it's near $81 a share.
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Kentucky House lawmakers are considering a bill that could make it harder to close aging coal-fired power plants.
At the Kentucky Resources Council, Program Attorney Bryon Gary said the bill is part of the larger legislative effort to tip the state's energy planning process in favor of the coal industry.
He explained Senate Bill 349 would create a new "energy planning and inventory" commission tasked with reviewing utilities' plans to retire their aging plants.
"To artificially limit what resources a utility can build," said Gary, "and to artificially require them to keep running power plants that are well beyond their useful life and incredibly expensive to run, is just going to make the problem worse."
The bill's sponsor, state Sen. Robby Mills, R-Henderson, and supporters say the change is needed to ensure the state has a reliable power supply.
Kentucky has several aging coal-fired power plants from the 1970s and 1980s that are no longer economically competitive and are set to be decommissioned within several years.
President of LG&E and KU Energy John Crockett said creating the new commission isn't in customers' best interest.
"It's a group that's almost entirely without expertise in generating or distributing electricity," said Crockett. "And it's designed to promote and perpetuate coal generation outside of a traditional 'least cost reasonable' analysis that has served Kentucky well for decades."
Gary added the bill also would impose a six-month deadline for the state's utility regulator to make decisions for certain types of cases.
He said this could silence voices from low-income communities and other groups affected by rate hikes.
"And would weaken the due process protections for all parties involved," said Gary, "by shortening the timeline for things that are essential to make sure that cases are fully heard and vetted, such as discovery and a hearing and briefing of all the parties."
The Kentucky Energy and Environment Cabinet and the Public Service Commission warn the bill doesn't allocate funds to cover costs related to the new commission.
They're also concerned about the bill's time limit for fuel adjustment clause proceedings, which help return millions of dollars in utility bill refunds to Kentucky customers.
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New York's state lawmakers are considering a measure that would shake up the way Long Island's power grid operates.
The Long Island Power Authority Public Power Act would make LIPA the sole operator of the grid, ending the long-standing public-private model. Residents feel this model has made communication between ratepayers and their power company inefficient.
Ryan Madden, climate and energy campaigns director for the Long Island Progressive Coalition, said the status quo creates something akin to "a game of unnecessary telephone."
"For example, an issue is raised, and it's brought either from the LIPA board or LIPA staff brings it to the LIPA board," Madden explained. "It then has to be passed along to PSE&G. PSE&G takes weeks, months in order to come back. Then they have to bring in the Department of Public Service of Long Island."
In 2023, numerous groups from Long Island and the Rockaways called for an end to this model, and customers have expressed concerns over how Long Island power responds to bad weather. After Superstorm Sandy, PSE&G replaced National Grid as the third-party manager because people felt the company mishandled power restoration to the area.
Residents have a similar feeling for how PSE&G dealt with the aftermath of Tropical Storm Isaias.
The bill is under review by the Assembly's Corporations, Authorities and Commissions Committee.
Supporters have contended that replacing the public-private model would put more money back in ratepayers' pockets. A 2023 study found that a fully public Long Island grid could save ratepayers around $500 million over the next decade.
Madden said terminating PSE&G's contract would create some of the initial savings.
"There's been some ranges depending on conservative estimates," he noted. "Anywhere from $60 million to $80 million saved in the functioning of the utility, right? So we're getting rid of $80 million in management fees for PSE&G."
Madden said LIPA could use some of the savings to make improvements in the grid, expand programs and increase stakeholder input. He also said he thinks this will help make the grid more climate-efficient in a way that doesn't further disadvantage certain communities.
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Minnesota already has a law calling for 100% carbon-free electricity by 2040. Now, there's a similar plan for transportation, and a legislative committee will consider the idea today.
The clean transportation standard has a target year of 2050 for phasing out carbon-intensive fuel sources for cars and trucks.
Producers slow to adapt would have to buy credits, while companies distributing cleaner products would receive incentives.
Transportation accounts for about a quarter of Minnesota's greenhouse gas emissions, and Fresh Energy's Senior Lead for Innovation and Impact Margaret Cherne-Hendrick said this approach could help reduce that total.
She pointed to newer types of biofuels, beyond standards like ethanol.
"For example, winter oil seeds are better for the environment," said Cherne-Hendrick. "They require much less fertilizer. "
University of Minnesota researchers note these seeds could benefit parts of the transportation sector that face challenges in going electric, such as heavy-duty trucks.
Under the bill, fuel sources would be graded on their carbon intensity - to determine where they rate with the standard.
Skeptics, including some environmental researchers, say the plan could have unintended consequences in reducing emissions.
State Senate Transportation Committee Chair Scott Dibble - DFL-Minneapolis - said while there's a strong push for electric vehicle adoption, many people right now still have to buy cars powered by traditional fuel sources.
"The market penetration is still very small for EVs," said Dibble, "and they're going to own and operate that liquid fuel-based car for the coming 20 plus years."
As the EV market takes shape, he said it makes sense to fill these other cars with the cleanest fuels possible.
There's still a lot to sort out in establishing the standard, and Dibble acknowledged it might have to start as a goal, given the current state of fuel technology.
His bill calls for a one-time appropriation of $900,000 for implementation, but Dibble insisted the incentives market would largely support itself in the long-term.
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