Coal losing its power on U.S. grid
Coal is on track to disappear from the U.S. power grid by 2033 as the push for a carbon-free electricity system gains strength, according to Morgan Stanley.
The fossil fuel will be supplanted largely by renewables, which will supply 39 percent of U.S. electricity in 2030 and 55 percent in 2035, according to a report Monday from Morgan Stanley. The shift comes as a growing number of states implement laws mandating utilities eliminate carbon emissions from their fleets.
Coal supplied about 20 percent of U.S. electricity last year and may rebound to as much as 22 percent in 2021 as higher natural gas prices prompt utilities to shift their fuel mix, according to Energy Department forecasts. But that short-term rebound won’t overcome the global shift toward cleaner sources of electricity, a trend that’s getting a big push from President Joe Biden’s pledge to put the U.S. on a path to an all-green power system.
Gas prices may climb 48 percent this year, which “drives coal generation and the sector’s carbon footprint to increase in 2021 but we continue to project a constant decline thereafter,” Morgan Stanley analysts said in the report.
Exxon promises to defend dividend
Exxon Mobil pledged to safeguard the S&P 500 Index’s third-largest dividend after posting its first annual loss in at least 40 years, a show of defiance by an oil driller besieged by activist investors and climatechange campaigners.
Exxon assured investors of its financial health in a world of $50-a-barrel oil and promised that if crude were to dip to $45 it would sacrifice spending in the name of dividends. The Western world’s largest oil explorer has increased the payout each year since 1972, unlike rivals Royal Dutch Shell Plc and BP Plc that cut distributions last year.
The dividend pledge comes on the heels of a $19.3-billion writedown of U.S. natural gas fields and other assets, and the lowest production since the 1999 Mobil Corp. merger. Cash flow from operations — a key gauge of corporate strength — shrank by almost 9 percet during the final three months of 2020 to $4 billion, not even enough to cover capital spending.
LNG struggles as Europe demand sinks
Liquefied natural gas deliveries fell for the third straight month amid shipping restraints and lackluster demand for the fuel in Europe.
Imports fell 3.7 percent in January from a year earlier, according to ship-tracking data compiled by Bloomberg. While North Asian demand jumped 17 percent on the back of frigid winter weather, it wasn’t enough to offset a 56 percent drop in Western Europe, where nations continue to extend lockdown measures to contain COVID-19 infections.
Deliveries to Asia likely would have been even higher if not for delays traversing the Panama Canal, which also reduced the amount of available vessels, as well as ongoing maintenance at several export plants. A recordbreaking rally in North Asia spot LNG prices also lured cargoes from Europe.
China was the largest importer of LNG for the third straight month as industrial activity rebounded and amid colderthan-normal temperatures. Japan wasn’t far behind, with imports jumping 13 percent, as utilities snatched up spot supplies due to a domestic supply crunch.