Wonky policy could help oil industry — which has been largely ignored by bailout plans.
New power from wind and solar is set to fall this year for the first time in two decades.
Construction of new wind and solar farms is being delayed by factory closures, workers’ needs for social distancing and developers’ financial concerns as they emerge from the coronavirus crisis, according to research from the International Energy Agency.
The world is set to add 167 gigawatts of renewable power capacity this year, 13 percent less than in 2019. It’s a reality check for a sector that’s seen only growth for years and has emerged relatively unscathed from the plunge in energy demand that’s hit the oil and gas business.
“The continued decrease in the cost and increasing competitiveness of wind and solar alone will not shelter renewables from the economic downturn,” Fatih Birol, the IEA’s executive director said in a phone interview.
Shell hoping voluntary exits can boost finances
Royal Dutch Shell will use measures including voluntary severance for staff to bolster its finances as the coronavirus pandemic batters profits, according to people with knowledge of the matter.
The company has already slashed spending and surprised investors with a two-thirds cut to its dividend.
Shell isn’t the only company making big changes to withstand the disruption caused by Covid-19. Most of its peers have made big spending reductions, while Norway’s Equinor ASA also cut its dividend.
BP promised its employees their jobs were safe at least until the end of June, but companies including Chevron Corp., Marathon Oil Corp. and Halliburton Corp. are laying off employees.
Royalty cuts help drillers working on public lands
The Trump administration has granted at least 76 petitions to cut royalty payments for oil and natural gas produced on public land in Utah — a move condemned by critics as encouraging production the market doesn’t need.
The Bureau of Land Management approved all 76 petitions it received for leases in Utah since May 1, according to an online government database. The approvals temporarily lower royalty rates so that oil companies can pay the federal government as little as 2.5 percent the value of oil and natural gas extracted from the tracts, instead of the usual 12.5 percent rate. The initial wave of data only reflects royalty relief applications in Utah, though requests from other states are also under review.
The move is designed to aid oil companies fighting to survive during the coronavirus pandemic.
Conservationists said the move would encourage more oil production when storage tanks are filling up and the industry still needs to curtail output.
Plunge in electricity use may linger after business reopens
The global plunge in electricity demand will drag on long after nations lift stay-at-home orders, leading to the biggest annual drop since the Great Depression and fundamentally reshaping power markets.
Worldwide electricity consumption will decline 5 percent in 2020, the most in more than eight decades, according to the International Energy Agency.
The prolonged slowdown will increase economic pressure on older, uneconomic power plants — especially those that burn coal — and help speed the transition toward cleaner and cheaper wind and solar. It will also contribute to the biggest annual decline in greenhouse gasses from energy ever recorded.
Food deliveries raising gasoline demand
Gig-economy deliveries for groceries, alcohol and other goods look to be driving a nascent recovery in U.S. gasoline demand after the lowest plunge in almost 30 years.
Americans’ embrace of those services in the Covid-19 lockdowns may be permanent, experts say, and many consumers may never return to buying their own groceries in a store.
The resulting surge in the use of services such as Instacart Inc. is increasingly influencing gasoline consumption in ways that will have a lasting impact.