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ENERGY SECTOR LOSES JOBS AT ‘HISTORIC RATE’: The energy sector is being hit hard by the coronavirus outbreak.
More than 1 million U.S. energy workers have lost their jobs since the pandemic began, a 13% drop in employment that erases nearly all of the job growth the sector has seen since 2015, according to new analysis released Monday by BW Research.
The bulk of those energy jobs (958,500) were shed in April, as shelter-in-place restrictions set in around the country and demand for fuel and energy plummeted, the data reveals.
Absent policies to boost the energy sector, BW Research projects more than 1.75 million energy jobs could be lost by the end of the second quarter.
“The energy sector is shedding jobs at an historic rate,” said Philip Jordan, a vice president and principal at BW Research who authored the analysis. He added policies such as “investing in modernizing our energy grid, transportation systems, and buildings” could put people back to work in the energy sector.
Drilling down into the numbers: The oil and gas industry lost more than 40,000 jobs in April alone, most in oil and gas field work. Since March, the industry has seen a more than 16% decline in employment.
The job losses come as oil prices took a nosedive into negative territory for the first time ever last month. Several shale producers filed for bankruptcy or are preparing to file.
It’s not yet clear how quickly employment in the oil industry will pick back up as prices are on the rise (more on that below).
The coal industry, already under threat by the energy markets in recent years, has also been hard hit. Since March, coal mining and coal power have shed more than 9,000 jobs, a nearly 10% employment decline, according to the data.
Almost 50% of total energy sector job losses have been in clean energy: In April alone, clean energy lost nearly 450,000 jobs, according to analysis released by BW Research last week. (Abby has more on that here.) The firm defines clean energy as energy efficiency, renewable energy, clean fuels, and clean vehicles.
In its own analysis released Monday, the Solar Energy Industries Association says most of the 95,600 renewable energy jobs lost since March have come from the solar industry. The group projects that in June, the industry will employ 188,000, a 38% decline from pre-pandemic forecasts of 302,000.
Congress hasn’t done much yet to help out the renewable energy sector, despite pleas from the industry for tweaks to federal tax credits to account for pandemic-induced delays for projects.
And Abigail Ross Hopper, SEIA’s president, said it isn’t yet clear how much the Treasury Department’s pledge to modify the rules for the “safe harbor” for renewable energy tax credits will help the solar industry. What the solar industry is looking for, she said, is essentially a “mulligan” on 2020, to allow solar developers to take advantage of the 26% tax credit for another year instead of it stepping down to 22% in 2021.
“I think most businesses are looking at their books and thinking, ‘Could we just pretend like this didn’t happen? Can we start over?’” Hopper told Abby of 2020. She added she’s hopeful the extension is something Congress will address once it turns its attention to economic recovery.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
OIL PRICES PASS $30 HURDLE: Oil prices are above $30 per barrel Monday for the first time since mid-March as traders express optimism about gasoline demand picking up as countries and U.S. states emerge from confinement.
The West Texas Intermediate price is trading at $32.65 of this writing, after briefly falling below zero last month for the first time ever. Brent crude, the international benchmark, is trading even higher, at $35.15.
“OIL (ENERGY) IS BACK!!!!” President Trump tweeted Monday morning.
Also helping the oil price rally are production cuts, including government-driven ones by OPEC+ countries, and reductions by companies in countries such as the U.S. and Canada.
U.S. producers have already announced crude shut-ins of at least 1.2 million barrels per day in May and June, notes research group Rystad Energy.
“Producers are significantly throttling back output and, with demand increasing, the market is on a slow path towards recovery,” said Rystad’s senior oil market analyst Paola Rodriguez Masiu.
But can prices ‘get much higher,’ to quote Kanye? The oil market recovery is still fragile and uncertain, with the potential for future coronavirus outbreaks and long-term questions about people’s transportation habits. Prices are also much below where they were before the pandemic, so perspective is important.
“Still only in 2nd inning of this oil market ‘process’,” tweeted Dan Pickering, CEO of Pickering Energy Partners, an energy investment firm. “Prepare for many ups-and-downs.”
GLOBAL NATURAL GAS DEMAND TO FALL FOR FIRST TIME SINCE 2009: The world will see no growth in its consumption of natural gas this year for the first time in more than a decade, Rystad projected Monday.
Global natural gas demand will fall 2% because of a decline in commercial and industrial activity.
“This will be a hard blow for an industry accustomed to yearly growth rates of more than 3%,” said Rystad’s Carlos Torres-Diaz, head of gas and power markets.
But low prices have kept gas use in the power sector stable in most countries, shielding gas from the worse effects oil is experiencing.
Because it’s been so cheap for so long, natural gas in recent years passed coal as the most used fuel for electricity.
While some important uses for gas are falling, without the need to power or heat large office spaces and some nonessential manufacturing facilities, demand has picked up in other places, such as in feedstock for plastics used to make key health equipment.
EXCLUSIVE…ZINKE BLAMES OUSTER ON POLITICIZED INSPECTOR GENERAL: Ryan Zinke says he was unfairly targeted during his time as Interior secretary, part of a pattern of attacks on Trump administration officials from within the government, led by agency staff who are supposed to be impartial watchdogs.
“You have the investigative arms of our government that are not being referees. They’re wearing uniforms,” Zinke told Abby in a recent interview. “That is troubling, and this has to be addressed.”
When Zinke left his post at the end of 2018, he was facing at least six different investigations into allegations of ethical misconduct and other violations. At least one of those, a probe into a real estate deal involving Zinke’s family and the chairman of oil services giant Halliburton, was referred to the Justice Department.
A year and a half out, Zinke is defending his tenure: Zinke said decisions he made as secretary were misunderstood and mischaracterized by environmentalists in a way that was “dishonest.” That included his recommendation to Trump that he shrink the size of several monuments, the most controversial of which was the Bears Ears monument in Utah.
Much more on what Zinke had to say about his time at Interior in Abby’s story posted Sunday.
MORE FROM ZINKE…BIDEN’S PLAN TO BAN FEDERAL DRILLING IS ‘NUTS’: By barring new oil and gas drilling on federal lands, Joe Biden would threaten U.S. energy security, Zinke told Abby.
“For Senator Biden to even suggest that we’re not going to have a federal land component of our energy policy or that component will only include hundreds and hundreds and thousands of miles of solar cells or windmills in every backyard is inappropriate,” he said.
Strong U.S. energy production is what afforded Trump leverage in negotiations between the Saudis and the Russians over oil prices, Zinke added.
But while Zinke said the U.S. is better positioned on energy, the former Interior secretary outlined supply chain risks, ranging from critical minerals to medical equipment, exposed by the coronavirus. Trump and Congress must take steps to address those risks post-pandemic, he said.
More in Abby’s story posted this morning.
CUOMO ADMINISTRATION KILLS NATURAL GAS PIPELINE TO NEW YORK CITY: The administration of New York Democratic Gov. Andrew Cuomo denied a permit Friday for a pipeline to deliver natural gas from Pennsylvania through New Jersey to New York City.
New York’s Department of Environmental Conservation said the $1 billion Williams Northeast Supply Enhancement Project would not satisfy water quality standards, denying the pipeline a Section 401 permit. New Jersey’s Department of Environmental Protection also denied permits for the pipeline Friday.
New York vs. Feds: New York’s rejection sets up a clash with the Trump administration, which has proposed limiting state use of Section 401 of the Clean Water Act to deny permits if leaks from a pipeline or other energy infrastructure projects could harm nearby streams or lakes. The EPA is expected to release final guidance on the matter soon.
The climate factor: New York also cited the project’s potential contribution to climate change, including the production of the gas used in the pipeline, the construction of the project itself, and the end use of the gas.
These lifecycle emissions are incompatible with the state’s law to reach net-zero emissions by 2050.
“The continued long-term use of fossil fuels is inconsistent with the State’s laws and objectives and with the actions necessary to prevent the most severe impacts from climate change,” said Daniel Whitehead, director of the division of environmental permits at the Department of Environmental Conservation, in a letter to Williams Co., the company building the pipeline.
Utility National Grid had agreed to buy gas from the pipeline as a source for heating homes and buildings to displace oil, which is more carbon intensive than gas.
CITING COVID, EPA ALLOWS MORE TIME ON WOOD HEATER STANDARDS: The EPA wants to give manufacturers and retailers an extra six months to sell higher-emitting wood heating devices, proposing to push the deadline to stop sales of the devices from May 15 to November 30.
The additional time “will give businesses an opportunity to recover sales that have been lost due to the coronavirus health crisis,” EPA Administrator Andrew Wheeler said in a statement, adding most manufacturers and retailers of wood heaters are small businesses. “This action will provide economic relief to these employers as America begins to reopen its businesses.”
LCV LAUNCHES MASSIVE PITCH TO ‘ENVIRONMENTAL’ SWING STATE VOTERS: The campaign, starting with a $14 million paid media program in six swing states, targets Trump’s climate and environmental record. It’s the biggest electoral program in the League of Conservation Voters Victory Fund’s history, the organization said in its Monday announcement.
Citing research the group conducted with Hart Research, LCV Victory Fund said swing voters’ support for Democratic candidates increases 20 points when they learn about Trump’s environmental record. One of the campaign’s first ads slams Trump for separate comments calling the coronavirus and climate change a “hoax.” LCV Victory Fund is running the campaign in Arizona, Florida, Michigan, North Carolina, Pennsylvania, and Wisconsin.
The Rundown
New York Times In the shadow of America’s smokestacks, virus is one more deadly risk
Axios Trump’s energy chief: Banks are “redlining” oil and gas investments
Reuters Coronavirus widens climate rift between European and US oil majors
Bloomberg Chinese oil demand is almost back to pre-virus crisis levels
Wall Street Journal The oil market is betting people want crude for Christmas
Reuters Trump admin slaps solar, wind operators with retroactive rent bills
Calendar
MONDAY | MAY 18
The Senate is in session. The House is out.
WEDNESDAY | MAY 20
10 a.m. 106 Dirksen. The Senate Environment and Public Works Committee holds an oversight hearing with EPA Administrator Andrew Wheeler.
2:30 p.m. 106 Dirksen. The Senate Energy and Natural Resources Committee holds a hearing to consider the nomination of Mark Menezes to be deputy secretary of the Energy Department.
