General
News
Exxon Mobil Resists Write-Downs As Oil, Gas Prices
Plummet. According to the Wall Street
Journal, “As its peers write down U.S. shale assets by billions of dollars amid lower oil and gas prices, Exxon Mobil Corp. XOM 0.90% stands increasingly alone in not adjusting the value of its holdings. Rivals, including BP PLC, Hess Corp. and Occidental
Petroleum Corp., have recently taken multibillion-dollar impairments as a coronavirus-induced economic slowdown adds pressure to an already struggling shale sector. Chevron Corp. took a $10 billion write-down in December, and Royal Dutch Shell PLC said Tuesday
that it would write down the value of its assets by up to $22 billion because of lower energy prices. Exxon has yet to write down any shale assets this year, holding to a belief that oil and gas values will eventually rebound. Several oil and gas accounting
experts allege that Exxon’s reticence to adjust the value of shale assets on its balance sheet amounts to accounting fraud. In a series of complaints filed to U.S. authorities, they argue that the company is deceiving investors by failing to write down much
of the value of XTO Energy Inc., a natural-gas driller it purchased for $31 billion a decade ago, along with other assets. Exxon’s refusal to write down its acquisition of XTO is part of an ‘arrogant, aberrant, long-standing…posture’ at the company, said one
of the accountants, Franklin Bennett, a former senior accounting analyst in Exxon’s oil and gas business, in a complaint filed under the Securities and Exchange Commission’s whistleblower program that was viewed by The Wall Street Journal. Mr. Bennett left
Exxon in 1995, well before the XTO deal, but maintains the company’s accounting of the acquisition fits with its past practice of handling assets that might be worth less than anticipated.” [Wall Street Journal,
6/30/20
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House
Democrats’ Climate Plan Embraces Much Of Green New Deal, But Not A Ban On Fracking.
According
to Inside Climate News, “House Democrats unveiled a sweeping plan for climate action Tuesday that embraces much of the ambition of the Green New Deal, while avoiding the use of the name and steering clear of calls for abrupt bans on fossil fuel development.
Instead, the package of more than 120 pieces of legislation seeks to drive a transition to net zero carbon emissions by 2050, achieved by reaching into every corner of the U.S. economy with new investments, standards and incentives favoring clean energy, jobs
creation, lands protection and environmental justice. The report drew criticism both from those who want to see a more rapid retreat from fossil fuels, and those who think the Democrats should have sought more common ground with the GOP. While the plan has
no chance of coming to fruition in the current Congress, its endorsement by House Speaker Nancy Pelosi and moderate Democrats sets a marker for what is possible if the Democrats gain control of the government next year. ‘To the young people who have urged
us to act fearlessly, we have heard you,’ said U.S. Rep. Kathy Castor (D-Fla.), chair of the House Select Committee on the Climate Crisis, who led development of the 500-page report by the panel’s Democrats. Castor and panel member Rep. A. Donald McEachen
(D-Va.) are both members of a task force appointed by former vice president Joe Biden, the Democrats’ presumed presidential nominee, to advise him and party platform writers on climate policy this summer.” [Inside Climate News,
7/1/20
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Court Rules Against Energy Regulator Over Delayed
Appeals. According to The Hill, “A federal
court ruled Tuesday against delays used by the Federal Energy Regulatory Commission (FERC) during the appeals process for those seeking to overturn the body’s approval for energy infrastructure projects. The D.C. Circuit Court’s decision restricts FERC’s use
of so-called tolling orders, which it issued to keep appeals from being automatically denied after 30 days. After appeals are automatically denied, landowners who want to appeal FERC’s decision can take the issue to court. ‘The question in this case is whether
the Commission can eliminate that statutorily prescribed consequence of its inaction—and, in doing so, stave off judicial review—by issuing a tolling order that takes no action on the application other than buying the Commission more time,’ said the majority
opinion. ‘Such tolling orders are not the kind of action on a rehearing application that can fend off a deemed denial and the opportunity for judicial review,’ it continued. Until recently, companies building energy infrastructure projects such as pipelines
could continue with construction while the appeals process was ongoing. However, a new rule issued this month delays the start of construction until FERC makes a determination on an appeal. The body’s one Democratic commissioner, Richard Glick, praised the
court’s decision. ‘Today’s ... decision from the DC Circuit Court is a resounding victory for #landowners & communities affected by @FERC’s pipeline orders,’ he tweeted. ‘It is important that these parties can go to court before a company can take their land
& build a pipeline affecting their communities.’” [The Hill, 6/30/20
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Trump To Release Rule On Gas Flaring, Royalty
Cuts. According to E&E News, “The Bureau
of Land Management plans to propose a rule this summer that would eliminate royalties oil and gas companies pay on some flared gas, according to the Trump administration’s spring regulatory agenda released yesterday. The planned regulatory change sparked criticism
from advocates who said it would worsen emissions and give an unfair financial break to the oil industry, although the White House said its overall regulatory plan would ‘promote economic recovery and growth’ (E&E News PM, June 30). Flaring is the burning
of excess natural gas, primarily the greenhouse gas methane. Under the plan, when operators on federal or tribal lands lack gas pipeline or processing capacity but are producing methane from an oil well, they may qualify to flare that product without paying
royalties, according to a summary of the regulation posted on the Office of Management and Budget’s website. Royalties are split between the federal government and states. The flaring royalty allowance would depend on consistency with state or tribal rules,
according to OMB, which noted in its agenda that flaring due to pipeline constraints is ‘routine’ in states like New Mexico and North Dakota. A notice of proposed rulemaking is planned for August for the flaring regulation, with public comment ending in October,
according to the agenda. The Trump administration has been criticized for its stance on Interior Department rules for methane flaring and venting. Interior effectively rescinded a suite of Obama-era restrictions that demanded operators cut intentional release
and invest in equipment and monitoring to catch ‘fugitive’ or accidental leaks of methane, a potent greenhouse gas (Energywire, June 10, 2019).” [E&E News,
7/1/20
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Landmark Court Ruling Could Spur FERC 'Sea Change'.
According to E&E News, “Landowner advocates
are cheering a watershed court ruling that cleared a long-standing obstacle to timely legal challenges of projects approved by the Federal Energy Regulatory Commission. The U.S. Court of Appeals for the District of Columbia Circuit found yesterday that FERC
could not use ‘tolling orders’ to delay challengers of natural gas pipelines and other projects from bringing their claims before a court — even as construction moved forward. This ‘asymmetrical finality timetable’ for landowners and project developers had
become commonplace, Judge Patricia Millett wrote in an opinion that sharply criticized the FERC practice. ‘[T]hrough the use of tolling orders, the Commission has eliminated entirely the jurisdictional consequences of its inaction,’ wrote the judge, an Obama
appointee. ‘Tolling orders, in other words, render Commission decisions akin to Schrödinger’s cat: both final and not final at the same time.’ All but one of the court’s 11 active judges joined Millett in reversing D.C. Circuit precedent that had allowed FERC
to continue issuing tolling orders. The commission must now stick to the statutorily mandated 30-day time frame for approving or denying requests to reconsider its project approvals (Greenwire, June 30). In her dissent, Judge Karen Henderson, a George H.W.
Bush appointee, said the court should have given more weight to its past decisions. Longtime critics of FERC’s tolling orders said the court’s decision would push the agency to follow through on its public commitment to address landowner concerns faster, even
as some acknowledged that long delays in decisions from both FERC and from the courts could remain a problem.” [E&E News,
7/1/20
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DOE Report Calls For Appalachian Infrastructure Investments.
According to E&E News, “A new report from the Department of Energy released today makes the case that additional infrastructure spending in the Appalachian region could help unleash
its potential to become a major petrochemical hub. The report satisfies requirements directed by President Trump in a 2019 executive order for the federal government to study the economic potential of supporting a petrochemical build-out in one of the perennially
struggling economic zones in the country. Today’s report offered limited support for federal intervention into helping build out such a petrochemical industry. Instead, it said such support should be limited to infrastructure investments, tax incentives and
regulatory certainty to ensure a framework to enable private spending to succeed. Many of those recommendations have already been put in place during the past four years under the Trump administration. ‘To fully realize the promise of this renaissance, the
public sector (Federal, State, and local governments) must continue to work proactively to catalyze additional private capital investment within the region,’ the report’s executive summary said. ‘Ultimately, the private sector powers the economy and creates
family sustaining jobs.’ To achieve that, the report offers a series of areas where public infrastructure spending could help the industry, including Army Corps of Engineers upgrades on rivers and locks to help shipments of coal and natural gas, expediting
pipeline permitting, workforce training programs, and spending to overcome the hilly and remote topography of the region with road and broadband improvements.” [E&E News,
6/30/20 (=)]
Chad Ellwood
Senior Research Associate
Climate Action Campaign
202.448.2877 ext. 119