US energy secretary urges oil sector to diversify

: Crude oil, Emissions, Natural gas
21/04/26

Oil companies that are slow to shift toward cleaner energy source risk of being left behind as the world reduces carbon emissions, US energy secretary Jennifer Granholm said.

Her remarks today are the latest from cabinet members serving under President Joe Biden who are urging the industry to decarbonize. Granholm said diversifying would help the oil sector remain competitive over the long term, as the US steps up efforts to reach new commitments under the Paris climate accord.

"The bottom line is you have got to move," Granholm said today during an event hosted by news outlet Politico. "You cannot hang on and be the Kodak or the Blockbuster Video of the energy world. You have got to diversify."

Blockbuster and Kodak were household names in video rental and film but lost business as their industries went digital. The companies sought bankruptcy protection in 2010 and 2012, respectively.

The US over time will shift to clean electricity as it reduces carbon emissions, Granholm said, with a likely continued role for biofuels in hard-to-decarbonize industries such as air travel. Granholm said companies like ExxonMobil are offering proposals like a hub for carbon capture in Houston because they see where the world is headed.

"Some of the oil companies have decided that they are going to diversify and become diversified energy companies," she said. "The proof will be in the pudding. You do not want to just assume that somebody is greenwashing."

ExxonMobil, Chevron, BP and other major oil companies have urged the US to put a price on carbon emissions to achieve its climate goals. Biden has sought to increase an existing tax credit for carbon sequestration as part of a $2 trillion infrastructure plan named the "American Jobs Plan," but he has yet to embrace an economy-wide price on carbon.

"A lot of economists believe this is the most efficient thing to do, but this administration is not there yet," Granholm said. "They want to use the American Jobs Plan using the carrots that they have to incentivize and move away from carbon polluting industries."

Despite the lack of an existing price on carbon, Biden is "particularly interested" in evaluating whether to deploy a US border adjustment mechanism that would reflect carbon emissions, White House climate envoy John Kerry said last week during an interview with Bloomberg TV. The EU is considering its own carbon adjustment on trade, which could offset the economic incentive to shift carbon-intensive businesses outside of the trading bloc to avoid carbon pricing.

By Chris Knight

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25/04/28

Oil services spell out initial cost of Trump’s tariffs

New York, 28 April (Argus) — The world's top oil field service firms are starting to count the cost of US president Donald Trump's unprecedented trade wars, amid a challenging outlook caused by tariff-related volatility that has sent oil prices lower and sparked fears of a recession. Halliburton forecasts a 2-3¢/share hit to second-quarter results, with its completion and production unit — which includes the hydraulic fracturing (fracking) business — accounting for 60pc of the expected fallout, and drilling and evaluation making up the rest. Baker Hughes says full-year profit could be reduced by $100mn-200mn, assuming that the tariff levels in effect under Trump's 90-day pause remain in place for the rest of the year. While SLB, the world's biggest oil field contractor, says it is to early to fully assess the potential impact of tariffs, the company is taking proactive steps to shore up its supply chain and manufacturing network, as well as pursuing exemptions and engaging with customers to recover related cost increases. Crude prices slumped to a four-year low earlier this month after Trump's tariffs threw global markets into a tailspin. The oil field service industry argues that it is better prepared for a downturn this time around, given a focus on capital discipline and returns in recent years. Yet the double blow of tariffs and an accelerated return of Opec+ barrels to the market could cause further headaches — even as firms move to mitigate the impact. "We need a bit more clarity and stability in the structure of tariffs so that we can really understand what levers we can pull and then what the overall outcome is going to be," Halliburton's chief financial officer, Eric Carre, says. "There's just a lot of moving parts right now." Global upstream spending will be "down by high-single digits" this year, Baker Hughes says. The company forecasts a low-double digit decline in North America spending by its clients, and a mid-to-high single-digit drop internationally. "A sustained move lower in oil prices or worsening tariffs would introduce further downside risk to this outlook," chief executive Lorenzo Simonelli argues. "The prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels." While Baker Hughes' "strong weighting" to international markets and a diversified and local supply chain provide a cushion, the company is seeking to limit the tariff impact for its industrial and energy technology division by exploring domestic procurement alternatives and improving its global manufacturing footprint. The Wright stuff Liberty Energy , whose former chief executive Chris Wright was picked by Trump to serve as his energy secretary, expects modest tariff-related inflationary impacts on engines and other electric components, some of which are being offset by lower prices or volume discounts. "All said, we don't anticipate a significant direct impact from tariffs at the moment," chief financial officer Michael Stock says. Shale producers are also starting to figure out how they may be affected, with Diamondback Energy reviewing its operating plan for the rest of the year. "Should low commodity prices persist or worsen, Diamondback has the flexibility to reduce activity to maximise free cash flow generation," the company says. And Devon Energy aims to boost annual pre-tax free cash flow by $1bn, partly by doubling down on efficiency savings — a strategy that has gained momentum from the recent tariff turmoil. "Given the challenging market and shifting competitive landscape, this is the right moment to focus internally and improve our profitability," chief executive Clay Gaspar says. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump works to blunt renewables growth

25/04/28

Trump works to blunt renewables growth

Washington, 28 April (Argus) — US president Donald Trump has started to impede development of renewable energy projects he sees as boondoggles, but he is facing challenges to his attempts to halt government funding and tax credits for the sector. Trump has attacked wind turbines and solar projects as part of a "Green New Scam" that should not be built, based on his preference for the fossil fuel-fired and nuclear power plants he says are more reliable and affordable. Trump selected a cabinet of like-minded individuals who oppose renewables and see little urgency to address climate change. He was elected to end the "nonsense" of building renewable resources that are heavily subsidised, make the grid less reliable and raise costs, energy secretary Chris Wright said in an interview on Earth Day. Interior secretary Doug Burgum on 16 April ordered Norwegian state-controlled Equinor to "immediately halt" construction of the 810MW Empire Wind project off New York. Trump had already ordered a freeze on future offshore wind leases , and suspending Empire Wind's permits is likely to spook investors even outside the renewables sphere. To reverse course on a fully permitted project is "bad policy" that "sends a chilling signal to all energy investment", American Clean Power Association chief executive Jason Grumet says. The US last week separately said it would impose anti-dumping duties on solar components imported from four southeast Asian countries that will range from 15pc to 3,400pc. Those duties — in effect from June to support US solar manufacturers — will be in addition to a 10pc across-the-board tariff the US imposed this month on most imports. Solar industry groups have said that steep import duties will make new installations unaffordable, stunting the industry's ability to grow. Trump has had less success in his push to axe support for renewables approved under Joe Biden. On 15 April, a federal judge ordered the administration to unfreeze billions of dollars for clean energy projects provided by the Inflation Reduction Act (IRA) and 2021 infrastructure law. The administration lacks "unfettered power to hamstring in perpetuity two statutes", judge Mary McElroy wrote. In a separate ruling on 15 April, judge Tanya Chutkan prohibited the administration from suspending $14bn in grants distributed to nonprofits under the IRA for a greenhouse gas reduction programme. The administration is appealing both rulings. Targeting the windfall Trump could further undermine the growth of renewables by convincing Republicans in Congress to use an upcoming filibuster-proof budget package to repeal or narrow the IRA's tax credits for wind, solar and other clean energy projects. Critics of that law see the potential for $1 trillion in savings by repealing its tax credits, which could offset the costs of more than $5 trillion in planned tax cuts. But there appear to be enough votes in each chamber of Congress to spare at least some of the IRA's energy tax credits. In the Senate, where Republicans can only afford to lose three votes, Alaska's Lisa Murkowski and three other Republicans signed a joint letter this month saying "wholesale repeal" of the tax credits would fuel uncertainty and undermine job creation. In the House of Representatives, where Republicans have a similarly slim majority, 21 Republicans voiced concerns earlier this year about repealing all of the tax credits. Renewables are on track to overtake natural gas as the largest source of US electricity by 2030 — assuming the tax credits and climate rules enacted under Biden remain intact — the EIA stated this month in its Annual Energy Outlook . The amount of power from renewables under the EIA's existing policy baseline by 2035 will increase by 135pc to 2.8bn MWh, while gas-fired power will decline by 14pc to 1.6bn MWh over the same time period. By Chris Knight Baseline US net power generation Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Phillips 66 ups Sweeny crude switching capacity: Update

25/04/25

Phillips 66 ups Sweeny crude switching capacity: Update

Adds CEO comment from earnings call Houston, 25 April (Argus) — US independent refiner Phillips 66 completed a project in the first quarter that allows it to adjust more of the crude slate at its 265,000 b/d Sweeny refinery in Old Ocean, Texas. The project will allow the company to switch about 40,000 b/d between heavy and light crude, Phillips 66 said today in an earnings release. The flexibility project was completed during a first quarter turnaround. Phillips 66 plans to run additional crude from the Permian basin in west Texas and eastern New Mexico through Sweeny, depending on market conditions, chief executive Mark Lashier said on an earnings call. The lighter crude from the Permian will displace imported heavy crude, he said. Several US refiners are exploring ways to run more lighter crude grades in the wake of new US tariffs and other actions that may limit the supply of heavier and medium grade crudes imported from trading partners. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

SLB taking steps to offset tariffs: Update

25/04/25

SLB taking steps to offset tariffs: Update

Adds details from call. New York, 25 April (Argus) — Oilfield services contractor SLB said it is taking proactive steps to offset the impact of US tariffs by reviewing its supply chain and manufacturing network, pursuing exemptions and talking to customers to recover related cost increases. "We have made progress on all these fronts in the last two weeks, and we are stepping up those actions across the organization as we speak," chief financial officer Stephane Biguet told analysts after the company reported first quarter results today. SLB is partly protected from the overall tariff fallout given 80pc of total revenue comes from international markets, as well as its in-country manufacturing and local sourcing efforts. But other areas are exposed to increasing tariffs, such as imports of raw materials into the US, as well as exports from the US subject to retaliatory action. Under the current tariff framework, most of the likely effects come from trade activity between the US and China. "As the second quarter progresses and ongoing trade negotiations continue, we will hopefully gain better visibility of where tariffs may settle and the extent to which we will be able to mitigate their effects on our business," Biguet said. In the current climate, SLB says customers are likely to take a more cautious approach to near-term activity. Given industry headwinds from volatile oil prices and demand risks, SLB expects global upstream investment to decline this year from 2024, with customer spending in the Middle East and Asia holding up better than elsewhere. SLB reported a "subdued" start to the year as revenue fell 3pc in the first quarter from the same three months of 2024. The company noted higher activity in parts of the Middle East, North Africa, Argentina and offshore US, along with strong growth in its data center and digital businesses in North America. However, those gains were more than offset by a larger-than-expected slowdown in Mexico, a slow start in Saudi Arabia and offshore Africa, and a steep decline in Russia. Even so, SLB remains committed to returning a minimum of $4bn to shareholders through dividends and share buybacks this year. "The industry may experience a potential shift of priorities driven by changes in the global economy, fluctuating commodity prices and evolving tariffs — all of which could impact upstream oil and gas investment and, in turn, affect demand for our products and services, said chief executive officer Olivier Le Peuch. "In this uncertain environment, we remain committed to protecting our margins, generating strong cash flow and delivering consistent value." First quarter profit of $797mn was down from $1.07bn in the same three months of 2024. Revenue of $8.5bn compared with $8.7bn last year. SLB is the last of the top oilfield services firms to post first-quarter results. Halliburton and Baker Hughes reported earlier this week. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Nations, groups ramp up efforts on climate unity

25/04/25

Nations, groups ramp up efforts on climate unity

Transition aligning with energy security and more Chinese climate leadership may reinforce co-operation despite the US withdrawal, writes Georgia Gratton London, 25 April (Argus) — The UN, IEA and countries including the UK and Brazil — which hosts this year's UN Cop 30 climate summit — stepped up efforts this week to demonstrate common ground and build unity on climate action and the energy transition. Organisations and countries are looking to capitalise on areas of commonality in order to preserve climate action, as the US administration repeatedly pushes back on measures to tackle climate change and moves to curb the energy transition. A virtual meeting convened this week by UN secretary-general Antonio Guterres and Brazil's president, Luiz Inacio Lula da Silva, drew 17 world leaders to commit to keeping climate action a key priority. "Leaders need reassurance that they're not acting alone," a senior UN official says. "Collaboration and multilateralism still matter," a senior Brazilian official says. Cop 30, which will take place in November in the Amazonian city of Belem, will "have a different dynamic", the official adds. "We want to prove that multilateralism is not only about negotiating documents… but about making them real." China's president, Xi Jinping, participated in this week's high-level meeting, the UN confirmed. While the US — the world's second-highest emitter — has withdrawn from the Paris climate agreement, China is continuing to step forward on climate action. It remains the highest-emitting country by some way, but this week reiterated a commitment to a new climate plan for the period to 2035, covering "all economic sectors and all greenhouse gases", Guterres said. The EU this week noted China's co-operation at Cop 29 — where it was widely viewed as projecting leadership on climate — setting the scene for new climate alliances. While the US government pushes back on clean energy and climate action, support for the energy transition remains strong at sub-national level, from many US state governors, and from the private sector . A poll from three NGOs, including the UK's E3G, this week found that of nearly 1,500 business executives — including in the US — 97pc supported a transition from fossil fuels to renewable energy. The majority of the world has held firm on climate commitments. Heads of state and government of jurisdictions including the EU, several G20 economies and developing nations committed to submitting "ambitious and robust [climate] plans", Guterres said after the meeting. Renewable security Organisations and countries have been careful to underline that different national circumstances will mean that jurisdictions take different approaches to tackling climate change. Although this is a key tenet of the Paris agreement, it also remains a bone of contention in multilateral talks. But the co-hosts of this week's energy security summit, the UK government and energy watchdog the IEA, put the issue front and centre. "Different pathways for different nations should be respected," UK energy minister Ed Miliband told the summit. The almost 60 governments that the UK and IEA hosted will have "different approaches to energy security based on their nation's circumstances and policies", IEA executive director Fatih Birol said. European Commission president Ursula von der Leyen reiterated the EU's determination to double down on its energy transition, but also extended a nod to the US for its LNG supply as the bloc pivoted away from imports of Russian gas. But many note that achieving energy security is well aligned with a transition to renewable energy. The UK's path "is a hard-headed approach to the role of low carbon power as the route to energy security", Miliband said, while the cost of renewable power is now the cheapest option for the majority of the world. "The pathway out of climate hell is paved by renewables," Guterres said. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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