While ExxonMobil may be considered the pace-setter in the integrated oil and gas business, Chevron has outperformed its larger rival over the past five years. Chevron pays a slightly higher dividend than XOM (3.3 percent versus 2.8 percent), and its share price has appreciated 22 percent over the past five years, versus 2 percent for ExxonMobil. (Keep in mind that this includes the oil price crash of 2008). Over the last 10 years, Chevron is up an impressive 265 percent, versus 156% for ExxonMobil. During the oil price plunge in the second half of 2008, Chevron's share price only fell 10 percent (vs. 18 percent for XOM).
Chevron's market cap of $228 billion is substantially behind that of XOM, but that was still good enough for third place on last year's Fortune 500 list, with Walmart (NYSE: WMT) sandwiched between them. Chevron's 2012 profit margin of 10.9 percent was slightly ahead of Exxon's 10.2 percent. The higher profit margin - as well as Exxon's lagging stock performance relative to Chevron - is largely a reflection of the fact that natural gas is a larger component of Exxon's business, so that it was harder hit by last year's price crash.
A big concern for many investors has been a $19 billion judgement against Chevron for environmental damages in Ecuador. It concerns operations that Texaco had in Ecuador from the 1960s until about 1990. Chevron acquired Texaco in 2001, and after years of legal battles Chevron lost a lawsuit in a provincial court in Ecuador. ( Continue… )
New draft regulations on a controversial drilling method are drawing fire from both sides of the hydraulic fracturing debate. The technique, which involves injecting large amounts of water, sand, and chemicals into the ground to release oil and gas, has helped to spark a boom in US energy production.
Environmentalists say the proposal by the Bureau of Land Management (BLM) does not go far enough in overseeing "fracking" on public lands. Citing preexisting state regulations, oil and gas representatives say the federal oversight is redundant and curtails an industry that supports millions of jobs.
“States have led the way in regulating hydraulic fracturing operations while protecting communities and the environment for decades," Erik Milito, director of upstream and industry operations for the American Petroleum Institute, said in a statement "While changes to the proposed rule attempt to better acknowledge the state role, BLM has yet to answer the question why BLM is moving forward with these requirements in the first place."
The draft allows for states to propose their own rules if they can demonstrate they sufficiently protect local resources from contamination. It requires companies to disclose the chemical makeup of their fracking fluid but allows for "trade secret" exemption. Environmentalists say that process lacks a policing mechanism and is susceptible to abuse. ( Continue… )
Canada’s tars sands may just be the most unpopular source of energy in the world. Never the less they are vitally important to Canada’s plans for the future, so they are keen to reverse this opinion, and have increased their expenditure on advertising by nearly 100% from $9 million in 2012, to $16.5 million in 2013.
The Canadian government has begun an aggressive campaign to promote the tar sands just before Prime Minister Stephen Harper makes a visit to New York on Thursday to discuss issues on trade, energy security, and the Keystone XL pipeline.
Canada has been aiming its advertising campaign at the White House administration officials, hoping to sway their opinion on Keystone XL.
Prime Minister Harper will begin his trip to New York with a question and answer session with the Council on Foreign Relations, before addressing American business leaders on the merits of trade. (Related article: Canada’s Oil Sands Threatened by Lack of Market) ( Continue… )
The US Senate unanimously confirmed Ernest Moniz as Energy secretary Thursday.
The bipartisan approval of the nuclear physicist comes in contrast to divided opinions over the fate of another key member of President Obama's second-term energy and environment team. Citing transparency concerns, Republican lawmakers have sought to stall the nomination of Gina McCarthy, Mr. Obama's pick to head the Environmental Protection Agency (EPA).
With a background in both government and science, Mr. Moniz is seen as a departure from his predecessor, Steven Chu. Moniz served as under secretary of the Department of Energy between 1997 and 2001. Prior to his nomination, he was the director of the Energy Initiative at the Massachusetts Institute of Technology in Cambridge, Mass. Moniz also served on President Obama’s Council of Advisors on Science and Technology.
In his confirmation hearing last month, Moniz stressed the importance of a diverse, balanced energy portfolio. He is expected to be the flag-bearer of President Obama's "all-of-the-above" energy policy, a strategy he openly embraces. Research and development should be "first and foremost," he said, in the Department's work towards a clean-energy future. ( Continue… )
"There is a way for the Tesla Model S to be recharged throughout the country faster than you could fill a gas tank."
It's a bit of a holy grail for an industry eager to overcome "range anxiety," the fear of running out of power. But what if electric cars could refuel as quickly and conveniently as gas cars?
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Mr. Musk's tweet, as well as a hint dropped in Tesla's latest quarterly report, suggests the company is working on a "battery-swapping" feature that would accomplish exactly that. ( Continue… )
The United States needs to make some decisions on how to capitalize on its surging oil production. Crude oil exports, except under certain circumstances, were banned in 1979 in response to the Arab oil embargo. More than 30 years later, Saudi Oil Minister Ali al-Naimi said he was upbeat about an emerging U.S. oil market but said talk of energy independence was a "naive" position. There may be enough oil available in the United States to sideline Saudi Arabia and its fellow OPEC members, the International Energy Agency said. In its latest market report, the IEA said an increase in North American oil production could have long-lasting domino effects. Many of those extend far beyond oil markets to the very core of the geopolitical hierarchy.
The IEA said it expects North American oil supply to increase by 4 million barrels per day, a figure that represents about half of what's expected from global oil producers during the same period. IEA Executive Director Maria van der Hoeven said production gains mean it's time to take a serious look at export restrictions by the United States.
Over the past two years the spot price of natural gas fell from nearly $5 per million British thermal units (MMBtu) in June 2011 to less than $2 per MMBtu in April 2012, before beginning a steady climb back to the current level of about $4 per MMBtu. Prices have been supported by resilient demand as well as diminishing supply from some of the more mature shale formations and the depleted wells offshore.
Stronger natural gas prices are good news for some and bad news for others. Natural gas producers likeChesapeake Energy Corporation (NYSE:CHK) were hit especially hard as gas prices fell. Between June 2011 and April 2012, CHK’s share price declined 25 percent. But over the past 12 months, CHK has rallied 36 percent as gas prices recovered. Since Chesapeake is the nation’s second-largest producer of natural gas, it’s not surprising that its shares track the price of the commodity. The company isn’t diversified, so it is nearly a pure play on natural gas. (Related: Short-Term Trend in U.S. Natural Gas Prices Point Higher)
However, Chesapeake isn’t the nation’s largest producer of natural gas. That distinction goes to ExxonMobil(NYSE:XOM). ExxonMobil shares have underperformed in recent years because of the company’s ill-timed $41 billion buyout of natural gas producer XTO Energy in 2009. The week the deal was announced natural gas fetched close to $6 per MMBtu. The acquisition of XTO made Exxon the largest US natural gas producer just as prices began a long decline. By June 2012 CEO Rex Tillerson was admitting that “We are losing our shirts” on natural gas production because of low prices. ( Continue… )
China asserted its Arctic presence at a meeting of the Arctic Council Wednesday, advancing the ascendant superpower's expanding interest in the region. The Arctic Council granted China "permanent observer" status, giving it influence over decisions made by the group's eight member nations.
It comes as melting Arctic ice opens new shipping lanes and access to oil and gas. Once an undesirable, obscure destination, the Arctic is quickly emerging as a critical frontier in the global quest for resources. The accelerating interest has many concerned for the future stability of a region already undergoing rapid environmental change.
"Eyes are on the Arctic right now," said Chris Krenz, Arctic campaign manager and senior scientist at Oceana, an international ocean conservation organization based in Washington. "It’s really a big resource rush. We have the opportunity to decide how and if that resource rush happens."
Oil and gas are the obvious targets. The region lays claim to 13 percent of the world's undiscovered oil resources and nearly a third of its undiscovered natural gas. That captures the attention of an economic juggernaut in search of alternatives to its dependence on coal power and foreign oil. ( Continue… )
Production spikes from US shale oil and Canadian oil sands have sent a supply shock through world energy markets, the International Energy Agency said in a report Tuesday.
That shock makes the oil and gas industries in the United States and some developing nations winners in the new energy environment, while Europe's, quite possibly, emerges as a loser. Separately, European officials are investigating three energy companies accused of rigging oil prices.
The benefits of the North American oil boom on this side of the Atlantic are well-documented. Elsewhere, the production surge signifies a shifting dynamic between once-dominant oil giants and developing nations asserting their presence.
“The good news is that this is helping to ease a market that was relatively tight for several years," IEA Executive Director Maria van der Hoeven said in a statement. "But as companies rethink their strategies, and as emerging economies become the leading players in the refining and demand sectors, not everyone will be a winner.”
Steep growth in non-OECD refining capacity will put refineries in traditional powerhouses at risk of closure, according to the report. Unique drilling technologies pioneered in the US will be applied elsewhere, dramatically recasting global reserve estimates. This quarter, non-OECD economies will overtake OECD nations in oil demand for the first time, IEA projects. ( Continue… )
Back in 1939 a bet between two Shell scientists regarding who could build a vehicle to carry them the furthest on a set amount of fuel turned into an annual event which has grown in popularity ever since.
Today, the Shell Eco-marathon follows the same parameters, using a mix of ingenuity, imagination, and skill, high schools and universities from around the world compete to discover who can build the most fuel efficient car. Teams use an array of fuels to try and determine the most energy dense mixes, some which could possibly be used in vehicles or machines of the future.
Events now take place in Kuala Lumpur (Asia), The Netherlands (Europe), and Houston (the Americas), as the race has become a truly global event. There are two categories in each competition: prototype, and urban concept. (Related article: Nevada Renewable Energy – Good or Bad?)
Canada has a fearsome reputation in the Huston-based event, with the Laval University of Quebec having won the prototype category for four of the previous five years. They managed to retain their title this year, powering their car for 3,587 miles on a single gallon of gasoline (5,773 kilometres on 3.8 litres). ( Continue… )