Latest news with #BigOil
Yahoo
5 hours ago
- Health
- Yahoo
Big Oil Gets Slapped With Its First Wrongful Death Lawsuit
On August 27, 2019, ExxonMobil posted a video on Facebook titled 'Efficient Driving Tips.' The caption read, 'It's tempting to crank the AC and windows while driving in warm weather, but here's how you can stay cool while enhancing your fuel economy.' To upbeat music, the video advised viewers, 'While driving around town, roll down the windows and skip the AC.' Less than two years later, on June 28, 2021, Juliana Leon—a poet and mother, known by her friends and family as Julie—was doing just that. Julie was driving home from a doctor's appointment in Seattle, during the Pacific Northwest Heat Dome, the worst heat wave the area had experienced in recorded history. Her car's air conditioning wasn't working—not usually a cause for concern in temperate Seattle—so she rolled down her windows as the thermometer climbed to 102 degrees. Even with her windows down, the heat was too much for Julie's body to take. As heat stroke began to close in on her, Julie pulled off the highway and parked on a nearby residential street, choosing to make sure she would not cause harm to anyone else with what turned out to be her final act. Two hours later, a passerby found Julie unconscious in her car. First responders administered CPR and attempted other lifesaving measures, but they could not revive her. Her official cause of death was recorded as hyperthermia—overheating of the body. Julie was not alone in succumbing to this lethal heat. Over 1,400 people in the Pacific Northwest were killed by the Heat Dome event. But Julie's story became unique in at least one way last week, when her daughter filed the first ever U.S. lawsuit directly taking on the fossil fuel industry for causing a climate-related death. The wrongful death suit, Leon v. ExxonMobil et al., was filed in Washington state court by Misti Leon, Julie's daughter. It alleges that Big Oil companies like ExxonMobil, Chevron, Shell, and BP have known—since before her mother was born—that the conspiracy of climate deception they executed to protect their fossil fuel–based profits would cause deaths like Julie's. The suit further seeks to hold these corporations accountable for the devastating tragedy their conduct imposed on the Leon family. The argument put forward in Leon v. ExxonMobil is relatively straightforward: Julie's death was caused by unnaturally extreme heat; this heat was the result of climate change caused by Big Oil's fossil fuel products; these companies knew that their products would cause disasters like the Heat Dome and deaths like Julie's, but rather than warning the public about this lethal danger, Big Oil launched a campaign of deception to defraud the public about climate risks and block solutions that could have prevented Julie's death. There is strong evidence to support each of these claims. First, multiple extreme weather attribution studies have determined that the occurrence of the Heat Dome event would have been 'virtually impossible' but for human-caused climate change. The lead author of one of these attribution studies, Friederike Otto, a climate scientist at the University of Oxford, put it as plainly as possible: 'Without climate change this event would not have happened.' Second, there is a large body of documentation demonstrating that Big Oil companies have long understood with shocking accuracy that their fossil fuel products would cause, in their own words, 'catastrophic' climate harms that would do 'great irreversible harm to our planet,' 'have serious consequences for man's comfort and survival,' create 'more violent weather,' and cause 'suffering and death due to thermal extremes.' Third, there are piles of internal strategy memos and external materials outlining the massive disinformation campaign these companies executed to prevent regulators, investors, consumers, and ordinary citizens like Julie from understanding the risks their products were creating. Documented tactics include publishing deceptive advertisements; directing bought-and-paid-for scientists to fraudulently undermine the clear scientific consensus on climate; harassing and attempting to discredit scientists and activists engaged in researching and communicating the actual climate science; deceptively attacking renewable energy efforts and policies; and 'greenwashing' to falsely promote Big Oil products and brands as climate solutions. There is also substantial evidence of the impact this conspiracy has had in delaying climate mitigation and adaptation measures that could have prevented Julie's death. For example, a recent Pew Research survey found that only 27 percent of Americans believed that almost all scientists agreed that climate change is caused by human activity. Compare this to the most recent analysis of the peer-reviewed scientific literature on climate change, which found that there is a greater than 99 percent consensus among scientists on this point—out of the 88,125 papers surveyed, just 28 were skeptical, mostly authored by the same few, discredited, industry-funded individuals. In the words of former Senator Chuck Hagel, who co-sponsored the resolution that prohibited the U.S. from ratifying the Kyoto Protocol, 'I was misled. Others were misled. When [fossil fuel companies] had evidence in their own institutions that countered what they were saying publicly—I mean, they lied.… It would have changed everything [had they told the truth]. I think it would have changed the average citizen's appreciation of climate change.… And mine, of course. It would have put the United States and the world on a whole different track, and today we would have been so much further ahead than we are. It's cost this country, and it cost the world.' For Julie Leon, and her daughter Misti, this cost could not have been higher. They both deserve justice. And it's clear Big Oil doesn't have a great answer yet for why that justice should be denied to them. Nearly all the fossil fuel defendants named in the suit have declined to comment on it. The only response thus far has come from Chevron's lead counsel, Gibson Dunn partner Ted Boutrous, who said, 'Exploiting a personal tragedy to promote politicized climate tort litigation is contrary to law, science, and common sense.' Maybe it's possible to portray a bereaved daughter pursuing justice for the killing of her mother as exploiting her own personal tragedy—but that seems a challenging argument to defend. Likely contributing to Big Oil's nervousness here is the reality that Julie and Misti are far from the only ones to experience this kind of personal tragedy. While Leon v. ExxonMobil is an attempt to win justice for one climate victim and her family, the case is noteworthy in part because it could provide a compelling new model for thousands of survivors across the country who have lost loved ones to climate disasters in recent years, and millions of Americans who will, unfortunately, face similar tragedies in the years to come. Perhaps just as significantly, this lawsuit could also lay the groundwork for another approach to public accountability for the fossil fuel actors responsible for lethal climate disasters: criminal homicide prosecutions. The purpose of wrongful death suits like Misti Leon's is to provide private remedies to individuals who have been wrongfully bereaved. The purpose of criminal law enforcement is to deter future crimes, protect the public, punish wrongdoers, and encourage the convicted to pursue less harmful practices. All of these public safety goals apply to Big Oil's ongoing contributions to climate change. The legal argument required to win a wrongful death suit is also essentially the same as that required to win a negligent homicide prosecution; the primary difference is a higher burden of proof on the criminal side. That is a significant hurdle—but one it may be possible to clear in the context of Big Oil and climate-related deaths. Prosecutors across the country would be well served to take note of Leon v. ExxonMobil and carefully consider how the climate harms their constituents are experiencing fit the criminal laws they are charged with enforcing. The lawsuit filed last week marks a significant step for the movement seeking to hold the fossil fuel industry accountable for its role in knowingly condemning us to a future of climate catastrophe. Though Big Oil companies will fight this litigation with everything they've got, there's only so much that money and corporate spin doctors and BigLaw mercenaries can do to distract from what is, at its core, a very simple message: Climate victims like Julie Leon matter. They deserve justice. And the fossil fuel corporations behind their deaths should pay for their lethal misconduct.
Reuters
a day ago
- Business
- Reuters
BP needs to scrap its Big Oil mentality, and its buybacks: Bousso
LONDON, June 3 - BP has jumped from crisis to crisis in recent years, severely eroding the British firm's stature as one of the world's leading oil companies. Given the increasingly challenging dynamics in today's oil market, BP may finally need to accept that it is no longer a true oil major and can't keep managing cash like one. The exclusive Big Oil club of Exxon Mobil (XOM.N), opens new tab, Chevron (CVX.N), opens new tab, Shell (SHEL.L), opens new tab, TotalEnergies ( opens new tab and BP (BP.L), opens new tab has for decades been synonymous with sprawling upstream and downstream oil and gas operations, solid balance sheets and long-term strategies that have helped generate sizeable, stable shareholder returns. But BP hasn't ticked most of these boxes for years, having dealt with a succession of crises over the past 15 years that have slashed its market cap and left it financially vulnerable and lacking clear strategic direction. Most recently, a failed foray into renewables and a management scandal saddled the company with a ballooning debt pile as it struggles to revert back to oil and gas. CEO Murray Auchincloss acknowledged the need for change when he unveiled in February a fundamental strategy reset that includes reducing spending to below $15 billion to 2027, cutting up to $5 billion in costs and selling $20 billion of assets in an effort to boost performance and rein in ballooning debt. The plan also reset the rate of shareholder returns to 30-40% of operating cash flow. But the reset has done little to alleviate investor concerns. BP's shares have declined by 18% since the strategy update, underperforming rivals. Piling on the pressure, activist shareholder Elliott Management, which has recently built a 5% position in the company, has indicated it wants BP to cut spending even more. There is, therefore, clearly a need for deeper change. While it may be challenging for the 116-year-old company to admit that it can no longer carry the same financial heft it once did, accepting reality will offer the company's leadership an opportunity to reduce some of its commitments to investors, particularly its share repurchase programme. All energy majors today have multi-billion-dollar buyback programmes that send capital back to shareholders, helping to attract investors who may be wary about the future of fossil fuel demand. But BP's buybacks feel like a luxury that is out of synch with its financial woes. In its first quarter results released in February, BP said it would buy back $750 million over the following three months. That was lower than the $1.75 billion in the previous three months, but even at this reduced rate, this would still total $3 billion per year. That doesn't seem prudent, especially given the 20% drop in oil prices to around $65 a barrel this year and the darkening economic outlook. Auchincloss' financial objectives assume a Brent oil price of $70, meaning the Canadian CEO will most likely struggle to meet his targets without borrowing further. Removing the annual $3 billion buyback would certainly upset investors, but it would go a long way towards reducing BP's net debt to between $14 and $18 billion by 2027, compared with $27 billion at the end of March 2025. The 'ground zero' of BP's financial decline was the deadly 2010 Deepwater Horizon disaster in the Gulf of Mexico, which generated $69 billion in clean-up and legal costs, opens new tab. The company continues to pay out over $1 billion per year in settlements. The financial shock forced BP to sell billions of dollars of assets and issue huge amounts of debt to foot the bill. Its market value dropped to around $77 billion today compared to $180 billion in 2010. BP's debt-to-capitalization ratio, known as gearing, reached 25.7% at the end of the first quarter of 2025, significantly higher than those of other oil majors, including Shell's 19% or Chevron's 14%. And, importantly, BP's current $27 billion net debt figure omits several major liabilities held on its books. This includes $17 billion in hybrid bonds, an instrument that has qualities of both equity and debt, including a coupon that must be paid or accrued. While companies may issue hybrids for many reasons, including maintaining flexibility, they often do so in part because rating agencies do not treat hybrids as regular debt, which flatters the issuer's leverage ratios. Anish Kapadia, director of energy at Palissy Advisors, calculated BP's adjusted net debt hit $86 billion at the end of the first quarter of 2025, when including net debt, hybrids, Gulf of Mexico liabilities, leases and other provisions. Ultimately, cutting the buybacks should enable BP to tame its huge debt pile and repair its balance sheet faster. That, in turn, should create a strong foundation for rebuilding investor confidence. The departure of current BP Chairman Helge Lund in the coming months could be a good opportunity for the company to consider such radical change. It's unclear who will take this job, but one qualification for whoever succeeds Lund should be a much-needed sense of financial realism. Want to receive my column in your inbox every Thursday, along with additional energy insights and trending stories? Sign up for my Power Up newsletter here.
3 days ago
- Politics
Will Trump kill America's clean future?
Donald Trump's campaign pledge to "drill, baby, drill," struck fear into the hearts of climate campaigners, but it was music to the ears of Washington's fossil fuel lobbyists. And the US President didn't waste any time delivering on his promises to Big Oil. In a dizzying slew of executive orders on his first day in office, Mr Trump pulled the United States out of the Paris Agreement to limit global warming, rolled back Biden-era clean energy incentives, stripped away environmental restrictions on oil and gas exploration and threw a lifeline to America's dying coal industry. Leaving no doubt as to the direction of travel, the administration went on to initiate legal action against states over their climate policies, shutter federal climate research offices, scrub information on extreme weather tracking from government websites and even ban the use of paper straws in federal buildings. "We're going back to plastic," Mr Trump said as he signed the order, "these things don't work". The president has made no secret of his disdain for renewable energy projects either, calling wind turbines "stupid" and "unsightly" and freezing approvals for wind and solar projects on federal lands and water. The administration is now reportedly preparing to eliminate limits on greenhouse gas emissions from coal and gas-fired power plants in the United States, which is already the world's second-largest polluter. For some analysts, Mr Trump's policies could sound the death knell for America's competitiveness in green energy, a field where other countries, like China, are already surging ahead. "They're really taking a meat axe to the federal government's work, both on the science of climate change and the technology addressing climate change," Harvard professor John Holdren, who was science advisor to former President Barack Obama during his two terms, told RTÉ News. Others, though, welcomed what they saw as the administration shifting focus to America's own energy security, which they believed would benefit the US in the long term. Energy security "I think what we are seeing from President Trump and Republicans in Congress is a strategy that looks to balance a future that has abundant, affordable, reliable and lower emissions energy," said Jeremy Harrell, CEO of ClearPath, a conservative-leaning clean energy organisation, based in Washington DC. Federal programmes were being reevaluated under President Trump to ensure they were "economically viable" as well as targeted towards technologies in which the US was in pole position to lead, Mr Harrell said, citing geothermal, nuclear and carbon-capture as examples. Was this an acknowledgment that the US couldn't compete with China in sectors like wind and solar, given that China now makes 80% of the world's solar panels and dominates global wind turbine manufacturing? There was certainly bi-partisan support in the US Congress, Mr Harrell said, to onshore US energy in an effort "to reduce reliance on China and Chinese supply chains, and position the US as a technology leader globally, in areas where we have some strategic advantage". But other observers felt the moment for asserting any strategic advantage had come and gone. "It is a travesty that the United States has not taken a leadership position on the clean energy future," said Caroline Spears head of Climate Cabinet, which advocates for pro-climate policies at the state and local levels. She was also sceptical that the United States would be able to boost domestic industry and technology under current conditions. "The amount of uncertainty and volatility being created is wild," said Ms Spears. And when it comes to massive projects - like nuclear - there was a danger the administration would overpromise and underdeliver, she said. The push on climate was going to have to come from individual states, she said. The power of red states Last week the US House of Representatives passed a major tax bill - dubbed the "Big Beautiful Bill," - which gutted the clean energy credits established in former President Biden's signature piece of legislation, the Inflation Reduction Act (IRA). The bill is now on its way to the Senate, where it may well be watered down, experts said. That's partly because much of the financial benefits from the Inflation Reduction Act flowed to Republican-voting areas of the country. Senators of these so-called "red states" will be reluctant to legislate against large renewable energy plants that have brought jobs to their constituencies and have proven popular with voters, experts told RTÉ News. A recent poll carried out by the Conservative Texans for Energy Innovation found that 84 percent of Texans were in favour of renewable energy projects. Although best known for its Stetson-sporting oil barons, Texas is now the nation's leading producer of wind and solar power, having outstripped California some years ago. Nationally, a long-term study carried out by the Yale Program on Climate Change Communication showed that more that three quarters of Americans supported renewable energy infrastructure on public land while 66% of people polled wanted a full transition away from fossil fuels to clean energy by mid-century. All this leads to a degree of unstoppable momentum, analysts said. "A lot of the progress we have made in the United States on the ground is not going to be reversed through policy changes," said Anthony Moffa, law professor at the University of Maine. The deployment of more renewable energy or electric vehicle adoption are trends that are going to continue, he said, even without federal government incentives. "Automakers have already invested a significant amount of money and time in developing affordable electric vehicles," he said, "and we're seeing them adopted more and more throughout the United States". Indeed, despite the Trump administration's rollback of the tax credits and incentives in the Inflation Reduction Act, the US power system began producing more electricity from clean energy sources than fossil fuels in March, according to data released by Ember, a think tank. That trend has continued for the past three months. Stalling the energy transition But while progress may not be halted, it's likely to see a significant slowdown, analysts said. According to data from E2, a US-based group of business leaders and investors, $14 billion in clean energy projects supporting 10,000 jobs have been cancelled or postponed so far this year. But this is where individual states can make a difference, Caroline Spears told RTÉ News. "They can set renewable portfolio standards, for example," she said, "they can create permitting and leasing offices and make it easier to get projects off the ground". And beyond supporting clean power generation, local governments had a variety of strategies to tackle climate change, she said. "The biggest source of pollution in the country is increasingly transportation," she said. "There's a lot that states can do on electric vehicles and on public transport," she said, "and we're seeing progress and movement there as well". Court battles As with President Trump's trade tariffs, the US courts have become a major climate battleground too. In what law professor Anthony Moffa called an "unprecedented move", the administration has thrown its weight behind lawsuits brought by fossil fuel companies against state climate policies. The department of justice, for example, sued New York and Vermont over their climate "superfund" laws that would force oil and gas companies to pay into a state fund for clean infrastructure projects. But similarly, climate campaigners are also using the courts to challenge government policies. A group of 22 young activists filed a lawsuit in Montana this week arguing that President Trump's executive orders suppressed climate science and slowed the transition to renewable energy sources in favour of fossil fuels, "thereby worsening the air pollution and climate conditions that immediately harm and endanger Plaintiffs' lives and personal security". The spokesperson for the plaintiffs 19-year-old Eva Lighthiser said in a statement that the president's fossil fuel directives were "a death sentence for my generation". "I'm not suing because I want to, I'm suing because I have to," she said. "My health, my future, and my right to speak the truth are all on the line. [President Trump] is waging war on us with fossil fuels as his weapon, and we're fighting back with the Constitution," she said. Earlier this month, 17 states and Washington DC sued the government over its ban on wind power projects. The White House accused the attorneys general of the states of using "lawfare" to thwart President Trump's agenda. 'Spherically senseless' But whatever the final legal outcome of the various cases before the courts, cuts to climate research have already caused "an enormous amount of damage," that will outlast this administration, according to John Holdren. The National Science Foundation, National Oceanic and Atmospheric Administration and the Department of Energy's Office of Energy Efficiency and Renewable Energy have all seen their budgets slashed, he said. Key offices that are responsible for climate change monitoring, maintaining the nation's databases related to climate change and for a large fraction of climate education in US schools, colleges and universities have been closed. Research programs cannot be revived overnight, he said, noting that staff who have been fired may have moved on to other jobs of even other countries. That early research was the "seed corn" from which future practical advances grew, he added. "When you cut that off, you're basically killing the future of innovation in all these domains, in terms of environmental and public health and in solutions for climate change," he said. This was "absolutely a case of shooting the country in the foot," he told RTÉ News. "It is what the energy analyst Amory Lovins once called 'spherically senseless,'" he said. "No matter how you look at it, it's crazy".
Politico
28-05-2025
- Business
- Politico
A Trump-era twist to Newsom's oil fight
With help from Alex Nieves CRUDE SHOWDOWN: A Texas-based oil company is putting Gov. Gavin Newsom's fight with Big Oil to the test in the Trump era. Sable Offshore Corp. started pumping oil last week out of wells in federal waters off the Santa Barbara coast, almost exactly 10 years after an oil spill from a connected pipeline leaked over 100,000 gallons of crude and shut down production. And while some state agencies are putting up a fight, Newsom isn't. 'Under Gov. Newsom's leadership, California has strengthened its position as a national leader in protecting the coastline and public health,' said Newsom spokesperson Daniel Villaseñor in an email. 'While some offshore drilling continues in federal waters under longstanding federal leases, the governor remains unwavering in his commitment: no new offshore drilling — period.' Some of Sable's restart is out of Newsom's control: Sable is avoiding some hoops by restarting a dormant operation instead of building a new one (thus technically abiding by Newsom's 'no new drilling' dictum), and President Donald Trump is providing some tailwinds with the declaration of an 'energy emergency' and reversal of a Biden-era ban on new drilling. But some of it is under Newsom's control, at least sort of. Eight state agencies have piecemeal oversight over the onshore pipeline that ruptured 10 years ago and that Sable bought from Exxon to shuttle the newly flowing crude to refineries — and have made at times contradictory moves towards a full restart. Sen. Monique Limón, a Democrat who represents the Santa Barbara coast, sees some of those permits as a change in tone from Newsom's two special sessions on gas prices in the last two years, which resulted in measures enabling the state to cap refiners' profits and regulate their gasoline inventories. Newsom's also sought climate damages from the world's largest oil companies and signed a law requiring them to situate new wells far away from homes and schools. 'We really got a lot of messaging about how important it was to keep our community safe, to think about the future and the energy transition,' she said. 'This is a reversal, of course, from even just last fall. … The word I would use is 'disconnect.'' Environmental groups sued the Office of the State Fire Marshal last month over its December conditional permit, or 'waiver,' to Sable for its alternative to corrosion prevention on the pipeline and called for a full environmental analysis. They're also concerned about State Parks' move in early May to waive environmental review for a right-of-entry permit for Sable to make repairs within Gaviota State Beach. Only one agency has come out swinging against Sable: The California Coastal Commission, which fined the company $18 million for continuing its repairs despite three cease-and-desist orders. (Sable, in turn, sued the Coastal Commission in February, arguing it already has the agency's authorization from decades ago.) State Fire Marshal Daniel Berlant said his office has more stringent safety requirements than the federal government and that it is still waiting for Sable to do a final pressure test on the pipeline before it allows crude oil to flow. Lt. Gov. Eleni Kounalakis wrote to Sable on Friday urging it to resolve its issues with other agencies before fully restarting operations or the State Lands Commission, which she chairs, may not approve future leases with the company. She also wrote that Sable failed to meet a requirement to notify the commission before starting up any oil flow, which 'undermines trust of Sable's motives.' In the meantime, state lawmakers are trying to throw up roadblocks with legislation. Limón's SB 542 would require thorough hydrostatic testing before an oil pipeline that's been dormant five years or more can be restarted. And AB 1448, from fellow Central Coast representative Assemblymember Gregg Hart, would add requirements for State Lands Commission leases for coastal oil and gas infrastructure. Western States Petroleum Association opposes both bills. Sable has been moving quickly in the past few months and is eyeing July for sales of its crude, which is currently being stored in tanks onshore. 'Sable will continue to aggressively defend our vested rights to pursue low-carbon native California oil and natural gas sorely needed to stabilize supply and lower consumer gasoline prices,' said spokesperson Alice Walton. — CvK Did someone forward you this newsletter? Sign up here! GAO COW: Republicans' bucking of the Government Accountability Office on California's vehicle emissions waivers is just the tip of their crusade. The typically uncontroversial, under-the-radar agency is fighting a slew of attacks against its independence, as Jennifer Scholtes, Jordain Carney and Katherine Tully-McManus report. From the Office of Management and Budget's criticism of GAO for finding the Trump administration improperly withheld funding for electric vehicle infrastructure to the Department of Government Efficiency's attempts to assign the agency a downsizing team, the office has found itself in the middle of the partisan fray — despite its attempts to stay out of it. 'We're just responding to help Congress,' GAO Comptroller Gene Dodaro said at a recent hearing. 'We're not trying to influence things one way or the other. We're nonpartisan. We're asked a question; we give an answer. It doesn't matter who it is.' FORKLIFT IN THE ROAD: Amid all the federal rule rollbacks, state regulators issued an advisory Tuesday confirming that they won't enforce a zero-emission forklift rule they never got federal approval for. The California Air Resources Board, in an email, encouraged companies to voluntarily report their progress at phasing out fossil fuel forklifts but clarified that it wouldn't retroactively hold them responsible if the rule is enforced in the future. CARB last June approved the proposal to ban the sale of new combustion engine forklifts by 2026 and phase out older models by 2038. But state officials never submitted the rule for an EPA waiver, anticipating that the Trump administration would not approve it. The Western Propane Gas Association sued in August, arguing that CARB failed to analyze the environmental impacts of new infrastructure needed to operate larger fleets of electric forklifts. — AN MORE SUSPENSE: We're back with another tranche of bills that either hit a wall or got through Friday's appropriations committee deadline with significant amendments: Inmate firefighter pay: Assemblymember Isaac Bryan's bid to boost pay for incarcerated firefighters survived appropriations, but only after he agreed to significantly reduce how much they'd earn while responding to an active fire. Bryan lowered his proposal in AB 247 from $19 per hour to $7.25 per hour, equal to the federal minimum wage. Inmate firefighters are currently paid $30 per day for a 24-hour emergency shift. Child labor: The Senate Appropriations Committee killed a bill from Sen. Shannon Grove that would have required California to certify that vehicles purchased for state-owned fleets were manufactured with metal and minerals mined at operations without child labor. SB 77 cleared its only policy committee hearing with unanimous support, but the Department of General Services warned that the costs associated with analyzing complex supply chains and working with potentially unwilling vehicle manufacturers would be high. Leno's Law: Grove also made amendments to her bill championed by comedian Jay Leno that would exempt classic collector cars from smog checks. The Republican added language to SB 712 that would require qualifying cars to have collector's insurance and be required as historical vehicles, which restricts their use to events like historical exhibitions, parades, or club activities. The amendments mirror language originally in the bill that Grove removed in March. Fuel prices: Assembly Appropriations nixed a bill from Assemblymember Corey Jackson, AB 555, that would have required CARB to submit quarterly reports on the impacts of regulations on transportation fuel prices. CARB argued the proposal could create significant new costs by forcing it to develop new models for calculating the 'cause-and-effect relationships' between its regulations and consumer prices. The issue isn't going away. Speaker Robert Rivas last month named Assemblymembers David Alvarez and Lori Wilson co-chairs of a new committee to study the state's low-carbon fuel standard and transportation affordability. — AN SUMMER SPLASH: The federal government gave San Joaquin Valley farmers a 'welcome to summer' gift Tuesday by increasing its expected water deliveries from 50 percent of requested supplies to 55 percent. The Bureau of Reclamation adjusted its forecast because of 'greater certainty about water availability' now that the state's wet season is over, according to a statement by acting Regional Director Adam Nickels. Reservoirs are currently brimming at or nearly at capacity across California following the third year in a row with average to above average winter precipitation. The Bureau of Reclamation also cited Trump's January executive order to 'maximize' California water supplies for its new allocation. The state government's summer allocations, meanwhile, remain at 50 percent for now, though Department of Water Resources spokesperson Ryan Endean said state officials are continuing to analyze snowmelt runoff and current water supply and could still adjust allocations later. — CvK FROG FIGHT: California water agencies, farmers and utility companies got a temporary reprieve in their fight against expansive habitat protections for the endangered foothill yellow-legged frog. The federal Fish and Wildlife Service extended its review period from May 17 to July 28 for a proposal to designate 760,071 acres as critical habitat for the 3-inch-long frog that historically ranged from Oregon to Baja California, Michael Doyle reports for POLITICO's E&E News. The potential habitat designation, published during the waning days of former President Joe Biden's term, has set off alarms across the political spectrum. Groups like the Association of California Water Districts and California Farm Bureau warn that the proposal could hinder efforts to manage water resources on public and private land. And the San Francisco Public Utilities Commission that a proposed buffer zone for transmission lines and other infrastructure is too large and includes habit unsuitable for the frog. — AN — Former Los Angeles mayor and gubernatorial candidate Antonio Villaraigosa is defending refineries and accepting campaign donations from oil companies and executives. — Groundwater losses exceed above-ground losses of water in the Colorado River Basin. — PG&E has seen requests for power from data center developers jump over 40 percent this year.
Business Times
27-05-2025
- Business
- Business Times
The oil market has a bigger problem than a slowing China
INDIA is the stuff of dreams for Opec and Big Oil: a rapidly developing nation of nearly 1.5 billion people where petroleum consumption is still in its infancy. It's the next China – so the theory goes. Perhaps one day, but in 2025 it's still the stuff of dreams. For years, energy economists have talked about 'structural tailwinds' – including benign demographics, a burgeoning middle class and accelerating urbanisation and industrialisation – that would propel Indian oil demand. Those phenomena turned China into the world's engine of petroleum demand growth (along with everything else) for a quarter century. From 2000 to 2025, the Asian giant added an average of 485,000 barrels a day every year to global consumption. Now, the boom is ending. Weighed down by slower economic growth and the rapid uptake of electric cars, Chinese oil demand will expand by 135,000 barrels a day this year, according to the International Energy Agency. Except for the pandemic period, that would be the smallest annual increase since 2005. If the bulls were right, India would be taking over by now. But it isn't: For the last three months, its oil demand growth has been contracting. As things stand, India consumption may increase by as little as 130,000 barrels a day this year, about half what many thought a year ago; if confirmed, that would be the smallest annual increase in a decade, excluding the pandemic period. Optimistic view Until now, the consensus – but perhaps optimistic – view was that New Delhi would add about one million barrels of extra demand from 2025 to 2030. No other country was expected to see such large increases. Even if large when compared to other rapidly growing economies – Brazil, Indonesia and Pakistan, to name a few – that increase would still be far smaller than what Beijing managed during its heyday. For example, from 2010 to 2015, Chinese oil demand increased by a cumulative 3.7 million barrels a day. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The expectation that India would add lots of extra oil consumption is in part anchored in comparing it today with China. The average Indian today consumes about 1.4 barrels of oil a year, well below the 4.3 barrels a year of the average Chinese. Before we finish, here's a detour into commodity demand 101: The amount of oil that a country consumes is, for the most part, a function of two factors: population and incomes. The sweet spot for commodities demand starts when annual per capita income rises above US$4,000. At that point, countries typically industrialise and urbanise, creating a strong, and sometimes disproportionate, relationship between further economic growth and extra commodity demand. China hit the commodity sweet spot around 2001. And oil demand boomed. India hit the sweet spot five years later, around 2006, but demand there didn't balloon. To understand why, one needs to dig into the details of its gross domestic product. While China relied on oil-intensive heavy industries, manufacturing, and large investment in public infrastructure, India did the opposite, growing its services, which use comparatively less energy. Two key factors Cuneyt Kazokoglu, director of energy economics at consultancy FGE Energy, notes two other key factors. First, India hasn't urbanised nearly as rapidly as China did, with the urban-to-rural population at around 35 per cent to 65 per cent; it's almost the other way around in China. Second, labour-force participation, particularly among women, is notably lower in India than in China. That has an impact that's often overlooked. Even though India is today more populous than China, and the total population of the latter is declining, the labour force in India will remain smaller for decades to come, reducing the need for extra energy consumption. There are two additional problems: First, China benefited from globalisation, when governments embraced the Asian nation as the world's workshop. India wouldn't be welcomed playing that role. For an example, look at the reaction that Donald Trump had when he realised that Apple planned to shift iPhone production to India from China. His response: Move it into America. Second, India has an alternative to oil that China didn't in the early 2000s: electric vehicles. In India, a significant chunk of petrol demand comes from two-wheelers rather than cars, making the shift to electric vehicles – in this case, the vehicles are small motorcycles – relatively easy. As the world's third-largest consumer, ahead of Japan, and behind only the US and China, India is still a power in the oil market. But it increasingly looks like India will be a large force inside a smaller global oil growth muscle: good, but not game-changing. The oil bulls knew that China was a problem. But few have recognised that India may be a bigger problem. BLOOMBERG
