Industry Layoffs Coming Experts Warn
Experts are preaching calm despite two major oil and gas companies announcing layoffs in the past five days.
Last week, Suncor announced it was shedding 1,500 employees from their workforce of about 16,500. On Tuesday night, Reuters reported Calgary-based TC Energy was following suit with an undisclosed number of layoffs, but fewer than Suncor.
“We’re just not in a situation of growth right now of investment coming on stream that allows for some of the people that were retained in companies that have lots to do,” said Richard Masson, executive fellow at the University of Calgary’s School of Public Policy and chair of the World Petroleum Conference in Calgary set for Sept. 17 to 21.
“There’s probably going to be a little bits of trimming here and there just to make sure things are as efficient as possible.”
Suncor’s layoffs followed pressure from an activist shareholder on the oilsands giant to bring efficiencies to their workforce, cited as lagging their competition. The company has yet to say where the cuts will be made across their network.
TC Energy would not say in an emailed statement to Postmedia how many jobs are being cut or where, only that it was undergoing a realignment of labor needs.
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Exxon to Continue to Drill While Researching Carbon Capture Technologies
(Bloomberg) – European leaders looking to tackle climate change should look to U.S. policy and “let the market work” to avoid driving companies away with prescriptive regulations, ExxonMobil Corp. Chief Executive Officer Darren Woods said.
“I think it’s a huge mistake to be picking winners and losers and focusing on specific technologies,” Woods told the CEO Norway’s Wealth Fund, Nicolai Tangen, on his podcast. “Instead, we should be looking more broadly at letting the markets figure out which solutions provide the most emissions reductions for the lowest cost.”
Europe has been working with a greater sense of urgency since the Biden administration last year passed its Inflation Reduction Act, with $370 billion in tax subsidies to cut carbon emissions. The package is turbo-charging interest in carbon capture and storage technologies, which for years have been considered too expensive and prone to failure. Exxon, which has pledged to spend $17 billion through 2027 on low-carbon initiatives, is among the companies ramping up plans to capture emissions.
“Carbon capture is going to play a really important role. It is a technology that exists today. It’s one that we have a lot of experience in,” Woods said. “Think carbon capture and storage, think hydrogen, think biofuels, all of those recognized by credible third parties are going to be needed as part of the solution.”
While other oil majors are looking to develop wind farms and solar parks, Exxon is focused on technologies that dovetail with the company’s strengths, Woods said. “At the end of the day, we’re a molecule company, not an electron company.”
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U.S. Electricity Generation from Natural Gas was Highest on Record this Past Winter
According to our Short-Term Energy Outlook (STEO), U.S. electricity generation from natural gas reached a record-high 619 billion kilowatthours (BkWh) during the most recent winter heating season (November 1–March 31), averaging more than 120 BkWh per month and accounting for 38% of the country’s electricity generation mix. Electricity generation from natural gas increased in the United States this past winter due to increased demand for electricity and continued reductions in electricity generation from coal.
U.S. electricity generation from natural gas peaks in the summer when demand for electricity is greatest—largely driven by demand for air conditioning. A smaller peak occurs during the winter, when homes and businesses in some areas of the country use heat pumps, electric radiators, space heaters, and other electric-heating equipment to heat buildings.
Overall, U.S. electricity generation this past winter was the highest since at least 1997. The increased electricity demand was met by natural gas, wind, and solar—all of which increased their overall electricity generation compared with the previous winter of 2021–22. In contrast, electricity generation from coal decreased compared with the previous winter.
Natural gas-fired power plants are relatively flexible to operate because they can ramp electricity generation up or down relatively quickly to meet demand fluctuations. Coal-fired electricity declined throughout 2022 and into 2023 because of a long-term trend of coal capacity retirements as well as increased competition from natural gas-fired combined-cycle power plants when natural gas prices are low. As a result, the natural gas-fired share of the U.S. electricity generation mix increased from 35% in winter 2021–22 to 38% last winter. During the same period, coal’s generation share fell from 21% to 18%.
Renewables’ share of electricity generation also increased to help meet overall electricity demand. In 2022, 8 gigawatts (GW) of new wind capacity additions and 10 GW of new solar capacity additions came online, according to our Electric Power Monthly.
Beijing to Baghdad: China’s Growing Role in Iraq’s Energy Sector
Iraq’s economy is overwhelmingly dominated by the oil sector. According to the World Bank, over the last decade oil revenues have accounted for more than 99% of exports, 85% of the government’s budget, and 42% of GDP. Despite the strong rebound of the economy after the pandemic thanks largely to high oil prices and increased export volumes that last year drove oil revenues to exceed $115 billion, Iraq’s long-term economic prospects remain challenged by its lack of diversification, limited investment, anemic private sector, and widespread corruption.
Yearlong political paralysis left Iraq without a budget for 2022, holding up spending on much-needed energy-related and other infrastructure projects. Yet, since the formation last October of a new government headed by Prime Minister Mohammed Shia al-Sudani, Iraq has pressed ahead with plans to boost oil production capacity, develop domestic gas supplies, and repair and expand refineries.
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Layoffs Expected, UAS Heating Up, Natural Gas Saves Lives and Exxon's Desire to Capture Carbon