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ExxonMobil posts first annual loss in 40 years, losing $22.44 billion

With energy prices decimated, shale gas properties reduced by more than $20 billion in value during the fourth quarter, a far cry from fourth-quarter 2019 when they last posted a profit, totalling $5.69 billion.

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By Alex Dhaliwal

Top U.S. oil producer ExxonMobil has posted its first annual loss in 40 years, owing mainly to the COVID-19 pandemic, activist investors, and climate-change campaigns.

With energy prices decimated, shale gas properties reduced by more than $20 billion in value during the fourth quarter, a far cry from fourth-quarter 2019 when they last posted a profit, totalling $5.69 billion.

The company reported a net annual loss of $22.44 billion for 2020, compared to a full-year profit of $14.34 billion in 2019, with four consecutive quarters of losses in 2020.

In response to the devastating quarter, ExxonMobil laid off 15 per cent of its workforce and distributed $326 million in after-tax severance charges.

According to the Company’s fourth-quarter report, capital and exploration expenditures were $4.8 billion, bringing full-year spending to $21.4 billion, $9.8 billion lower than the prior year.

Though oil prices are likely to remain below $60 a barrel for years, despite a mounting $22-billion debt incurred last year to cover dividend and project spending, ExxonMobil assured investors of its financial health in a world of $50-a-barrel oil. 

Should prices fall below $45 per barrel, the company committed to “further reduce capital investments, cover the dividend and maintain a strong balance sheet.”

Despite the devastating year for ExxonMobil, “full-year 2020 capital spending of $21.4 billion was nearly $12 billion, or 35 per cent, lower than the initial $33 billion plan, and $2 billion below the revised $23 billion plan,” said ExxonMobil in its fourth-quarter report.

Though cash operating expenses for the year were 15 per cent lower than 2019, capturing savings from increased efficiencies, reduced activity, and lower energy costs, further reductions in operating expenses are expected. 

Dhaliwal is an Edmonton-based freelance reporter.

Energy

Energy report tells feds to incentivize moves away from oil

The IEA calls for the Canadian government to creating transparent changes to the oil and gas industry but incentivizing technology changes and creating emergency oil stocks.

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A new report says Canada should further invest in clean in electricity and that our country is already among the cleanest energy production in the world.

The International Energy Analysis (IEA) came out with a report outlining recommendations for Canada’s energy future, including balanced decarbonization across the country.

That means higher coordination between federal, provincial and territorial levels to set clear targets for energy efficiency in buildings, transport and industry sectors.

The IEA calls for the Canadian government to create transparent changes to the oil and gas industry but incentivizing technology changes and creating emergency oil stocks.

Canada’s electricity system is one of the cleanest globally according to the IEA report, as 80% of supply is from non-emitting sources such as hydropower and nuclear power.

“Canada’s wealth of clean electricity and its innovative spirit can help drive a secure and affordable transformation of its energy system and help realize its ambitious goals,” said IEA Executive Director Fatih Birol.

“Equally important, Canada’s efforts to reduce emissions — of both carbon dioxide and methane — from its oil and gas production can help ensure its continued place as a reliable supplier of energy to the world.”

The report follows Environmental Minister Steven Guildbeault’s announcement for Canada to be ready to eliminate fossil fuels in 18 months, with zero-emission cars and stricter methane regulations.

Conservative leader Erin O’Toole expressed concern on Twitter with the zero emission plans, calling attention to the need to invest in the oil sector rather than turn away from it.

Energy makes up over 10% of Canada’s GDP, being a major source of capital investment, export revenue and jobs, making the net-zero goals both a challenge and opportunity.

Since the last IEA review in 2015, Canada has made international and domestic commitments dedicated to transforming the energy sector, including a target to cut greenhouse gas emissions by 40‑45% by 2030.

Canada is also a part of the United Nations zero-emission 2050 target that involves over 130 countries worldwide.

Ewa Sudyk is a reporter with the Western Standard.
esudyk@westernstandardonline.com

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Energy

O’Toole mocks Guilbeault’s two-year fossil fuel plan

Full implementation of this ethanol use would create a 60% increase in heating a home, according to the advocacy group Canadians for Affordable Energy.

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The federal cabinet is planning to phase out the use of fossil fuels in the next 18 months, but didn’t mention how much Canadians rely on fossil fuels and what costs this initiative entails.

According to Blacklock’s Reporter, Environment Minister Steven Guilbeault said in the next two years Canadians should also see more stringent methane regulations and zero-emission vehicle standards.

Conservative leader Erin O’Toole was opposed to the proposition, and highlighted the need for using Canada’s fossil fuel industry and supporting those who work in it.

“Canada is a cold country. We need fossil fuels, natural gas, to heat our homes,” said O’Toole in a video standing in front of a freezing cold House of Commons.

O’Toole tweet

“Someone so disconnected from reality that he’s making policy that will hurt our country. Division and absolute disconnect from reality.”

Guilbeault stressed the need for faster action on environmental initiatives by the Liberal government.

“I mean, maybe 2024, but that’s the type of time frame we have to work with and it’s going to be tough because on the one hand, some people are going to criticize us for not giving them enough time to be consulted, but the state of climate change is such that we need to learn to do things faster and that’s certainly true of us as a government,” he said.

Guilbeault acknowledged many of his proposed environmental actions will cause significant costs to consumers, but stated the luxury of waiting to make environmental changes is something Canadians don’t have any more.

The Clean Fuel Standard, implemented in 2021, mandated higher use of renewable energy in everyday consumption which includes tripling expensive ethanol content in gasoline and increasing carbon taxes.

Full implementation of the ethanol use would create a 60% increase in heating a home, according to the advocacy group Canadians for Affordable Energy.

Guilbeault complained about regulators taking too long to finalize the Clean Fuel Standard, as the regulation took five years to finalize and implement.

“One of the things I told stakeholders when I was in Toronto recently and then in Calgary, one of the things I told the department as well is we don’t have that luxury anymore,” said Guilbeault.

“We don’t have five years to consult every time we want to introduce a new measure.”

Canada’s two major parties are opposing on the matter.

O’Toole ended his statements on Twitter saying the Conservative party will keep fighting to keep Canadians warm and fossil fuel jobs safe.

Ewa Sudyk is a reporter with the Western Standard
esudyk@westernstandardonline.com

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Energy

Energy report says fossil fuel usage set to plunge in Canada

The news was met with glee from Canada’s Environment Minister Steven Guilbeault.

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The use of fossils fuels in Canada is set to drop drastically in the next three decades, says a new report.

The Canada Energy Regulator predicts fossil fuel use will fall by 62% by 2025.

The forecast predicts Canadians will use significantly less gasoline and diesel over coming years, resulting in a 43% decline in the use of refined petroleum products by 2050.

Electricity use could rise by as much 45% as people change over to electric vehicles.

The report predicts wind and solar power will be used to help meet the rise in demand.

The news was met with glee from Canada’s Environment Minister Steven Guilbeault.

“Some welcome news from The Canada Energy Regulator: fossil fuel use will fall by 62% in Canada by 2050. We’re making progress, the work continues!” he tweeted.

The forecast calls for Canadian crude oil production to peak at 5.8 million barrels per day in 2032, and then to decline to reach 4.8 million barrels per day in 2050.

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