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Pound rises after UK clears first hurdle for Brexit treaty breach

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Pound rises after UK clears first hurdle for Brexit treaty breach

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Big Oil Goes Looking for a Career Change

(Bloomberg) — For most of the past century, Big Oil executives found it pretty easy to explain to investors how their businesses worked. Just locate more of the commodities that everyone needed, extract and process them as cheaply as possible, and watch the profits flow.That’s all over now. The change has been so profound that the chief executive officer of BP Plc recently found himself hyping the profit potential of another commodity. “People may not know—BP sells coffee. We sold 150 million cups of coffee last year,” Bernard Looney said in an interview in August, referring to beverage kiosks attached to the company’s fuel stations. “This is a very strong business. It’s a growth business.”Perhaps it was tongue-in-cheek, or a way for the leader of the world’s fifth-largest international oil company to emphasize a relationship with consumers. But it’s clear Looney and other oil bosses are struggling to sell their plans for a future in which the world wants more green energy. Last year, for the first time in history, solar and wind made up most of the world’s new power sources, according to BloombergNEF. If the margins on cappuccinos look good right now, that’s an indication of how hard it will be for Big Oil to rapidly ditch its winning formula of drilling, pumping, and refining while spending its way into renewables.“This is a time of energy transition,” says Daniel Yergin, the oil historian and vice chairman at consultant IHS Markit Ltd. “The supermajors were born of the trauma of the late 1990s,” he notes, and now “this global trauma of the pandemic will also be a decisive period.”Legacy energy companies are for the first time sketching out new strategies that in the near future—as soon as 2030, in some cases—would eliminate hydrocarbons. The industry would like everyone to believe it’s turning its back on fossil fuels for the good of the planet. After decades of denying its role in global warming, however, the reality is that Big Oil has been forced to change by green campaigners, local politicians, and pension funds.The green transition is more evident in Europe, but the same forces are hammering the industry in the U.S. In another unmistakable sign of the times, last month Exxon Mobil Corp. was dropped from the Dow Jones Industrial Average for the first time since 1928. In the S&P 500, the energy sector is now the smallest component. (The mostly state-owned oil giants of the Middle East, India, and China are, for now at least, largely carrying on as before.)What is the future of Big Oil without oil? At the extreme of this approach are the pathways sketched out by BP and Italian oil group Eni SpA. These companies claim that in the next decade they will come to resemble a cross between a slimmer version of a traditional oil company and what’s today more like a utility (with, yes, a coffee-selling convenience store chain for drivers of electric vehicles). As the legacy business fades, the theory goes, investments in renewable electricity, biofuels, and EV charging points will pay off.If in the past the biggest names of the industry were known as “international oil companies,” the new jargon describes this approach as creating “integrated energy companies.” Michele Della Vigna, the top oil industry analyst at Goldman Sachs Group Inc., expects to see oil giants attempt the same all-in strategy as before. “We believe the coming decade will see them integrating vertically in gas, already evident, and in power,” he says.Industry executives insist their legacy business is resilient even as they shift away from oil and natural gas, but their actions suggest otherwise. BP and Royal Dutch Shell Plc have already slashed their dividends—for Shell it was the first time in nearly 80 years. Returning profits to shareholders has long been a pillar of oil’s strength on financial markets. And those like Exxon who are keeping their shareholder payments untouched are taking on far more debt to do so.The fossil fuel industry as a whole has taken billions of dollars in writedowns, in part linked to the rise of U.S. shale production and the impact of the coronavirus pandemic. If demand peaks earlier than expected, as some in the industry now fear, the most expensive and polluting oil fields such as tar sands in Canada may never be developed. The term of art for these uneconomic oil resources is stranded assets. The consultants at Rystad Energy AS estimate that 10% of the world’s recoverable oil resources—some 125 billion barrels—could become obsolete.Add it all up, and the Not-So-Big Oil of tomorrow looks greener, smaller, and nimbler—and also less profitable, more indebted, and paying lower dividends. That spells the end of a business model that hasn’t changed much since it was pioneered by John Rockefeller: Integrate oil production with refining, and market it under a single umbrella.This formula built an industry that made possible 20th century automobile culture, reshaped cities, produced political dynasties, and defined modern life. With hydrocarbons occupying a central role in the global economy, the model became a cash machine and a darling of long-only shareholders who adored its fat and predictable dividends. Oil interests became a powerful political force. The model was durable enough to survive the oil crisis of the 1970s, the rise of OPEC, wars in the Middle East, and the emergence of the ecological movement in the ’80s.When crude prices plunged in 1998 and the oil giants appeared on the brink, the industry responded in true fashion: doubling down on oil in a series of mergers that created the modern petroleum industry. The five companies that have dominated since then—Exxon, Chevron, Shell, Total, and BP—have been doing roughly the same things their predecessors did decades earlier.This time is different. The existential crisis of the ’90s taught Big Oil how to do the same but better and cheaper. In the 2020s these companies are trying to figure out how to do something completely different—renewable energy—while quickly reducing or offsetting emissions from the oil and gas they sell.“All the companies are swimming in the same water of energy transition,” says Yergin, “but they are adopting different strokes to get to the other side.”The answer from BP is far more radical than from Chevron. But even the smaller steps by American supermajors are remarkable by the standards of a conservative and slow-moving industry. Chevron’s last update to its shareholders in July highlighted an oil project, a deal to buy fuel stations, and investment in solar power. It looks like the end of an era.Which also means “past profitability is no longer a guide to the future,” says Martijn Rats, who covers the energy industry at Morgan Stanley. The writedowns and diminished dividends demonstrate “that the oil majors have entered a new phase.”Many are skeptical of the green drive in this new phase. BP promised to move “Beyond Petroleum” in the ’90s, only to return to business as usual once prices rocketed above $100 a barrel in 2008. If crude and natural gas prices rise again, these skeptics say, Big Oil will go back to basics—perhaps even under pressure from shareholders.The difference this time around is that most top oil executives are adamant there’s no going back. “Our transformation is irreversible,” says Claudio Descalzi, CEO of Eni, the sort of comment that’s widely echoed by his peers. Most senior executives simply don’t believe hydrocarbon prices will ever come back to the above-$100-a-barrel days for any sustained period. And the social, and investor, pressure to tackle climate change is unlikely to abate.And then there’s oil consumption. In BP’s long-term energy outlook, released on Sept. 14, the company acknowledged that the appetite for refined petroleum has all but peaked. “Demand for oil falls over the next 30 years,” BP wrote in its report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”That’s why most of the industry—even Chevron—is spending billions of dollars on renewable electricity generation, particularly investments in solar and wind power. BP has pledged to generate 50 gigawatts of renewable electricity by 2030, up from 2.5GW now. Reaching that goal would mark a tremendous shift; it’s more than the renewable output of some large utilities today. But it’s still a drop in BP’s hydrocarbon bucket, even as that bucket shrinks. In 2019, BP’s oil-and-gas production was the equivalent of 2.6 million barrels per day. By 2030, the company has told investors, daily oil and gas output will drop to 1.5 million barrels. Renewables won’t fill the hole left by the missing million barrels.The question is whether Big Oil can deliver on any of its pledges and make money doing so.Paul Sankey, a veteran oil analyst, has doubts about the supermajors’ ability to rebuild outside their traditional business. “If they can’t make returns in their core competency, what chance do they stand in a new competition?” he says. The new areas that are supposed to become the heart of Big Oil’s future are, at least today, less profitable than the fossil fuels business. Renewable energy usually delivers a return on capital, a typical measure of profitability, of about 8% to 10%. A conventional oil project yields a return of around 15%. One way to generate higher returns is by taking on more debt, something the companies appear to be open to. The supermajors also face strong competition from incumbents that have already mastered the renewables business, including the likes of Italian utility Enel SpA or its Spanish rival Iberdrola SA.The strategy shift poses a question to investors: Why pour money into legacy players trying to prove a new concept rather than back a utility that’s already making money in the sector? Take an example: Enel today pays a 4.6% dividend yield—virtually the same as Shell’s 4.3%.The supermajors have some advantages as they move into greener sources. One is the size of their balance sheet, which allows them to invest more and faster than many of the renewables players. Another is they can learn from the mistakes that others made before them. In theory, the oil giants are also well suited to manage big projects.And green projects can help legacy giants because renewables are, surprisingly, the steadier sector. “Volatility is lower compared to the oil-and-gas sector, and thus more stable,” says Atul Arya, a consultant who used to work at BP in business strategy.In the end, that less-profitable stability from solar and wind resources will matter. Because even the oil giants most committed to turning green won’t complete their long goodbye to oil and gas anytime soon. The supermajors will depend on fossil fuels for the next 10 to 20 years, at the very least, to generate enough cash to keep shareholders happy and have some money left to invest in clean-energy projects. And perhaps, as Looney of BP says, in more coffee, too. For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Christine founded Sports Grind Entertainment with an aim to bring relevant and unaltered Sports news to the general public with a specific view point for each story catered by the team. She is a proficient journalist who holds a reputable portfolio with proficiency in content analysis and research.

Christine founded Sports Grind Entertainment with an aim to bring relevant and unaltered Sports news to the general public with a specific view point for each story catered by the team. She is a proficient journalist who holds a reputable portfolio with proficiency in content analysis and research.

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Rep. Doug Collins has a big idea to prevent Supreme Court packing

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Rep. Doug Collins has a big idea to prevent Supreme Court packing

House Judiciary Committee member joins 'The Story' to discuss his proposed constitutional amendment

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Christine founded Sports Grind Entertainment with an aim to bring relevant and unaltered Sports news to the general public with a specific view point for each story catered by the team. She is a proficient journalist who holds a reputable portfolio with proficiency in content analysis and research.

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House Republicans Call on Attorney General Barr to Investigate Recent Spike in Anti-Catholic Hate Crimes

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House Republicans Call on Attorney General Barr to Investigate Recent Spike in Anti-Catholic Hate Crimes

A group of House Republicans led by Representative Jim Banks (R., Ind.) on Friday called on attorney general William Barr to investigate a recent rise in anti-Catholic hate crimes.

There have been 70 instances of anti-Catholic violence in North America this year — with 57 crimes being reported since May alone — according to a letter sent to the attorney general by Banks and 15 other House Republicans.

By contrast, in all of 2018, the most recent year for which data is available, the FBI reported 53 incidents of anti-Catholic hate crimes in the U.S.

“Bigoted criminals are threatening Catholics and undermining America’s core ideal of religious liberty,” Banks said in a statement. “The DOJ’s Civil Rights Division exists to combat spikes in targeted violence. It needs to fulfill its duty, determine who is behind this pattern of attacks and bring them to justice.”

Beginning in early July, reports of “horrific and brutal attacks on Catholic and Church properties” spiked, the letter says, including in Boston where a statue of the Virgin Mary at Saint Peters Parish Church was set ablaze. 

One day earlier, the letter says, a man in Florida allegedly drove a van into a church with parishioners inside before spilling gasoline in the church’s foyer and attempting to set it on fire.

That same day, San Gabriel Mission in California was burned down. The letter calls the issue “ongoing,” citing an incident in September where a man was videotaped toppling an Our Lady of Guadalupe statue in Coney Island, N.Y.

As in any other instance of a rapid spike in hate crimes targeted at a specific group, the Justice Department’s Civil Rights Division has an obligation to investigate the perpetrators of this violence and any organizational or ideological connections between them,” the letter states.

“Crimes like these aren’t just targeted at individuals and their property; they are targeted at American society as a whole,” it continues. “They are motivated by a destructive impulse to harm property and persons, but also the equally warped desire to undermine America’s constitutionally guaranteed rights and social trust within our communities.”

The Republicans’ call to investigate concludes in saying the attacks threaten the physical safety of Catholics as well as the integrity of the American system, and saying the Department of Justice has an obligation to uphold both. 

The letter was co-signed by Representatives Andy Harris (R., Md.), Greg Steube (R., Fl.), Ted Yoho (R., Fl.), Jackie Walorski (R., Ind.), Doug Collins (R., Ga.), Jeff Duncan (R., S.C.), Rick Allen (R., Ga.), Pete Olson (R., Texas), Glenn Grothman (R., Wisc.), Chuck Fleischmann (R., Tenn.), Ron Wright (R., Texas), Paul Gosar (R., Ariz.), Mike Kelly (R., Pa.), Ken Buck (R., Colo.), and Dan Crenshaw (R., Texas).

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Experts say there are 2 times when you should wear a mask at home

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Experts say there are 2 times when you should wear a mask at home

When the window in my bedroom broke, the ever-hovering threat of COVID-19 made me hesitant about letting someone in to our apartment to fix it. Even though the repairman was only in my home for 15 minutes and wore a mask the whole time, I found myself full of questions: When is it safe to take my mask off? How long should I keep the windows open? Would it help to spray Lysol in the air? What can I do to protect my family?

After spending so many months quarantined at home to distance from others, the presence of an outsider within my walls was unsettling and also confusing. Was it only strangers I should be concerned about? What about family and friends who don’t live with me? And what about those who are living under the same roof?

By now it’s second nature to slip your mask on when walking out the door, but when to wear a mask in the safety of your own home is a little less clear cut. So we tapped the experts. And it turns out that there are two circumstances where infectious disease experts recommend doing it.

Related: With COVID-19, fall looks a little different this year. Follow these expert tips to stay safe and healthy.

When anyone who doesn’t live with you comes over

“Whenever you have someone who is coming into your home that’s not a member of your immediate household, they should wear a mask, you should wear a mask, you and whoever else is in the house should wear the mask,” says Soniya Gandhi, MD, associate chief medical officer, Cedars-Sinai/Marina Del Rey Hospital. “You don’t know if that person is infectious — people can be asymptomatic and can still transmit the virus. Wearing masks and maintaining as much physical distance as possible when somebody is coming into your home are the cornerstones of trying to mitigate the risk of transmission.”

The right kind of mask helps as well, says Thomas A. Russo, chief of the division of infectious diseases at the University at Buffalo Jacobs School of Medicine and Biomedical Sciences. “Either a N95, surgical mask or well-fitting multilayered cloth mask — no bandanas, no scarves, no gators and definitely no masks with valves, because those valves are just one-way valves, so they protect the wearer but the stuff that they breathe out is not filtered, so if they were infectious they’d just be spewing stuff on you,” Russo explains.

Theoretically, if you’re both wearing well-fitting masks (snugly over the nose and mouth, extending over your chin, and fitting snugly on the face) the entire time and neither of you drop the mask, your risk of contracting COVID from a home visitor is relatively low, says Russo.

This recommendation extends to friends and family who don’t live with you, says Gandhi. “There’s an assumption that because people are family outside of your immediate household, that maybe you somehow have less risk. That’s unfortunately just not true,” she says.

The good news is, if masks are worn properly, Russo says you can probably take your mask off soon after they leave. “If you’re very vulnerable, want to be very conservative, are nervous about imperfect mask usage, and you’re living in a place that isn’t optimally ventilated, you could consider wearing your mask for 30 minutes after they leave,” he suggests.

Related: Your guide to having awkward conversations and minimizing coronavirus spread at family get-togethers.

When someone in your home is sick

If someone in your home comes down with COVID symptoms (including common cold symptoms like a stuffy nose, low grade fever, and a sore throat) it might be a good idea for them — and you — to mask up until they get tested when in shared spaces. “If anyone has any symptoms in the house, you should assume it’s COVID until proven otherwise,” says Gandhi. “The individual should isolate the best they can, use a separate bathroom if at all possible, and try to get COVID tested as soon as possible,” she says.

“Perhaps keep the mask on for up to 30 minutes (especially if you are vulnerable) after you leave the sick person’s space, since it’s possible that aerosols will escape the room when the door is open,” Russo advises.

Related: Experts answer key questions about how to clean and store coronavirus face masks.

In addition to wearing a mask, it also helps to:

Stay at least six feet apart

“Close proximity is the most important risk factor of COVID transmission,” Russo says. “Respiratory secretions come in two modes: respiratory droplets are larger particles, and since they’re larger they could contain a lot more infectious virus but they fall out within seconds. The other mode are what we call aerosols. They’re smaller and they could remain suspended in the air for longer periods of time, and could travel greater distances. There’s a lot of controversy in terms of the relative importance of aerosols because even within the 6-foot range, you’re going to get a mix of aerosols and droplets at a much higher concentration. Aerosols could remain suspended in the air — and the science is not great — for 30 minutes, though experimentally they’ve been shown to remain in the air up to three hours,” Russo explains.

Throw open a window

Russo says good ventilation — even if everybody’s wearing a mask — can also help decrease your risk when someone new comes into your space by circulating both respiratory droplets and aerosols. How long you should keep the windows open depends on the weather and your risk tolerance, says Russo.

Ultimately, both infectious disease specialists say it’s better to err on the side of caution with either scenario. “It only takes one person to infect you. If there’s only a 1 percent chance that someone is infected, that one out of 100 could still be the person that fixes your window,” says Russo. “We’re learning now that even people with asymptomatic or mild disease, there are potentially long-term consequences in other organs from this infection. We should all consider ourselves relatively vulnerable and make every effort to protect ourselves.”

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Christine founded Sports Grind Entertainment with an aim to bring relevant and unaltered Sports news to the general public with a specific view point for each story catered by the team. She is a proficient journalist who holds a reputable portfolio with proficiency in content analysis and research.

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