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The tiny South American country has become a big deal in oil.
The much-predicted wave of oil consolidation is happening.
The oil giant Chevron announced on Monday it was acquiring rival Hess in a deal worth $53 billion. This comes weeks after ExxonMobil announced a merger with Pioneer Natural Resources in a similarly sized deal. While that tie-up was largely interpreted as ExxonMobil trying to consolidate its position in West Texas’s immensely productive Permian Basin, this latest deal is about Chevron getting in on another prize: the massive offshore oil resources of Guyana.
From 2014 to 2022, the South American nation has seen its gross domestic product grow from just over $4 billion to almost $14 billion. With a population of just over 800,000, the tiny country has been transformed by the 2015 discovery of oil by ExxonMobil off its coast, which turned into actual production by 2019. Today, the area known as the “Stabroek block” is controlled by a consortium of ExxonMobil, Hess, and the Chinese oil company CNOOC, of which Hess is a 30 percent owner. (Hess also has positions in North Dakota, the Gulf of Mexico, and Southeast Asia.)
“The Stabroek block in Guyana is an extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade,” Hess and Chevron said in their statements today.
Hess in its most recent quarterly earnings said that its production in Guyana had almost doubled, going from 67,000 barrels per day in the second quarter of last year to 110,000 in the second quarter of this year.
Hess estimates that there are 11 billion recoverable barrels in the Stabroek Block. Last year, Rystad Energy wrote that more potentially drillable oil was probably discovered in Guyana than in any other country.
Guyana’s resources are a rare source of newly discovered growth for the oil industry. Western oil companies recently have had to abandon projects in Russia due to sanctions, while heavy investor and political pressure have made European oil companies less interested in, well, oil. Meanwhile in Latin America, Guyana’s neighbor, Venezeula, further nationalized its oil industry in the 2000s, and ExxonMobil was one of the first oil companies to leave the country entirely. But in turning its attention to Guyana, ExxonMobil quickly found huge stores of crude with lower sulfur content than Venezuela’s, which is notoriously expensive to refine and thus less profitable to drill.
So what does this deal mean for climate change and clean energy?
Like other large oil companies, Chevron has a bevy of projects that could fit into a lower-carbon-emissions world, like carbon capture and hydrogen production. Indeed, just last month it spent around half a billion dollars to acquire a stake in a planned hydrogen storage plant in Utah. But while Chevron has said it wants to spend $10 billion on low carbon investments by 2028, that figure is dwarfed by today’s announced deal with Hess alone.
The massive move is an indication that Chevron expects there to be steady oil demand in the years and decades to come, as Hess’s operations are still growing. “Hess brings growth to Chevron — growth in resource, growth in production, growth in cash flow,” chief executive John Hess said on CNBC on Monday morning. “We have the best growth portfolio in the business.”
And yes, toy trucks. "The Hess toy truck will continue," Hess said.
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When then-President-Elect Donald Trump nominated then-Oklahoma Attorney General Scott Pruitt to lead the Environmental Protection Agency in 2016, everyone right, left, and center knew exactly what that meant: The top law enforcement officer from one of the nation’s most conservative states and largest oil and gas producers would take aim at environmental rules implemented by the previous administration — rules he had often sued to overturn — and pave the way to increased fossil fuel production.
Trump’s pick this time around, former Long Island Congressman and New York Republican gubernatorial candidate Lee Zeldin, is more distinguished by his personal closeness to and support for the President-Reelect than he is by anything to do with the environment.
“It is an honor to join President Trump’s Cabinet as EPA Administrator. We will restore US energy dominance, revitalize our auto industry to bring back American jobs, and make the US the global leader of AI,” Zeldin wrote on X soon after the New York Post broke the story. He added for good measure: “We will do so while protecting access to clean air and water.”
So, who is Lee Zeldin? In his four terms in Congress as the representative from New York’s easternmost congressional district on Long Island, Zeldin did not cut any particular profile on climate, environment, or energy issues, and was best known for his hawkish foreign policy position. His surprisingly close run against Kathy Hochul for New York’s governor’s mansion in 2022 was largely defined by crime, public safety, and the effect of Covid-19 restrictions on the state’s economic recovery.
To the extent Zeldin has defined himself on the environment beyond standard-issue Republican opposition to restrictions on fossil fuels and car purchasing, it’s been in the context of issues specific to his coastal Long Island constituency. During his 2018 congressional campaign, he pointed to his membership in the “shellfish and national estuary caucuses,” as well as federal programs for estuaries and his opposition to expanded offshore drilling exploration at an event hosted by the League of Conservation Voters.
Throughout his gubernatorial run, Zeldin assailed New York’s ban on fracking, which had been implemented by Hochul’s predecessor, Andrew Cuomo. He also criticized New York’s planned phase-out of sales of internal combustion engine vehicles by 2035, as well as the proposal to institute congestion pricing in Lower Manhattan (an effort that died but may be brought back to life as part of Hochul’s scheme to protect Democratic congressional candidates on Long Island).
Cosmetics heir Ronald Lauder spent millions supporting Zeldin’s gubernatorial run, which The New York Timessuggested was motivated in part by the billionaire’s opposition to a cable from an offshore wind project that was planned to land in Wainscott, in the Hamptons, where Lauder has a home. The project, South Fork Wind, has been delivering power to New York since March of this year. Trump’s opposition to wind and offshore wind energy specifically has been a hallmark of his climate and energy policies.
“Congratulations! By saving the whales, you and @realDonaldTrump will establish a legacy for which Americans will feel grateful, decades and centuries into the future,” Michael Shellenberger, the anti-offshore-wind activist, wrote on X.
Since August, climate policy optimists have pointed to a letter sent by 18 Republican members of the House of Representatives to Speaker Mike Johnson imploring him to preserve the energy tax credits in the Inflation Reduction Act.
As of January, however, some of them will no longer be Johnson’s problem.
Two signatories from newly redrawn House districts in New York, Marcus Molinaro and Anthony D’Esposito, are out of a job already, beaten by Democrats Josh Riley and Laura Gillen, respectively, each of whom received an endorsement from the New York League of Conservation Voters. Also definitively leaving the House is Utah Republican John Curtis, founder of the Conservative Climate Caucus, who is headed across the hall to the Senate.
Of the remaining 15 Republicans, four are in races that still have not been called, and three look to be in moderate-to-severe jeopardy. The current chair of the Conservative Climate Caucus, for instance, Iowa’s Mariannette Miller-Meeks, is leading challenger Christina Bohannan by just 0.2% — i.e. 799 votes — with all precincts reporting. The state has no automatic recount law, but candidates can request one at little to no expense when the margin is within 1%; a spokesperson from the Iowa Secretary of State’s office told a local TV network that if a request comes in, it’ll likely be after the results are certified early this week. As Heatmap’s Jeva Lange wrote in our climate election tracker, “Bohannan has attacked Miller-Meeks for slow-walking action on addressing climate change through her soft hand with the oil and gas industry,” and as of the final weeks of the race was out-raising Miller-Meeks by a 2-to-1 ratio, E&E News reported.
Another seat Democrats saw an opportunity to flip was Arizona’s 6th Congressional District, where letter signatory Juan Ciscomani has, as of this moment, squeaked out ahead of Democrat Kirsten Engel by 0.6% after appearing to trail for much of last week, though that could change again as more votes are counted. The news is worse for Oregon’s Lori Chavez-DeRemer, however, who with 87% of precincts reporting is behind Democrat Janelle Bynum in the vote by close to 3%.
If all these races were to be certified as they currently stand, that would leave 14 of the original group of 18 representatives still in Congress. If all the House races with results still outstanding fall into line per their current leanings, then Johnson will have just an 11-vote majority. That means this group of lawmakers can still derail the House’s agenda if they so choose, though just barely.
As for the three House seats Republicans have flipped so far, two are in Pennsylvania and one is in Michigan, both states Biden won in 2020. The victors in the two Pennsylvania races, campaigned against the “radical climate agenda” and the “climate crazies,” respectively. Yet the new representative from Michigan’s 7th district, Tom Barrett, has earned a score of 32% from the Michigan League of Conservation Voters during his time in the state Senate, making him a potential Conservative Climate Caucus recruit. The group’s current chair, Miller-Meeks, has a LCV score of just 12%.
So where does that leave us? About where we started, with the politics of repeal teetering on a wind turbine blade-edge. It’s one thing to campaign against the IRA, but the actual business of gutting is another thing entirely. On election night, my colleague Robinson Meyer cited a Washington Post analysis showing that Trump 2020 districts have received three times as much funding from Biden’s signature climate law as those that went the other way. Though that won’t necessarily convince every voter to welcome solar developments in their backyard, when the margins of victory are this slim, every tenth of a percent of the vote counts.
Voters don’t hate clean energy, but they also don’t want to work for it.
The re-election of Donald Trump all but assures that the next four years of climate policy will have to unfold at the local level. With a climate change denier who previously wreaked havoc on longstanding environmental regulations, opened wildlife refuges to drilling, and put the U.S. at odds with its international partners now set to return to the White House in January, the country will almost certainly fall far short of its 2030 emission reduction targets. But state and local policies can still achieve meaningful progress on their own: On Wednesday morning, green organizers like Climate Cabinet were already stressing that “it will now be up to state leaders to hold the line against Trump and to ensure continued progress toward clean energy.”
Will Americans defend and advance that progress, though? The results of several climate-related ballot measures that were put to vote Tuesday night are giving mixed signals.
On the one hand, there were a number of victories worth celebrating. Most significantly, Washington voters confirmed their state’s cap-and-invest carbon trading program, which pumps millions of dollars into local transit, environmental, and decarbonization projects. Voters across the country also signed off on creating climate- and conservation-related bonds and funds, including in Honolulu, Louisiana, Jefferson County, Iowa, Minnesota, and (likely) the state of California. Local transit-related measures also, on the whole, had a good night.
But there were some concerning rejections, too. Two counties on the southern Oregon coast expressed overwhelming (though non-binding) opposition to offshore wind development in their region, with some 80% of voters in Curry County signaling their objection. Two-thirds of voters in Berkeley, California — one of the most liberal cities in the country — also rejected what would have been a first-in-the-nation tax on natural gas in large buildings. In Washington, early results on an initiative that is still too close to call show voters on track to approve a measure that would bar cities, towns, and the state from “prohibiting, penalizing, or discouraging” gas appliances in buildings — “discouraging” being the operative, ill-defined, and all-encompassing word — threatening Seattle’s 2050 net-zero emissions target.
South Dakotans also rejected a bill that would have smoothed the permitting process for a carbon dioxide pipeline that would carry CO2 from ethanol plants to an injection well in North Dakota as a means of dealing with planet-warming emissions. Though CO2 pipelines are controversial and have “strange politics,” as Heatmap’s Emily Pontecorvo has written, the citizen-led backlash was often couched in the language of opposing out-of-state interests who were “going to make a buck from the future energy transition.”
My read of the night’s referenda and ballot measures is that voters largely seem willing to do the passive work of supporting climate and environmental policy (for instance by directing the use of property taxes or reconfirming a law already in place) and less willing to voluntarily take on some of the burden themselves, in the form of hosting new development in their communities or opting into transitions away from climate-polluting fuels. This isn’t terribly surprising — local battles over the energy transition are common and frequent enough that we have a whole weekly newsletter here at Heatmap addressing them — but it also suggests that there isn’t nearly enough momentum to prevent potentially catastrophic backsliding under four more years of Trump.
There is good news, though. Local policy is often nimbler and more responsive than state- or federal-level policy. It’s also something anyone can get involved in, and there is presently a wide-open opportunity to convince Americans to embrace a clean energy economy and build things. The seemingly total failure of the current administration to capitalize on the benefits of the Inflation Reduction Act, however, does mean that climate, transit, environmental justice, decarbonization, and conservation organizers and activists will have their work cut out for them in the next years to come.
But it isn’t impossible, even if it is uphill sledding. As Climate Cabinet’s Caroline Spears put it in her Wednesday morning note, “It’s time to go back to our roots, dig deep, and rebuild our democracy and climate progress from the local level up.”