Exxon's no good, very bad week

Ahmed Jadallah/ReutersSaudi Aramco’s Ras Tanura oil refinery.

Welcome to Insider Energy, a weekly energy newsletter brought to you by Business Insider.

Here’s what you need to know:

  • Want to get Insider Energy in your inbox every Friday?Sign up here.
  • Do you have feedback or story tips? Reach out to me at [email protected].
  • Reminder: We’re looking for a reporter/editor to help lead our coverage. Apply here.

I’ve been thinking a lot about that fly.

Speaking of surprise appearances at the VP debate Wednesday, fracking made a show — Mike Pence repeatedly said that Joe Biden and Kamala Harris want to ban the technology. Harris said they wouldn’t.

Fracking is a super common method of extracting oil and natural gas in the US, which involves some engineering magic like sideways drilling.

The technology turned America into a fossil-fuel powerhouse, starting around 2009. It also led to a surge in plastics and chemicals.

As I recently learned, pretty much everything that’s not made of wood or cotton is made with chemicals derived from oil and gas, known as petrochemicals. Laundry detergent, diapers, antifreeze, hand sanitizer … these chemicals are everywhere!

And Big Oil wants to keep it that way. Let’s start there.

Global demand for petrochemicalsYuqing Liu/Business Insider

This obscure $US400-billion industry might just save Big Oil

As we’ve written, clean energy sources like wind and hydro power will eventually dominate the global electricity mix, and EVs are set to replace gas-guzzling cars. That alone doesn’t spell the end of big oil companies.

Reality check: Most of the world’s largest fossil-fuel producers including Exxon and Shell have invested in a wide range of products to stay relevant including petrochemicals — which have grown into a gigantic industry.

  • The US market was worth almost $US400 billion last year, according to the American Chemistry Council.

Defined: Petrochemicals are chemicals derived from petroleum and natural gas.

  • By quantity, the vast majority of chemicals out there — the stuff in disinfectants, detergents, everything in The Container Store — are, in fact, petrochemicals.
  • My point being: The reach of this industry, backed by Big Oil, is almost unfathomable.

A lifeline: As oil giants stare down a future with fewer gas-powered cars, they’re looking to petrochemicals to stay afloat.

  • By 2050, petrochemicals are projected to overtake the transportation sector as the largest driver of growth in oil demand, according to the International Energy Agency.
  • Top oil companies are adjusting accordingly, as we reported this week.

Read our full story here.

FILE PHOTO: Darren Woods, Chairman & CEO of Exxon Mobil Corporation attends a news conference at the New York Stock Exchange (NYSE) in New York, U.S., March 1, 2017. REUTERS/Brendan McDermidReutersDarren Woods, Chairman & CEO, Exxon Mobil Corporation attends a news conference at the NYSE

Exxon’s no good, very bad week

I mean, it’s not like any of us had a good week. But Exxon’s was particularly challenged.

What’s going on? Exxon is trying to maintain its dividend and reputation as a stable employer even as oil prices fail to gain ground. They were down about 35% this year as of Friday morning.

  • At the same time, investors are souring on companies that fail to set climate-change targets.
  • Exxon is considered a laggard among oil companies when it comes to climate policy.

What next? More job cuts are likely as the restructuring carries on. The company is also doubling down on its oil resources in lower-cost regions including Guyana.

Do you have information on Exxon? You can reach me at [email protected] or through Signal/text at +1-646-768-1657.

Vivint Solar rooftop solarAnne Cusack/Los Angeles Times via Getty ImagesVivint Solar workers install rooftop solar panels

Layoffs reach all corners of the energy industry

Two new reports this week detail the toll COVID-19 has taken on energy-industry jobs. It’s not great.

Clean energy: Just under half a million clean-energy workers are still out of work from the pandemic, according to BW Research.

  • The industry added 12,500 jobs back last month, and is recovering at a slower rate than the rest of the economy, the group said.
  • California, to no surprise, has lost the largest number of positions.

Oil and gas: The fossil fuel industry, including chemicals, laid off 107,000 workers from March through August, according to a new Deloitte analysis.

  • Bleaker still, as many as 70% of those jobs may not return by the end of 2021 in a business-as-usual scenario, the firm said.
  • “Such large-scale layoffs, coupled with the heightening cyclicality in employment, are challenging the industry’s reputation as a reliable employer,” the report said.

In other news: Chevron is demanding its workers reapply for jobs as part of a global restructuring that’s set to reduce its workforce by up to 15%.

Chevron gas stationJustin Sullivan/Getty Images

Will there be more mega-mergers? These top analysts think so — and list the most likely ones.

Chevron bought Noble Energy in a deal worth $US5 billion. Devon Energy has agreed to acquire WPX Energy. Meanwhile, Sunrun took over Vivint Solar, a deal that closed this week.

Who’s next? Morgan Stanley has some ideas. In a report Wednesday, the bank laid out 11 potential mega-mergers in the US energy industry (specific to oil and gas) that involve heavyweights like Exxon and Chevron.

FILE PHOTO: A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in Manhattan, New York, U.S., November 13, 2017. REUTERS/Amr AlfikyReutersA sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York

5 big stories we didn’t cover this week

That’s it! Have a great weekend.

– Benji

Ps. I planted basil in a wine bottle, merging my top interests.

Benji Jones basil wine bottlBenji Jones

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.