The logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange, ... [+] Tuesday, Oct. 8, 2019. (AP Photo/Richard Drew)

Because of its long-standing position as the biggest member of the “Big Oil” club, ExxonMobil XOM is a company many love to hate. So, stories about ExxonMobil’s woes generate a lot of schadenfreude, and hence a lot of clicks.

Many people celebrated last year when ExxonMobil’s stock price crashed along with the rest of the oil industry. Meanwhile, many of the people celebrating continued to fuel up at ExxonMobil gas stations. We prefer to blame ExxonMobil for our fossil fuel consumption rather than our own choices.

The latest controversy with the company was reported last week by the The Wall Street Journal. The WSJ reported that the Securities and Exchange Commission has launched an investigation into allegations that the company overstated the value of certain assets in the Permian Basin. ExxonMobil had reportedly fired an employee who complained that unrealistic assumptions were being used to value the asset.

The company has ramping up its activity in the Permian Basin. In 2017, ExxonMobil agreed to buy the Bass family’s Permian assets for up to $6.6 billion. That was a factor that led ExxonMobil CEO Darren Woods to claim in early 2019 that the company would increase oil and gas production in the Permian Basin from 600,000 barrels per day (bpd) to over 1 million bpd.

An Exxon refinery in Baton Rouge, Louisiana.

The U.S. Securities and Exchange Commission opened an investigation into Exxon XOM Mobil for possibly overvaluing one of its key oil and gas properties in the Permian Basin, the highest-producing oil field in the U.S., after an employee filed a whistleblower complaint last fall, according to a report in the Wall Street Journal on Friday that sent the oil major’s market value down 5%. 

In 2019 several people complained during an internal assessment that employees were being forced to use unrealistic assumptions about how quickly the company could drill wells in the Permian to achieve a higher value, reported the Journal, which reviewed a copy of the complaint. 

Citing unnamed sources, the article reported that the SEC had begun investigating the allegations after it received the complaint. The SEC declined to comment for the story. 

The oil and gas property in question, in the Delaware Basin of the Permian, forms a key part of Exxon's plan to ramp up shale production. In 2017 it paid $6 billion for 275,000 acres of land that at the time produced just 18,800 barrels per day, though Exxon insisted that there were 60 billion barrels of oil beneath the ground.  

U.S. oil production has fallen more than 2 million barrels per day since March 2020. Many reasonably expect that DUCs (drilled uncompleted wells) provide a solution to output falling further.

They won’t.

There are about 5,800 DUCs in the main U.S. tight oil plays. These are already drilled and could be converted into producing wells for the cost of completion which is about half the total well cost.

Most DUCs, however, are uncompleted for a reason namely, that their owners don’t believe that their performance will be as good as wells that they chose to complete instead.

Even assuming similar performance, the larger problem is that large numbers of DUCs are already being completed and official EIA 914 production remains less than 10.5 mmb/d. 

MOSCOW, RUSSIA - OCTOBER 03: Vice Chairman of IHS Markit Daniel Yergin speaks during "Maintaining ... [+] Energy Connectivity in an Unstable World" panel within Russia Energy Week in Moscow, Russia on October 03, 2019. (Photo by Sefa Karacan/Anadolu Agency via Getty Images)

Let’s start this update with a couple of book recommendations. Many readers know that, along with Shale Magazine publisher Kym Bolado, I co-host a weekly oil and gas-focused radio program called In The Oil Patch Radio, which airs across the state of Texas. In recent weeks we have conducted interviews with the authors of two new books that should be required reading for anyone who is interested in the oil and gas industry and the shale business in the United States.

The first author is well known to most everyone: Daniel Yergin, the Vice Charman at IHS Markit INFO , and author of a series of books about the oil and gas industry, including “The Prize: The Epic Quest for Oil Money and Power” and “The Quest: Energy, Security, and the Remaking of the Modern World.”

We interviewed Mr. Yergin on the November 15 edition of In the Oil Patch, focusing in on his latest book, titled “The New Map: Energy, Climate, and the Clash of Nations.” You can listen to the podcast of that interview at this link. All of his books are extremely educational and intriguing books filled with vast stores of useful information. Mr. Yergin is an extremely gifted writer who is able to present this wealth of information in a novel-like narrative that holds your interest and makes it difficult to put the books down. If you want to know where the world is headed where the intersection of energy and climate is concerned, “The New Map” is truly a must-read.

The same is true of another new book titled “The Shale Controversy” by Dr. Ian Dexter Palmer. We interviewed Dr. Palmer late this week for a show to air on the radio later this month, so the podcast of this particular episode is not yet available. Our initial hour-long interview with Dr. Palmer was so compelling that we have scheduled a follow-up interview with him next week so we can delve more in-depth into his book.

getty

When the first reliable leaks announced, in June 2020, that Apple’s upcoming iPhone 12 wouldn’t pack a charger or a headset, many, even the brand’s own customers, were unhappy. When the company launched the phone without them, in a significantly smaller box, and citing environmental reasons, a tsunami of complaints was unleashed: this was just a way to squeeze more money out of customers, it wouldn’t reduce electronic waste … Meanwhile, brands like Samsung or Xiaomi even made ads laughing at Apple’s move, and pretty much suggesting that this was one road they wouldn’t be following the company down.

What happened? Guess what the next model that Xiaomi has brought out doesn’t include? Or Samsung’s latest and the next generation? What a surprise! No charger, citing precisely the same environmental reasons as Apple: to reduce waste and to be able to pack more units in each box, thus lowering the carbon footprint from shipping costs.

Soon, the entire industry will adopt a standard that was once ridiculed. A measure that Apple will have achieved simply by leadership: having the courage of its convictions to withstand a storm of criticism, knowing that what its competitors criticized today, they would imitate tomorrow.

Tablet and phone chargers actually make up barely 0.1% of total e-waste, some 54,000 metric tons. If we consider only the portion that Apple generated, we would be talking about half or less, at most, about 25,000 metric tons, or 0.05% of the total. However, someone has to take the step of starting to lower that number, of creating awareness among users that all those chargers accumulated over the years make no sense, and get all the other manufacturers to incorporate the new standard and make the reduction of electronic waste one of their goals.

Tesla EV in the fleet of Earth Rides, a Nashvile-based ride share company with an all-Tesla fleet.

Raven Hernandez wasn’t always healthy. Just as she was entering law school in Malibu, California, she found herself “very, very ill” and the view of smog rising from Los Angeles International Airport was simply a sickening sight. 

She decided to learn to heal herself, changing her lifestyle and eating better, which led to her and her husband thinking about trying to make the world a little healthier with fewer carbon emissions. The result? Going back to her hometown of Nashville, Tenn. and last October, launching Earth Rides—a ride share company where every vehicle is a battery electric car.

Raven Hernandez. Found of Nashville ride share company Earth Rides.

“The reason we started it is to make healthy cool again,” said Hernandez in an interview. “We’re removing the emissions out of the transportation equation.”

SAN ANSELMO, CA - FEBRUARY 13: Bottles of Pepsi are displayed on a shelf at a convenience store on ... [+] February 13, 2018 in San Anselmo, California. (Photo by Justin Sullivan/Getty Images)

PepsiC PEP o pledged to reduce greenhouse gas (GHG) emissions across its value chain by more than 40% before 2030 and to reach net-zero by 2040, a decade earlier than called for in the Paris Agreement. This change is expected to avoid more than 26 million metric tons of GHG emissions.

To achieve its goals, PepsiCo wants to focus on sustainable agriculture using low emission fertilisers,  precision technology and regenerative practices to improve soil health, biodiversity and productivity; alongside maximizing efficiency in its supply chain and adopting low or zero emission fuel transport.

Also, the ‘Sustainable from the Start’ program will ensure a product design that mitigates the environmental impact of the packaging, as shown by the recent announcement to reduce the use of virgin plastic and move nine European markets into 100% recycled plastic bottles by 2022.

“There is no vaccine for climate change. But our planet is in crisis,” said Silviu Popovici, CEO of PepsiCo Europe. “PepsiCo’s new climate goal will double our efforts on emission reductions. This impacts both our company-owned businesses but also includes our suppliers and bottlers. Simply put, we all have to do more.”

CES can leave you with side effects like TMI.

CES is like a public viewing of the Batcave or 007’s latest toolkit. It’s incredible to see what kind of powerful and ingenious tools humanity can create. It’s remarkable that humans now have the ability to design a faucet that can dispense exactly 1 tablespoon of water with a voice command. In the words of the internet: “What kind of sorcery is this?”

Well, in terms of impact, it’s not the kind of sorcery that will take the world very far. It needs to be said: a lot of the powerful tools presented are also absurd. Not that CES claims to showcase innovations that bring humanity forward... it’s all in the name after all: Consumer Electronics SHOW. And everyone is, indeed, entertained.

New Ways To Make Waste.

Perhaps nothing is more entertaining than the ultimate first world problem: how to optimize pooping. Last year we saw a toilet that had Alexa built into it and this year we were presented with a toilet that can analyze our droppings. Fortunately people don’t change their toilets all that often, but we still need to ask the question: is all this entertainment worth the waste we are going out and encouraging everyone to create? 

Technology shapes culture. It can change the course of history—just look at the wheel or the internet. And yet, too often, what people call innovation feels a lot more like distraction: shiny new objects with benefits for the near future that keep consumers from looking at the long run. There’s no better way to do it than perpetuating a navel-gazing obsession with individual data, small comforts, and the occasional light show. What is waiting at the long run that everyone’s eyes are being averted from? The check. This is the real “worst of” from CES 2021 (and the others before it). Sooner or later, someone is going to have to pay that bill.

Prince Charles, Prince of Wales wearing a face-mask during a visit to Gloucestershire Vaccination ... [+] Centre. (Photo by Chris Jackson/Getty Images)

The Prince of Wales is asking companies to join "Terra Carta" (Earth charter) for a more sustainable future, aiming to raise £7.3 billion ($10 billion) to invest in nature. After he met with Greta Thunberg in Davos last year, Prince Charles presented his new campaign at the virtual One Planet Summit on Monday.

"If we consider the legacy of our generation, more than 800 years ago, Magna Carta inspired a belief in the fundamental rights and liberties of people,” he wrote in Terra Carta’s presentation. "As we strive to imagine the next 800 years of human progress, the fundamental rights and value of nature must represent a step-change in our 'future of industry' and 'future of economy' approach."

The Prince of Wales, who has been committing to the environment since the 1970s, added on Monday that he “can only encourage, in particular, those in industry and finance to provide practical leadership to this common project, as only they are able to mobilize the innovation, scale and resources that are required to transform our global economy."

Eurasian Resources Group (ERG) was among the first 25 world- leading organizations to support the ‘Terra Carta’. As co-chair of Global Battery Alliance and CEO of ERG, Benedikt Sobotka said "it will catalyze action and commitments across industries, and bring about precisely the type of systemic transition that is needed over the course of this decade and beyond".

EV batteries are loaded with rare minerals like lithium. China is a huge player in this supply ... [+] chain. For some rare earths, China is downright dominant. Their recent slump in exports is partially due to the pandemic, but industry experts see it as China hoarding supply for themselves to drive up prices. (Photo by Paul Hennessy/NurPhoto via Getty Images)

China loves to be in everybody’s strategic supply chains. Rare earths is one of them. These are the minerals, often dug out of mines in Africa, that China controls. They go into your iPhone. They go into the Panasonic battery that powers your Tesla TSLA .

China’s rare earth exports fell to 35,448 tons last year from 46,330 tonnes in 2019, customs data showed on Thursday. China blamed the pandemic for weak demand. The 2020 exports were the lowest since 2015, according to Reuters.

But there may be more to it than the pandemic. For those China watchers, and competitors, looking for tears in the fabric, the slump has a little less to do with the pandemic than Beijing may be letting on.

“We are seeing the unfolding of the Chinese Communist Party’s Made in China 2025 and Belt and Road initiatives,” says Pini Althaus, CEO of USA Rare Earth. Both policies have been strategies for China’s continued dominance as a global manufacturer and exporter of finished goods. This strategy is leading to an increase in local demand for rare earth metals, from lithium to cobalt.

Written by Fred Krupp, president of Environmental Defense Fund.

The Biden administration should put the United States on a path to 100% zero pollution new trucks ... [+] and buses by 2040.

President-elect Biden has made clear that clean transportation is at the heart of his plan to Build Back Better. That’s the right focus — but it can’t be accomplished without a strong emphasis on America’s 13 million heavy duty trucks and buses, which produce significantly more climate pollution than the entire British economy.

To achieve its goal, the Biden administration should put the United States on a path to 100% zero pollution new trucks and buses by 2040 — and commit to quickly setting ambitious pollution standards to drive this transition.

More Jobs and Healthier Communities

2021 Benjamins

Earlier this week, I posted the first part of this column, in which we’re looking at what 2021 might have in store for us. Now here’s the second of my personal predictions for the year ahead, specifically for private markets in sustainability in North America. Remember, this isn’t investment advice, but just a sharing of ideas heading into the new year. And I think 2021 could be a big one for our industry:

8) In 2021, what happens on Wall Street could impact private markets more than usual

Normally, venture capital and private equity are fairly insulated from the short-term vagaries of the stock market. The monthly ups and downs of the S&P 500 do affect the windows of opportunity for venture-backed companies to IPO or to be acquired, but otherwise in normal times private markets and public equities are generally correlated only by the fact that they both are driven by the overall state of the economy — not that one directly drives the other.

And yet for the past year, at least for some observers the stock market seems to be defying gravity, with the NASDAQ NDAQ price-to-sales ratio near all-time highs, for example. This, in the midst of an economy that has clearly been disrupted by a global pandemic. Can it keep going up? Some investors seem to think so, arguing that negative real yields in assets like government bonds could continue to drive capital into stocks and other alternative assets.

GILLETTE, WYOMING--antelope grazing near a gas compressor station.

Wyoming oil and gas boosters succeeded a few weeks ago in pushing through Bureau of Land Management approvals for a massive campaign in the Powder River Basin that could see the drilling and fracking of 5,000 new wells . The region is better known as being home to America’s biggest coal mines — now in severe decline. So it’s no surprise that state were eager to see a project approved before the anti-fracking Biden Administration could block it.

This is no kneejerk project. It was only after seven years of environmental analysis that the Bureau of Land Management (BLM) signed, in late December, a Record of Decision to approve the drilling on federal leases in Converse County in Wyoming.  

The numbers are large: 5,000 wells, 1,500 well pads each large enough to accommodate up to 16 individual wells, plus new infrastructure entailing hundreds of miles of water and gas pipelines, electricity lines, and roads. The duration of the project is to be 10 years.

The BLM has a heavy hand in this because the minerals they manage (which include oil and gas) lie beneath 64% of the total area even though they only manage about 6% of the surface area.