# Political Climate Shifting Against The Oil And Gas Industry

- Link: https://greenlivingguy.com/2019/12/political-climate-shifting-against-the-oil-and-gas-industry/
- Published: 2019-12-10T01:51:28-05:00
- Author: greenlivingguy

## Introduction

Oil and gas companies have had a tough time over the past year trying to weather
the storm of falling oil prices. But the political and financial winds are moving
in the wrong direction for the industry, raising more “above ground” problems at
a time that they can ill-afford it.

First of all, drilling oil and gas wells requires a lot of money. Similarly, companies
have seen their revenues vanish because of collapsing oil prices. As well as access
to credit is obviously critically important.

### Financial Regulators

As a result, U.S. financial regulators are growing concerned. Especially about a
pile of energy debt that is deteriorating in quality.

So a report from the Federal Deposit Insurance Corporation, the Office of the Comptroller
of the Currency and the Federal Reserve singled out the oil and gas sector. Especially
when it concluded that credit risk was rising across the United States.

![Climate change, global warming](https://i0.wp.com/greenlivingguy.com/wp-content/
uploads/2021/02/chris-leboutillier-TUJud0AWAPI-unsplash.jpg?resize=300%2C200&quality
=52&ssl=1)

Air pollution. Photo by [Chris LeBoutillier](https://unsplash.com/@chrisleboutillier?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText)
on [Unsplash](https://unsplash.com/s/photos/air-pollution?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText)

For example, there is at least $34.2 billion in loans in the banking sector that
have a credit rating suggesting they are “substandard,” “doubtful,” or “loss.” That
figure is up from just $6.9 billion in 2014. Put another way, about 12 percent of
all loans to oil and gas companies are rated “substandard” or worse.

#### Low Oil Prices

Low oil prices are undermining the ability of some companies to pay back their debt.
However, increased oversight from banking regulators could force banks to take corrective
measures, which could mean reducing their exposure to high-risk energy debt. Such
a development does not bode well for oil and gas drillers. Tighter credit conditions–
which could also be impacted by a pending rate increase by the Federal Reserve in
December – will make drilling more expensive.

In the political arena, things are not any better, with last week being a particularly
rough one for the energy sector.

#### NYS Attorney General 

First, the attorney general in New York announced an investigation into ExxonMobil,
for what it sees as evidence that the company lied about the dangers of climate 
change. The probe comes on the heels of reports from InsideClimate News that the
[oil](https://greenlivingguy.com/2007/04/climate-report-poor-will-suffer-most/) 
major’s own scientists knew about the threat of climate change decades ago. But,
according to the report, [ExxonMobil](https://greenlivingguy.com/2005/10/exxon-mobil-posts-quarterly-profit-of-9-9-billion/)
buried the science and instead began funding think tanks and scientific research
to sow doubt about climate change.

[⌊Oil and gas industry hid Information on climate change ⌉⌊Oil and gas industry 
hid Information on climate change ⌉[

Critics of ExxonMobil have called for an investigation by the U.S. Justice Department,
a chorus that includes three democratic presidential candidates and a growing number
of members of Congress. But the NY attorney general investigation has taken the 
scandal to a new level. Att. General Eric T. Schneiderman subpoenaed financial records,
emails and other documents from the Texas-based oil major.

#### President Obama

Finally, President Obama rejected the Keystone XL pipeline on November 6, which 
will only come as news to readers living under a rock. The immediate reaction is
to look at the [effect on oil](https://greenlivingguy.com/2014/10/bp-gulf-oil-spill-effects-of-deepwater-horizon/)
markets; analysis that has been beaten to death over the past seven years. Still,
as of the fourth quarter of 2015, there’s good reason to think that the rejection
hurts [oil sands](https://greenlivingguy.com/2011/04/oil-sands-environmental-monitoring-improvements-ahead/)
producers because of limited pipeline capacity. Even Keystone XL’s proponents agree.
Joe Oliver, the former Canadian minister of natural resources and minister of finance
under Prime Minister Stephen Harper, wrote in the Financial Post about the urgent
need for new pipelines. He says that Canadian oil producers would lose $100 billion
over the next 15 years if no new pipelines are built. The business atmosphere is
likely to get much tougher for Canadian oil now that a new government has promised
a more rigorous environmental review for pipelines.

But the political fallout from Keystone XL is probably more significant than the
immediate effect on oil and gas markets. The project was rejected because of its
impact on greenhouse gas emissions. In addition, a potential precedent for [climate change action](https://greenlivingguy.com/2016/04/obama-administration-urged-to-do-fair-share-to-fight-climate-crisis/).

The world may look back on this point as the first in a series of moves. All in 
which fossil fuel projects must climb an ever steeper political hill. All in terms
of gaining approval. Because even now with President Trump, alternative energy projects
are cheaper and cheaper. So the political establishment is finding that taking on
the energy industry is not as intimidating as it once was.

Bloomberg published a pretty glaring chart. One that sums up how the industry has
for years overestimated its long-term prospects for oil.

Even based on the world’s largest oil and gas company. Let’s not forget the rejection
of the most politicized energy project to date. I mean the “above ground” problems
for the energy industry are growing. That could also complicate the future fortunes
of oil and gas companies.

#### **Then InsideClimateNews reported:**

A comprehensive, peer-reviewed [academic study](http://iopscience.iop.org/article/10.1088/1748-9326/aa815f)
of ExxonMobil’s internal deliberations was conducted. It includes scientific research
and public rhetoric over the decades. This report has confirmed empirically that
the oil giant misled the public. Especially about what it knew about climate change.
More importantly, the risks posed by fossil fuel emissions. That’s what the authors
said on Tuesday.

The paper also confirming the findings of a [2015 investigative series by InsideClimate News](https://insideclimatenews.org/content/Exxon-The-Road-Not-Taken).
A report that was based largely on the company’s internal records. As well as of
independent work published by the _Los Angeles Times_. That reporting ignited investigations
by state attorneys general that are still in litigation.

The authors explicitly rejected Exxon’s main defense, which was to claim that journalists
were “cherry picking” the company’s record and that its positions had always been
in step with the state of the science. The company often said that anyone who read
the full documentary record would see matters Exxon’s way.

#### Conclusion

In conclusion, the Harvard researchers said their task was to accept Exxon’s challenge.
As a result to review the full record. So among the documents they also examined
were dozens cited in ICN’s work. That’s as well as more than 50 scientific papers.
Therefore, Exxon frequently mentioned in its own defense and its issue advertising.

Article Sources: [http://oilprice.com/Energy/Energy-General/Political-Climate-Shifting-Against-The-Oil-And-Gas-Industry.html ](https://oilprice.com/Energy/Energy-General/Political-Climate-Shifting-Against-The-Oil-And-Gas-Industry.html)
_and [Inside Climate News](https://insideclimatenews.org/news/22082017/study-confirms-exxon-misled-public-about-climate-change-authors-say)_

##### **_By Nick Cunningham of Oilprice.com_**

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 greenlivingguy

 The Green Living Guy, Seth Leitman is an independent power producer, a green living
expert, and Editor of the McGraw-Hill, TAB Green Guru Guides. Seth is also an Author,
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