This weekend it is great fun watching the G20 leadership talking about climate change, and how we need to impose the will of the industrialized nations upon the rest of the world. African countries have the right to ask the industrialized countries to offset the cost of renewables much like the United States has to subsidize renewable energy through tax programs.
In CNBC this Sunday by Dan Murhpy he posts:
- Aramco reported a 160% surge in third-quarter net income to $30.4 billion, free cash flow jumps 131% as the oil giant capitalizes on market recovery.
- World’s largest energy company says it is “optimistic that energy demand will remain healthy for the foreseeable future” as global leaders gather for COP26 climate summit.
With the 158% increase in Q3 net income to $30 billion as compared to only $11.8 billion in Q3 2020. These numbers again indicate that Saudi Arabia is on the right path with a long-term plan for a balanced budget, increased E&P activity while having the all-inclusive plan for a smooth migration to renewable energy.
I think most people would agree that climate changes is one of the greatest challenges facing society,’ Aramco Chairman Yasir Al-Rumayan – CNBC – and “Recent energy disruptions around the world are evidence of the need for a stable and inclusive energy transition,”
If Warren Buffett will not invest in a wind farm without tax incentives, one could assume that they would not deliver the lowest kWh and have a good return for the stakeholders. I would ask one more question. Why should the more industrialized countries impose the same financial burdens on less developed economies?
Let’s take it one step further. What can we do to help set the example for world leadership in designing new programs to transfer wealth from the United States to Dispraportanatly Impacted Countries. Some of the suggestions for change and the energy wealth transfer would be establishing a tax credit for energy saved.
The energy saved tax credit could be applied to the United States energy companies that would help all of the countries needing help with the financing of the higher implementation costs of renewables. So let’s take ExxonMobil and Chevron who are striving to be energy companies rather than just oil and gas E&P companies.
Let’s get the U.S. Citizens sacrificing their use of power, and pay forward those savings to the renewable divisions of the oil and gas firms striving to be energy companies. They can then present large windfarm, solar and other projects to African countries at a discount, and have a long-term revenue stream. This self-sacrifice of Americans can then help show the world that we would want to walk a mile in their shoes to help them walk the road to renewables in our shoes.
So let’s start the energy sacrifice challenge and see if the people forcing the migration to renewables without a comprehensive energy plan as suggested by the Saudi’s, really would turn down the heat in their homes this winter. Or would they use fewer lights, not have six TVs, work out rather than sitting on the couch.
As a family member with a 100-year history of work in the oil field, and owning King Operating, one thing is clear. The oil and gas community has not always been perfect in how things were done in the past. But I have seen the change in the industry over the last 10 to 15 years and it has been substantial. ESG is at the forefront and private, small, and large-cap oil companies are all implementing ESG practices. Accountability is getting better in many ways. As an industry, we are not there, but well on the road to solving many of our issues.
One of the things that are important in the King Operating Corporation is returning value to its investors and stakeholders while practicing the best ESG policies that we can. We have a series coming up on some of the key steps to getting Net Zero sooner than too late.
If you have any questions about energy market research, please reach out to our King Operating Research Department at https://bit.ly/3pSka2w
Buckle up, we are in for some interesting times ahead.
Jay R. Young, CEO, King Operating
