The oil and gas industry is in a state of free fall. With prices for both commodities lower then they have been in years, oil companies are cutting jobs and many major drilling projects across the United States have ground to a virtual standstill.
Unlike the US, countries around the globe whose political apparatuses are not heavily funded by the fossil fuel industry are actively moving away from fossil fuels. With the mounting and unarguable impacts of anthropogenic climate disruption escalating daily, the oil and gas industry now resembles embattled dinosaurs desperately groping for their survival.
Meanwhile, vocal protest against oil and gas companies is only growing.
Recently, a coalition of 165 organizations – including environmental, faith and political groups and businesses – signed a massive petition calling on the Government Accountability Office to launch a full-scale investigation of the Federal Energy Regulatory Commission (FERC), the agency that, while it has never declined a permit request by a company to build a gas pipeline, theoretically regulates them.
Even in oil and gas friendly Texas, there is a growing outcry about the egregious abuse of landowners rights’ carried out by the company behind a new gas pipeline.
That pipeline, the Trans-Pecos high-pressure gas pipeline project that will transport natural gas from Far West Texas into Mexico, is moving forward nonetheless.
The proposed 143-mile Trans-Pecos pipeline would deliver up to 1.4 billion cubic feet of Permian Basin natural gas into Mexico each day. The pipeline consortium is led by the richest man in Mexico, Carlos Slim, and Energy Transfer Partners (ETP), headed by CEO Kelcy Warren, who Forbes says is worth $6.7 billion, and is being built for the Mexican Federal Electricity Commission.
ETP, however, is on rocky terrain financially: It recently experienced its largest one-day drop in stock price since 2006 when its value lost 15 percent and reached a seven-year low.
“The [industry] downturn has led investors to worry that pipeline stocks can’t raise dividends, finance growth, and pay their debt after values collapsed and spending outpaced revenue,” The Dallas Morning News reports.
How can the CEO of a company that recently lost 15 percent of its total value in a single day – and dropped to its lowest value in a decade – think this new pipeline will turn a major profit given that the gas industry is experiencing such a dramatic downturn in the United States?
The answer lies in Japan, where wholesale gas prices are roughly 10 times higher than they are in the United States.