Net Zero

1. Oil bonuses at risk
2. Mineral deal locked in
3. Climate jobs on the line
4. Rising climate risk
5. India’s mineral push

Deep-sea miners are feeling optimistic. Equinor is not.

Trump’s trade war threatens oil investors

Quarterly earnings reports from oil and gas companies suggest the industry is already feeling the impact of US President Donald Trump’s trade wars, pointing to headaches ahead for its shareholders.

As much as Trump and his team are rhetorical boosters of Big Oil — “If I’m not president, you’re f*cked,” he reportedly told execs at Mar-a-Lago after the election — his unpredictable deployment of tariffs and enticement of OPEC countries to drill more have weighed down the oil price. Crude slid below $60 per barrel in the US this week, its lowest point since the pandemic, pushing the boundary of where many oil companies can turn a profit. It’s too soon to see the full toll that dip has had on the industry, since price falls began in earnest after the end of the first quarter. But red flags are going up.

Last week, US independent shale driller Matador became the first to admit it would need to shut down a rig because of dipping prices. European majors have also reported alarming results: Profits at Eni fell about 11% from the first quarter a year ago, by about 18% at TotalEnergies, and by 48% at BP. Chevron, ExxonMobil, and Shell all report tomorrow.

Booms and busts are as old as the oil industry itself: In 2023 most of these companies were posting record profits. And specialist energy investors seem willing to be patient, or even to use the oil price downturn to pick up undervalued stocks. The more interesting question is whether oil companies will be able to maintain their other shareholder benefits — share buybacks and dividend payments — which are a vital tool to keep investors interested in a sector that is prone to downturns and unlikely to see substantial growth ever again.

Mineral deal locked in

After weeks of haggling, Washington and Kyiv signed a deal to jointly manage revenue from Ukraine’s natural resources, which could be a step in rebuilding relations between the countries’ leaders and encouraging more US military aid. The agreement essentially creates a circular investment fund: Half of royalties from future production of critical minerals, oil, and gas in Ukraine will go into the fund, which will be equally controlled by both countries, and which will then invest into new resource development projects in Ukraine.

It doesn’t include any specific security guarantees for Kyiv. But to the extent that it streamlines access to investment opportunities for US firms, it would create a greater incentive for Washington to support Ukraine’s military defense. Some proceeds from the fund’s investments could also eventually be returned to the US Treasury.

In practice, the most immediate tangible outcome of the deal is a PR win for US President Donald Trump. Many of Ukraine’s richest natural resource deposits — the actual extent and value of which are highly disputed — are either under occupied territory or close to the front line, making peace a prerequisite for their development, rather than the other way around. And Ukraine’s severe energy deficit, caused by the occupation and destruction of power plants by Russia, also remains a major impediment to new mining projects.

Climate jobs on the line

More than 60,000 US jobs in clean energy have been delayed, threatened, or eliminated entirely since US President Donald Trump’s reelection in November, putting the country’s manufacturing renaissance at risk, according to a new analysis.

A further 399,000 jobs — the bulk of which are in GOP-controlled districts — could be on the chopping block if congressional Republicans follow through with their legislative agenda to repeal or gut Biden-era tax credits, with the future of manufacturing “ceded to China yet again,” climate advocacy group Climate Power warned in its April Clean Energy Jobs report. Around 10% of those jobs are in Georgia, one of the leading beneficiaries of IRA-related incentives: “If [Republican members of Congress] want to proceed with blind partisan loyalty and harm Georgia’s economy, then they have that choice, but it’s a choice that will harm the state, and they’ll be punished by voter support,” Sen. Jon Ossoff (D-GA) told reporters Wednesday. The Rhodium Group and MIT’s Center for Energy and Environmental Policy Research published research last week showing six projects worth $6.2 billion in investment have been canceled since January.

— Mizy Clifton

Rising climate risk

Projected value of assets exposed to high climate risk by 2050 that are owned by companies listed on the world’s five biggest stock exchanges, up from $34.8 billion today. Researchers at the risk consultancy Verisk Maplecroft calculated the value of physical assets owned by companies in the S&P 500, DAX, CAC 40, Nikkei 225, and FTSE 100 that are located in climate-vulnerable countries like India, Nigeria, Kenya, Bangladesh, and Pakistan.

Because climate impacts in those countries will worsen over time, even as their growing economies draw increased foreign investment, companies owning assets there will see much greater exposure to climate risk by midcentury. “Investors working with these companies need to look for data that’s more granular across these assets, rather than the obfuscated, high-level, aggregated climate data that can hide these vulnerabilities in a company’s portfolio,” Franca Wolf, the firm’s principal markets analyst, said.

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India’s mineral push

India is ramping up its Latin America presence to tap the region’s vast mineral reserves, with Prime Minister Narendra Modi hailing a “new energy” in relations with the region.

New Delhi’s green targets have fed a push for greater access to key minerals such as copper and lithium, used in renewables technologies, with Chile a particular target: Modi recently met with Chile’s leader and hosted a meeting of Latin American businesses, and India has been expanding its continental embassy network in recent years. The moves reflect a growing awareness that securing access to critical minerals is “a strategic imperative,” an expert said. However, New Delhi will face competition from Beijing and Washington, the biggest trading partners for almost all the region.

New Energy

• Norwegian energy group Equinor is considering suing the Trump administration for halting its $4.5 billion wind farm off the New York coast.

• Blackouts on the Iberian peninsula earlier this week demonstrate that investments in power storage and grid upgrades need to go hand in hand with expanding renewables generation.

Fossil Fuels

• China’s 125% tariffs on US LNG could see other suppliers such as Russia, Qatar, and Iran step in to meet demand, potentially diminishing Washington’s ability to influence Beijing.

Finance

• Schneider Electric this week announced it had enabled $1.7 billion in tax credit transfers since late 2023.
• Homeowners insurance has skyrocketed 24% on average across the US, with the Consumer Federation of America citing climate change as a factor.

Tech

• US deployment of carbon capture and storage is under threat from inflation and the uncertainty of future federal support.
• Green hydrogen startups are rushing to Texas.

EVs

• Tesla’s board denied a report it was seeking to replace CEO Elon Musk in response to plunging sales, saying it was “highly confident” in the tech billionaire.

Personnel

• Former Biden administration official and solar pioneer Jigar Shah is launching an advisory firm aimed at helping green startups grow and sell themselves.

Gerard Barron, CEO of The Metals Company.

Elon Musk plans to remain a presence in Washington, even if he’ll be spending a bit less time on the Department of Government Efficiency’s work — which he thinks will continue as long as President Donald Trump wants it to.

After becoming a fixture of Trump’s White House during its first 100 days, presiding over broad federal cuts and firings that thrilled Republicans while sparking public protests that at times shifted into vandalism against his Tesla car company — the face of DOGE is now planning to directly manage it less, saying it’s gotten into a “rhythm,” Semafor’s Shelby Talcott wrote.