EGEB: Zoom meetings instead of travel are going to hit oil demand hard

In today’s Electrek Green Energy Brief (EGEB):

• Businesses will increasingly opt for Zoom meetings instead of travel, and that will hurt Big Oil.
• Big Oil and Gas companies received at least $72 million in the small business bailout loans.
• Might there be some relief for renewables coming in Congress?

The Electrek Green Energy Brief (EGEB): A daily technical, financial, and political review/analysis of important green energy news.

Zoom over travel — and oil

Jeff Currie, Goldman’s global head of commodities research, told media on Thursday last week that he thought a drop in business travel will permanently hit the oil industry. Currie said [via MarketWatch]:

I think you’re going to lose a good chunk of the jet demand that would have been associated with business travel. Our base case is you lose somewhere around 2 to 3 million barrels per day.

Before we used to have these internal meetings and things of that nature, and I think this is going to be way more Zoom-oriented, other types of substitutes.

He expects a recovery in demand, but oversupply will have to be addressed. He says US oil bounce-back could come as late as the third quarter of 2022.

Electrek’s Take: As mentioned throughout today’s EGEB, we need support for renewables — not an oil recovery, or Big Oil bailouts.

Since when are Big Oil and Gas small businesses?

The March US coronavirus stimulus package, the $2.2 trillion CARES Act, featured the Small Business Association’s Paycheck Protection Program. To reiterate, it was created for small businesses.

Vice reports:

At least 16 drillers, fuel transporters, oil technology firms, and service providers tapped the Small Business Association’s Paycheck Protection Program… the records show. Most of those borrowers are valued at over $10 million on the stock market.

That’s at least $72 million in total for fossil-fuel companies. Treasury Secretary Steven Mnuchin said at the end of April:

Before we forgive these loans, we’ll check every single one over $2 million. So anybody that took the money that shouldn’t have taken the money, one it won’t be forgiven, and two, they may be subject to criminal liability, which is a big deal.

Electrek’s Take: The government ought to be more than a little busy auditing Big Oil and Gas if Mnuchin meant what he said. We’ll see.

Stimulus support for green energy

Support from the current administration for the renewables industry, which makes up around one-fifth of all US power, has been almost nonexistent until just a couple days ago, when, as the Washington Post reports:

In a letter sent to senators Thursday, the Treasury Department said it is considering ways to let solar, wind, and other alternative energy developers continue to qualify for tax incentives critical for paying for the building of wind turbines and solar panel arrays — even if construction is put on hold.

‘Projects that have been waylaid by the economic disruptions of this pandemic can now proceed with more certainty,’ said Charles E. Grassley (R-IA), who led a bipartisan group of six senators in asking the department for the relief for renewables.

Solar and wind developers need to complete construction on projects within four years to receive government incentives. Grassley’s group has asked for an extension to five years. It was positively received.

It’s unsurprising that Grassley, a Republican, led the charge for renewable relief; wind power is now the largest source of electricity in Iowa.

But don’t get too excited. The chances of green energy incentives in the next stimulus bill are minuscule, as the focus will be on front-line workers and state and local governments.

Senate Majority Leader Mitch McConnell (R-KY) doesn’t want any “wish list items” in stimulus packages, and he hasn’t quite figured out, unlike the rest of the world, that addressing coronavirus and reducing pollution and addressing climate change go hand in hand.