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XOM's Baytown Project Hit by Trump Administration's Grant Rollback
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Key Takeaways
ExxonMobil's Baytown project lost a $332 million grant from the U.S. DoE, amid federal funding rollbacks.
The Trump administration is scaling back Biden-era clean energy awards totaling more than $3.7 billion.
DoE says green energy projects, including XOM's, lacked proper financial review under Biden's administration.
ExxonMobil Corporation (XOM - Free Report) , the U.S. energy supermajor, recently hit a setback in advancing its low-carbon energy solutions following the U.S. Department of Energy’s (DoE) decision to revoke awards granted to 24 green energy projects under the former President Joe Biden’s administration. These awards, holding a value of more than $3.7 billion, included a $332 million grant for ExxonMobil’s low-carbon energy project at its Baytown complex in Texas.
Shifts Under the Trump Administration
President Trump’s administration is currently reviewing publicly funded financial support that was awarded to clean energy and emerging technology projects under the administration of the former President. The Trump administration is attempting to scale back the progress and initiatives introduced under the previous administration. In line with the pro-fossil fuel approach, President Donald Trump is working to maximize the production of oil and gas while rolling back the policies implemented under President Biden aimed at addressing climate change and promoting clean energy & sustainability.
The awards given by the DoE’s Office of Clean Energy Developments were for carbon capture and sequestration (CCS) technology and other developments aimed at decarbonization. The award granted to the Baytown refinery was intended to cut down emissions from the facility by using hydrogen as a replacement for natural gas in the production of ethylene.
The DoE’s office, currently led by Chris Wright, stated that these projects were commercially unviable and would not offer a positive return on taxpayers’ money invested. He also alleged that President Joe Biden’s administration did not conduct a proper financial review of these projects before handing out the awards.
Environmental Advocates Warn of Setbacks
Environmental groups working in the energy landscape criticized these cuts as they could slow down the progress toward clean energy and sustainability. Many believe that this move to axe funding to emerging technology projects was short-sighted and could hinder innovation. Furthermore, this could also reduce the competitiveness of the industry in the future.
According to the Center for Climate and Energy Solutions, the withdrawal of publicly funded awards and grants for these projects could lead to the loss of 25,000 jobs and $4.6 billion in industrial output, as these projects were meant to serve as the pilot initiative for large-scale industrial programs.
Flotek Industriesspecializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans more than 44 states. With a presence in all the major U.S. production basins, ET’s outlook seems positive.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks. This makes RPC an attractive choice for investors seeking steady returns.
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XOM's Baytown Project Hit by Trump Administration's Grant Rollback
Key Takeaways
ExxonMobil Corporation (XOM - Free Report) , the U.S. energy supermajor, recently hit a setback in advancing its low-carbon energy solutions following the U.S. Department of Energy’s (DoE) decision to revoke awards granted to 24 green energy projects under the former President Joe Biden’s administration. These awards, holding a value of more than $3.7 billion, included a $332 million grant for ExxonMobil’s low-carbon energy project at its Baytown complex in Texas.
Shifts Under the Trump Administration
President Trump’s administration is currently reviewing publicly funded financial support that was awarded to clean energy and emerging technology projects under the administration of the former President. The Trump administration is attempting to scale back the progress and initiatives introduced under the previous administration. In line with the pro-fossil fuel approach, President Donald Trump is working to maximize the production of oil and gas while rolling back the policies implemented under President Biden aimed at addressing climate change and promoting clean energy & sustainability.
The awards given by the DoE’s Office of Clean Energy Developments were for carbon capture and sequestration (CCS) technology and other developments aimed at decarbonization. The award granted to the Baytown refinery was intended to cut down emissions from the facility by using hydrogen as a replacement for natural gas in the production of ethylene.
The DoE’s office, currently led by Chris Wright, stated that these projects were commercially unviable and would not offer a positive return on taxpayers’ money invested. He also alleged that President Joe Biden’s administration did not conduct a proper financial review of these projects before handing out the awards.
Environmental Advocates Warn of Setbacks
Environmental groups working in the energy landscape criticized these cuts as they could slow down the progress toward clean energy and sustainability. Many believe that this move to axe funding to emerging technology projects was short-sighted and could hinder innovation. Furthermore, this could also reduce the competitiveness of the industry in the future.
According to the Center for Climate and Energy Solutions, the withdrawal of publicly funded awards and grants for these projects could lead to the loss of 25,000 jobs and $4.6 billion in industrial output, as these projects were meant to serve as the pilot initiative for large-scale industrial programs.
XOM’s Zacks Rank & Key Picks
XOM currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector are Flotek Industries Inc. (FTK - Free Report) , Energy Transfer (ET - Free Report) and RPC, Inc. (RES - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans more than 44 states. With a presence in all the major U.S. production basins, ET’s outlook seems positive.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks. This makes RPC an attractive choice for investors seeking steady returns.