Trump Asked to Make Good on Vow to Save Coal

ARIZONA PLANT POSES FIRST TEST OF DONALD TRUMP’S SUPPORT FOR COAL SECTOR

Workers affected by the closure of a coal-burning power plant have asked President Donald Trump to intervene – a potential first test for the administration’s vow to help the industry, reports The Wall Street Journal.

The majority owners of one of the biggest coal plants in the country, the Navajo Generating Station in Page, Ariz., have said the plant will be shuttered after 2019 because it is being undercut by cheaper natural-gas-fired electricity.

Workers represented by Russell Begaye, the president of the Navajo Nation—whose reservation is home to the plant and an adjoining coal mine—stand to lose 800 jobs. They have called on Mr. Trump to act on his campaign-trail promise to save the ailing U.S. coal industry and stop the latest plant closure.

Mr. Begaye said he has asked the White House to throw the plant a lifeline including a tax break or subsidy to help it stay open until at least 2030.

A spokesman for the Department of the Interior’s Bureau of Reclamation, which is a minority owner of the plant, said it was organizing a meeting next month to find a way to keep the plant open.

A White House spokeswoman didn’t have an immediate comment on the meetings.

DEFENSE SECRETARY MATTIS SAYS U.S. ISN’T IN IRAQ TO TAKE ITS OIL

On his first trip to Iraq as Defense Secretary, Jim Mattis said the U.S. isn’t going to take the Middle Eastern country’s oil, writes Gordon Lubold.

Mr. Mattis’ comments are at odds with remarks made repeatedly by President Trump, who has said that the U.S. should have taken Iraq’s oil.

ENERGY COMPANIES FACE CRUDE REALITY: BETTER TO LEAVE IT IN THE GROUND

Exxon Mobil Corp. is expected to announce that a sizeable amount of its oil reserves are no longer profitable to extract amid low crude prices and stricter regulations on climate change.

The energy giant has said that as many as 3.6 billion barrels of oil that it planned to produce in Canada will be left in the ground unless crude prices rise. The move is in response to U.S. regulations that require companies to take oil reserves off their books if they aren’t profitable at existing prices.

During the past decade, Exxon and other giant oil companies have spent billions of dollars in Canada to replenish their sources of supply.

But now a supply glut that led to a price collapse in 2014 and an anemic recovery have left energy producers wondering if demand for oil will reach a peak and decline in the coming decades.

“Once considered a safe bet, Canada’s vast deposits are emerging as a prominent case of reserves being stranded by a combination of high costs, low prices and tough new environmental rules,” the Journal reports.

HURDLES MOUNT FOR SAUDI ARAMCO’S IPO

State-owned Saudi Arabian Oil Co, the world’s single largest crude producer, is set to be listed next year but its complicated structure and finances are slowing down the process, report Summer Said, Maureen Farrell and Justin Scheck.

The initial public offering for Saudi Aramco, estimated to be valued at more than $2 trillion when it goes public, may be pushed back until late next year or even 2019 amid difficulties separating the firm’s finances from those of the government.

Basic elements of Aramco’s structure including financial disclosures remain up in the air. “Aramco and the government need to determine how to account for various subsidies and how the newly public company would pay taxes,” the Journal reports.

Currently, about 90% of Aramco’s profit goes to the Saudi government and the rest is reinvested in the company.

HOW BILL WALTON’S SON MADE $1 BILLION IN THE OIL PATCH

Nate Walton, the son of a former professional basketball player, managed to score one of the most successful shale deals in recent years through flexible investing, writes Ryan Dezember.

Last year during the downturn in oil, Mr. Walton, a partner in the private-equity group at Ares Management, led his firm to invest in Clayton Williams Energy Inc., a Texas-based oil producer.

Last month Noble Energy Inc. agreed to buy Clayton Williams for $2.7 billion and now Mr. Walton’s firm is in line to reap more than $1 billion in profit.

“Mr. Walton said Ares’s flexibility to buy corporate debt, equity or sometimes both has enabled the firm to tailor deals to entice energy executives into partnerships and boost return,” writes Mr. Dezember.

Mr. Walton is the son of Bill Walton, a former star basketball player for UCLA and the NBA in the 1970s.

SHELL SEES NO GLUT OF LIQUEFIED NATURAL GAS AS DEMAND RISES

Royal Dutch Shell PLC said there is no evidence of a glut in liquefied natural gas supply, dismissing concerns that a wave of new gas projects coming online could clog up the market.

Shell has doubled down on LNG, after its acquisition of BG Group last year. “The deal was a roughly $50 billion bet, staking the company’s future on natural gas and huge deep-water prospects offshore Brazil, “ writes Sarah Kent.

MARKETS

Oil prices gained on Tuesday as investors held on to their bullish positions, betting on supply to tighten as major producers cut their output.

Trading activity has been muted in the early sessions of this week, according to Olivier Jakob from the Switzerland-based Petromatrix, and this is reflected in the timid price action of Monday.

Last week, hedge funds and other big money managers increased their net long position—a bet on rising prices—in Brent crude oil to the highest level since records started in 2011, the Intercontinental Exchange Inc. said Monday. This mirrors the U.S., where funds have raised their bullish bets to a fresh record.