Pipelines Hit Roadblocks
This week, we talk about why oil-and-gas companies have abandoned recent pipeline projects.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts this week, Dieter Holger and Dave Sebastian. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi Dave! Have you seen that confirmed coronavirus cases in the U.S. rose by more than 150,000 over the July 4th weekend?
Yes, the pandemic has subdued celebrations of the holiday. But there’s also a big environmental story that unfolded this week. Two major oil-and-gas pipelines, the Dakota Access Pipeline and Atlantic Coast Pipeline, are now in jeopardy. The surge in virus cases also damps hopes for the projects. What have you heard?
On Monday, a federal judge ordered the Dakota Access Pipeline, which has been carrying oil since 2017, to shut down by next month pending an environmental impact review. Environmentalists have opposed oil-and-gas pipelines out of climate-change concerns. The Standing Rock Sioux tribe led the movement against the pipeline because they say it threatens sacred sites and drinking water. This is a major setback for operator Energy Transfer and the U.S. shale-drilling industry.
Another blow to the industry came over the weekend when Duke Energy and Dominion Energy abandoned plans for the Atlantic Coast Pipeline, which would have taken gas 600 miles through West Virginia, Virginia and North Carolina and underneath the Appalachian Trail. The decision came after years of delays due to legal and regulatory challenges.
All of this is happening as oil-and-gas companies struggle to recover from a crash in demand stoked by the pandemic. In late June, fracking trailblazer Chesapeake Energy and oil-and-gas driller Lilis Energy both filed for bankruptcy. Still, legendary investor Warren Buffett is seeing dollar signs. His firm Berkshire Hathaway paid $9.7 billion for Dominion Energy’s oil-and-gas processing, storage and transport business. That includes Dominion’s share of the Atlantic Coast Pipeline, which he plans to get back on track.
Have you seen any other interesting moves in the market lately, Dave?
You bet! The pandemic has been a boon for Etsy. The craft site sells everything from gemstones to garden gnomes, but has also emerged as a top seller of today’s most important accessory: the face mask. Its sales have soared, which could help it sell other items that consumers didn’t even know they needed. Even as the broader retail market sunk, Etsy says it sold 12 million masks in April, or 17% of its gross market sales for the month. Its stock has more than doubled so far this year. Look at this chart to get an idea.
What am I looking at? The chart above compares the percentage gains of stocks from online retailers Etsy, Amazon, eBay and Zalando since the beginning of the year.
Anything else on your mind, Dieter?
Yes. Black businesses and workers have been hit especially hard by the economic fallout from the coronavirus crisis and the recovery doesn’t look good. The unemployment disparity between Black and white workers has narrowed in the U.S. in recent years, but Black unemployment actually went up last month even as overall numbers fell. Some Black executives have also shared their experiences of racism for the first time. Kamau Witherspoon, a senior vice president of operations at Target, says: “The education, the degrees, the fact that I’m a veteran—none of it matters. I’m a Black man and someone could perceive me as a threat.”
These are issues we will keep discussing. Now let’s open it up to our readers: What do you think of how oil-and-gas companies are struggling?
Share your thoughts below or catch us on Twitter. Your words could appear in our next edition! Have a great weekend and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardomaitane
Dave Sebastian, Reporter: I'm interested in covering the intersection of business and economic trends—and the people behind them. In my free time, I like to check out dim sum spots in New York, and I can't wait to venture out again after the pandemic. dave.sebastian@wsj.com @depsebastian
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy