Chevron agreed to pay $33 billion for Anadarko Petroleum on Friday, broadening its access to the largest oil region in the continental U.S. as President Trump pushes the country to produce enough fuel to meet its own energy needs.
The deal, which offers Anadarko investors $65 a share in cash and stock, expands Chevron’s oil production in the Permian Basin, the oil-rich swath of land in western Texas and southeastern New Mexico that’s 250 miles wide and about 300 miles long, as well as deepwater drilling in the Gulf of Mexico.
“We intend to accelerate activity in Anadarko’s Permian acreage,” Chevron CEO Michael Wirth, who hopes to complete the deal by the end of this year, told investors on Friday. “Getting more out of the Permian sooner is an important value driver.”
For the San Ramon, Calif.-based company, which already controlled 2.2 million acres in the region and is adding 589,000 with the transaction, the driver isn’t “getting bigger in the Permian, it’s about getting better,” Wirth said. That includes the the area’s Delaware Basin, where Anadarko has operations.
Late last year, the U.S. Geological Survey identified an estimated 46 billion barrels of oil in two formations in the Delaware Basin, a development that left then-Interior Secretary Ryan Zinke confident “that American energy dominance is within our grasp.”
The U.S. is the world’s largest oil producer, outpacing both Russia and Saudi Arabia, thanks largely to technological advances that let producers extract oil from shale formations.
Achieving energy independence was one of Trump’s signature campaign promises in 2016, a commitment based on concern that U.S. reliance on oil imports left the country more vulnerable and cost American jobs.
“We’re ending the theft of American prosperity and rebuilding our beloved country,” Trump said when he signed an executive order prompting energy independence just two months after taking office. “We will unlock job-producing natural gas, oil and shale energy.”
Anadarko climbed 33 percent to $62.20 after the sale was announced Friday. Chevron, which has a market value of $232.9 billion, has climbed 10 percent this year to $119.76.
The Supreme Court said Friday it will allow Alabama to follow through with the execution of Christopher Lee Price, a death row inmate convicted of a sword-and-dagger slaying of a pastor in 1991, overriding a federal judge’s halt of the execution.
The 5-4 ruling, however, came just nearly two hours after Price’s death warrant was set to expire, 12 a.m. Friday. Even though the execution was approved by the nation’s highest court, the state of Alabama must now reapply to state courts for a new execution date, a process likely to draw out Price’s execution for several more weeks.
Price, 46, had appealed to federal courts over Alabama’s use of lethal injection, saying he asked the state to use nitrogen gas. The inmate claims that lethal injection could potentially be excruciatingly painful if botched. Both a district judge and the 11th U.S. Circuit Court of Appeals issued a stay on his execution so that the courts could fully consider Price’s demands.
Arguments over Price’s death sentence, the fourth death penalty case this year before the Supreme Court, has only highlighted the divide among the Justices on the issue since Brett Kavanaugh’s appointment to the court consolidated the conservative majority. In all cases, the conservative-leaning justices have favored stopping death row inmates from using legal maneuvers and appeals to delay their death. The liberal-leaning justices have shown a preference to defer to lower courts.
Justice Stephen Breyer wrote a scathing dissent against the ruling, arguing that the courts have a fundamental responsibility to err on the side of caution, particularly in sensitive cases such as the death penalty.
“Should anyone doubt that death sentences in the United States can be carried out in an arbitrary way, let that person review the following circumstances as they have been presented to our Court this evening,” Breyer wrote in the dissent released at 3 a.m. Friday.
“To proceed in this matter in the middle of the night without giving all Members of this Court the opportunity for discussion tomorrow morning, is I believe, unfortunate,” he said.”Alabama will soon subject Price to a death that he alleges will cause him severe pain and needless suffering.”
The majority, however, argued that Price and his legal team waited too long to file the appeal.
“He then waited until February 2019 to file this action and submitted additional evidence today, a few hours before his scheduled execution time,” the majority argued, concurring with the determination of Alabama state officials.
The state of Alabama allowed the use of nitrogen gas as an alternative to lethal injection in its executions in 2018. As stipulated in the law, death row inmates have a 30-day window to petition for the use of nitrogen. State officials argue that Price missed the window when he petitioned for the use of nitrogen.
When it comes to the possibility of a sweeping infrastructure package, it’s all about the money. Despite some gridlock between the White House and Congress, lawmakers are hoping for a bipartisan infrastructure package sometime this year. What that package would look like, and more importantly what the price tag would be, is still very much up for discussion.
At a recent Democratic retreat, House Speaker Nancy Pelosi, D-Calif., signaled hope for the prospects of Republicans and Democrats coming together to embrace some sort of sweeping bipartisan infrastructure package. She said Democrats are looking for up to $2 trillion in funding for the project.
“It has to be $1 trillion. I’d like it to be closer to $2 trillion,” Pelosi said.
That number is high, but lawmakers are exploring funding options, including the possibility of raising the federal gas tax, which sits at 18.4 cents per gallon and hasn’t been raised since 1993. There have been multiple reports that President Trump, behind closed doors, supports raising the federal gas tax by 25 cents, but he has yet to acknowledge those reports publicly.
Transportation Secretary Elaine Chao also said last month that “everything is on the table” when asked about the possibility of increasing the tax. A 25 cent increase is supported by the U.S. Chamber of Commerce. Since 2013, more than two dozen states have raised gas taxes in response to federal inaction on the matter.
As talk of an increase in the gas tax grows, some are pushing back. The conservative group Americans for Prosperity will begin running ads in April in 20 states, urging members of the Senate Finance Committee, the Senate Environment and Public Works Committee, the House Ways and Means Committee, and the House Transportation and Infrastructure Committee not to push for an increase in the tax.
Another idea floated for increasing funding is a “vehicle miles traveled” tax. With that policy, motorists would be taxed based on how far they travel rather than on the gas their cars consume. This is an appealing idea to some, as cars have become increasingly fuel-efficient, further reducing revenue from gas taxes.
Rep. Sam Graves of Missouri, the top Republican on the Transportation and Infrastructure Committee, has signaled support for a vehicle miles traveled tax, while acknowledging full implementation would be a long way off. During testimony before the House Ways and Means Committee on March 6, Graves called the tax “the most promising long-term solution.”
“A VMT has the potential to be a true user-funded program that captures everyone and gets the Highway Trust Fund back to where it needs to be to maintain our network and improve it,” Graves told the committee. However, he also acknowledged some trepidation about the idea, including privacy concerns about the data that would be collected in order to determine a vehicle’s miles traveled.
Joseph Kane, an associate fellow at the Brookings Institution, confirmed to the Washington Examiner that support for an infrastructure package is ultimately going to come down to funding.
“Funding is still the most vexing question for policymakers in Washington and throughout the country,” Kane explained. “A $1 trillion investment has been referenced in several previous proposals, and is likely to keep coming up — as a talking point if nothing else. But for Congress, the White House, and many other agencies and groups to actually act on such a proposal will take a level of coordination not seen up to this point.
“The energy and visibility are there, but there are still serious questions on where this money will come from and how it will be deployed effectively. The next few months will hopefully lead to more details on that front,” Kane added.
Despite lingering questions over funding, Democrats are determined to try to work with the president to build support for a plan. Pelosi said during the March 11 retreat that she would be personally reaching out to Trump on the matter. Having voiced her preference for a price tag between $1 trillion and $2 trillion, she said that she and the president would “talk about what the number would be.”
“Even if it isn’t 100%, there is plenty of area of common ground to move forward,” Pelosi said. “I think the president wants to do that, and I think the president needs to do that.”
Trump made rebuilding U.S. infrastructure a major pillar of his 2016 campaign, and now that special counsel Robert Mueller’s probe has concluded, the White House is beginning to look ahead to other issues.