Welcome to Grid Brief! Here’s what we’re looking at today: tech is pulling in Texas oil workers, the Biden administration is escalating an energy trade dispute with Mexico, the West pressures South Africa to move away from coal, and more.

Big Tech Poaches Texas Oil Workers

Big Tech is peeling off the Lone Star States’s oil and gas workforce for itself.

Part of what’s driving fossil industry workers into the tech sector is the stigma around “dirty energy.” But the main driver is a lack of job growth in the oil and gas sector. While oil and gas job growth has rebounded a great deal since the pandemic, the overall number of oil patch jobs has dropped over the last six year. In tech, the number of jobs has increased since 2018.

“Labor costs and work scheduling issues could add headwinds to the boom of U.S. LNG projects, which have already faced supply-chain cost inflation and increased competition to secure long-term buyers and financing,” reports Oilprice.com.

Regardless of the world’s hunger for American LNG and the country’s wealth of natural gas, the expected LNG export boom could stall as costs increase and the financing process becomes more difficult.

Biden Admin Escalates Energy Disputes With Mexico

In response to Mexican President Andres Manuel Lopez Obrador’s rollback of reforms to open the Mexican energy sector to foreign firms, the Biden administration has asked US energy companies to ready their affidavits.

“U.S. energy and power companies, such as Chevron and Marathon Petroleum, which sought to expand in Mexico, have complained that they have been denied simple permits and applications in decisions that favored state oil company Petroleos Mexicanos (Pemex) and national power utility Comision Federal de Electricidad (CFE),” reports Reuters. “The United States is likely to seek a dispute panel before the end of the year if talks on the issue continue to stall, and the affidavits represent evidence that would be included in the panel request, the sources said.”

If the panel rules in America’s favor and if Mexico doesn’t correct course, Washington may hit Mexico with billions in retaliatory tariffs.

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The West Pressures South Africa to Quit Coal

South Africa must move towards renewable energy to avoid levies from the European Union.

South Africa relies on coal for 80% of its power.

“The country is suffering from its worst power outages on record because the state-owned utility’s poorly-maintained and aging power stations can’t meet demand,” reports Bloomberg. “The South African central bank has predicted that power cuts, known locally as load shedding, will shave 2 percentage points off the nation’s economic growth this year.”

South Africa argues that the levy may violate World Trade Organization rules.

Conversation Starters

• Trump-era Alaskan oil drilling leases have been cancelled. “The U.S. Interior Department on Wednesday said it would cancel oil and gas leases in a federal wildlife refuge that were bought by an Alaska state development agency in the final days of former President Donald Trump's administration,” reports Reuters. “Trump's Republican administration issued the Alaska Industrial Development and Export Authority (AIDEA) seven leases in the Arctic National Wildlife Refuge a day before the inauguration of President Joe Biden, a Democrat who had pledged to protect the 19.6 million-acre (7.7 million hectares) habitat for polar bears and caribou.”

• Rising crude prices and high fuel prices sap airlines’ third quarter. “Southwest Airlines said its August bookings were at the low end of what it expected, and cut its expectations for revenue per seat mile. United Airlines and Alaska Air Group issued warnings of their own, as higher fuel costs came thanks to tightening supplies. According to an SEC filing by United Airlines, the cost of jet fuel has risen more than 20% since mid-July, with Q3 fuel costs averaging between $2.95 and $3.05 per gallon. This compares to UAL’s cost of between $2.50 and $2.80 per gallon in July,” reports Oilprice.com. “The speedy rise in crude oil prices, and the subsequent jump in jet fuel, left little time for airlines to compensate for the higher costs by revising ticket prices.”

• Moody’s downgrades Ørsted. “Credit rating agency Moody’s Investors Service announced Tuesday that it had downgraded its outlook for Danish energy company Ørsted from stable to negative after the company announced it would be taking impairments of up to $2.3 billion on its U.S. offshore wind portfolio,” reports Utility Dive. “‘Moody’s expects the headwinds that Ørsted is currently facing in the US to lead to its credit metrics being weakly positioned at least until the end of 2025,’ the ratings agency said, adding that an outlook stabilization would ‘likely require more visibility on project delivery and funding of its US offshore wind farms portfolio.’”

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