Limited use of Fed programs, pipeline shutdowns, and more

As part of its efforts to support financial markets, the Federal Reserve is buying bonds issued by oil-and-gas companies. Some critics say that is a mistake.

Policy analysts pushing for action on climate say the central bank shouldn’t provide any form of support for companies directly involved in producing fossil fuels because climate change could hurt financial stability and economic activity in the long run. The Fed’s mandate is to foster stable prices and maximum job creation, and both of those could be affected in a world where climate change causes disruptions to the economy.

Lending facilities set up by the Federal Reserve and Treasury Department to avoid a coronavirus-related credit crunch have distributed about $14 billion out of $500 billion Congress approved in a March aid bill.

The light activity of the 11 emergency lending facilities was the main topic of a monthly report released Monday by the Congressional Oversight Commission, which was created under the $2 trillion pandemic relief package to oversee the law’s lending programs to distressed businesses, states and municipalities.

Judy Shelton, an unorthodox economist who was an adviser to President Trump’s 2016 campaign, could move one step closer to a seat on the Federal Reserve’s Board of Governors this week.

While her fate is far from guaranteed, the Senate Banking Committee is expected to approve Ms. Shelton’s nomination on Tuesday, putting her one simple-majority vote in the full Senate away from confirmation at a moment when the central bank is employing vast powers that she has a track record of questioning.

Chevron Corp (CVX.N) said on Monday it would buy oil and gas producer Noble Energy Inc (NBL.O) for about $5 billion in stock, the first big energy deal since the coronavirus crisis crushed global fuel demand and sent crude prices to historic lows.

The oil price crash has decimated shares of many energy companies, making them attractive targets for those that have weathered the downturn and have the resources to buy. Chevron ended the first quarter with a cash pile of $8.5 billion after withdrawing a $33 billion bid for Anadarko last year and then being among the first big oil companies to slash spending during the downturn.

The usual post-merger giddiness that abounds after a multibillion-dollar oil deal is noticeably absent in the wake of Chevron Corp.’s $5 billion takeover bid for Noble Energy Inc.

With Chevron agreeing to pay just a 7.5% premium over Noble’s July 17 closing price, the all-stock deal isn’t eliciting much speculation that a new spree of acquisitions is in the offing. That means little prospect of relief for investors in hundreds of struggling drillers in places like West Texas and Oklahoma.

Earlier this month, a federal judge stunned the U.S. energy sector with an order to shut down the Dakota Access pipeline. Environmentalists hailed it as the first time a fully operating system had been forced to close by a legal challenge.

As it turns out, it was actually the second time an oil pipeline was ordered shut in a matter of four days.

Oklahoma's oil industry, already beset by the coronavirus pandemic, now is dealing with the uncertainty stemming from a major Supreme Court decision declaring nearly half of eastern Oklahoma to be Native American land.

With the high court’s ruling, oil and gas drillers in the nation’s fourth largest oil-producing state suddenly find themselves operating within the Muscogee (Creek) Nation and four other tribal reservations.

R.V. Kuhns & Associates Inc, an investment consulting firm that advises on $2.5 trillion in retirement plans and other assets, sent a message of confidence in a Securities and Exchange Commission filing this spring, as COVID-19 wreaked destruction across America’s economy. The firm, it said, stood ready to “to maintain all the services we provide.”

The Portland, Oregon-based company, known as RVK, disclosed in the filing that it had been helped by some extra cash: a forgivable loan of between $2 million and $5 million from the Small Business Administration’s pandemic relief fund.