From: Douglas Grandt answerthecall@icloud.

com
Subject:Deliberate with me while the cherries blossom
Date:March 29, 2018 at 4:31 PM
To:Brian Hughes (Senate ENR Ctee-R) Brian_Hughes@energy.senate.gov, David Poyer (Senate ENR Ctee-D)
david_poyer@energy.senate.gov, Michael Pawlowski (Sen. Murkowski) michael_pawlowski@murkowski.senate.gov,
Travis Lumpkin (Sen. Cantwell) Travis_Lumpkin@cantwell.senate.gov
Cc: U. S. Senator Bernie Sanders senator@sanders.senate.gov, Michaeleen Crowell (Sen. Sanders)
Michaeleen_Crowell@sanders.senate.gov, Katie Thomas katie_thomas@sanders.senate.gov

I love D.C. in the Spring Time ,

Plato (428-347 B.C) Aristotle (384-322 B.C.)

Deliberate with me while the cherries blossom.

There is no democracy without true deliberation.
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This is a time of uncertainty and volatility in oil, gas, ExxonMobil and its ilk.
Consider the ongoing shifts in global policy, finance, production, security, etc.
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A. A nexus of forces threatens American social & national security

1. Climate change solutions call for abandoning carbon fuels quickly

2. ExxonMobil (XOM) “financial engineering” has become treacherous
a. Declining earnings due to declining production
b. Stock buy-back to reduce outstanding shares
c. Increasing earnings per share = increasing dividends
d. Declining world oil & gas prices have reduced cash flow
e. Dramatic debt increase for stock buy back & to pay dividends
3. Low oil & gas prices threaten bankruptcies and fuel shortages
a. U.S. fracking and directional/horizontal drilling technology
b. U.S. drilling boom and oil & gas production “renaissance”
i. Bakken Shale (North Dakota)
 ii. Marcellus Shale (Pennsylvania)
iii. Permian Basin (Texas & New Mexico)
c. U.S. boom puts excess supply onto world market
d. Saudi production responded to protect market share
e. World production surplus increased world inventory glut
f. Investor/speculator response has crashed world prices
g. OPEC negative cashflows are depleting national treasuries
h. Saudi/OPEC attempt to reduce production to increase prices
i. Intention is to increase cashflow for national budgets
ii. OPEC nations are not reducing production successfully
iii. Libya, Iran, Iraq, Nigeria production has been increasing
iv. Global inventory glut has increased to record high levels
v. Global oil & gas prices continue to decline toward the $30s
4. Oil drilling and production companies become marginally profitable
a. Debt default, insolvency, bankruptcy—kills oil patch jobs
b. 30% of drilling and service companies vanished in 2016
5. Feedstocks to heavy- and light-crude refineries likely will decline
a. Refineries cease to operate below ~70% of maximum capacity
b. Fuel shortages for freight (food & supplies) and passenger vehicles
c. Export pipelines fall victim to declining shale oil, gas and tarsands
d. Availability of supply drops precipitously from worldwide closures
6. Unprofitable integrated oil majors default on debt, file Chapter 11
a. Failure to increase dividends leads to eroding share price
b. Debt default and insolvency precipitate a market-wide panic
c. Stock markets begin downward spiral, retirement funds fail
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B. My “ask” to avert the threat to American social & national security

1. Advise Senate ENR Chairman Lisa Murkowski of the possible scenario

2. Compel ENR Chairman to prepare for and to take action immediately
a. Educate members of the ENR Committee about oil and gas
i. Worldwide oil & gas production rates (historical and potential)
ii. U.S. conventional and shale oil & gas production rates
iii. U.S. conventional and shale oil & gas boom drilling rig counts
iv. OPEC and non-OPEC agreements relating to production rates
v. U.S. and global oil and gas price history and futures
b. Call XOM and other CEOs and Boards of Directors to testify
i. Historical financial performance measures
• Gross revenues
 • Capital expenditures (CAPEX)
• Reserve replacement history and forecast (by year)
• Earnings
• Dividends
• Stock buyback
• Earnings and dividends per share
• Total debt (outstanding amounts accrued)
• Debt servicing schedule (payments)
• Price/earnings ratio
• Debt/earnings
• Stock buyback and dividends funded by debt
ii. Ground rules for exercising fiduciary duty
iii. How fiduciary duty aligns with National and Public Interest
c. Determine whether XOM and other will act in the National Interest
d. Compel XOM and others to submit plans for worst-case scenarios
e. Deliberate how to hold XOM and others accountable to Americans
f. Create and implement strict policies to protect American’s interests