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California’s Insurance System Faces Crucial Test as Wildfire Losses Mount

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It’s too soon to know how the Los Angeles fires will change life in California, but it may heavily depend on the answer to a single question: Will a once-obscure insurance program run out of money?That program, the California FAIR Plan, was created by state lawmakers in 1968 to cover people who couldn’t get standard home insurance for various reasons. But as climate change makes wildfires more frequent and intense, causing commercial insurance companies to pull back from the state, the rapidly growing FAIR Plan has become the linchpin holding together California’s increasingly fragile insurance market.Because of the fires that started last week, that linchpin may be about to break, with consequences that would reverberate throughout California’s economy.As of last Friday, the FAIR Plan had just $377 million available to pay claims, according to the office of Senator Alex Padilla, Democrat of California. It’s not yet known how much in claims the plan will face but the total insured losses from the fires so far has been estimated at as much as $30 billion. Because the fires are still burning, that number could grow.Unlike regular insurance companies, the FAIR Plan can’t refuse to cover homes just because they’re in vulnerable areas. As a result, as the risk of wildfires grows, homes deemed too dangerous by major insurers have been piling up on the FAIR Plan’s books.Between 2020 and 2024, the number of homes covered by the plan more than doubled, to almost half a million properties with a value that tripled to about half a trillion dollars.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Plans to Scrap Climate Policies Has Unnerved Green Energy Investors

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    President-elect Donald J. Trump is expected to roll back many of the rules and subsidies that have attracted billions of dollars from the private sector to renewable energy and electric vehicles.Money is the mother’s milk of politics, but the outcome of elections also determines where it flows — and last month’s was especially crucial for the energy industry.Clean investment — including renewable energy as well as the manufacturing of electric vehicles, batteries and solar panels — has boomed since the passage of the 2022 Inflation Reduction Act, championed by President Biden. In the third quarter of 2024, it reached a record $71 billion, according to a tracker maintained by the Rhodium Group, an energy-focused research firm, and M.I.T.The big question looming now on Wall Street: Will President-elect Donald J. Trump, who called Mr. Biden’s policies the “green new scam” during the campaign, pull back enough of those subsidies and regulations to meaningfully change the economics of investing in decarbonization?Market reactions right after the election seemed clear. Clean energy stocks dropped sharply, while shares of oil companies bounced, indicating a divergent view of how the two sectors will fare in the coming years.Near the top of Mr. Trump’s agenda next year is extending his 2017 tax cuts. He will most likely need to reduce spending elsewhere to do that. Clean energy tax credits — worth about $350 billion over just the next three years, according to the Congressional Joint Committee on Taxation — would be a tempting target. The more those subsidies are pared, the more projects would no longer make financial sense.President Biden has championed the 2022 Inflation Reduction Act and other policies designed to address climate change and spur investment in cleaner forms of energy.Kenny Holston/The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Ramps Up Hunt for Uranium to End Reliance on Russia

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    More than 1,400 feet below an Arizona pine forest, miners are blasting tunnels in search of a radioactive element that can be used to make electricity.Two states north, in central Wyoming, drillers have been digging well after well in the desert, where that element — uranium — is buried in layers of sandstone.Uranium mines are ramping up across the West, spurred by rising demand for electricity and federal efforts to cut Russia out of the supply chain for U.S. nuclear fuel.Those twin pressures have helped lift uranium prices to their highest levels in more than 15 years, according to the consulting firm TradeTech, helping to resuscitate mining regions that entered a steep decline toward the end of the Cold War.Pinyon Plain miners working hundreds of feet beneath Kaibab National Forest.Uranium ore held by Matthew Germansen, an assistant mine superintendent at Pinyon Plain.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    As Wildfires Grow Fiercer, Some Companies Look to Rebuild the Tree Supply Chain

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    As forests succumb to ever-fiercer wildfires, the federal government and some adventurous private companies are trying to resuscitate an industry.When it came to wildfires, 2021 was an increasingly common kind of year in Montana: Flames consumed 747,000 acres, an area nearly the size of Long Island.About 2,700 of those acres were on Don Harland’s Sheep Creek Ranch, where ever-drier summers have turned lodgepole pines into matchsticks ready to ignite. After the smoke cleared, Mr. Harland found creeks running black with soot and the ground hardening more with every day that passed.A former timber industry executive, Mr. Harland knew the forest wouldn’t grow back on its own. The land is high and dry, the ground rocky and inhospitable — not like the rainy coastal Northwest, where trees grow thick and fast. Nor did he have the money to carry out a replanting operation, since growing for timber wouldn’t pay for itself; most of the nearby sawmills had shut down long ago anyway. The state government offered a few grants, but nothing on the scale needed to heal the scar.Then a local forester Mr. Harland knew suggested he get in touch with a new company out of Seattle, called Mast. After visiting to scope out the site, Mast’s staff proposed to replant the whole acreage, free, and even pay Mr. Harland a bit at the end. Mast, in turn, was to earn money from companies that wanted to offset their carbon emissions and would put millions of dollars into planting trees that otherwise wouldn’t exist.Mr. Harland said he had his doubts about the carbon-selling part of the plan, but he was impressed with Mast’s operations, so he said yes.Two years later, after seeds had been collected from similar trees on nearby lands, crews of planters came out with bags full of seedlings, rapidly plunking them into the ashen ground. As part of the deal, Mr. Harland signed an agreement to let the trees grow for at least 100 years, so they can keep sucking greenhouse gases out of the air as they mature.Can carbon credits help rebuild a forest? Tell us what you think. More

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    Can Europe Save Forests Without Killing Jobs in Malaysia?

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    The European Union’s upcoming ban on imports linked to deforestation has been hailed as a “gold standard” in climate policy: a meaningful step to protect the world’s forests, which help remove planet-killing greenhouse gases from the atmosphere.The law requires traders to trace the origins of a head-spinning variety of products — beef and books, chocolate and charcoal, lipstick and leather. To the European Union, the mandate, set to take effect next year, is a testament to the bloc’s role as a global leader on climate change.The policy, though, has gotten caught in fierce crosscurrents about how to navigate the economic and political trade-offs demanded by climate change in a world where power is shifting and international institutions are fracturing.Developing countries have expressed outrage — with Malaysia and Indonesia among the most vocal. Together, the two nations supply 85 percent of the world’s palm oil, one of seven critical commodities covered by the European Union’s ban. And they maintain that the law puts their economies at risk.In their eyes, rich, technologically advanced countries — and former colonial powers — are yet again dictating terms and changing the rules of trade when it suits them. “Regulatory imperialism,” Indonesia’s economic minister declared.The view fits with complaints from developing countries that the reigning international order neglects their concerns.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Nature Has Value. Could We Literally Invest in It?

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    “Natural asset companies” would put a market price on improving ecosystems, rather than on destroying them.Picture this: You own a few hundred acres near a growing town that your family has been farming for generations. Turning a profit has gotten harder, and none of your children want to take it over. You don’t want to sell the land; you love the open space, the flora and fauna it hosts. But offers from developers who would turn it into subdivisions or strip malls seem increasingly tempting.One day, a land broker mentions an idea. How about granting a long-term lease to a company that values your property for the same reasons you do: long walks through tall grass, the calls of migrating birds, the way it keeps the air and water clean.It sounds like a scam. Or charity. In fact, it’s an approach backed by hardheaded investors who think nature has an intrinsic value that can provide them with a return down the road — and in the meantime, they would be happy to hold shares of the new company on their balance sheets.Such a company doesn’t yet exist. But the idea has gained traction among environmentalists, money managers and philanthropists who believe that nature won’t be adequately protected unless it is assigned a value in the market — whether or not that asset generates dividends through a monetizable use.The concept almost hit the big time when the Securities and Exchange Commission was considering a proposal from the New York Stock Exchange to list these “natural asset companies” for public trading. But after a wave of fierce opposition from right-wing groups and Republican politicians, and even conservationists wary of Wall Street, in mid-January the exchange pulled the plug.That doesn’t mean natural asset companies are going away; their proponents are working on prototypes in the private markets to build out the model. And even if this concept doesn’t take off, it’s part of a larger movement motivated by the belief that if natural riches are to be preserved, they must have a price.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    At COP28, More Than 20 Nations Pledge to Triple Nuclear Capacity

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    The group, including Britain, France and the United States, said the agreement was critical to meeting nations’ climate commitments.The United States and 21 other countries pledged on Saturday at the United Nations climate summit in Dubai to triple nuclear energy capacity by 2050, saying the revival of nuclear power was critical for cutting carbon emissions to near zero in the coming decades.Proponents of nuclear energy, which supplies 18 percent of electricity in the United States, say it is a clean, safe and reliable complement to wind and solar energy. But a significant hurdle is funding.Last month, a developer of small nuclear reactors in Idaho said it was canceling a project that had been expected to be part of a new wave of power plants. The cost of building the reactors had risen to $9.3 billion from $5.3 billion because of increasing interest rates and inflation.Britain, Canada, France, Ghana, South Korea, Sweden and the United Arab Emirates were among the 22 countries that signed the declaration to triple capacity from 2020 levels.Tripling nuclear energy capacity by 2050, which would also help Europe reduce its dependence on Russia oil and gas, would require significant investment. In advanced economies, which have nearly 70 percent of global nuclear capacity, investments has stalled as construction costs have soared, projects have run over budget and faced delays. On top of cost, another hurdle to expanding nuclear capacity is that plants are slower to build than many other forms of power.Addressing the issue of financing, John Kerry, President Biden’s climate envoy, said that there were “trillions of dollars” available that could be used for investment in nuclear. “We are not making the argument to anybody that this is absolutely going to be the sweeping alternative to every other energy source — no, that’s not what brings us here,” he said. But, he added, the science has shown that “you can’t get to net-zero 2050 without some nuclear.”Nuclear power does not emit carbon, and an International Energy Agency report last year that said nuclear was crucial to helping to reduce carbon emissions in line with the Paris Agreement goals outlined in 2015. President Emmanuel Macron of France said nuclear energy, including small modular reactors, was an “indispensable solution” to efforts to curb climate change. France, Europe’s biggest producer of nuclear power, gets about 70 percent of its own electricity from nuclear stations.Mr. Macron and other leaders, including Prime Minister Ulf Kristersson of Sweden, called on the World Bank and international financial institutions to help finance nuclear projects. Mr. Kristersson said that governments must “assume a role in sharing the financial risks to strengthen the conditions and provide additional incentives for investments in nuclear energy.”While world leaders on Saturday called nuclear the most effective alternative to fossil fuels, some climate activists said nuclear energy was not a panacea.David Tong, a researcher at Oil Change International, said the pledge was divorced from the reality of nuclear energy — that it was too costly and too slow. “It’s a self-serving political pledge that doesn’t reflect the role that nuclear is likely to play in the energy transition, which is menial,” he said. “There is very small growth in nuclear — certainly nothing like tripling.” He said he rejected the stance that there was no pathway to limit global warming to 1.5 degrees Celsius above preindustrial levels, a goal set in the Paris Agreement to avoid the worst effects of global warming, without nuclear. Masayoshi Iyoda, an activist from Japan with 350.org, an international climate action campaign, cited the nuclear disaster at Fukushima in 2011 and said that nuclear power was a dangerous distraction from decarbonization goals. “It is simply too costly, too risky, too undemocratic, and too time-consuming,” he said in a statement.“We already have cheaper, safer, democratic, and faster solutions to the climate crisis, and they are renewable energy and energy efficiency,” Mr. Iyoda said.All but four of the 31 reactors that have begun construction since 2017 were designed by Russia or China, with China poised to become the leading nuclear power producer by 2030, the International Energy Agency said. This year, Germany shut its last three nuclear plants.Nuclear capacity rose in the 1980s, particularly in Europe and North America, but dropped sharply over the subsequent years after accidents at Three Mile Island in Pennsylvania in 1979 and Chernobyl in 1986. New technology and tighter regulations have been put in place since then. Americans are conflicted about nuclear power, but a growing number favor expansion compared with a few years ago, according to a Pew Research Center study published in August. More

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    Shipping Contributes Heavily to Climate Change. Are Green Ships the Solution?

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    On a bright September day on the harbor in Copenhagen, several hundred people gathered to welcome the official arrival of Laura Maersk.Laura was not a visiting European dignitary like many of those in attendance. She was a hulking containership, towering a hundred feet above the crowd, and the most visible evidence to date of an effort by the global shipping industry to mitigate its role in the planet’s warming.The ship, commissioned by the Danish shipping giant Maersk, was designed with a special engine that can burn two types of fuel — either the black, sticky oil that has powered ships for more than a century, or a greener type made from methanol. By switching to green methanol, this single ship will produce 100 fewer tons of greenhouse gas per day, an amount equivalent to the emissions of 8,000 cars.The effect of global shipping on the climate is hard to overstate. Cargo shipping is responsible for nearly 3 percent of global greenhouse gas emissions — producing roughly as much carbon each year as the aviation industry does.Figuring out how to limit those emissions has been tricky. Some ships are turning to an age-old strategy: harnessing the wind to move them. But ships still need a more constant source of energy that is powerful enough to propel them halfway around the world in a single go.Unlike cars and trucks, ships can’t plug in frequently enough to be powered by batteries and the electrical grid: They need a clean fuel that is portable.Ursula von der Leyen, center, the president of the E.U. Commission, stands with the captains of the Laura Maersk as well as company and government officials in Copenhagen in September.Betina Garcia for The New York TimesThe Laura Maersk is the first of its kind to set sail with a green methanol engine and represents a significant step in the industry’s efforts to address its contribution to climate change. The vessel is also a vivid illustration of just how far the global shipping sector has to go. While roughly 125 methanol-burning ships are now on order at global shipyards from Maersk and other companies, that is just a tiny portion of the more than 50,000 cargo ships that ply the oceans today, which deliver 90 percent of the world’s traded goods.The market for green methanol is also in its infancy, and there is no guarantee that the new fuel will be made in sufficient quantities — or at the right price — to power the vast fleet of cargo ships operating worldwide.Shipping is surprisingly efficient: Transporting a good by container ship halfway around the world produces far less climate-warming gas than trucking it across the United States.That’s true in part because of the scale of modern cargo vessels. The biggest container ships today are larger than aircraft carriers. Each one is able to carry more than 20,000 metal containers, which would stretch for 75 miles if placed in a row.That incredible efficiency has lowered the cost of transport and enabled the modern consumer lifestyle, allowing retailers like Amazon, Walmart, Ikea and Home Depot to offer a vast suite of products at a fraction of their historical cost.Yet that easy consumption has come at the price of a warmer and dirtier planet. In addition to affecting the atmosphere, ships burning fossil fuel also spew out pollutants that reduce the life expectancy of the large percentage of the world’s people who live near ports, said Teresa Bui, policy director for climate at Pacific Environment, an environmental organization.Cargo ships at the Port of Los Angeles in 2021 sometimes had to wait days to dock because of congestion, producing huge amounts of pollution.Coley Brown for The New York TimesThat pollution was particularly bad during the Covid-19 pandemic, when supply chain bottlenecks caused ships to pile up outside of the Port of Los Angeles, producing pollution equivalent to nearly 100,000 big rigs per day, she said.“They have been under regulated for decades,” Ms. Bui said of the shipping industry.Some shipping companies have tried to cut emissions in recent years and comply with new global pollution standards by fueling their vessels with liquefied natural gas. Yet environmental groups, and some shipping executives, say that adopting another fossil fuel that contributes to climate change has been a move in the wrong direction.Maersk and other shipping companies now see greener fuels such as methanol, ammonia and hydrogen as the most promising path for the industry. Maersk is trying to cut its carbon emissions to zero by 2040, and is pouring billion of dollars into cleaner fuels, along with other investors. But making the switch — even to methanol, the most commercially viable of those fuels today — is no easy feat.Switching to methanol requires building new ships, or retrofitting old ones, with different engines and fuel storage systems. Global ports must install new infrastructure to fuel the vessels when they dock.Perhaps most crucially, an entire industry still needs to spring up to produce green methanol, which is in demand from airlines and factory owners as well as from shipping carriers.Methanol, which is used to make chemicals and plastics as well as fuel, is typically produced using coal, oil or natural gas. Green methanol can be made in far more environmentally friendly ways by using renewable energy and carbon captured from the atmosphere or siphoned from landfills, cow and pig manure, or other bio waste.By using green methanol, the Laura Maersk could produce 100 fewer tons of greenhouse gas per day, equivalent to the emissions of 8,000 cars.Betina Garcia for The New York TimesCargo ships require fuel sources that are powerful enough to propel them halfway around the world in a single go.Betina Garcia for The New York TimesFlemming Sogaard Christensen, the chief engineer of the Laura Maersk, inside the engineering room. The ship’s engine can burn oil or a greener type of fuel made from methanol.Betina Garcia for The New York TimesBut the world today does not yet produce much green methanol. Maersk has committed to using only sustainably produced methanol, but if other shipping companies end up using methanol fuel made with coal or oil, that will be no better for the environment.Ahmed El-Hoshy, the chief executive of OCI Global, which makes methane from natural gas and greener sources like landfill gas, said companies today were producing “infinitesimally small volumes” of green methanol using renewable energy.“Companies haven’t done much in our industry yet quite frankly,” he said. “It’s all hype.”Fuel producers still need to master the technology to build these projects, he said. And in order to finance them they need buyers who are willing to commit to long-term contracts for green fuel, which can be three to five times as expensive as conventional fuel.Maersk has signed contracts with fuel providers including OCI and European Energy, which is building in Denmark what will be the world’s largest plant producing methanol with renewable electricity. The shipping company already has clients like Amazon and Volvo that are willing to pay more to have their goods transported with green fuels, in order to reduce their own carbon footprints.But many other companies are not yet willing to pay the necessary cost for greener technologies, Mr. El-Hoshy said.The missing piece, said Mr. El-Hoshy and others in the shipping and methanol industries, is regulation that would help level the playing field between companies trying to clean up their emissions and those still burning dirtier fuels.The European Union is ushering in rules that encourage ships to decarbonize, including new subsidies for green fuels and penalties for fossil fuel use. The United States is also spurring new investments in green fuel production and more modern ports through generous domestic spending programs.Maersk has clients like Amazon and Volvo that are willing to pay more to have their goods transported with green fuels, in order to reduce their own carbon footprints.Betina Garcia for The New York TimesBut proponents say the key to a green transition in the shipping sector are global rules that are pending through the International Maritime Organization, the United Nations body that regulates global shipping.The organization has long received heavy criticism for its lagging efforts on climate. This summer, it adopted a more ambitious target: eliminating the global shipping industry’s greenhouse gas emissions “by or around” 2050.To get there, nations have promised to agree on a legally binding way to regulate emissions by the end of 2025, which they would put into effect in 2027.Yet countries have yet to agree on what kind of regulation to use. They are debating whether to adopt a new standard for cleaner fuels, new taxes per ton of greenhouse gas emitted or some kind of mix of tools.Some developing countries, and nations that export low-value goods like farm products, say that strict regulation would raise shipping costs and be economically harmful.Proponents of the regulation — including Maersk — say it’s necessary to avoid penalizing those who are trying to clean up the business, and provide certainty about the industry’s direction.“There has to be an economic mechanism by which you level the playing field so that people are incentivized and not punished for using low-carbon fuels,” said John Butler, the chief executive of the World Shipping Council, which represents container carriers including Maersk.“Then you can invest with some confidence,” he added.A container ship traveling halfway around the world produce less climate-warming gas than a truck traveling across the United States.Betina Garcia for The New York TimesVincent Clerc, the chief executive of Maersk, said the company would continue to adopt new green technologies as they became available.Betina Garcia for The New York TimesStill, Maersk acknowledges that green methanol is unlikely to be the final solution. Experts say that the fuel’s reliance on finite sources of waste, like corn husks and cow manure, mean there will not be enough to power the entire global shipping fleet.In an interview, Vincent Clerc, the chief executive of Maersk, said that the entire maritime sector was unlikely to ever be powered predominantly by methanol. But Maersk had no regrets about moving some of its fleet from fossil fuels to methanol now, then adopting new technologies as they become available, he said.“This marks a real systemic change for this sector,” Mr. Clerc said, gesturing toward the vessel piled high with 20-foot containers in front of him.Eric Leveridge, the climate campaign manager for Pacific Environment, said his group was glad that Maersk and other shipping companies were moving toward more sustainable fuels. But the organization is still concerned that “it is more for optics and that the impact is potentially being exaggerated,” he said.“When it comes down to it, even if there is this investment, there’s still a lot of heavy fuel oil ships on the water,” he said. More

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    Exxon Acquires Pioneer Natural Resources for $60 Billion

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    The acquisition of Pioneer Natural Resources, Exxon’s largest since its merger with Mobil in 1999, increases the company’s presence in the Permian basin in Texas and New Mexico.Exxon Mobil announced on Wednesday that it was acquiring Pioneer Natural Resources for $59.5 billion, doubling down on fossil fuel production even as many global policymakers grow increasingly concerned about climate change and the oil industry’s reluctance to shift to cleaner energy.After decades of investing in projects around the world, the deal would squarely lodge Exxon’s future close to its Houston base, with most of its oil production in Texas and offshore in the Gulf of Mexico and along the coast of Guyana.By concentrating its production close to home, Exxon is effectively betting that U.S. energy policy will not move against fossil fuels in a major way even as the Biden administration encourages automakers to switch to electric vehicles and utilities to make the transition to renewable energy.Exxon executives have said that in addition to producing more fossil fuels, the company is building a new business that will capture carbon dioxide from industrial sites and bury the greenhouse gas in the ground. The technology to do that remains in an early stage and has not been successfully used on a large scale.“The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” said Darren Woods, Exxon’s chief executive.American oil production has reached a record of roughly 13 million barrels a day, around 13 percent of the global market, but growth has slowed in recent years. Despite a wave of consolidation among oil and gas companies, and higher oil prices after the Russian invasion of Ukraine last year, producers are having a more difficult time finding new locations to drill.The Pioneer deal is a sign that it is now easier to acquire an oil producer than to drill for oil in a new location.Exxon, a refining and petrochemical powerhouse, needs a lot more oil and gas to turn into gasoline, diesel, plastics, liquefied natural gas, chemicals and other products. Much of that oil and gas is likely to come from the Permian basin, the most productive U.S. oil and gas field, which straddles Texas and New Mexico and where Pioneer is a major player.Exxon’s $10 billion Golden Pass terminal near the Texas-Louisiana border is scheduled to begin shipping liquefied natural gas to the rest of the world next year. Gas bubbles up with oil from the Permian basin, making the basin all the more valuable for exports as Europe weans itself from Russian gas.The Pioneer deal would be Exxon’s largest acquisition since it bought Mobil in 1999. It is bigger than the company’s ill-fated $30 billion acquisition of XTO Energy, a major natural gas producer, in 2010. Exxon had to write off much of that investment later when natural gas prices collapsed from the high levels that prevailed when it bought XTO.By buying Pioneer now, when the U.S. oil benchmark is around $83 a barrel, Exxon is counting on prices remaining relatively high in the next few years.Exxon has been careful in recent years to invest modestly in new production as it raised its dividends and bought back more of its own stock. Buying Pioneer would add production, a big change in its strategy.The acquisition would make Exxon the dominant player in the Permian basin, far outpacing Chevron, its biggest rival.Pioneer has been a darling of Wall Street investors as it has capitalized on the shale drilling boom. Scott Sheffield, its chief executive, got the company out of Alaska, Africa and offshore fields while buying up shale operations in the Permian at cheap prices. By 2020, it had become one of the biggest American drillers, with relatively low cost production.Mr. Sheffield is retiring at the end of the year. His company has a market value of about $50 billion, roughly one-eighth the size of Exxon. Many of its oil and gas fields are still untapped.“While the company has a solid succession plan in place, oil and gas markets have been volatile and the capital available to traditional oil and gas companies in the U.S. has been limited,” said Peter McNally, an analyst at Third Bridge, a research and analytics firm.The deal would be Exxon’s first major acquisition since Mr. Darren Woods became chief executive in 2017, replacing Rex Tillerson, who went on to become secretary of state.Exxon, which reported a record profit of $56 billion last year, is flush with cash that it could invest in Pioneer’s untapped fields. Since Exxon is also a large producer in the Permian, analysts say the merger would bring greater efficiencies in operations of both companies.This is just the latest in a series of mergers and acquisitions in the oil industry in recent years. But it has been consolidating. Occidental Petroleum acquired Anadarko Petroleum four years ago for nearly $40 billion, a deal that made Occidental a major competitor to Exxon and Chevron in the Permian basin. Pioneer spent more than $10 billion buying two other Permian producers, Parsley Energy and DoublePoint Energy, in 2021.Exxon bought Denbury, a Texas energy company that owns pipelines that can transport carbon dioxide, for $4.9 billion this year. More