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“Oil spending is falling around the world, but the most dramatic cuts are in North America,” says Dan Pratt, executive director of IHS Herold Inc., a London-based energy analytics firm. North American energy firms plan to cut spending in 2020 by 36%, he says.

ExxonMobil said April 7 that it is reducing its 2020 capital spending by 30% in response to low commodity prices resulting from oil and gas sector oversupply and demand weakness. “We haven’t seen anything like what we’re experiencing today,” CEO Darren Woods said in a conference call. Capital investment is predicted at about $23 billion, down from $33 billion previously expected this year.

The company planned to spend $30 billion to $35 billion in the next several years, but Woods said 2021 spending is set to decline. While oil demand is expected to drop up to 30%, he said he is confident in the longer term that trade, transportation and manufacturing will recover. “The economy will rebound despite the shocks from the pandemic,” he said. Most ExxonMobil cuts will be in the southwest U.S. Permian Basin, but the company expects to meet its projected $20-billion multiyear investment in U.S. Gulf Coast manufacturing facilities outlined in a 2017 initiative, Woods said.

ExxonMobil’s 30% capacity-expansion cut exceeds those of BP, Chevron, Royal Dutch Shell and Saudi Aramco, which have made 20% to 25% reductions, says Bloomberg News. Royal Dutch Shell announced its exit March 30 from the joint venture development of a Lake Charles, La., LNG project due to market conditions, with Dallas-based partner Energy Transfer set to take over. Shell said it will continue to support Energy Transfer in bidding for the EPC contract before a phased handover of the project’s remaining activities, but the latter said it could cut project size by one-third.

Power generation is set to fall 3% this year, including a 20% drop from coal-fired sources, says the U.S. Energy Dept.’s Energy Information Agency. Supply chain disruption and other COVID-19 impacts could delay completion of a number of new generation plants, says agency economist Tyler Hodge. EIA’s short-term energy outlook, released April 7, assumes that 39% of total U.S. generating capacity set to come on line between April and September will be delayed or canceled.

The assumption is based on the amount of total capacity set to come on line, not any specific project, Hodge told ENR. The outlook “reflects a high level of uncertainty … regarding COVID-19 and its associated impacts,” he said. Paul Patterson, an energy analyst at Glenrock Associates, says longer-term economic impact is the unknown. “We can expect delays and capacity expansion plans can be altered, but the real issue is whether there will be cancellations. A deep recession would derail plants,” he says. Solar and wind energy trade groups are monitoring virus effects on their respective workforces and global supply chains.

In other sectors, S&P Global Ratings noted the likelihood of low-to-no revenue in lodging and leisure, which is causing cash runs, possibility of an extended prolonged loss and only a 10% to 20% recovery in 2021. Even the health care sector is not immune from a pandemic financial hit. Fitch Ratings on April 9 placed 15 not-for-profit hospital and health care systems on “rating watch negative,” affecting $3.7 billion of total outstanding debt. David Tesher, S&P Global Ratings managing director for credit research, predicted the end of the COVID-19 business turmoil is “fraught with variables.”