The pandemic and the recession that followed it in 2020 have ravaged the global economy. The oil and gas sector has felt the sting harder than most. With more people becoming environmentally conscious each year, the future of energy is changing faster than most people would have guessed.

Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) both are targeting lower capital spending plans in 2021 and the years thereafter. Some investors will keep questioning and second-guessing whether the oil and gas giants will be able to keep paying out those ridiculously high dividends in the future.

Chevron has announced that it plans to cut its annual capital spending budget by more than 25% in 2021. What is worse is that Chevron also sees its capital spending being sharply lower through the middle of the decade.

Chevron aims to spend roughly $14 billion in 2021. It is also targeting a capital spending range of $14 billion to $16 billion each year through 2025. To put this into context, Chevron previously targeted a range of $19 billion to $22 billion per year through 2024. That was ahead of the pandemic. Chevron also had said that it planned to return as much as $80 billion to shareholders over the coming years, but that pre-pandemic thinking too.

Chevron is not alone here in a lower capital spending environment. Exxon announced earlier this week that it would cut its annual capital spending by about $5 billion to $10 billion each year out to 2025. Exxon also announced was that it would cut the book value of its assets by up to $20 billion. After all, if the price of oil is lower and is not expected to return to higher levels, it implies that the real value of its proven and probable reserves has to be lower than it had been in the past.

After significant cost savings that Exxon announced in 2020, the company is now on track to reduce spending by $10 billion. The company noted that this is about 30% of capital spending and 15% of cash operating expenses.

All of this will bring up a longer debate about the oil and gas dividends. They are ridiculously high. Chevron’s dividend yield is about 5.9%, and Exxon’s yield is 8.7%.

While Chevron has posted a loss of about $5 billion year to date, it has managed to avoid selling the same massive new debt that Exxon did earlier in the year. Chevron’s balance sheet also is considered much stronger than that of its rival. Moreover, Chevron was allowed to stay in the Dow Jones industrial average while Exxon was booted out of the index.

Chevron’s prior guidance had excluded Noble Energy. The company noted that capital is expected to decrease for a major expansion in Kazakhstan, and it plans to increase investments in the so-called advantaged assets in the Permian basin, other unconventional basins and the Gulf of Mexico.

The oil and gas giants are still overly committed to maintaining their dividends. Investors have some serious doubts about the ability to keep funneling cash out, with energy prices where they are now and where they likely will be in the coming years.

Chevron’s view is that the company is in a different spot than other rivals. Its note about the dividend said this:

We’ve maintained consistent financial priorities starting with our firm commitment to the dividend. We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs and protect our industry-leading balance sheet. And we’ve completed a major acquisition and restructuring that positions our company to deliver higher returns and grow long-term value.

Exxon’s capital spending and focus on high-value assets announced earlier this week also included a note that it had a commitment to cost reduction and that its “reliable” dividend plans remain unchanged. The company noted this:

Recent exploration success and reductions in development costs of strategic investments have further enhanced the value of our industry-leading investment portfolio. Continued emphasis on high-grading the asset base – through exploration, divestment and prioritization of advantaged development opportunities – will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend.

Chevron stock traded below $90 Thursday morning, in a 52-week range of $51.60 to $122.72. Refinitiv’s consensus target price was $96.12.

Exxon Mobil stock was trading below $40. It has a 52-week range of $30.11 to $71.37 and a consensus target price of $43.77.

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