Michael Ash of PERI discusses the “Toxic 100” index, which ranks the top 100 corporations in the US, including the U.S. government, according to the degree to which they pollute the air, the water, and contribute to greenhouse gases. The index assists in divestment campaigns and in identifying opportunities for green growth MORE
In early 2018 when major financial publications like the Wall Street Journal were predicting a bright and profitable future for the fracking industry, DeSmog began a series detailing the failing business model of fracking shale deposits for oil and gas in America.
Over a year later, the fracking industry is having to reckon with many of the issues DeSmog highlighted, in addition to one new issue — investors are finally giving up on the industry.
Billionaire oil CEO Harold Hamm — who has been touted as a “Shale King” — made comments this week reflecting how weak investment interest is in oil and gas fracking, going so far as to say that it wasn’t worth being a publicly traded company. “In today’s market, we don’t see a lot of value in it,” he said on his company’s earnings call.
A similar sentiment has appeared in The Financial Post, which this week reported how “unloved” by investors the Canadian tar sands industry — which DeSmog also has highlighted as a financial disaster — currently is.
“General investors are saying, ‘To heck with energy,’” Jennifer Rowland, an oil and gas analyst for Edward Jones, told The Financial Post.
After years of patience as the fracking and tar sands industries continued to pile up losses, investors are understandably tired of losing money. MORE
New research, led by Mark Lewis, our Global Head of our Sustainability Research, shows that oil needs a long-term breakeven price of USD 10 – 20/barrel to remain competitive in mobility.
- The economics of renewables are impossible for oil to compete with when looked at over the cycle
- Renewable electricity has a short-run marginal cost of zero, is cleaner environmentally, could readily replace up to 40% of global oil demand
- The oil industry should remember the fate of utilities
In a white paper, published this week, Mark introduces the concept of the Energy Return on Capital Invested (EROCI), focusing on the energy return on a USD 100 bn outlay on oil and renewables where the energy is being used to power cars and other light-duty vehicles (LDVs).
For a given capital outlay on oil and renewables, how much useful energy at the wheel do we get?
Our analysis indicates that for the same capital outlay today, new wind and solar-energy projects in tandem with battery electric vehicles will produce 6x – 7x more useful energy at the wheels than will oil at USD 60/barrel for gasoline powered light-duty vehicles, and 3x – 4x more than will oil at USD 60/barrel for light-duty vehicles running on diesel.
Accordingly, the research calculates that the long-term break-even oil price for gasoline to remain competitive as a source of mobility is USD 9 – 10/barrel, and for diesel USD 17 – 19/barrel.
Oil has a massive flow-rate advantage, but this is time limited
The oil industry is so massive that the amounts available for purchase on the spot market can provide very large and effectively instantaneous flows of energy. By contrast, new wind and solar projects deliver their energy over a 25-year operating life. Nonetheless, we think the economics of renewables are impossible for oil to compete with when looked at over the cycle. MORE
The Impossible Burger, a vegan burger with heme harvested from soybean roots to look, feel, and taste like beef, as prepared by Hell’s Kitchen in Downtown Minneapolis, MN. Photo via Tony Webster under Creative Commons Attribution 2.0 Generic license
In one of those interchangeable American office parks, where oceans of blacktop pool around lowrise grey-on-grey buildings, a gaggle of kids in white lab coats gathered to apply temporary burger tattoos, conduct mini science experiments, and await the arrival of a radically transformed food system.
The backs of those lab coats were decorated with the initials IF standing for “Impossible Foods,” the eight-year-old startup working to replace all animal meat with its plant-based alternatives.
The kids went from table to table under big white tents in the parking lot behind company headquarters. There was a station where they could try and guess the flavor of jelly beans while wearing nose plugs (it’s almost impossible), and another where they could make little wind turbines out of paper. The vibe was more grade-school science fair than Silicon Valley bacchanal, despite the fact that the company is flush with cash.
Investors are clawing and shoving for the opportunity to throw money at young alternative-meat companies. Impossible just raised $300 million in its fifth time going back to the money well. Another veggie-burger maker, Beyond Meat, saw its stock price increase more than 600 percent since it first went on sale in May. Del Taco, Carl’s Jr., and T.G.I. Friday’s are selling Beyond Meat products, while White Castle, Burger King, and Qdoba are offering Impossible burgers — and the company can’t make enough to keep up with demand. Things seem a little frothy: Is this a faux-meat bubble?
Impossible Foods’ kid-centric event was perfectly crafted to quash fears that America’s enthusiasm for its burgers is just a flash in the pan. The company organized the party to herald a set of survey findings showing that young people are more likely than past generations to seek out meat alternatives. The report attempts to dispel any bubble fears in the very first line: “Plant-based meat is the hottest trend of 2019 — but it isn’t a passing fad.” MORE
AFP / Getty Images
CARTEL IT LIKE IT IS
What’s one of the world’s most powerful cartel’s afraid of? A bunch of meddling kids.
Climate activists and their “unscientific” claims are “perhaps the greatest threat to our industry going forward,” said Mohammed Barkindo, the secretary general of OPEC (the cartel representing 14 countries with 80 percent of the world’s oil reserves) earlier this week.
He might have been talking about protesters more broadly, but the rest of his statement suggests that young people are being particularly irksome. Barkindo said some of his colleague’s children are asking them about the future because “they see their peers on the streets campaigning against this industry.” (I guess the birds and the bees isn’t the most uncomfortable conversation parents are having with their kids in OPEC households.)
This is, of course, heartening news for climate activists. Greta Thunberg, the 16-year-old Swede famous for starting a movement of youth strikes calling for climate action, thanked OPEC for the compliment.
As for climate activists’ “unscientific claims,” it’s unclear if Barkindo had a particular statement in mind, but the science pretty unequivocally supports demands for urgent change. Global emissions need to be drastically cut by 2050 to avoid more than 1.5 degrees C of warming, and to do that we need to use way less fossil fuels.
It’s not just public opinion that’s turning against the fossil fuel industry — insurance companies and investors are increasingly opting to put their money elsewhere. But that’s not the fault of some upstart kids: It’s because science and common sense are showing fossil fuels are a bad investment, especially in the long run. Recent figures estimate that climate change could cost the world economy as much as $69 trillion by 2100. MORE
Doug Ford can feel the heat.
He can also sense the thirst. For he can see a hunger in the land for beer in a corner store near you.
Now, the premier who proclaimed himself leader of “Ontario’s First Government For the People” has a revolutionary plan. A Five Year Plan.
It begins with a bit of Bolshevism — by blowing the Beer Store out of the water.
Ford’s Tories will pass a law this month cancelling a signed contract between the crown and the Beer Store’s owners — condemned as a “sweetheart deal” with foreign-owned multinationals. His Progressive Conservative government shall pass legislation for cancellation without compensation, using its supreme powers to absolve Ontario of any liability in a court of law.
Confiscatory legislation invites litigation, so we may yet pay the price — estimated at hundreds of millions of dollars in damages. But the revolution demands sacrifices. MORE
“Our strong concern is that terminating an existing contract, and doing so without compensation — something we understand is proposed in the case of the ‘Bringing Choice and Fairness to the People Act’ — risks sending a negative signal to U.S. and other international investors about the business and investment climate in Ontario.”
A series of new reports shows how climate change is intertwined with the world’s worsening health, and suggests changes in the global food production system.
New reports describe how food choices and farming practices can exacerbate climate change, and they argue for changes and even an international treaty. Investors are also calling for greenhouse gas reductions from the fast-food industry. Credit: Cate Gillon/Getty Images
A scientific study published Monday also shows how “food production shocks” linked to climate change have been rising globally, putting food security at risk. The researchers identified nearly 230 food production shocks, in 134 countries, from 1961 to 2013, and said the frequency of crop production shocks driven by extreme weather had been increasing steadily. Food shocks threaten to destabilize the global food supply and drive up global hunger rates, which have started to tick up in recent years.
“Land-based crop and livestock production are particularly vulnerable to extreme weather events such as drought, which are expected to become more frequent and intense with climate change,” said Richard Cottrell of the University of Tasmania, the report’s lead author.
“The dominant diets that the world has been producing and eating for the past 50 years are no longer nutritionally optimal, are a major contributor to climate change, and are accelerating erosion of natural biodiversity.”
The drumbeat for change in food and nutrition gained volume this month with the release of a detailed plan by an international commission organized by the prestigious medical journal The Lancet. The plan urges a major overhaul in food production and diets, or what one of the report’s authors called “nothing less than a new global agricultural revolution.” MORE
Prime Minister Justin Trudeau speaks to reporters at a news conference in Ottawa on June 20, 2018. File photo by Alex Tétreault
Prime Minister Justin Trudeau is relying on an aggressive and outdated Western Canadian crude oil supply outlook to re-approve Trans Mountain’s expansion. Trudeau’s outlook seriously contradicts the supply forecast oilsands producers support as commercially viable.
The outlook Trudeau is clinging to was prepared in early 2015 when Stephen Harper was still prime minister. It predicts that by 2035 there will be an increase in oilsands supply of more than two million barrels a day from its current level of three million barrels a day, taking total oilsands supply to five million barrels a day. Trudeau expects an increase in oilsands supply of almost 70 per cent in little more than 15 years. This is a future that no longer exists.
Ottawa seems not to have noticed that major multinationals have pulled out of the oilsands selling to mainly Canadian-based producers whose debt loads are too high to satisfy investors that it’s financially prudent for them to expand. Overpaying for reserves that are threatened to become stranded assets makes sophisticated investors skittish. MORE
Mining company Westmoreland Coal, which purchased five coal mines in Alberta, is suing Canada for $470 million under NAFTA after the province legislated a phaseout of coal-fired power plants
“Coal is dead.”
These are not the words of a Greenpeace activist or left-wing politician, but of Jim Barry, the global head of the infrastructure investment group at Blackrock — the world’s largest asset manager. Barry made this statement in 2017, but the writing has been on the wall for longer than that.
Banks know it, which is why they are increasingly unwilling to underwrite new coal mines and power plants. Unions and coal workers know it, which is why they are demanding a just transition and new employment opportunities in the clean economy. Even large diversified mining companies are getting out of the business of coal. MORE
UN summit urged to end all coal burning and introduce substantial taxes on emissions
Global investors managing $32tn issued a stark warning to governments at the UN climate summit on Monday, demanding urgent cuts in carbon emissions and the phasing out of all coal burning. Without these, the world faces a financial crash several times worse than the 2008 crisis, they said.
The investors include some of the world’s biggest pension funds, insurers and asset managers and marks the largest such intervention to date. They say fossil fuel subsidies must end and substantial taxes on carbon be introduced. MORE