Investors warn moves to curb climate change will hit fuel demand
From the Financial Times (pay wall I believe):
Investors warn moves to curb climate change will hit fuel demand
October 24, 2013
By Ed Crooks
Investors managing assets worth about $3tn have written to the world’s largest oil, gas and coal companies, calling on them to prepare for a possible decline in demand for fossil fuels caused by policies to fight the threat of climate change.
The letters, signed by 72 investors including several US state pension systems and fund managers such as Scottish Widows and Aviva, warn the companies that they may be investing in production capacity that will never be used.
The correspondence reflects growing concern among many investors about the prospect that fossil fuel reserves will be “stranded assets”, which cannot be extracted and used without causing dangerous global warming. The letters were sent to 45 companies, including large oil and gas producers such as ExxonMobil, Royal Dutch Shell and BP, and mining groups including BHP Billiton, Rio Tinto and Peabody Energy.
They urge the companies to carry out a “risk assessment” of the consequences of a global move to cut greenhouse gas emissions by 80 per cent by 2050, a reduction that has been estimated as giving a reasonable chance of limiting the rise in global temperatures to an acceptable 2°C.
The investors asked the companies to carry out the risk assessment in time for their 2014 annual meetings, generally in the first half of
next year, and to publish details about their conclusions, subject to the constraints of commercial confidentiality. About 30 companies have now replied to the letter, Ceres said, some rejecting the idea outright, some saying they planned to comply…
This statement: “… which cannot be extracted and used without causing dangerous global warming.”
“…consequences of a global move to cut greenhouse gas emissions by 80 per cent by 2050,…” Are neither supported by the current science nor current usage statistics. http://www.worldwatch.org/fossil-fuels-dominate-primary-energy-consumption-1
Dangerous Global Warming? Which report actually cites the danger of GW? Nearly every prediction has been WRONG!
Worse, even though CO2has increased temperatures have not followed. We are approaching the statically significant period >?17 years windows of warming hiatus. http://woodfortrees.org/plot/rss/from:1980/to:2013/scale:50/plot/esrl-co2/from:1980/to:2013/offset:-350/plot/rss/from:1998/to:2013/scale:50/trend/plot/esrl-co2/from:1998/to:2013/offset:-350/trend/plot/uah/from:1998/to:2013/scale:50/plot/uah/from:1998/to:2013/scale:50/trend
The authors of this request clearly are not familiar with the latest peer reviewed science. Worse they are totally unaware of what is happening in the world re: energy generation. Germany, once a high point for renewables, is now shifting to building COAL FIRED plant while cutting Govt Subsidies for solar and wind. The reason is simple. Energy costs are rising so fast that industries are leaving, and there is growing recognition of energy poverty for too large a segment of the populace. Decisions to heat or eat are more commonplace.
I recall reading about the fossil fuel industry that the better way to look at them is the value of the asset in the ground. As we move away from the use/need for that asset these companies become the last buggy whip maker.
I have also read recently that there is a concerted move by the industry to prevent alternatives especially solar because of the ability for solar to decentralize energy production. Again, not good for the fossil fuel industry.
Unfortunately, we don’t have a congress that will do what is best for humanity which if we truly believe in the “free market” would mean that policies would be put in place to assure the people are able to purchase energy at the least cost. The fossil fuel industry is working against that.
Global warming be damned. If the money dynamics are as I’ve noted then global warming means nothing to them and declining reserves with even static use levels means greater company value and thus power.
I watched an article noting that solar is poised to do for underdeveloped countries what cell phones did to communication. It allowed them to leapfrog the current old tech (fossil fuel provided electricity) and it’s cost, instead going direct to solar. That’s a game changer regarding costs of doing business in a country in that it will mean savings a nation like ours does not receive.
You need to do more reading regarding Germany. They are not scrapping their alternative, however the plan in place actually is working counter to the desired goal of reduced emissions because of the lack of storage tech and improper incentives.
“German law stipulates that renewable energy always has priority in the grid. When gaps emerge in the electricity supply, though, they have to be bridged by conventional power plants. Unfortunately, these are usually not gas plants, but ones burning cheaper coal. As long as there are no storage facilities for green electricity, every wind turbine and every rooftop solar panel will cast a dark shadow.”
“And then there is the brake on investments: The price of electricity at noon used to be particularly high due to the large demand. Today, it’s often particularly low because large amounts of solar power are flowing into the grid. Subsidized and privileged solar electricity is forcing other power plants out of the market. Only cheap coal can compete on price. Nearly all plans for the construction of new, better and more efficient power plants have been shelved. Nobody invests in facilities that don’t pay off. Instead, the energy companies are drawing as much electricity as possible from their power plants that are slated to be phased out.
Likewise, there is the dilemma over the right to pollute: Germany’s efforts to promote green energy are colliding with the European emissions trading system. Every kilowatt hour of renewable energy frees up emissions allowances.
These allowances are regrettably not discarded, but are instead sold and used elsewhere to offset pollution by the Spanish cement industry, Polish lignite plants and German steel mills, for example. All of the wind turbines, rooftop solar panels, hydroelectric and biogas plants in Germany have not reduced CO2 emissions in Europe by a single gram. On the contrary, they have helped lower the price of emissions allowances on the European carbon market — much to the delight of Europe’s dirtiest industries.”
There’s your carbon trading for you!
Rusty, this is the kind of articles I see and read: http://notrickszone.com/2013/10/26/germany-sends-clear-signal-that-it-will-slam-the-brakes-on-renewables-saving-industrial-jobs-more-important/ Losing jobs? Not really, they are starting to lose industries. The very robust German Solar Panel industry is all but defunct. Why? Competition from the Chinese, but actually because the Govt subsidies for solar is being cut.
And this: http://notrickszone.com/2013/10/18/germanys-green-energies-lead-to-skyrocketing-electricity-prices-feed-in-rates-increase-more-than-10-fold/ Explains the overall effect on electricity pricing.
I’ll stop with this one: http://www.renewableenergyworld.com/rea/news/article/2013/09/german-industry-calls-for-renewables-reform
Which starts: ” LONDON — Germany’s industry federation has released a proposal for reform of the nation’s renewable energy strategy, calling for it to be enacted in the new government’s first 100 days.
Key to the trade body’s plan are strategies for abolishing the feed-in tariff (FIT) for renewable energy and instead allowing market mechanisms to determine its price, procuring more reserve power capacity, and more closely matching German renewable energy policy with EU policies.
Renewable energy policy reform has been a growing issue in Germany, but has essentially been on hold in the runup to the election….”
BTW your Energiewende article actually was a BLOG response to even another article complaining about the renewables.