16 ms·

The $47T Death Sentence for Oil and Gas

63 points by elorant 7y ago

jsingleton 7y ago
> Around 130 international banks, all present at the UN climate change summit in New York, have committed themselves to decrease their support and investments in the oil and gas sector... Edit: If you want an action you can take then change your pension fund to an ethical one that doesn't invest in companies that do harm.
- frankbreetz 7y ago
  https://news.ycombinator.com/item?id=20998948 https://news.ycombinator.com/item?id=20998948
  - jsingleton 7y ago
    This is a link to Bill Gates' recent comments. However, with pension funds this is slightly different. Funds have a huge voice and customers switching investments can influence how they use their votes. It's very easy to do, so why not do this in addition to all the other things? It's also less about removing funds from fossil fuels and more about putting your retirement savings to better work. If you move your fund to a "future world" style one then this provides capital to clean energy projects etc. The ethical funds I looked at even performed better historically than the standard ones, so it's win-win.
    - rootusrootus 7y ago
      > Funds have a huge voice If they divest, they have no voice at all.
      - jsingleton 7y ago
        Most people unfortunately stick with the default investments their employers choose. So funds will still have a big vote share even if a large number of concerned people switch, however it is a signal to them.
        rootusrootus 7y ago
        It may be a signal to the funds themselves, but it is not any kind of signal to the underlying companies whose stock is being held in the fund.
      - eecc 7y ago
        So you’re saying that now “voting with your money” doesn’t make any sense? But wasn’t that the standard liberal answer to “socialist strikes”? /s Also, does that mean that one has to pay to be heard? Isn’t that census all over again? (Not so /s)
        rootusrootus 7y ago
        > you’re saying that now “voting with your money” doesn’t make any sense I said no such thing. Voting with your wallet means changing who you do business with. Selling your stock in a company does exactly zero to their bottom line, you are not voting at all.
        ageofwant 7y ago
        Value is determined by demand. If demand drops so does value. Also bottom line and stock price are different things.
    - roenxi 7y ago
      The economic system is successful because in general there is no way to stop someone from doing something economic. Much like how you can pull with a piece of string but not push; in economics you can take action but it is very challenging to prevent an economic action from happening. It is possible to do in the small but devilishly hard in the large (c.f. the content industries trying to deal with piracy for a good example). Divesting just shifts profits away from ethical people towards unethical people. It is a bad strategy. And the banks know that. If they stop investing in something it is because an actuary somewhere has worked out that it is risky and unprofitable.
  - natch 7y ago
    Bill Gates is wrong on this though. Mark my words, he will admit this in the future.
  - AtlasBarfed 7y ago
    Bill Gates is a smart programmer and skilled monopolist. He's not a god of prognostication or economics.
ptah 7y ago
>Activism is threatening value destruction for all, not only the environment. how can you draw a distinction. destroying your environment is destroying yourself. does existing not have value?
- jsingleton 7y ago
  Yes. The cost of action is dwarfed by the cost of inaction, but that cost is felt (not so) far in the future. It's a problem with short-term thinking creating a false economy and building up a huge debt.
  - turk73 7y ago
    The cost of action is 4 billion current human lives.
- KoftaBob 7y ago
  If you're of the baby boomer age group and older, it's likely you'll be gone before the worst effects of climate change are in effect, and they know that. For them, destroying the environment is not destroying yourself. It's prioritizing short term gain at the expense of their children and grandchildren. It's no coincidence that the majority of politicians and corporate leadership is in this age group, hence the lack of urgency in mitigating climate change.
  - JTon 7y ago
    I don't believe this to be a conscious decision (rather the result of trying to maximize ones/ones family's prosperity) and I believe plenty of non-boomers act in the same way. I suspect pillaging the environment is structural to both our survival instincts and inherited culture.
    - throwaway9980 7y ago
      My boomer mother dismisses any concern about climate change with “well, your father and I will be dead and gone before any of this really matters.” I have three small kids that she smothers with love. It’s really hard to reconcile with the total antipathy towards their future world.
planetzero 7y ago
What about a country like Norway that bases its entire economy on oil? Why shouldn't they be considered evil too?
- Iv 7y ago
  You are a bit harsh on a country that generates 98% of its electricity through renewable energy.
  - piokoch 7y ago
    Yup, and they can afford that because they sell oil and gas to others.
    - Iv 7y ago
      Nah, because of low density and tons of mountains (it is hydroelectricity mostly) BTW, dropping oil and gas investment (which is not what this article is about yet, as it seems to impact mostly coal) has been on their agenda since 2017: https://www.bbc.co.uk/news/business-42011995 https://www.bbc.co.uk/news/business-42011995
- eloff 7y ago
  Saudi Arabia would be a better example. Norway isn't all about oil anymore.
- kachnuv_ocasek 7y ago
  Norway has started steering away from fossil fuels already: https://www.theguardian.com/world/2019/mar/08/norways-1tn-wealth-fund-to-divest-from-oil-and-gas-exploration https://www.theguardian.com/world/2019/mar/08/norways-1tn-we...
- jihadjihad 7y ago
  I wouldn't say it "bases its entire economy on oil." If you're referring to their sovereign wealth fund [0], your statement is misleading since the fund was started with monies from Noway's own oil reserves, and the fund actively excludes companies on ethical grounds. [0]: https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
alex_young 7y ago
What possible effect can divestment have on the industry? They still sell a valuable product everyone buys.
- itemGrey 7y ago
  Yep, I'm fairly sure the jury is out on this, see Bill Gates' recent comments, https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1f17 https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1... My thinking would be if they divest from Oil and Gas, they will invest this capital somewhere else such as Nuclear, or renewable resources.
  - allannienhuis 7y ago
    non-paywall: https://archive.fo/PGRcH https://archive.fo/PGRcH
- Jaygles 7y ago
  Isn't divestment just one side of the coin? The other side would be moving those investments in cleaner and more renewable sources of energy which should have a clear impact.
- AtlasBarfed 7y ago
  Why is it that this thread is full of people saying constraining the supply of something (financing) that is critical to the actual supply of a product will have no effect on the price? The banks can raise the interest rate on financing. That has a huge effect on something like this where large investments and equipment and labor projects are required to get oil extraction underway, especially with commodity pricing fluctuations and the impending threats to fundamental demand from EVs and alternative energy.
sailfast 7y ago
Banks signing letters doesn't really do much - they're still responsible for making money, and they'll keep working in hydrocarbons. This title is hyperbolic. Further, banks typically "invest" on behalf of customers, not by themselves (are loans investments?). Pretty sure if ARAMCO is going IPO they want a piece of the business. What about M&A advisory work for hydrocarbon companies? Brokering corporate bonds? It's great that folks are signing letters that they understand the problem, but I don't think one can read any significance into them until behavior actually changes. What downside is there to signing the letter? EDIT: That said, I clicked. Not sure I'll ever go to this domain again though.
LatteLazy 7y ago
I don't think there is anything actually happening here. IF (and it's a big IF) financing for oil and gas projects was reduced, that might increase the price, or at least make the price more volatile as supply couldn't be increased quickly when demand increases. This would be offset by the fact that as a self financing industry outside finance is more about managing capital costs than supplying it. It's also worth noting that supply is at least partly controlled politically (by Opec and the Saudis etc), not by actual availability. You might stop all new developments and investment and still find the price falling if the Saudi's decide to turn on the tap. And it will be very very difficult to actually reduce the supply of capital to oil and gas companies: many are state funded and new ventures are among those most likely to receive state funding. Add to that that money is fungible: you might think your buying Walmart bonds, but then you find out Walmart used the money to lend $1bn to Exonn and suddenly you funded oil and gas exploration without knowing it. You need basically EVERYONE to agree to stop, as long as one bank/hedge fund/Private Equity firm/Big Corporation will still take this business it will continue (and that firm will become very very rich and successful).
- gzimhelshani 7y ago
  If the oil prices increase, that would be a good thing, alternative energy sources would be able worth investing since their price could compete with the new high oil price.
- SlowRobotAhead 7y ago
  >You need basically EVERYONE to agree to stop, This is the thing I don’t understand from climate... um... super activists. We know of no more efficient, safe, and easily convertible storage of energy than petrol hydrocarbons. So even if everyone else stopped today, someone will keep using them, and that group will have an advantage over their peers. Second, if we stop using oil in engines, guess what? It’ll go into lubes, and plastics, and other forms. We have a material we know no better alternative for. You know how composites like carbon fiber enable windmills and solar panels and electric vehicles, and all the new cool things? Carbon fiber is non-recyclable burnt plastic. It’s very oil heavy in production, they take plastic bars, spin, spool, and burn them to get the fiber. It’s extremely non-green, then you have the resins and epoxy that uses oil in its production, and all the greases, lubes, finishes, etc. If you agreed to get everyone to stop, it basically can’t stop. Someone won’t and they’ll do well because of it in the short term. And obviously we’ll need oil for far more than cars, we use most of it in energy production and cars, but remove those and we’ll just usher in a different era of plastics and composites. Now of course you can argue plastic in a landfill is better than vaporized in the atmosphere! But to pretend big oil will just “go away” is very foolish.
paulsutter 7y ago
Banks are an important conduit to financing oil and gas projects, but the banks themselves are not significant investors, so this “death sentence” narrative is nonsense A gradual carbon tax, that starts out at a level that’s politically acceptable, and grows to become massive, is what’s needed > Around 130 international banks, all present at the UN climate change summit in New York, have committed themselves to decrease their support and investments in the oil and gas sector the coming years.
ojosilva 7y ago
The article does not offer counter-arguments to balance its own hypothesis. It uses FUD profusely, including threats on "global security", and has a click-bait title: the $47T is the combined assets of the banks pledging to align with the Paris agreement. Yes, the oil and gas industry has rolling financial needs and we can't just stop depending on fossil from one day to the next, but it's all about creating a new ethical baseline where the planet, and not short term economic gains, become the priority. The fate of fossil fuels has to follow what happened to slavery around 150-200 years ago. Back then slavery was also a huge economy that was considered absolutely crucial for making the world go 'round, but humanism became the baseline, changing how society perceived enslavement of human beings. Abolitionist laws were enacted and conflict followed, including long and bloody wars sponsored by the affected (land)owners and their partisans. I hope that's not the case now.
natch 7y ago
This article presents one interpretation, and a strongly biased one at that. Although the headline is generally right when interpreted loosely, the text is scare mongering to try to give readers talking points on oil's side. >Removing financial support for hydrocarbon companies will put a major bomb under the future of emerging economies. ... affecting the global economy ... blah blah As the investment swings from oil and gas to renewables, the emerging economies can also pick up use of renewables. There is no rule saying they are not allowed to do so. But the writer of this article pretends that cannot happen. Sure, the oil and gas crutch will be needed at first, but it can be phased out eventually, and doing so will create a huge boom in development of renewable technologies that will provide plenty of economic stimulus to replace the destructive money that was being dumped into the oil and gas money fire.
- throwaway5752 7y ago
  I've been following the hydrocarbon industry from development stage E&P to vertically integrated supermajors for the best part of two decades. This website is not a source of information that I would use.
xiphias2 7y ago
If banks decrease funding oil, it is because renewables have a higher ROI at this point. Saudi Arabia knows this as well, that’s why they want to IPO Aramco.
darksaints 7y ago
What I don't understand is the fixation on defunding the investment side, as opposed to investing in alternatives. If you pull your funding out of oil and gas, less scrupulous people will take their place and happily rake in the profits, because the demand isn't going anywhere. But make alternative energy cheaper, and the demand for oil and gas will disappear.
- SlowRobotAhead 7y ago
  >If you pull your funding out of oil and gas, less scrupulous people will take their place and happily rake in the profits, Agreed. You create opportunity for at least a short term advantage. >make alternative energy cheaper, and the demand for oil and gas will disappear IDK, it seems the actual demand for oil will remain high. We’ll shift from using it in energy production and transportation to plastics, manufacturing, lubes and other refined oils, aviation which to shift to electric will need another 50 years of battery tech it seems, etc.
  - darksaints 7y ago
    > IDK, it seems the actual demand for oil will remain high. We’ll shift from using it in energy production and transportation to plastics, manufacturing, lubes and other refined oils, aviation which to shift to electric will need another 50 years of battery tech it seems, etc. Agreed on the uses for oil, but I think planes are a lot closer than you think, but not via batteries. Fuel cells will be what is used, IMO. All of their disadvantages that make them a terrible fit for cars are pretty much null for planes. Electric motors are reaching 15 kw/kg. SOFC designs are now reaching 2.5 kw/kg power density and > 60% efficiency. With waste heat recovery, 80% efficiency is on the horizon. All combined, my napkin math (which could be wrong) shows those power densities are almost double that of even state of the art jet engines like LEAP. Which just leaves the fuel aspect. SOFCs, due to their high operating temperatures, allow for a lot of fuel flexibility. Technically, they could still use regular jet fuel. While that wouldn't get rid of the fossil fuels, the much higher efficiencies would result in significant decreases in the demand for fuel, which have additional efficiencies (It takes a lot of fuel to fly a lot of fuel). However, I wouldn't rule out hydrogen. The traditionally cited disadvantages of liquid hydrogen are significantly minimized for aviation. You don't really need heavy duty cryo tanks: planes operating at 15km altitudes are already at -50 degrees C, and the consumption rates would be higher than the evaporation bleedoff rates. When descending or ascending, temperatures are higher, but consumption rates are also higher. That means that the optimal insulation is a weight/bleedoff optimization problem, and I wouldn't be surprised if current foam insulation technologies were good enough. I've found an example of a 125kL vacuum-insulated tank that only needed a constant 390W of cooling to maintain zero boil-off [0], meaning that that rate of fuel bleedoff without cooling is <390W. That is 2-3 orders of magnitude lower than the consumption rates of jet aircraft, which gives a lot of leeway for reducing the insulation requirements. And even if it doesn't work, liquified renewable methane might still work, with its higher boiling point and higher volumetric energy density. [0] https://iopscience.iop.org/article/10.1088/1757-899X/278/1/012012/pdf https://iopscience.iop.org/article/10.1088/1757-899X/278/1/0...
BAReF00t 7y ago
I highly doubt this is more than lip service. Thesr organizations are run by certified psychopaths, who don’t care about being good, but only about looking good. So they can keep doing what they do. Which is maximizing profit. I’ll accept it when I have seen, checked, scrutinized and double checked evidence for at least ten years, for the obligatory sneaky technicalities and spin.
socrates1998 7y ago
Oil and Gas companies are going to kill themselves because they made the critical error when they decided they were Oil and Gas companies and not energy companies. I don't why none of the large Oil and Gas companies aren't leading the way to renewables? You would think at least one or two of them would strategically realize that as the tech gets better, wind and solar will gradually become the main energy source. And you can either hold on to your dying market (not dying now, but it will eventually). NONE of them seem to have any real vision for a post oil and gas world. My guess is that they are fixed on making sure that solar and wind power stays a small percent of energy consumption rather than being a market leader. I wouldn't be surprised if in the near future more damming evidence comes out that proves the major oil and gas companies have been trying to fuck the solar and wind industries for decades now.
- chimi 7y ago
  You can see the transition they are making to other energy sources in their advertisements. BP even changed their logo in 2000 to a green sun they call Helios. https://www.bp.com/en/global/corporate/who-we-are/our-brands/the-bp-brand.html https://www.bp.com/en/global/corporate/who-we-are/our-brands...
ThomPete 7y ago
Hurting oil means hurting the alternative energy sector making it more expensive to produce. All the materials, manufacturing, r&d, infrastructure installation, maintenance and i could go on heavily rely on oil, gas and coal to even be possible. In other words death sentences to oil and gas means Death sentence to alternatives. and thats just for that specific industry. 80% of what we surround us with and cool modern living is fossil based. If you welcome the death of oil and gas you welcome the death of millions.

63 points by elorant 7y ago

> Around 130 international banks, all present at the UN climate change summit in New York, have committed themselves to decrease their support and investments in the oil and gas sector... Edit: If you want an action you can take then change your pension fund to an ethical one that doesn't invest in companies that do harm.

frankbreetz 7y ago
https://news.ycombinator.com/item?id=20998948 https://news.ycombinator.com/item?id=20998948
- jsingleton 7y ago
  This is a link to Bill Gates' recent comments. However, with pension funds this is slightly different. Funds have a huge voice and customers switching investments can influence how they use their votes. It's very easy to do, so why not do this in addition to all the other things? It's also less about removing funds from fossil fuels and more about putting your retirement savings to better work. If you move your fund to a "future world" style one then this provides capital to clean energy projects etc. The ethical funds I looked at even performed better historically than the standard ones, so it's win-win.
  - rootusrootus 7y ago
    > Funds have a huge voice If they divest, they have no voice at all.
    - jsingleton 7y ago
      Most people unfortunately stick with the default investments their employers choose. So funds will still have a big vote share even if a large number of concerned people switch, however it is a signal to them.
      - rootusrootus 7y ago
        It may be a signal to the funds themselves, but it is not any kind of signal to the underlying companies whose stock is being held in the fund.
    - eecc 7y ago
      So you’re saying that now “voting with your money” doesn’t make any sense? But wasn’t that the standard liberal answer to “socialist strikes”? /s Also, does that mean that one has to pay to be heard? Isn’t that census all over again? (Not so /s)
      - rootusrootus 7y ago
        > you’re saying that now “voting with your money” doesn’t make any sense I said no such thing. Voting with your wallet means changing who you do business with. Selling your stock in a company does exactly zero to their bottom line, you are not voting at all.
        ageofwant 7y ago
        Value is determined by demand. If demand drops so does value. Also bottom line and stock price are different things.
  - roenxi 7y ago
    The economic system is successful because in general there is no way to stop someone from doing something economic. Much like how you can pull with a piece of string but not push; in economics you can take action but it is very challenging to prevent an economic action from happening. It is possible to do in the small but devilishly hard in the large (c.f. the content industries trying to deal with piracy for a good example). Divesting just shifts profits away from ethical people towards unethical people. It is a bad strategy. And the banks know that. If they stop investing in something it is because an actuary somewhere has worked out that it is risky and unprofitable.
- natch 7y ago
  Bill Gates is wrong on this though. Mark my words, he will admit this in the future.
- AtlasBarfed 7y ago
  Bill Gates is a smart programmer and skilled monopolist. He's not a god of prognostication or economics.

ptah 7y ago

>Activism is threatening value destruction for all, not only the environment. how can you draw a distinction. destroying your environment is destroying yourself. does existing not have value?

jsingleton 7y ago
Yes. The cost of action is dwarfed by the cost of inaction, but that cost is felt (not so) far in the future. It's a problem with short-term thinking creating a false economy and building up a huge debt.
- turk73 7y ago
  The cost of action is 4 billion current human lives.
KoftaBob 7y ago
If you're of the baby boomer age group and older, it's likely you'll be gone before the worst effects of climate change are in effect, and they know that. For them, destroying the environment is not destroying yourself. It's prioritizing short term gain at the expense of their children and grandchildren. It's no coincidence that the majority of politicians and corporate leadership is in this age group, hence the lack of urgency in mitigating climate change.
- JTon 7y ago
  I don't believe this to be a conscious decision (rather the result of trying to maximize ones/ones family's prosperity) and I believe plenty of non-boomers act in the same way. I suspect pillaging the environment is structural to both our survival instincts and inherited culture.
  - throwaway9980 7y ago
    My boomer mother dismisses any concern about climate change with “well, your father and I will be dead and gone before any of this really matters.” I have three small kids that she smothers with love. It’s really hard to reconcile with the total antipathy towards their future world.

planetzero 7y ago

What about a country like Norway that bases its entire economy on oil? Why shouldn't they be considered evil too?

Iv 7y ago
You are a bit harsh on a country that generates 98% of its electricity through renewable energy.
- piokoch 7y ago
  Yup, and they can afford that because they sell oil and gas to others.
  - Iv 7y ago
    Nah, because of low density and tons of mountains (it is hydroelectricity mostly) BTW, dropping oil and gas investment (which is not what this article is about yet, as it seems to impact mostly coal) has been on their agenda since 2017: https://www.bbc.co.uk/news/business-42011995 https://www.bbc.co.uk/news/business-42011995
eloff 7y ago
Saudi Arabia would be a better example. Norway isn't all about oil anymore.
kachnuv_ocasek 7y ago
Norway has started steering away from fossil fuels already: https://www.theguardian.com/world/2019/mar/08/norways-1tn-wealth-fund-to-divest-from-oil-and-gas-exploration https://www.theguardian.com/world/2019/mar/08/norways-1tn-we...
jihadjihad 7y ago
I wouldn't say it "bases its entire economy on oil." If you're referring to their sovereign wealth fund [0], your statement is misleading since the fund was started with monies from Noway's own oil reserves, and the fund actively excludes companies on ethical grounds. [0]: https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

alex_young 7y ago

What possible effect can divestment have on the industry? They still sell a valuable product everyone buys.

itemGrey 7y ago
Yep, I'm fairly sure the jury is out on this, see Bill Gates' recent comments, https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1f17 https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1... My thinking would be if they divest from Oil and Gas, they will invest this capital somewhere else such as Nuclear, or renewable resources.
- allannienhuis 7y ago
  non-paywall: https://archive.fo/PGRcH https://archive.fo/PGRcH
Jaygles 7y ago
Isn't divestment just one side of the coin? The other side would be moving those investments in cleaner and more renewable sources of energy which should have a clear impact.
AtlasBarfed 7y ago
Why is it that this thread is full of people saying constraining the supply of something (financing) that is critical to the actual supply of a product will have no effect on the price? The banks can raise the interest rate on financing. That has a huge effect on something like this where large investments and equipment and labor projects are required to get oil extraction underway, especially with commodity pricing fluctuations and the impending threats to fundamental demand from EVs and alternative energy.

sailfast 7y ago

Banks signing letters doesn't really do much - they're still responsible for making money, and they'll keep working in hydrocarbons. This title is hyperbolic. Further, banks typically "invest" on behalf of customers, not by themselves (are loans investments?). Pretty sure if ARAMCO is going IPO they want a piece of the business. What about M&A advisory work for hydrocarbon companies? Brokering corporate bonds? It's great that folks are signing letters that they understand the problem, but I don't think one can read any significance into them until behavior actually changes. What downside is there to signing the letter? EDIT: That said, I clicked. Not sure I'll ever go to this domain again though.

LatteLazy 7y ago

I don't think there is anything actually happening here. IF (and it's a big IF) financing for oil and gas projects was reduced, that might increase the price, or at least make the price more volatile as supply couldn't be increased quickly when demand increases. This would be offset by the fact that as a self financing industry outside finance is more about managing capital costs than supplying it. It's also worth noting that supply is at least partly controlled politically (by Opec and the Saudis etc), not by actual availability. You might stop all new developments and investment and still find the price falling if the Saudi's decide to turn on the tap. And it will be very very difficult to actually reduce the supply of capital to oil and gas companies: many are state funded and new ventures are among those most likely to receive state funding. Add to that that money is fungible: you might think your buying Walmart bonds, but then you find out Walmart used the money to lend $1bn to Exonn and suddenly you funded oil and gas exploration without knowing it. You need basically EVERYONE to agree to stop, as long as one bank/hedge fund/Private Equity firm/Big Corporation will still take this business it will continue (and that firm will become very very rich and successful).

gzimhelshani 7y ago
If the oil prices increase, that would be a good thing, alternative energy sources would be able worth investing since their price could compete with the new high oil price.
SlowRobotAhead 7y ago
>You need basically EVERYONE to agree to stop, This is the thing I don’t understand from climate... um... super activists. We know of no more efficient, safe, and easily convertible storage of energy than petrol hydrocarbons. So even if everyone else stopped today, someone will keep using them, and that group will have an advantage over their peers. Second, if we stop using oil in engines, guess what? It’ll go into lubes, and plastics, and other forms. We have a material we know no better alternative for. You know how composites like carbon fiber enable windmills and solar panels and electric vehicles, and all the new cool things? Carbon fiber is non-recyclable burnt plastic. It’s very oil heavy in production, they take plastic bars, spin, spool, and burn them to get the fiber. It’s extremely non-green, then you have the resins and epoxy that uses oil in its production, and all the greases, lubes, finishes, etc. If you agreed to get everyone to stop, it basically can’t stop. Someone won’t and they’ll do well because of it in the short term. And obviously we’ll need oil for far more than cars, we use most of it in energy production and cars, but remove those and we’ll just usher in a different era of plastics and composites. Now of course you can argue plastic in a landfill is better than vaporized in the atmosphere! But to pretend big oil will just “go away” is very foolish.

paulsutter 7y ago

Banks are an important conduit to financing oil and gas projects, but the banks themselves are not significant investors, so this “death sentence” narrative is nonsense A gradual carbon tax, that starts out at a level that’s politically acceptable, and grows to become massive, is what’s needed > Around 130 international banks, all present at the UN climate change summit in New York, have committed themselves to decrease their support and investments in the oil and gas sector the coming years.

ojosilva 7y ago

The article does not offer counter-arguments to balance its own hypothesis. It uses FUD profusely, including threats on "global security", and has a click-bait title: the $47T is the combined assets of the banks pledging to align with the Paris agreement. Yes, the oil and gas industry has rolling financial needs and we can't just stop depending on fossil from one day to the next, but it's all about creating a new ethical baseline where the planet, and not short term economic gains, become the priority. The fate of fossil fuels has to follow what happened to slavery around 150-200 years ago. Back then slavery was also a huge economy that was considered absolutely crucial for making the world go 'round, but humanism became the baseline, changing how society perceived enslavement of human beings. Abolitionist laws were enacted and conflict followed, including long and bloody wars sponsored by the affected (land)owners and their partisans. I hope that's not the case now.

natch 7y ago

This article presents one interpretation, and a strongly biased one at that. Although the headline is generally right when interpreted loosely, the text is scare mongering to try to give readers talking points on oil's side. >Removing financial support for hydrocarbon companies will put a major bomb under the future of emerging economies. ... affecting the global economy ... blah blah As the investment swings from oil and gas to renewables, the emerging economies can also pick up use of renewables. There is no rule saying they are not allowed to do so. But the writer of this article pretends that cannot happen. Sure, the oil and gas crutch will be needed at first, but it can be phased out eventually, and doing so will create a huge boom in development of renewable technologies that will provide plenty of economic stimulus to replace the destructive money that was being dumped into the oil and gas money fire.

throwaway5752 7y ago
I've been following the hydrocarbon industry from development stage E&P to vertically integrated supermajors for the best part of two decades. This website is not a source of information that I would use.

xiphias2 7y ago

If banks decrease funding oil, it is because renewables have a higher ROI at this point. Saudi Arabia knows this as well, that’s why they want to IPO Aramco.

darksaints 7y ago

What I don't understand is the fixation on defunding the investment side, as opposed to investing in alternatives. If you pull your funding out of oil and gas, less scrupulous people will take their place and happily rake in the profits, because the demand isn't going anywhere. But make alternative energy cheaper, and the demand for oil and gas will disappear.

SlowRobotAhead 7y ago
>If you pull your funding out of oil and gas, less scrupulous people will take their place and happily rake in the profits, Agreed. You create opportunity for at least a short term advantage. >make alternative energy cheaper, and the demand for oil and gas will disappear IDK, it seems the actual demand for oil will remain high. We’ll shift from using it in energy production and transportation to plastics, manufacturing, lubes and other refined oils, aviation which to shift to electric will need another 50 years of battery tech it seems, etc.
- darksaints 7y ago
  > IDK, it seems the actual demand for oil will remain high. We’ll shift from using it in energy production and transportation to plastics, manufacturing, lubes and other refined oils, aviation which to shift to electric will need another 50 years of battery tech it seems, etc. Agreed on the uses for oil, but I think planes are a lot closer than you think, but not via batteries. Fuel cells will be what is used, IMO. All of their disadvantages that make them a terrible fit for cars are pretty much null for planes. Electric motors are reaching 15 kw/kg. SOFC designs are now reaching 2.5 kw/kg power density and > 60% efficiency. With waste heat recovery, 80% efficiency is on the horizon. All combined, my napkin math (which could be wrong) shows those power densities are almost double that of even state of the art jet engines like LEAP. Which just leaves the fuel aspect. SOFCs, due to their high operating temperatures, allow for a lot of fuel flexibility. Technically, they could still use regular jet fuel. While that wouldn't get rid of the fossil fuels, the much higher efficiencies would result in significant decreases in the demand for fuel, which have additional efficiencies (It takes a lot of fuel to fly a lot of fuel). However, I wouldn't rule out hydrogen. The traditionally cited disadvantages of liquid hydrogen are significantly minimized for aviation. You don't really need heavy duty cryo tanks: planes operating at 15km altitudes are already at -50 degrees C, and the consumption rates would be higher than the evaporation bleedoff rates. When descending or ascending, temperatures are higher, but consumption rates are also higher. That means that the optimal insulation is a weight/bleedoff optimization problem, and I wouldn't be surprised if current foam insulation technologies were good enough. I've found an example of a 125kL vacuum-insulated tank that only needed a constant 390W of cooling to maintain zero boil-off [0], meaning that that rate of fuel bleedoff without cooling is <390W. That is 2-3 orders of magnitude lower than the consumption rates of jet aircraft, which gives a lot of leeway for reducing the insulation requirements. And even if it doesn't work, liquified renewable methane might still work, with its higher boiling point and higher volumetric energy density. [0] https://iopscience.iop.org/article/10.1088/1757-899X/278/1/012012/pdf https://iopscience.iop.org/article/10.1088/1757-899X/278/1/0...

BAReF00t 7y ago

I highly doubt this is more than lip service. Thesr organizations are run by certified psychopaths, who don’t care about being good, but only about looking good. So they can keep doing what they do. Which is maximizing profit. I’ll accept it when I have seen, checked, scrutinized and double checked evidence for at least ten years, for the obligatory sneaky technicalities and spin.

socrates1998 7y ago

Oil and Gas companies are going to kill themselves because they made the critical error when they decided they were Oil and Gas companies and not energy companies. I don't why none of the large Oil and Gas companies aren't leading the way to renewables? You would think at least one or two of them would strategically realize that as the tech gets better, wind and solar will gradually become the main energy source. And you can either hold on to your dying market (not dying now, but it will eventually). NONE of them seem to have any real vision for a post oil and gas world. My guess is that they are fixed on making sure that solar and wind power stays a small percent of energy consumption rather than being a market leader. I wouldn't be surprised if in the near future more damming evidence comes out that proves the major oil and gas companies have been trying to fuck the solar and wind industries for decades now.

chimi 7y ago
You can see the transition they are making to other energy sources in their advertisements. BP even changed their logo in 2000 to a green sun they call Helios. https://www.bp.com/en/global/corporate/who-we-are/our-brands/the-bp-brand.html https://www.bp.com/en/global/corporate/who-we-are/our-brands...

ThomPete 7y ago

Hurting oil means hurting the alternative energy sector making it more expensive to produce. All the materials, manufacturing, r&d, infrastructure installation, maintenance and i could go on heavily rely on oil, gas and coal to even be possible. In other words death sentences to oil and gas means Death sentence to alternatives. and thats just for that specific industry. 80% of what we surround us with and cool modern living is fossil based. If you welcome the death of oil and gas you welcome the death of millions.