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"I hope that humanity will be able to free itself from its addiction of fossil fuels (arguably it is the primary reason for violent conflict in the last 30 year

"I hope that humanity will be able to free itself from its addiction of fossil fuels (arguably it is the primary reason for violent conflict in the last 30 years and the driving force behind climate change), but my bet is that things will get worse for a lot longer before we even reach the inflection point of “peak oil”. Change must happen. Change will happen. I don’t think the oil and gas industry is anywhere near to disappearing. Given the current valuation of many integrated oil majors, the favorable growth and interest rate environment, I believe that it is a good time to invest in oil companies." I love the cynicism of this perspective: We are well aware the world will burn because of this technology, but hey, you can make a buck now, so keep perpetuating the status quo. These kind of opinions are so frustrating.

mxschumacher 7y ago
I see what you mean. A more general question about capitalism can be considered here: Who holds responsibility, consumers or producers? Both? In my view, consumers who choose to lower their demand of fossil fuels (by using the bike instead of the car and reducing their vacationing on different continents) actually make a difference. If people stop consuming, companies go out of business. Investing on the other hand is a zero-sum game: If a promising opportunity exists, somebody will finance it. Anything else is unstable in a game-theory sense, it's like asking people to not pick up $100-bills from the street. In simpler terms: If you own Exxon shares you are not making climate change worse, but if you eat meat and own a car, you do.
- lotsofpulp 7y ago
  Consumers hold the responsibility. Their choices on where to spend money determine what kind of producers can exist. They can only make the right choices if they have the right education and data though, and that requires the government to step in.
  - mxschumacher 7y ago
    I agree. One huge caveat is advertising. Companies implant desire into human minds, a few implicit examples: -"If you buy this sports car, women will find you attractive and you will have more sex" - "Going on this beach vacation will make you happy" - "Getting this alcoholic beverage will allow you to have fun with your friends" It's extremely hard to avoid being influenced by ads, for me it's a moral reason to use an adblocker. I want to come with my my own desires, which are mostly not about consumption of products or services offered by for-profit enterprises.
    - appleiigs 7y ago
      There will always be advertising, fake news, scams... again it's on the consumer to make the difference by not only being aware but to change their behaviour.
- thedstrat 7y ago
  I entirely disagree. By buying and owning shares of Exxon, you’re contributing and supporting the oil and gas industry. It’s completely a choice, as opposed to driving a car which is a financial necessity to some.
  - mxschumacher 7y ago
    By not buying the shares, you make it more attractive for somebody else to buy them. For you to not buy the shares doesn't make any difference for Exxon. You should need one detractor who's interested in money. That's why the equilibrium is not stable. If you want to kill a business, stop buying from them. I'm not opposed to car ownership, but office workers don't need 450hp, 2.5t street tanks to cruise around in cities.
    - torpfactory 7y ago
      Sure, but the price at which the shares are available decreases with fewer available buyers. Let’s not give oil companies the money or collateral to finance their expansion.
      - mxschumacher 7y ago
        As I've elaborated in other responses to this thread: the lower the price is, the more buyers there will be. The company does not change as its price moves. Every decrease in price means investors will get more for less.
    - sgc 7y ago
      That is true to some extent, but if a stock tanks the company's value goes down, and lenders will not give them the same access to capital they had previously [1]. So they can't grow at the same rate, and in extreme cases will fail. For oil and gas, this effectively means locking some of it in the ground for the time being, while society (hopefully) works to reduce the demand via development and deployment of alternative technologies. [1] https://www.investopedia.com/investing/why-do-companies-care-about-their-stock-prices/ https://www.investopedia.com/investing/why-do-companies-care...
- clomond 7y ago
  I think this is pretty reductionist. My alternative viewpoint is that it is really one of choice and substitutes. For the last century, fossil fuels by in large had no generally viable substitutes. Now, substitutes are coming online to replace previously heavy fossil fuel uses (think, electric cars powered with renewable energy for getting around town or the emergence of plant based burgers to replace beef burgers -> fossil fuel related as a primary input to agriculture is fertilizer, which is sourced from natural gas. Real meat requires significantly more fertilizer for the same amount of calories). And - is investing really a zero-sum game? What about the opportunity for primary energy production to be substituted by renewable energy sources? Is that a promising opportunity that will be financed? If that does amount to an opportunity, wouldn't it be better to invest in that then Exxon? Particularly if you use the fuller definition of investment rather than just buying public shares?
  - mxschumacher 7y ago
    the stock market is a secondary market, so buying the shares doesn't inject capital into the company itself. I suppose you could make an argument that investing in the primary market gives you more power/moral responsibility. The extremely high valuations of Beyond meat and Tesla show you that many investors are willing to shower these companies in money. As unbelievable amounts of capital are moving into solar and wind, it becomes marginally less attractive for additional funds to be deployed into these industries.
    - pmart123 7y ago
      Well, it does in some ways. It makes it easier to pay employees in stock, which could be seen as an operating expense. A company could issue equity for financing at high prices like Shopify and Twilio did recently. Debt to equity is also used as a leverage characteristic.
  - appleiigs 7y ago
    There has always been choice and substitutes. The general public chooses to do what is cheapest and most convenient. For transportation, they could take the bus or ride a bike. A local electric utility offered green energy options for a premium cost. No one signed up.
- NeedMoreTea 7y ago
  If enough divest from Exxon they become a penny share, Greenpeace could buy them purely to sit the reserves away from use. Ridiculous, but being bought as the share price drops low enough is not. Every time a currency drops markedly businesses there are exposed to another round of international buyouts. Similarly regulation and impact fines and levies will come. Maybe Exxon gets bought by someone looking to asset strip or use the remaining oil to pivot them elsewhere... Would you pick up $100 and put it in your wallet in front of a police officer? Note on meat - American and Argentinian meat specifically - other parts of the world manage to raise livestock in a far less destructive manner.
  - mxschumacher 7y ago
    "The Greenpeace buying Exxon for pennies" scenario is deeply unrealistic for the moment. It's like finding $295.000.000.000 on the street. Exxon doesn't change if it's share price declines, the lower the price goes, the more attractive the opportunity from a risk-reward perspective. With pension funds and hedge funds hungry for yields, somebody will always buy. To go with your police scenario: In the oil industry, the police officer protects you while picking up the $100 bill and takes a 25% cut. That's the story of many oil-rich nations.
    - NeedMoreTea 7y ago
      Of course it is - yet governments and investments are showing early signs of divestment, including by pension schemes. If regulations to require carbon impact become a consideration in investment, or market listing - there's early signs some are thinking in those directions - then those pension schemes will start voting inconveniently or divest more significantly. If one of the top 5 blocs bakes climate into their approach trade, things could change fast. Exxon have the mass that it will take a great deal to actually impact, but large industries have been abolished or turned into niche industry before. No reason to believe it won't happen again.
bilbo0s 7y ago
What was eye opening to me is that, if the GP is to be believed, is that people keep buying F150s? Clearly, not everyone believes in the idea of climate change. (In fact, if that factoid is correct, a plurality of automobile consumers don't? That's a "wow" moment for me.)
- mxschumacher 7y ago
  I believe cognitive dissonance is extremely widespread. 100% of smokers know that what they are doing is extremely bad for their health. Everybody knows about the suffering the animal industry inflicts on billions of cows, chicken and pigs. The awareness of these problems does not seem to lead to widespread and lasting changes in behavior. The taste of a burger and the sensation of driving a powerful car seems to trump moral considerations for a majority of humans. As an example: Green party members in Germany are the ones who fly the most
  - netsharc 7y ago
    As someone who believes in climate change and still hasn't changed his lifestyle (I still like beef, I've flown a bit this year), I fully agree. And nowadays I and many people in this group are probably adopting the mindset of "well, we're all going to die and it's too late to change anything anyway!". Although actions like "paper straws please!" don't really have that huge of an effect anyway, it just fools social media activists to think they're helping... It seems the change will come when it comes through societal shaming, like smoking in the USA. But it'll be a long time before people look down at someone saying "oh your car is still internal combustion?"
    - Ancalagon 7y ago
      I gotta fess up I am the same way you are. My one excuse is that it would literally be impossible for me to get food/get to work in any reasonable way without a car, and I would never see my family if I couldn't fly back home. I also would like to stop eating meat, but I find my "addiction" to meat consumption to be unlike anything else. I could give up coffee and alcohol no sweat but meat is like a whole other level. Realistically, it seems to me that much of the economy and the way cities and populations work and interact need to be redesigned from the ground up to have a much smaller footprint...

mxschumacher 7y ago

I see what you mean. A more general question about capitalism can be considered here: Who holds responsibility, consumers or producers? Both? In my view, consumers who choose to lower their demand of fossil fuels (by using the bike instead of the car and reducing their vacationing on different continents) actually make a difference. If people stop consuming, companies go out of business. Investing on the other hand is a zero-sum game: If a promising opportunity exists, somebody will finance it. Anything else is unstable in a game-theory sense, it's like asking people to not pick up $100-bills from the street. In simpler terms: If you own Exxon shares you are not making climate change worse, but if you eat meat and own a car, you do.

lotsofpulp 7y ago
Consumers hold the responsibility. Their choices on where to spend money determine what kind of producers can exist. They can only make the right choices if they have the right education and data though, and that requires the government to step in.
- mxschumacher 7y ago
  I agree. One huge caveat is advertising. Companies implant desire into human minds, a few implicit examples: -"If you buy this sports car, women will find you attractive and you will have more sex" - "Going on this beach vacation will make you happy" - "Getting this alcoholic beverage will allow you to have fun with your friends" It's extremely hard to avoid being influenced by ads, for me it's a moral reason to use an adblocker. I want to come with my my own desires, which are mostly not about consumption of products or services offered by for-profit enterprises.
  - appleiigs 7y ago
    There will always be advertising, fake news, scams... again it's on the consumer to make the difference by not only being aware but to change their behaviour.
thedstrat 7y ago
I entirely disagree. By buying and owning shares of Exxon, you’re contributing and supporting the oil and gas industry. It’s completely a choice, as opposed to driving a car which is a financial necessity to some.
- mxschumacher 7y ago
  By not buying the shares, you make it more attractive for somebody else to buy them. For you to not buy the shares doesn't make any difference for Exxon. You should need one detractor who's interested in money. That's why the equilibrium is not stable. If you want to kill a business, stop buying from them. I'm not opposed to car ownership, but office workers don't need 450hp, 2.5t street tanks to cruise around in cities.
  - torpfactory 7y ago
    Sure, but the price at which the shares are available decreases with fewer available buyers. Let’s not give oil companies the money or collateral to finance their expansion.
    - mxschumacher 7y ago
      As I've elaborated in other responses to this thread: the lower the price is, the more buyers there will be. The company does not change as its price moves. Every decrease in price means investors will get more for less.
  - sgc 7y ago
    That is true to some extent, but if a stock tanks the company's value goes down, and lenders will not give them the same access to capital they had previously [1]. So they can't grow at the same rate, and in extreme cases will fail. For oil and gas, this effectively means locking some of it in the ground for the time being, while society (hopefully) works to reduce the demand via development and deployment of alternative technologies. [1] https://www.investopedia.com/investing/why-do-companies-care-about-their-stock-prices/ https://www.investopedia.com/investing/why-do-companies-care...
clomond 7y ago
I think this is pretty reductionist. My alternative viewpoint is that it is really one of choice and substitutes. For the last century, fossil fuels by in large had no generally viable substitutes. Now, substitutes are coming online to replace previously heavy fossil fuel uses (think, electric cars powered with renewable energy for getting around town or the emergence of plant based burgers to replace beef burgers -> fossil fuel related as a primary input to agriculture is fertilizer, which is sourced from natural gas. Real meat requires significantly more fertilizer for the same amount of calories). And - is investing really a zero-sum game? What about the opportunity for primary energy production to be substituted by renewable energy sources? Is that a promising opportunity that will be financed? If that does amount to an opportunity, wouldn't it be better to invest in that then Exxon? Particularly if you use the fuller definition of investment rather than just buying public shares?
- mxschumacher 7y ago
  the stock market is a secondary market, so buying the shares doesn't inject capital into the company itself. I suppose you could make an argument that investing in the primary market gives you more power/moral responsibility. The extremely high valuations of Beyond meat and Tesla show you that many investors are willing to shower these companies in money. As unbelievable amounts of capital are moving into solar and wind, it becomes marginally less attractive for additional funds to be deployed into these industries.
  - pmart123 7y ago
    Well, it does in some ways. It makes it easier to pay employees in stock, which could be seen as an operating expense. A company could issue equity for financing at high prices like Shopify and Twilio did recently. Debt to equity is also used as a leverage characteristic.
- appleiigs 7y ago
  There has always been choice and substitutes. The general public chooses to do what is cheapest and most convenient. For transportation, they could take the bus or ride a bike. A local electric utility offered green energy options for a premium cost. No one signed up.
NeedMoreTea 7y ago
If enough divest from Exxon they become a penny share, Greenpeace could buy them purely to sit the reserves away from use. Ridiculous, but being bought as the share price drops low enough is not. Every time a currency drops markedly businesses there are exposed to another round of international buyouts. Similarly regulation and impact fines and levies will come. Maybe Exxon gets bought by someone looking to asset strip or use the remaining oil to pivot them elsewhere... Would you pick up $100 and put it in your wallet in front of a police officer? Note on meat - American and Argentinian meat specifically - other parts of the world manage to raise livestock in a far less destructive manner.
- mxschumacher 7y ago
  "The Greenpeace buying Exxon for pennies" scenario is deeply unrealistic for the moment. It's like finding $295.000.000.000 on the street. Exxon doesn't change if it's share price declines, the lower the price goes, the more attractive the opportunity from a risk-reward perspective. With pension funds and hedge funds hungry for yields, somebody will always buy. To go with your police scenario: In the oil industry, the police officer protects you while picking up the $100 bill and takes a 25% cut. That's the story of many oil-rich nations.
  - NeedMoreTea 7y ago
    Of course it is - yet governments and investments are showing early signs of divestment, including by pension schemes. If regulations to require carbon impact become a consideration in investment, or market listing - there's early signs some are thinking in those directions - then those pension schemes will start voting inconveniently or divest more significantly. If one of the top 5 blocs bakes climate into their approach trade, things could change fast. Exxon have the mass that it will take a great deal to actually impact, but large industries have been abolished or turned into niche industry before. No reason to believe it won't happen again.

bilbo0s 7y ago

What was eye opening to me is that, if the GP is to be believed, is that people keep buying F150s? Clearly, not everyone believes in the idea of climate change. (In fact, if that factoid is correct, a plurality of automobile consumers don't? That's a "wow" moment for me.)

mxschumacher 7y ago
I believe cognitive dissonance is extremely widespread. 100% of smokers know that what they are doing is extremely bad for their health. Everybody knows about the suffering the animal industry inflicts on billions of cows, chicken and pigs. The awareness of these problems does not seem to lead to widespread and lasting changes in behavior. The taste of a burger and the sensation of driving a powerful car seems to trump moral considerations for a majority of humans. As an example: Green party members in Germany are the ones who fly the most
- netsharc 7y ago
  As someone who believes in climate change and still hasn't changed his lifestyle (I still like beef, I've flown a bit this year), I fully agree. And nowadays I and many people in this group are probably adopting the mindset of "well, we're all going to die and it's too late to change anything anyway!". Although actions like "paper straws please!" don't really have that huge of an effect anyway, it just fools social media activists to think they're helping... It seems the change will come when it comes through societal shaming, like smoking in the USA. But it'll be a long time before people look down at someone saying "oh your car is still internal combustion?"
  - Ancalagon 7y ago
    I gotta fess up I am the same way you are. My one excuse is that it would literally be impossible for me to get food/get to work in any reasonable way without a car, and I would never see my family if I couldn't fly back home. I also would like to stop eating meat, but I find my "addiction" to meat consumption to be unlike anything else. I could give up coffee and alcohol no sweat but meat is like a whole other level. Realistically, it seems to me that much of the economy and the way cities and populations work and interact need to be redesigned from the ground up to have a much smaller footprint...