"Invest, Divest: Renewable Investment To Hit $630 Billion A Year In 2030, Fossil Fuel Stocks At Risk Today"

From Thinkprogress.org

Bloomberg New Energy Finance has a must-read piece for investors on how the smart money is beginning to notice the quicksand on which fossil fuel stock prices are built.

We reported back in April that BNEF said 70 percent of new power generation capacity added between 2012 and 2030 will be from renewable technologies (including large hydro).

Indeed, BNEF founder Michael Liebreich posed a good news, bad news story back then:

“By 2030, the growth in fossil fuel use will almost have stopped,” Liebreich told renewable-energy investors…. “We’re told that it needs to happen by 2020” in order to prevent irreversible climate damage. “That won’t happen. But by 2030, it pretty much will.”

Yes, homo “sapiens” will miss by just 10 years or so the window to avert catastrophic climate change — resulting in possibly hundreds of years of misery for billions and billions of people. The tragic irony is the fossil fuel industry is essentially doomed no matter what — but humanity wouldn’t be, if we were just a tad more “sapiens.”

We reported in August that a Goldman Sachs research paper concluded the “window for profitable investment in coal mining is closing” — same for for coal exports.

Now BNEF points out that much the same is true for oil investments:

Last month 70 investors representing $3 trillion of assets under management sent letters to oil-and-gas companies asking them to disclose plans for adapting to a world that may be edging closer to peak fossil fuels. That’s the point when humans stop increasing their annual burn – either because the environmental danger makes it too costly or because buildings and cars run more efficiently. BNEF says peak demand could happen in 2030.

The risk: Oil and coal companies worth more than $7 trillion may be sinking billions of dollars today into projects that will never make sense to finish.

A key point of this article is that it isn’t just enviros saying the days of fossil fuel are numbered. We have institutional investors, Goldman Sachs, Bloomberg New Energy Finance and many, many others in the financial industry:

In 2013, so-called carbon-asset risk “went from a conceptual possibility to a sort of near-and-present reality,” Nick Robins, head of the Climate Change Center at HSBC Holdings Plc in London, said in a phone interview. He wrote a research note in January valuing the risk of “unburnable reserves”: the oil and coal on companies’ balance sheets that will be too expensive to extract. “There is this undertow of demand destruction going on through technological improvement. That’s certainly not fully priced at the moment.”

And that’s without even considering the possibility of the world coming to its senses on the threat posed by unrestricted carbon pollution in time to avert the worst.

There’s more:

“The end is nigh” for global oil-demand growth, proclaimed a Citigroup report in March. Standard & Poor’s cautioned that a patchwork of policies that cut demand for fuels could lead to outlook revisions and downgrades in smaller oil-and-gas companies as early as next year, with a similar shock to the majors in 2016. Goldman Sachs’s advice to oil companies: “invest only in medium-/high-return projects, spend the rest of their cash on buybacks and focus on per share growth.” Translation: prepare to shrink the business.

Divesting from fossil fuels isn’t risky. Not divesting is.

"Peak Oil: The End Of the Oil Age is Near, Deutsche Bank Says"

From WSJ blogs:

By Keith Johnson

Here’s an intriguing thought: Global oil supplies are indeed set to peak within a few years, and no, that is not bullish for oil. Quite the contrary—it will spell the end of the “oil age.”

That’s the take from Deutsche Bank’s new report, “The Peak Oil Market.” In a nutshell: The oil industry chronically under invests in finding new supplies, exemplified both by Big Oil’s recent love of share buybacks and under-investment by big oil-producing nations. That spells a looming supply crunch.

That will send oil to $175 a barrel by 2016—and will simultaneously put the final nail in oil’s coffin and send prices plummeting back to $70 by 2030. That’s because there’s an even more important “peak” moment on the horizon: A global peak in oil demand. That has already begun in the world’s biggest oil-consuming nation, Deutsche Bank notes:

US demand is the key. It is the last market-priced, oil inefficient, major oil consumer. We believe Obama’s environmental agenda, the bankruptcy of the US auto industry, the war in Iraq, and global oil supply challenges have dovetailed to spell the end of the oil era.

The big driver? The coming-of-age of electric and hybrid vehicles, which promise massive fuel-economy gains for short-hop commuting but which so far have not been economic.

Deutsche Bank expects the electric car to become a truly “disruptive technology” which takes off around the world, sending demand for gasoline into an “inexorable and accelerating decline.”

In 2020, the bank expects electric and hybrid vehicles to account for 25% of new car sales—in both the U.S. and China. “We expect [electric propulsion] will reverse the dynamics of world oil demand, and spell the end of the oil age,” the bank writes.

But won’t cheaper oil in the future just lead to a revival in oil demand? That’s what’s happened in every other cycle. Au contraire, says the bank: Just as the explosion of digital cameras made the cost of film irrelevant, the growth of electric cars will make the price of oil (and gasoline) all but irrelevant for transportation.

"Peak Oil: Everything is going to change"

(This piece ran online with an ad for an "All-New" Chrysler Town and Country Mini-Van "Engineered Beautifully" in the middle - and an ad for a Jeep "Have fun out there" - next to it. That's America.)

By STATE REP. TERRY BACKER in the Connecticut Post

There is little government can do about the price of oil. That is not what people want to hear. Yet it is a fact. The U.S. government and all the states have no "Plan B." They continue to rely on a delusional "Plan A" — more oil and cheaper oil all the time. Politicians, generally asleep at the wheel on this issue, have been shocked into trying to do something about the current and future problems arising from oil costs. They are spinning around looking for someone to blame, dazed by the precipitous rise from $50 per barrel last January to $126 this past week.

In an election year, members of Congress are beating the bushes trying to escape the fallout of their years of dozing in their seats. They point at speculation, greedy profit takers or big oil companies, perhaps all true to one extent or another. However, despite the rising chorus of voices pointing out rising demand coinciding with falling or flat production, they seem to be ignoring the 800-pound gorilla in the room that is "Peak Oil" production. Just a few years ago, Mexico, Russia, Norway, England and Indonesia were producing vast amounts of oil for the world market. Today, England and Indonesia are net importers of oil, Russia's production is flat, Norway's production is falling and Mexico has informed us that their giant oil field, Canterall, is in terminal decline and may not be able to export after 2015.

Neither drilling in Alaska, the continental shelf or other ultra-deep-water sites will change the trends of less and more expensive oil. Only changing our infrastructure and consumption patterns will preserve somewhat our current lifestyle.
Connecticut broke out of the pack this month to become the first state in the country to make a major step forward in planning for the increasingly high cost and reduced availability of petroleum. With only 15 minutes remaining until the end of the 2008 General Assembly session, the state Senate approved by unanimous consent and sent to Gov. M. Jodi Rell the "Energy Scarcity and Security" bill.

The measure requires the state to develop a planning scenario model that will predict impacts based on the price of oil. The model will predict future impacts on heating, transportation, food cost, road paving, fleet operations, education, public health I think you get the idea. The outputs of the model will guide us in formulating Plans B, C and D for the state.

The model won't make more oil or cheaper oil; it will reveal to us the impacts on our citizens and our state before they happen. It will allow the Legislature and municipal governments to reprioritize what is possible and what is not.

Thanks to the members of the Connecticut Legislative Peak Oil and Natural Gas Caucus, state government opened its eyes for a quick peek into the future. A small awareness has begun in the Legislature, but it is not an understanding. The public now must educate itself about the issues of oil supply and help lead its government to make the changes that will surely be painful, but needed.

State Rep. Terry Backer is co-founder of the Connecticut Peak Oil and Natural Gas Caucus and a member of the General Assembly's Energy and Technologies Committee. He represents Stratford's 121st Assembly District.

"Peak Oil And Famine: Four Billion Deaths"

At some point in the early years of the 21st century, there will be a clash of two giant forces: overpopulation and oil depletion. That much has been known for a long time. It is also well known that population must eventually decline in order to match the decline in oil production. A further problem, however, is that it will be impossible to get those two giant forces into equilibrium in any gentle fashion, because of a matter that is rarely considered: that in every year that has gone by — and every year that will arrive — the population of the earth is automatically adjusted so that it is almost exactly equal to its carrying capacity. We are always barely surviving. Population growth is soaring, whereas oil production is plunging. If, at the start of any year, the world’s population is greater than its carrying capacity, only simple arithmetic is needed to see that the difference between the two numbers means that mortality will be above the normal by the end of that year. In fact, over the course of the 21st century there will be about 4 billion deaths (probably about 3.6, to be more precise) above normal.

Let us refer to those 4 billion above-normal deaths as "famine deaths," for lack of a better term, since "peak oil" in terms of daily life is really "peak food." There will, of course, also be famines for other reasons. It is also true that warfare and plague will take their toll to a large extent before famine claims those same humans as its victims.

The increase in the world’s population has been rather simple: from about 1.6 billion in 1900 to about 6.1 billion in 2000 [9]. A quick glance at a chart of world population growth shows a line that runs almost horizontally for thousands of years, and then makes an almost vertical ascent as it approaches the year 2000. As Gordon and Suzuki said in 1990, "more people have been added to the Earth during the past 40 or 50 years than have been added since the dawn of man"...

Another point to keep in mind is that the relation between population and oil production is one of cause and effect. The skyrocketing of population is not merely coincident with the skyrocketing of oil production. It is the latter that actually causes the former. With abundant oil, a large population is possible — ignoring, of course, the fact that environmental degradation may eventually wipe out those human numbers anyway. Without abundant oil, on the other hand, a large population is not possible...

Incidentally, carrying capacity does not increase in direct proportion to the number of barrels of oil per person, because as the population goes up there is more strain on the environment. As a result, we were comfortable enough with 1 barrel per person in 1940, but less comfortable with 4 barrels per person in 1990...

Human population will collapse in any year in which there is a difference between the initial population and the carrying capacity...

The famine deaths do not become zero until nearly the end of the 22nd century, when the population reaches about 1 billion, with almost no oil left, duplicating the conditions of the year 1900 or earlier...

"The end of civilization..."

From Guy McPherson's blog Nature Bats Last:

........As I wrote in one of my recent books, the problem is not that the road to Hell is paved with good intentions -- it's that the road to Hell is paved. We have, to the maximum possible extent allowed by our intellect and never-ending desire, consumed the planet and therefore traded in tomorrow for today. And we keep making these choices, every day, choosing dams over salmon, oil over whales, cars over polar bears, death over life. And when I say we keep making these choices, I do not mean you and me -- we have essentially nothing to do with it -- I mean the politicians and CEOs who run this country. They are killing the planet and, when they notice the screams, they turn up the volume on Fox News. Meanwhile, most Americans took the blue pill without really thinking about the consequences. In the wake of these endless insults to our only home, perhaps the biggest surprise is that so many native species have persisted, thus allowing for our continued use and enjoyment.

When I tell people about Peak Oil, the immediate response is something like, "C'mon, the Dow Jones Industrial Average is setting records; the economy looks great."

Uh-huh. Never mind the asset bubble built by shaky investments. Never mind the manipulation of the money supply by the Federal Reserve Bank since the Fed's monetary policy was removed from public view by Ben Bernanke. Never mind that the Dow, which is based on a whopping 30 companies, is in free-fall when measured against any metric except the U.S. dollar, which is falling even faster. Never mind that serious stock-market investors represent a slim minority of the world's populace.

Ignore all that, and think about this: When you jump off a 100-story building, everything seems fine for a while. In fact, the view just keeps getting more clear as you get closer to the ground. What could possibly go wrong? Well, maybe one thing. It's not the fall that kills you. It's the sudden stop at the bottom...

It appears humanity will be restricted to a few thousand hardy scavengers living near the poles within a century or two. Shortly thereafter, Homo sapiens will join, in extinction, every other species to occupy the planet. Recent projections indicate that, by century's end, there will be no planetary ice. That's dinosaur days, and the end of the human experience. It's very small consolation to me that, as the home team, Nature bats last.

We will persist about 10% as long as the typical species of mammal, giving credence to Schopenhauer's view that the human experience is a mere blink of an eye bounded on either side by infinities of time. Despite our apparently brief stay on this most wondrous of planets, it has become clear we will take a large percentage of the planet's biological diversity along with us into the abyss....

Knowledge of Peak Oil and runaway greenhouse leads me, again, to the question of Schopenhauer: How to get through a life not worth living? I have struggled mightily with this question – much to the chagrin of my wife, I can assure you – and have turned to my intellectual predecessors and heroes for answers.

I start, as I often do, with Socrates. Socrates pursued a life of excellence by questioning those who would tolerate him and his many inquiries. He knew we were beings singularly tuned to quality. Within the next few minutes, I will mention each of the six primary questions of Socrates, the questions that represent the qualities he found so important to the human condition: What is good? What is piety? What is virtue? What is courage? What is justice? What is moderation? These questions are as vibrant and relevant today as they were more than two millennia ago....

Hope, then, rooted in friendship, is my response to Schopenhauer. Hope, in other words, rooted in friendship -- let's call it Platonic love -- rooted in the right-brained friendship expressed by honoring each other and hugging trees.

Will to live is no solution: It's a problem, as Schopenhauer himself admitted when he proclaimed, "to desire immortality is to desire the eternal perpetuation of a great mistake."

Our will to live – rooted in the evolutionary drive to survive – makes us shortsighted and self-motivated (or, in the case of many of us, self-absorbed)....

If Schopenhauer's Will to live offers no viable solution, Nietzsche's Will to power is even worse, for it reveals our darkest nature. It's small wonder Nietzsche abandoned the Overman late in his career. Or perhaps the Overman abandoned Nietzsche.

Maybe Said wasn't so far off the mark:

Said said "optimism" … I say "hope."

Said said "intellectual and political work" … I say "the common good."

But we seem not so far apart, Said and I. Just like, on close inspection, those of us in this room: Our intellectual and political work require, nay demand, optimism. For without it, hope is lost for both kinds of humanity:

Without optimism, hope is lost for the individual, personal variety of humanity that is themeasure of our character.

And without optimism, hope is lost for our entire species, and many others on this planet. That hope is lost, too, without big doses of courage, justice, moderation, and virtue...

Step 1: Expand our horizons beyond the question of how we will run the cars by means other than gasoline.
...It's time to abandon the car, time to make other arrangements for nearly all the common activities of daily life.

Step 2: We must produce food differently.
...say hello to locally grown food, recognizing that you might have to grow your own....

Step 3: We must inhabit the terrain differently.
...Our towns must be re-inhabited and the areas around them must be re-structured to accommodate small farms and the manufacture of goods to serve the towns....

Step 4: We must move people and things differently.
... we could restore public transit....then...move to the waterways and then restoring the piers and warehouses...

Step 5: We need to transform retail trade.
...there are plenty of career opportunities for energetic individuals interested in small, local businesses...

Step 6: We have to start making things again.
...We will have far fewer choices when we go to the store, but we still will need clothes and household goods....

Step 7: We need artists again.
...We're going to need playhouses and live performance halls, albeit without high-tech light and sound systems. And we'll need musicians and actors and playwrights and stagehands and theater managers. We'll need storytellers, too, to keep history alive ...

Step 8: We must reorganize the educational system.
...Yellow fleets of school buses are on their way out....

Step 9: Our medical system must be completely reorganized.
...Without power-hungry high-tech tools, we'll need real doctors again: people who understand how the body actually functions...

Step 10: Our entire socio-economic and political system will become much more local.
...the worst possible outcome would be a battle to the death in a game of Last Man Standing. Our focus on the common good precludes a mentality of Us vs. Them; with the common good, there is no "Them."

There you have it: a thumbnail sketch of the agenda. I'm sure I've left out many important items, but take heart: any number can play, and there is so much to be done. We're sleepwalking into the future -- headed for a cliff of our own making -- and it's time to wake up....

During the time of Christ, in the Mediterranean region, the population of humans was viewed through the same lens as other populations. As such, human deaths often occurred in large numbers, as a result of war, conquest, famine, and pestilence -- these are the Four Horsemen ofthe Apocalypse, as described in the gospel of John....

Until very recently, large-scale die-offs were viewed as "normal," in much the same way we view as "normal" our K-12 system of education, or weekly shopping trips to Safeway, or using a cellular telephone. The description and management of human populations back in the days of the Greek Cynics was oriented along population lines, with relatively little societal regard for individuals. Contrast that perspective with our laser-like focus on individuals. Let's take a quick look at the Four Horsemen, one at a time. Famine's as good a place to start as any, considering that my limited understanding of public health tends toward eating … or, eating less....

Some countries have looked back to move forward. Ireland uses medical generalists in their communities to advance the public health. They preserve the good of the many at the occasional expense of the one, or of the few...But perhaps, in focusing on communities and therefore letting go of some individual lives, Ireland has preserved something we've lost: something economic, environmental, political, social … or moral...

Without the common good, and the struggle on its behalf, there can be no Aristotelian friendship. There can be no justice. And there can be no virtue.

Therefore, I am forced to conclude that: 5,000 generations into the human experience, with the end of humanity in clear view, our shared goal must be … the common good.

And I further conclude that: As friends, we reveal our differences, we appreciate our differences, and then we set them aside … for the common good.