Think tank says investors should weigh risks of big high-carbon projects


Large oil companies are betting more than $1T on large-scale, “high-risk” projects over the next decade, and investors should question the assumptions underpinning that spending, urges the Carbon Tracker Initiative.

The think tank advises oil investors to require annual stress tests of oil companies’ sensitivity to a low-price scenario, and to ask what demand and price assumptions underpinned companies’ spending strategy, as some major pension funds already have begun to do.

Among companies with the highest exposure to such high-risk projects, as measured in dollar terms, are Petrobras (PBR), Exxon (XOM), Rosneft (RNFTF), Shell (RDS.A, RDS.B) and Total (TOT), the CTI says in a new report.

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Comments (35)
  • petroglyph
    , contributor
    Comments (36) | Send Message
     
    Same song Al Gore is singing..... "All That Carbon's Staying in the Ground." Which strikes me as unlikely given the slow adoption of electric cars and the tiny portion of world energy that comes from renewables.

     

    PBR would, of course, be vulnerable to lower oil prices. But that happening for the reasons that this think tank is suggesting is not even in the top 5 things I'd worry about as a PBR investor.
    8 May 2014, 07:22 PM Reply Like
  • DonSimon
    , contributor
    Comments (124) | Send Message
     
    Did you notice now that the pressure is on to approve the Keystone pipeline, the greenies are dusting up the old scares on global warming. Now this.
    It is sad to see politics as usual.
    I would likto know what (and who) are the think tankers!
    8 May 2014, 07:33 PM Reply Like
  • rjj1960
    , contributor
    Comments (1472) | Send Message
     
    The stuff doesn't grow on trees.
    8 May 2014, 07:51 PM Reply Like
  • No Sympathy
    , contributor
    Comments (42) | Send Message
     
    Well...yes it does. But because of the particulate matter from wood fires is against the law natural gas is a better choice. :-))
    8 May 2014, 10:08 PM Reply Like
  • retired358
    , contributor
    Comments (305) | Send Message
     
    Reading about Carbon Tracker Initiative...somewhat hard to understand their objective (the one behind the one stated). It appears to be that they are anti carbon fuels and are using economic analysis to attempt to force less investment in carbon energy projects...

     

    They seem to be saying that beyond a certain level, carbon production will be limited by legislation. And, this will somehow result in lower hydrocarbon prices (meaning that there will still be a large supply but no place to sell it due to legislation).

     

    If that is the premiss (or there is some other premiss), they will need to explain what will replace hydrocarbons in the next several decades while, at the same time, energy demand is forecast to increase significantly. Or do they think we will all agree to live in caves and in the dark?

     

    I think they are yet another group with an agenda. And, they do need to explain what will replace the limited hydrocarbon usage before we can have a meaningful discussion.

     

    Until then, little credibility...in my view...
    8 May 2014, 07:59 PM Reply Like
  • Capt.Gene
    , contributor
    Comments (82) | Send Message
     
    I believe the premise is that low future demand will make all these big expensive projects money losers. So don't make the investments.
    The result will be higher energy prices and supply will not meet demand.
    9 May 2014, 05:20 PM Reply Like
  • Judd0813
    , contributor
    Comments (6) | Send Message
     
    Typical anti-hydrocarbon fears stirred up. Source of study is The Carbon Tracker Initiative, a London-based nonprofit organization that researches the potential effects of climate change and policy on the world’s capital markets. Scary if you put any value on computer climate models hard wired with equations biased to CO2, and not solar influx and upper atmosphere humidity.
    8 May 2014, 08:45 PM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    When Mr. Winter brings his polar vortex to town next year, all those nasty, carbon-based electrical generators should go into a temporary maintenance mode shut down. I'm sure the "greenies" wouldn't mind because, based on their hype, there must be ample solar & wind to meet the demand.
    8 May 2014, 09:34 PM Reply Like
  • No Sympathy
    , contributor
    Comments (42) | Send Message
     
    Free advice! Well worth the price.
    8 May 2014, 10:11 PM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    At a cost of $95 to extract E&P companies would do well to invest in renewables since the cost of producing carbon is only going up & renewables will be cheaper.
    8 May 2014, 10:18 PM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    153972...where on earth did you dream up the $95 figure? It just makes the rest of your comment of equal significance and value.
    8 May 2014, 10:31 PM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    John001, The $95 figure came from Carbon Track study. This is for high risk projects such as deepwater drilling off of the coasts of Brazil, North Sea, Africa, etc.

     

    http://bloom.bg/1g44Szv
    9 May 2014, 12:30 PM Reply Like
  • retired358
    , contributor
    Comments (305) | Send Message
     
    You say the cost to extract hydrocarbons is $95 and renewables will be cheaper???

     

    The average extraction cost is much less than $95...if it were 95, none would be produced.

     

    Currently, one of the few renewables less expensive than crude, coal, nat.gas is "in place" hydro (possibly some nuclear). Wind and solar and fuel from food (corn) are more expensive and the only reason they are being installed/produced is that we taxpayers are footing the bill through subsidies and mandates.

     

    Unless the population growth somehow declines and less developed countries decide they can do without and do not need to modernize, the world will need both hydrocarbons (all that can be produced) and renewables...
    9 May 2014, 12:52 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (875) | Send Message
     
    I don't think any company would risk producing one barrel of oil at a cost of $95/bbl with the size investment required. One more proof that these studies are a bunch of hokum.

     

    I worked in the E&P side for 2 decades and know the companies run a myriad of economics at various price levels only the uniformed think differently.
    9 May 2014, 01:20 PM Reply Like
  • Jake2
    , contributor
    Comments (681) | Send Message
     
    Read the other day that generally speaking Americans are outliers as far global warming is concerned. I.e., they are less concerned about it than Europeans. All you have to do is read some of the above head-in-the-sand comments.

     

    By the way, Stanford is getting rid of all investments in or related to coal. Good Greenies unite!
    9 May 2014, 12:51 AM Reply Like
  • retired358
    , contributor
    Comments (305) | Send Message
     
    Talk about "head-in-the-sand" comments...

     

    Europeans were much more concerned about global warming than we were...until they began to realize the cost to mitigate (assuming man can actually mitigate...which is not certain).

     

    Did you know that greenhouse gases are decreasing faster in the U.S. than in most European countries?

     

    Yes, Stanford has announced that...but to what end...it is only a feel good move and does little to nothing to reduce coal/CO2 production.

     

    When the "greenies" give up their homes for caves, elect to not use lights and quit using anything hydrocarbon based, then I will believe they are serious about uniting to save the world. Until then, they continue to enjoy the benefits of hydrocarbons, often at the expense of taxpayers.
    9 May 2014, 01:08 PM Reply Like
  • comsense8
    , contributor
    Comments (25) | Send Message
     
    I am having trouble understanding how we can clean our air any more when every job we send to china increases pollution there. And that situation is not improving. We are on the same planet.
    Do greenies drive electrict cars fueled only by wind and solar. Are their SUV's solar powered. Do their farm tractors and combines have electrict motors.
    The Amish farm with horses and mules and I have watched them harvest corn by hand. But when they want to get some real work done like loading a silo they use a gas engine. I have not seen them shipping out huge truck loads of grain either.
    Do greenies think of the mathematical difference between mule power and Diesel engine tractors. Why did we have the industrial revolution? Do we want to go backwards and all move back to the farm and drive mules to eke out a bare existence?
    From where you are sitting right now count the materials that come from oil and coal, then count the things that do not have a connection to oil or coal. If you don't understand this concept, read up on organic chemistry.
    9 May 2014, 07:42 AM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    comsense8.... there is no point in trying to talk logically to greenies because they are totally intolerant of anyone who doesn't agree with their views. They abandoned the term "global warming" when the data and fancy models showed it was pure nonsense, and then corrupted the term "climate change" in order to keep the money flowing and to keep the politicians in their pockets.
    9 May 2014, 09:55 AM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    John001,

     

    Climate change is real and the Sandy storm that impacted the Northeast only substantiates this claim. On October 30, 2012 the coverage of the storm by New York Times’ reporters quoted a climatologist that said, “Three of the top 10 highest floods at the Battery since 1900 happened in the last two and a half years. If that’s not a wake-up call to take this seriously, I don’t know what is."

     

    http://nyti.ms/SxOzgq

     

    With this quote in mind, I want mention that CO2 is more concentrated in the air, water and land today than ANYTIME in the last 500,000 years or since Homo erectus walked the planet. I’ve provided links that confirm this paragraph or show that rising levels of CO2 are due to man’s contribution of fossil burning fuels.

     

    http://1.usa.gov/QVtV7D

     

    http://bit.ly/SxOzgr

     

    http://bit.ly/QVtV7H

     

    http://bit.ly/SxOwBe

     

    http://1.usa.gov/LBvnuO

     

    http://1.usa.gov/SxOzgs

     

    http://1.usa.gov/QVtXfE

     

    Critics, skeptics, naysayers of climate change will refute these links with their links from approximately 2% of the world “scientists” that mention that the earth has had epochs that had more CO2 in the atmosphere hence, precipitated more heat than the current era. These “scientists” are correct. What they fail to mention is that those ages when the earth was warmer than it is today is because thousands and thousands of asteroids was also pelting the earth, (Precambrian) or that there were super volcanoes that erupted or that the amount of methane released by the dinosaurs is equal to the man made and natural causing methane today. They also fail to mention the last one hundred years have had the greatest increase in CO2 in the land, air and water than anytime since our species has become the dominant player on planet Earth.

     

    The climate change naysayers also tend to be anti-government or at least agnostic that the government can be a positive influence in the lives of its citizenry unless of course their U.S. national taxes are allocated towards a bloated national defense system that is consistently lobbied for by the military-industrial complex or a redistributive tax system that almost exclusively favors welfare for corporations and those that earn their livelihood through dividends instead of through wages. Since this true, it is understandable that these naysayers would also discount NOAA, NASA, UC Berkeley and other world renown institutions that have legitimate standing in world scientific community in favor of private based think tanks such as the CATO Institute that is also funded by the Koch Brothers that have vested interests in the chemical and fossil fuel industries to maintain the status quo of fossil fuels instead of a renewable energy policy.

     

    Under these circumstances, I have to ask the naysayers the following: If nine out ten publicly funded oncologists told you that your child has cancer but it is treatable and your child’s health will be restored through a change in lifestyle and some extensive treatments or one privately financed doctor said that your child’s loss of appetite and weight and sallow skin color is normal for a ten year old, who are you going to believe?
    9 May 2014, 12:35 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (875) | Send Message
     
    Hurricane Sandy impact was caused by the combination of a low grade #2 hurricane at the exact same time as a large regular tidal cycle. Bingo: low areas of NYC flooded.
    9 May 2014, 01:24 PM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    And significant parts of NY city are @ or below sea level so you get flooding.
    9 May 2014, 01:54 PM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    153972...ouch. You made me laugh so hard that I think I just broke my arm when I fell off my chair and hit the floor.

     

    I highly recommend that you take a basic course in historical geology at your nearest university. If you can't do that, then at least get hold of some text books in historical geology and read them. It will give you some understanding on what you mentioned in your above comments.

     

    Also, check out this link to some comments made by a former high priest in the the church of AGW. He is now considered a heretic, destined to be pilloried by his former peers:

     

    http://bit.ly/1g4s3cV

     

    "One of the world's most eminent climate scientists - for several decades a warmist - has defected to the climate sceptic camp.
    Lennart Bengtsson - a Swedish climatologist, meteorologist, former director of the Max Planck Institute for Meteorology in Hamburg and winner, in 2006, of the 51st IMO Prize of the World Meteorological Organization for his pioneering work in numerical weather prediction - is by some margin the most distinguished scientist to change sides.
    For most of his career, he has been a prominent member of the warmist establishment, subscribing to all its articles of faith - up to and including the belief that Michael Mann's Hockey Stick was a scientifically plausible assessment of the relationship between CO2 emissions and global mean temperature.
    But this week, he signalled his move to the enemy camp by agreeing to join the advisory council of Britain's Global Warming Policy Foundation (GWPF), the think tank created by the arch-sceptical former Chancellor Lord Lawson."
    9 May 2014, 02:19 PM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    John001, You trot out one guy that has become a private consultant and that refutes thousands of journals and papers, academia, the IMF, NOAA, NASA, etc that clearly document man's contribution to CO2 increases in the air, water and ground and the resulting effects on climate change?

     

    This speaks volumes about your understanding of the issue.

     

    9 May 2014, 03:16 PM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    153972...Lennart Bengtsson is not just another "guy", he is a "climatologist, meteorologist, former director of the Max Planck Institute for Meteorology in Hamburg and winner, in 2006, of the 51st IMO Prize of the World Meteorological Organization for his pioneering work in numerical weather prediction" so why belittle him just because he practised sound science and came to the conclusion that AGW is not all it was hyped up to be. That's how science works...test and retest hypotheses. Also, he did not become a "private consultant". That comment shows your hand.

     

    When you get around to your geological studies you will discover that climate change is cyclical, and has been around for a very long time (well before the pre-Cambrian) and is a part of the natural world. It has caused changes to the ocean chemistry ( Ph and subsequent mineralogy) many times. I think you will find discussions on the Greenhouse & Icehouse worlds of particular interest.

     

    Even though you probably have an excellent background in the natural sciences, you must have skipped the class discussion on consensus in science.

     

    stay warm

     

    9 May 2014, 04:20 PM Reply Like
  • User 353732
    , contributor
    Comments (5161) | Send Message
     
    Pravda must have relocated from Moscow to London after the Soviet Empire fell.....
    9 May 2014, 12:59 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (875) | Send Message
     
    And Soros is funding it
    9 May 2014, 01:22 PM Reply Like
  • comsense8
    , contributor
    Comments (25) | Send Message
     
    Our planet is always changing.

     

    I really was trying to make the point that we are worlds away from abandoning carbon based fuels and 200,000 other products from our lives. Right now our lives are more comfortable and less expensive because of hydrocarbons. Yes, eventually they will be used up and humanity will survive without them, and the survivors will be living very differently. That is expected to be about 200 years from now. The changes will come because of capital investment as the landscape changes.
    9 May 2014, 03:26 PM Reply Like
  • P. Dennis
    , contributor
    Comments (401) | Send Message
     
    What amazes me is that some top scientists are just now becoming willing to say that solar changes are the major driving force of earth's continually changing climate. Apparently some have concluded that this factor overwhelmingly trumps the amount of CO2 in the atmosphere. They have been moved to such a conclusion because today's mathematical climate models have not explained the relatively stable worldwide temperatures since 2000. In short, the predicted warming has virtually stopped in its' tracks during the last 14 years. Seems to me that many have chosen to ignore the incredible power, size, and influence of that gigantic fusion furnace we orbit around in their mathematical models because our knowledge of its' processes and changes is so severely limited.

     

    The short answer for me is that nobody can predict tomorrow's (yes, literally!) weather with certainty where I live in north western Nevada just east of The Sierra Nevada Mountain Range and I place little credence in anyone's mathematical model to explain a system as complex as our atmosphere's interaction with the rest of our solar system. If the day ever arrives that mankind does successfully construct such mathematical models they will surely bear very little resemblance to our puny efforts so far. They will have to be several orders of magnitude more complex than anything we have now in order to encompass the many significant interactions we have so little understanding of; including how the oceans react to changes in the levels of atmospheric gases and solar energy received on the earth.

     

    What kind of people would try to hobble the American Energy Revolution, and thereby the entire national economy, based upon little more than a guess? If you answer that question you will have a far better understanding of politics in the USA.
    9 May 2014, 05:05 PM Reply Like
  • john001
    , contributor
    Comments (1213) | Send Message
     
    Dennis...good comment. Not what the AGW crowd want to hear, but true. As for your question "what kind of people...", my guess is Obama supporters.
    9 May 2014, 06:53 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (875) | Send Message
     
    Dennis, Exactly. I often point to 3 things mankind can't predict accurately: the activities on the sun, earthquakes, and volcanoes. All 3 impact weather tremendously. A bit like the SupCt comment on porn, "we know what it is when we see it".
    10 May 2014, 06:39 AM Reply Like
  • P. Dennis
    , contributor
    Comments (401) | Send Message
     
    Thank you john001 and FleetUSA3226. I meant exactly what I said about being amazed. Think of earth's temperature as being predicted by a multiple regression equation with numerous coefficients as the measurements which impact our planet. I'm no scientist, but there would be coefficients for each major factor which determines the temperature. Don't scientists, or schoolchildren for example, have the reasoning power to understand that the Sun MUST be the factor with the greatest impact? Didn't they go to a decent public school with a science class early in life that taught them that Old Sol is the engine that provides the energy, in varying quantities, that powers almost anything that happens in our solar system?

     

    So, the equation would read something like the following. Earth's temperature = Sun's heating X (.90) + Radioactive Crust Events (volcanoes) X (.005) + Atmospheric CO2 Level X(.004) etc.

     

    By definition, the Sun's impact upon Earth's atmosphere must be the driving force. Additionally, every first year student of Statistics is taught that correlation does NOT necessarily equal causality, which must be born in mind when determining the coefficients that go with each factor.

     

    Far be it from me to lecture brilliant University scientists on this matter, but I'll stand my ground in the belief that the variable nuclear fusion furnace that is 93 M/Miles from us, and how its' various energy outputs both vary and impact our planet, must be understood far far better than they are now before I would be willing to impose decisions upon The American People that would hobble our economy in the face of Russia, Communist China, and terrorist threats. I say this because Economic Strength = Military Strength. Even Al Queda's leaders understand that.
    10 May 2014, 08:34 AM Reply Like
  • 153972
    , contributor
    Comments (1267) | Send Message
     
    There are four causes for climate change.

     

    1. Sun. Per hundreds of peer review studies by climatologists the sun has not been the reason for temperature increases. Has it had an impact? Yes, but only in the range of 15% at most. Several climatologists have argued that the earth's temperature would've cooled had not greenhouse gases had their impact since the 1850s.

     

    http://bit.ly/1nt7d9t

     

    http://bit.ly/1nt7d9v

     

    http://bit.ly/1nt7bOK

     

    The second cause is the 100,000 year cycle. Again, according to hundreds of peer review journals we should be entering a cooling period per the 100,000 year cycle but the earth is warming.

     

    http://bit.ly/1nt7bOL

     

    http://bit.ly/1nt7bOO

     

    The third cause of climate change is volcanoes.

     

    http://1.usa.gov/1nt7dpT

     

    http://bit.ly/1nt7eKk

     

    The last cause of climate change is greenhouse gases.

     

    There are hundreds of links that I could add but anyone with a modicum of knowledge already realizes that CO2 concentrations does raise the earth's temperature. Even Sister Sarah Palin recognizes this. Man's contribution to raising the CO2 level since the industrial revolution is undeniable. It is only getting worst now due to deforestation which further contributes another 20% of CO2 to the atmosphere.

     

    The naysayers will counter with their 2% of scientists that are funded through private think tanks that are funded by industries that have vested economic interests in the fossil fuel industry.

     

    I've attached links supporting this claim.

     

    http://bit.ly/1nt7eKm

     

    http://bit.ly/1nt7dpX

     

    http://bit.ly/1nt7eKn

     

    So deniers of man's contribution to climate change, continue to live in the world of lies, manipulation and avarice.
    10 May 2014, 02:57 PM Reply Like
  • DonSimon
    , contributor
    Comments (124) | Send Message
     
    The sun has major impacts on our weather. It has been shown that every eleven years or so the sun has serious flares that impact the weather here.
    Current weird weather has been or predicted by smart meteorologists after the Iceland volcano eruption a few years back. volcanic eruptions are often a major impact on weather for a few years.

     

    As far as co2 gasses, during the days of the dinosaur, the concentration was a lot higher than today. Google it.
    A litte known article theorized that the ice ages and subsequent warming was due to the following. As the world gets colder rain etc takes methane out of the atmosphere and it gets locked in the perma ice that the cooling creates, Lesser methane in the atmosphere creates more cooling/snow etc. and the cycle of cooling continues until there us a methane equilibrium and the warming cycle starts. This has taken about 10 thousand years typically. The last ice age ended about 1000 years ago. (New York was under 300 ft of ice!). So the world is in its traditional warming cycle. Trend is up with cycles around the trend(mini climate changes).

     

    Lastly, those computer models that predict all this calamity in 20, 30 etc. years are to be observed with a jaundiced eye. Heck, today climate programs can not even predict a path of a hurricane one week before land fall. Next huricane see what the "accurate " computer models show. Lol. yet they want us to believe that "accurate" models can predict the weather of the WORLD fifty yeas from now.
    Figures do not lie, but liars figure!

     

    I would like to see someone explain the cooling/warming cycles the WORLD has gone through over the eons! Remember the were no humans around then to "mess"the climate up.lol

     

    Ing
    11 May 2014, 10:30 AM Reply Like
  • muenstermann
    , contributor
    Comments (33) | Send Message
     
    Let me see now. Ok, I think I get it. The axiomatic principles of physics to longer apply! How interesting. Back to school for all of us! Somehow in the minds of these ideological fanatics it is cheaper to burn a fossil fuel, or even nuclear energy, under a large boiler of water; then bring that water up to 212 degrees F., then have the steam which is produced turn a turbine with such force that it makes electricity, then pass that electricity through resistors (wire cables), and THEN plug into that electricity to charge batteries, from which the stored electricity THEN turns over your engine and propels your auto. Somehow, they think on a basic BTU level that that method is cheaper than burning your own diesel fossil fuel in your car, which directly turns your engine over and propels the vehicle. What a triumph of ideology over logic. What an incompetent disaster.
    11 May 2014, 07:09 PM Reply Like
  • DonSimon
    , contributor
    Comments (124) | Send Message
     
    Muensterman: being an engineer is exactly what is not understood by the greenies. They do not understand nature's laws of ineffiencies. That is why I chuckle when folks claim that electrical cars are more economical than gasoline cars. It takes xxx amount of BTU's to move yyyy pound of car. That electricity is developed by a power plant far away, stored in a battery then deliverd to a motor....not efficient.
    But you have to be an engineer or have knowledge of how nature works to understand that. Most folks do not.
    12 May 2014, 11:19 AM Reply Like
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