The aging fossil-fuel industry — Big Oil, Big Coal, Big Gas — doesn’t want you to hear the relentless drumbeat leading investors away from fossil fuels: Falling stock prices, rising production costs, spills, rapidly depleting reserves. But the reality is, fossil fuels are being pushed aside by a new Age of Sustainable Energy, which is becoming a jackpot of investments in renewable energies, sustainable developments and high-tech opportunities in the rapidly emerging low-carbon world, Marketwatch reported.
Soon the old fossil industry will be pressured by its own investors — pension funds, bank and trust companies and insurance firms — to jump on the bandwagon and radically depart from old ways that started in Pennsylvania over 150 years ago. In fact, as investors turn away, eventually fossil-fuel giants will almost certainly eat their pride, hedge their bets, and acquire or joint venture with the new high-tech energy firms like SolarCity, Vesta Wind Systems, and Tesla PowerWall. Yes, even though Exxon Mobil’s CEO dismisses renewables, laughs at climate science and boasts about there being enough oil reserves for a couple centuries, that’s more macho braggadocio. They really are worried. Many experts predict Peak Oil is dead ahead.
Oil: The Long Goodbye
Several years ago, in a special issue of Foreign Policy, “Oil: The Long Goodbye,” Daniel Yerkin, one of the world’s leading minds wrote, “Oil’s very future is now being seriously questioned, debated and challenged.” And Foreign Policy’s CEO David Rothkopf punctuated that warning that “history won’t end, even if the oil runs out,” we’ll just morph into a new age of alternative energies. Flash-forward to a recent special report in Climate News Network by former Financial Times correspondent Kieran Cooke: “Trillions of dollars need to be redirected into building low-carbon economies to avoid serious climate change.”
Yes, even if later Exxon Mobil and the other fossil-fuel giants begrudgingly start hedging, even investing in sustainables and renewables, their obstinate Luddite vision of the future guarantees that they’ll be late to the table, negotiating from a one-down position, hammered by rising costs, collapsing stock prices and bleeding reserves.
On the other hand, Big Banks don’t share Big Oil’s irrational handicap, an obsession with climate-science denial. As a result, global banks can take a growing lead in allocating the estimated $90 trillion being invested in “building this new low-carbon world” by 2035. Big Banks will be in the lead of the emerging renewable, sustainable energy industry. And that will force the naysayers — Exxon Mobil, Shell, BP, Conoco, Massey, the Kochs and their allies — to play catch-up, competing with Big Banks whose power will just keep growing.
Oil Glut Grows, Banks Dumping Oil Loans
The reality is there is an oil glut. Worse, as MarketWatch’s commodities guru Myra Saefong put it the glut “will grow even bigger thanks to OEPC fiercely competing to hang onto its tenuous global market share. Even as another Journal headline hints to war between energy superpowers in “Easy Access to Money Keeps US Oil Pumping.” Or just pumping up the glut? Apparently doing it with capital from private equity and nonbanking sources. But in the current news context, this sounds less like a news story, and suspiciously like a press release planted by worried insiders reacting to the uncertain, risky, volatile energy futures markets.
While the old fossil-fuel giants are playing defensive, anchored in the past, fearing science, and denying the reality of global warming, Big Banks are already stepping into the future. Unfortunately, like a deer in the headlights, they just keep missing new investment opportunities as they get tossed around the global economy’s unpredictable seas. Cooke is painfully clear: “The world’s financial system must undergo comprehensive change by 2035 if humanity is to make the transition needed to reduce the threat of dangerous climate change, according to a new report by the United Nations Environment Program (UNEP).” The UNEP’s report specifically focuses on aligning the global “financial system with sustainable development, says finance must be focused on moving investments into low-carbon projects.”
