[BrianC]

Half World's Fossil Fuel Assets Could Become Worthless by 2036 in Net Zero Transition (theguardian.com) 7
Posted by msmash on Friday November 05, 2021 @02:46PM from the closer-look dept.
About half of the world's fossil fuel assets will be worthless by 2036 under a net zero transition, according to research. From a report:
Countries that are slow to decarbonise will suffer but early movers will profit; the study finds that renewables and freed-up investment will more than make up for the losses to the global economy. It highlights the risk of producing far more oil and gas than required for future demand, which is estimated to leave $11tn-$14tn in so-called stranded assets -- infrastructure, property and investments where the value has fallen so steeply they must be written off. The lead author, Jean-Francois Mercure of the University of Exeter, said the shift to clean energy would benefit the world economy overall, but it would need to be handled carefully to prevent regional pockets of misery and possible global instability. "In a worst-case scenario, people will keep investing in fossil fuels until suddenly the demand they expected does not materialise and they realise that what they own is worthless. Then we could see a financial crisis on the scale of 2008," he said, warning oil capitals such as Houston could suffer the same fate as Detroit after the decline of the US car industry unless the transition is carefully managed.
https://www.theguardian.com/environment ... transition

[Pops]

$this->bbcode_second_pass_quote('BrianC', ' ')"In a worst-case scenario, people will keep investing in fossil fuels until suddenly the demand they expected does not materialise and they realise that what they own is worthless. Then we could see a financial crisis on the scale of 2008,"

[jawagord]

I suggest the worst-case scenario is when energy companies fail to invest in new supplies based upon the stranded assets fear, while world population growth continues to drive demand and prices up to record levels and throws the world into a new recession. Happy to own O&G stocks in Brandon's ESG world.

A lack of investment in new oil and gas supplies, amid a shift in focus to cleaner fuels, is likely to drive price volatility in the next decade as demand for traditional energy sources grows, senior industry executives said.

Global energy investment saw its biggest fall on record in 2020 when the COVID-19 pandemic hammered demand, while a push for energy transition to meet greener targets pulled more funds into renewable resources.

"It seems likely that rather than falling, global oil demand is set to continue to rise as new markets and consumers emerge," Ben Luckock, co-head of oil trading at Trafigura said at the annual APPEC 2021 conference.

"That raises the prospect of potential cycles of higher prices for traditional forms of energy.

"Whilst that might be beneficial to oil producers in the short term, it also means significant costs to the global economy which is in nobody's long-term interest," Luckock added.

https://www.reuters.com/business/energy ... 021-09-28/

[Tanada]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('BrianC', ' ')"In a worst-case scenario, people will keep investing in fossil fuels until suddenly the demand they expected does not materialise and they realise that what they own is worthless. Then we could see a financial crisis on the scale of 2008,"

[evilgenius]

Any sort of depression that is indeed global, would open the door for the worst sort of world government options to compete alongside better options. All of us being in the same boat would provoke us to consider it, I think.

This is a tough one because it is a good idea to experiment. How do you determine which political ideas ought to be tabled?

There are impulses now being give the green light in this regard, that are bound to certain ideological centers. Those impulses were always considered restrained before, by what we call civilized society.

It may be that it is only this one man, Trump, that is at the center of everything? I'm not sure, however, that what isn't really going on is that people aren't discovering that they do need to think more these days, but that in their attempt to do so they have chosen the wrong sort of advisors. They are a lazy crowd, and they want to hear yes men.

When they do that, they can exist on vapor for a long time. They can exist on their version of the truth. They don't get too excited by truth, so it is no big deal to them. If they loved the truth, they would be able to see it when it was presented alongside all of those other competitors. It would stand out more for a greater number of people who are joining this bandwagon, I think.

First of all, they would be looking for it, and not for the fulfillment of their own story. They would stop talking about what they would like to do to all Liberals, or whatever group they hate, and begin to wonder if what they had to say sounded like a good idea or not, for one thing. It wouldn't be necessary for them to adopt every Liberal idea, only to function in their natural role, as some kind of arbiter that makes us take a look and be skeptical. In the proper frame, they make good skeptics. Run amok, they make poor masters.

[Pops]

$this->bbcode_second_pass_quote('evilgenius', 'A')ny sort of depression that is indeed global, would open the door for the worst sort of world government options .

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '
')Actually the worst case is people DO stop investing in fossils but governments like the US under the republicans plus Joe Coal Mansion don't go all out on renewables.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('Pops', '
')Actually the worst case is people DO stop investing in fossils but governments like the US under the republicans plus Joe Coal Mansion don't go all out on renewables.

[Plantagenet]

I'm very skeptical of any prediction or forecast that pretends to know what will be happening 10 or 20 years out into the future.

The prediction that half the world's fossil fuel assets will by worthless by 2036 assumes that all the world's governments will take steps to ban the use of fossil fuels to combat climate change.

But thats not what we see happening now......

We've got a UN climate change meeting happening right now in Glasgow, Scotland, and there's a proposal to ban the use of coal.

But the USA under Joe Biden joined with China, India, Russia and other big coal-consuming countries to say no to this idea.....thus ensuring the continued value of Coal Assets.

U.S.-Japan-China-Russia-and-India-missing-from-COP26-coal-pledge

Basically countries that don't use much coal pledged to not use coal, while countries who use coal wouldn't agree to stop using coal.


If a progressive D leader like Joe Biden is unwilling to sign on to phasing out the use of coal now, and instead aligns the USA with China, India and Russia to support continuing to use coal, then how exactly will coal and other fossil fuel assets become worthless when huge amounts of coal consumption are now on track to continue into the future?

Cheers!

[JuanP]

$this->bbcode_second_pass_quote('Plantagenet', 'I')'m very skeptical of any prediction or forecast that pretends to know what will be happening 10 or 20 years out into the future.

The prediction that half the world's fossil fuel assets will by worthless by 2036 assumes that all the world's governments will take steps to ban the use of fossil fuels to combat climate change.

But thats not what we see happening now......

We've got a UN climate change meeting happening right now in Glasgow, Scotland, and there's a proposal to ban the use of coal.

But the USA under Joe Biden joined with China, India, Russia and other big coal-consuming countries to say no to this idea.....thus ensuring the continued value of Coal Assets.

U.S.-Japan-China-Russia-and-India-missing-from-COP26-coal-pledge

Basically countries that don't use much coal pledged to not use coal, while countries who use coal wouldn't agree to stop using coal.

If a progressive D leader like Joe Biden is unwilling to sign on to phasing out the use of coal now, and instead aligns the USA with China, India and Russia to support continuing to use coal, then how exactly will coal and other fossil fuel assets become worthless when huge amounts of coal consumption are now on track to continue into the future?

Cheers!

[evilgenius]

I know that as oil prices come back from the low 80's, I am gradually building a position in RIG. I can see oil going over a hundred and ten dollars a barrel as inflation gets going. I am not investing heavily in conventional energy, but I am using this as a hedge against gas prices blowing up and harming my portfolio that much.

RIG is in the low 3's right now. If gas prices blow up, it could go to 7-8. If they fall, it could go to the low 2's. It looks like a good place to use leverage to protect myself from one type of bad story.

[gollum]

Until there's something that can replace oil and coal at a lower cost than what we pay for them now they will still be a valuable asset. The politics might go back and forth as far as using them but at the end of the day people will always elect someone that promises to make sure it's cheap to heat their house and drive to work.

[theluckycountry]

At some point in the future it will be the optimum time to buy several bafang electric bike conversion kits and an equal number of high capacity LiPO battery packs for them. After that point they may not even be available. The same would apply to decent solar panels, or any of the technologies promised to replace out dependence on fossil fuels but cannot be manufactured and distributed without tons of them.

[Pops]

$this->bbcode_second_pass_quote('gollum', 'U')ntil there's something that can replace oil and coal at a lower cost

[evilgenius]

You don't get anywhere by being Achilles. Participation means owning. I am so naturally a socialist. It took me a long time to admit that to myself.

That's why I think the world of robots has to come with at least some fundamental changes to what we consider comprises a corporation. I think we are missing at least one class of stock, which would be the one that the people who used to work would own, and that approximated their old position in the game.

They could sell it, but it could not be taken from them. The dividends are what they would live from. There would have to be rules about not being able to own more than so many otherwise normal shares in corporations, common or preferred, if a person also owned this type.

You want people to be able to invest as individuals, but you don't want the bosses getting that close to the heart of those people. I say this because workers quite naturally have a differing view of risk than management. Workers are workers because they don't want the risk of working for themselves, so to speak. They, therefore, require a deal like this rather than a cold slap in the face. And everybody must be dealt with.

Otherwise, yes, you would think the naturally lower, but more appealing to those who are that risk averse, return would tend to help classify what type of person owned this type of stock.

It's a different approach than UBI. Some sort of UBI might be necessary, but to participate one must own. It simply means that the entire structure must, then, acknowledge you. That other way, of the UBI, doesn't work on that level. It is for beggars.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('evilgenius', '
')That's why I think the world of robots has to come with at least some fundamental changes to what we consider comprises a corporation. I think we are missing at least one class of stock, which would be the one that the people who used to work would own, and that approximated their old position in the game.

They could sell it, but it could not be taken from them. The dividends are what they would live from. There would have to be rules about not being able to own more than so many otherwise normal shares in corporations, common or preferred, if a person also owned this type.

You want people to be able to invest as individuals, but you don't want the bosses getting that close to the heart of those people. I say this because workers quite naturally have a differing view of risk than management. Workers are workers because they don't want the risk of working for themselves, so to speak. They, therefore, require a deal like this rather than a cold slap in the face. And everybody must be dealt with.

Otherwise, yes, you would think the naturally lower, but more appealing to those who are that risk averse, return would tend to help classify what type of person owned this type of stock.

It's a different approach than UBI. Some sort of UBI might be necessary, but to participate one must own. It simply means that the entire structure must, then, acknowledge you. That other way, of the UBI, doesn't work on that level. It is for beggars.

[Pops]

Eventually a capitalist world made by robots and AI will grind to a halt. What would be the purpose of producing with no consumers aside from armies and lawyers? Come to think on it, why wouldn't armies and lawyers be AI too? The .1% spend huge sums to avoid taxes of any kind, they aren't going to roll over for the taxing them to turn around and give it out as UBI or universal babysitting—if they were that generous they would have been paying good wages and their taxes all along.

Consider how much of the big economies are post industrial now. I think 20% of the US economy is just commission: finance, insurance, and real estate, just churn. A growing amount is "health" and some now want the government to provide babysitters so moms (or dads) can afford to go to their menial jobs—while pumping out babies to become the next generation of consumers... that won't be able to earrn a wage to consume anything.

I'm more socialist all the time too. I still like private ownership, I like the market to the extent it is efficient. I like deciding what it is I do for a living, But end-stge capitalism is no longer efficient. Not when corporations can buy congressmen, operate defacto monopolies, absorb competitors, hide profit offshore... The global minimum tax is a good step if it is ever implemented—but half the US congress is already going crazy over funding our tax own collection system, refer back to buying congressmen.

I just have a hard time wrapping my mind around what comes next, especially in the archaic US republic. The idea was originally that we would elect wise leaders to govern but this aint that. Now a vanishing minority of primary voters elect fringe candidates who are affirmed in elections rigged by gerrymandering.

Oh, and peak fossils and global warming

.

[evilgenius]

I like the idea of governments capitalizing their citizens, very much like banks do, but without restriction. The program could work something like this: when you first become of age, you are eligible to borrow for a purpose. The purpose would be to borrow toward something for which the money you borrowed was actually capital.

I think of the example at that age as being able to borrow enough to buy up the stock for the high school concession stand. Then you sell those things, and pay off the loan. Your credit goes up. If you borrow and fail, or borrow and don't pay the loan back, you go into a period where you don't have credit with the system. You credit keeps going up, as you keep showing that you can operate this way. If you emerge from a period of no credit, society will figure out the rules of starting over. They could be fair.

If you need more, which most people who are serious about going into business might, then you might use a bank. If you were concerned about yourself in an AI world, you might use it to buy the worker's position type of stock, that had a poor return, in terms of capital gain, but paid you fairly well now, with dividends. There would be all sorts of arbitrage advantages and disadvantages that took place over time, as not only the market for the class of stock that represented the worker's old position underwent market based fluctuations, but also as anything that touched upon it did. Other people, who might not see themselves as such "sticks in the mud," might not want to ordinarily participate, but, just like the Yen carry trade, there will be times when they won't be able to resist it.

I think, to have the best world, you have to recognize human nature, the nature of true self-referencing consciousness, and run with it. It doesn't make any sense to deny it, only to give it the best places to run. Real management is about empowerment. If we look upon the government as our managers, we should be asking for, at the very least, this sort of thing, when we do face what AI is going to do, in only a few years.

UBI is almost only for animals, for cattle. This is for men. I'm not actually saying that there should be no payment of the sort that goes on with UBI. I'm saying that there is absolutely no need to call it universal. We can keep that for the weakest of us. That way, we don't steal something from them by accident, something about what their actual plight should say to the rest of us. You know, something to do with their dignity.

[Shaved Monkey]

If they are forced to pay damages and clean up their mess it could happen even quicker

[EnergyUnlimited]

$this->bbcode_second_pass_quote('BrianC', 'H')alf World's Fossil Fuel Assets Could Become Worthless by 2036 in Net Zero Transition (theguardian.com) 7
Posted by msmash on Friday November 05, 2021 @02:46PM from the closer-look dept.
About half of the world's fossil fuel assets will be worthless by 2036 under a net zero transition, according to research. From a report:
Countries that are slow to decarbonise will suffer but early movers will profit; the study finds that renewables and freed-up investment will more than make up for the losses to the global economy. It highlights the risk of producing far more oil and gas than required for future demand, which is estimated to leave $11tn-$14tn in so-called stranded assets -- infrastructure, property and investments where the value has fallen so steeply they must be written off. The lead author, Jean-Francois Mercure of the University of Exeter, said the shift to clean energy would benefit the world economy overall, but it would need to be handled carefully to prevent regional pockets of misery and possible global instability. "In a worst-case scenario, people will keep investing in fossil fuels until suddenly the demand they expected does not materialise and they realise that what they own is worthless. Then we could see a financial crisis on the scale of 2008," he said, warning oil capitals such as Houston could suffer the same fate as Detroit after the decline of the US car industry unless the transition is carefully managed.
https://www.theguardian.com/environment ... transition