Oil, gas and coal companies face financial disaster if they ignore the implications of the Paris climate change accord and should be required to tell investors how they will avoid such threats, a British economist has warned. Lord Nicholas Stern has told a climate task force set up by the Bank of England governor, Mark Carney, that the gap is disturbing between what politicians signed up to in the Paris agreement struck in December and what fossil fuel companies are assuming. “This gap should alarm policy-makers and central bankers,” he says in a submission to the task force, chaired by Michael Bloomberg, the former New York City mayor, and due to report in December.
FT 6th June 2016 read more »
Ports from south-west England to central Scotland have been taken aback by the speed at which demand has evaporated for what had been one of their most dependable cargoes – coal. As coal-fired power stations across the country shut, ports have been hit by a sharp drop in imports of a vital ingredient for that industry.
FT 5th June 2016 read more »
Nick Butler: Remember the Arab Spring and the heady promise of freedom and peace in the Middle East? Many normally sensible observers were carried away by the excitement of the internet-led revolution in Tahrir Square and across the region. Now, a similarly happy transformation is promised in the energy market as the world moves away from oil, gas and coal. The transition is certainly coming but its implications will be as disruptive and dangerous as those of the Arab Spring. We should be prepared for the consequences rather than misled by wishful thinking. The shift to a low-carbon energy system will be smooth, orderly and beneficial for most of the global economy: that is the view of a new set of papers from the Global Agenda on the Future of Oil and Gas – a group set up by the World Economic Forum, the organisers of Davos. Unfortunately, all the evidence so far points in the opposi te direction. The shift may be beneficial in terms of the world’s environment, but economically and politically the result could be dramatically destructive. Five years ago, the obsession of oil market analysts and commentators was with peak oil, meaning peak supply as finite resources were used up. The argument influenced price speculation and encouraged some companies to invest in expensive projects. Times change and now the common view is that demand will peak before supply, although there is no agreement on when that will occur.
FT 6th June 2016 read more »
World records tumbled in renewable energy this month. Utilities, facing short-term existential threat in the face of clean-energy growth, continued to wrestle with the imperative of escaping the energy incumbency. Oil and gas companies, facing longer term threat to business-model viability, read dire assessments of their prospects in places they could not have imagined possible until recently. Investors continued to awaken to climate risk, and a critical mass of governments stayed broadly on course for the current and future action that the Paris Agreement requires of them. None of this, however, happened as fast as the recent run of world-record monthly average temperatures merits. Unprecedented wildfires and die offs of coral reefs were harsh reminders this month of the race against time that civilisation is running.
Jeremy Leggett 5th June 2016 read more »