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Page added on June 9, 2017

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‘Coal is dead’ and oil faces ‘peak demand,’ says world’s largest investment group

Business

BlackRock investment group, with $5 trillion in assets, is bullish on electric cars and renewables.

U.S. coal production is at lowest level since 1978. CREDIT: EIA

“Coal is dead,” Jim Barry, the global head of BlackRock’s infrastructure investment group, explained in a recent interview.

BlackRock, the world’s largest investment group, with $5 trillion in assets — more than the world’s largest banks — has begun to bet on clean energy. Why? “The thing that has changed fundamentally the whole picture is that renewables have gotten so cheap,” said Barry.

No, the world’s coal plants are not going to all down shut tomorrow, Barry noted to The Australian Financial Review (subscription required). “But anyone who’s looking to take beyond a 10-year view on coal is gambling very significantly.”

President Donald Trump famously campaigned on restoring coal jobs, and has continued to reiterate that commitment as president, but the economic reality makes that a futile effort.

The U.S. alone has shuttered 40 gigawatts of coal plants since 2000.

“These [coal plants] will not reopen whatever anything President Trump does,” as Bloomberg New Energy Finance recently explained, “nor do we see much appetite among investors for ploughing money into U.S. coal extraction — stranded asset risk will trump rhetoric.”

The economic reality is that cheap fracked gas and plummeting prices for clean energy has squeezed both coal production and coal consumption to levels not seen for decades.

U.S. coal production (blue) and consumption (green). CREDIT: EIA

While the coal industry had hoped exports would pick up the slack, that dream has been thwarted by China’s accelerated shift away from coal-driven economic growth to clean energy, coupled with India’s new push to follow suit.

Coal isn’t the only fossil fuel at risk. Because of the rapidly improving performance and cost of batteries, Barry is “bullish” on electric vehicles. And as a result, he is bearish on oil demand, noting that “there was always this historic view on oil about peak supply but it’s about peak demand being an equal dynamic.” BNEF and the credit rating agency Fitch have made similar warnings.

In short, the smart money is headed away from fossil fuels and toward clean energy.



15 Comments on "‘Coal is dead’ and oil faces ‘peak demand,’ says world’s largest investment group"

  1. Cloggie on Fri, 9th Jun 2017 2:24 pm 

    BlackRock, the world’s largest investment group, with $5 trillion in assets — more than the world’s largest banks — has begun to bet on clean energy. Why? “The thing that has changed fundamentally the whole picture is that renewables have gotten so cheap,” said Barry.

    Well, well, well, the doomers here no longer have to rely on the testimony of a “green-right idealist”.

    Hard capitalism doing the advocating instead.

  2. Satori on Fri, 9th Jun 2017 3:04 pm 

    but,but,but
    Make AmURIkA Great Again !

    SUCKERS !!!

    sad fact is
    the people who supported Trump the most
    are the ones who are going to get hurt the most

  3. deadlykillerbeaz on Fri, 9th Jun 2017 3:24 pm 

    Just means that the use of coal as an energy source has greater efficiency than the coal-fired plants of yesteryear.

    Coal is dead is preposterous. There are coal-fired power plants under construction now.

    It is like saying wood is dead or air is dead.

    They need to have their heads examined.

  4. DerHundistlos on Fri, 9th Jun 2017 3:28 pm 

    Clogged, the “hard capitalism” you reference is in direct contradiction to the policy initiatives and wishes of your beloved Dear Leader. It will be interesting to see how you square the two diametrically opposed sides.

  5. rockman on Fri, 9th Jun 2017 4:31 pm 

    Coal is “dead”? Not according to some folks who aren’t exactly pro-coal. Like the Sierra Club and Greenpeace. From

    http://energypost.eu/coal-power-capacity-keeps-growing-utilisation-going/

    “While the amount of electricity generated from coal has declined for two years in a row, and utilisation rates of coal power plants have been going down, energy companies continue to build new coal-fired generating plants “at a rapid pace, creating an increasingly severe capacity bubble”, according a new report based on the Global Coal Plant Tracker published by the NGO’s CoalSwarm, Sierra Club and Greenpeace. Worldwide the equivalent of 1500 coal plants is under construction or in various stages of planning.

    Building new coal plants is “a massive diversion of resources away from clean energy technologies that must rapidly be developed if the worst effects of climate change are to be averted”, notes the report, “Boom and Bust 2016: Tracking the Global Coal Plant Pipeline”, published in March. Yet worldwide 338 GW of new coal capacity was in construction in January 2015 compared to 330 GW a year ealier. In addition, 1,086 GW was in various stages of planning compared to 1,083 GW the year before.

    The rise in construction and pre-construction activity was solely due to China and South Asia. Outside these regions, coal power construction either dropped or remained level:”

  6. Cloggie on Fri, 9th Jun 2017 5:24 pm 

    “Clogged, the “hard capitalism” you reference is in direct contradiction to the policy initiatives and wishes of your beloved Dear Leader. It will be interesting to see how you square the two diametrically opposed sides.”

    BlackRock is not Trump. I side with the assessment of BlackRock. I never supported Trump’s energy policies. On a personal level Trump is a buffoon.

    What I value in Trump is that he took on the establishment and their NWO policies directly and showed European America that said establishment is not invincible and can be defeated.

    After Trump the old guard will attempt a comeback, but will find out that the old globalist, exceptionalist America is gone and that a revival is ruled out. There will be a confrontation between the 1776-2.0 and NWO crowd and the country will fall apart, hopefully not too bloody.

  7. DerHundistlos on Fri, 9th Jun 2017 11:00 pm 

    Clogged- The establishment? Trump is the establishment, and he is anything but a unifier. He appeals to the lowest common denominator among poorly educated Southern and Appalachian White males, and his support among this group progressively weakens.
    Even I was hopeful at first that Trump would bridge the divide as a unifier. He was given a unique opportunity to transcend politics by including both Dems and Republicans in his administration. Instead he doubled down on the divide and conquer strategy.Even worse, Trump and his Republican confederates in congress are working feverishly to turn back the clock on 100 years of environmental progress. This is UNFORGIVABLE.

  8. Cloggie on Sat, 10th Jun 2017 3:02 am 

    Swiss deputy CEO BlackRock Hildebrand:

    http://www.spiegel.de/spiegel/globalisierung-europa-hat-die-aussicht-auf-ein-goldenes-jahrzehnt-a-1151389.html
    (paywall)

    “Europe faces golden decade”

    BlackRock is THE backbone of Western capitalism.

    Why faces Europe a golden decade?
    Hildebrand is upbeat about the global economy, 10 years after Lehman. He thinks that positive dynamics are underestimated. He doesn’t see Trump as a danger and believes that American institutions are strong and robust. He supports the easy money policies of the Fed and ECB and thinks they were successful. Populism is indeed dangerous according to Hildebrand, but he believes that the EU will hold and that the European economic model is better than the US and UK counter parts, because it better redistributes wealth. Hildebrand thinks that France is the key to a European revival and that Macron could deliver in that he will mover closer to Germany and revive the Paris-Berlin axis. Wages in Germany need to increase substantially and need to increase public investment. And now that Brexit is a fact (is it?) Europe can invest in security and defense. Europe needs to emancipate from US dominance in many areas, like pan-European banks. Europe needs to stop copying Anglo-investment banking model. BlackRock is 70% pension fund. They do not represent the financial elite (#Rothschild) but the ordinary pensioner.

    Here Blackrock’s impressive portfolio:

    https://cdn.static-economist.com/sites/default/files/images/print-edition/20131207_FBC893.png

  9. Cloggie on Sat, 10th Jun 2017 3:26 am 

    Clogged- The establishment? Trump is the establishment

    That was absolutely true, until 2015 that is:

    http://www.mintpressnews.com/wp-content/uploads/2015/08/donald-trump-hillary-clinton.jpg

    he is anything but a unifier.

    He is not indeed, but it is no longer possible to unite a demographically divided country. Large parts of the white population no longer wants to be united but instead are looking for the exits.

    He appeals to the lowest common denominator among poorly educated Southern and Appalachian White males, and his support among this group progressively weakens.

    That’s true, the so-called “deplorables”…

    https://www.youtube.com/watch?v=LBOTk00eMT4

    …despised and pissed upon for decades by the leftist North-Eastern “elites” (NYC-Washington axis), which in mentality includes you.

    Trump as a real entrepreneur saw the gap in the electoral market and skillfully exploited the opportunity, thanks to his money. He basically hijacked the country from the real governing elite (Fed, Wallstreet, CFR, media, Israel Lobby, think tanks, etc.)…

    https://www.youtube.com/watch?v=ZYx6denNAFo

    …for whom elections mean nothing, just a scam to provide political legitimization to itself, by letting the herd march to the voting booth and let them decide between meaningless slogans (“Yes we can”) and bought and paid for candidates, after which political BAU (=expanding empire) continues as if nothing had happened… because nothing has happened indeed.

    Democracy in America doesn’t exist, hasn’t for hundred years, except in November 2016 (and JFK and marginally Nixon; both had to go as a consequence of defying the kosher deep state).

    Instead he doubled down on the divide and conquer strategy.

    Yes, that’s why I “love” Trump, for his defiance of the establishment and media and representation of European-American interests, which can only lead to the breakup of the country, which from a European perspective would be wonderful. Finally getting rid of the big American a** that was planted in our face in 1945. You as an American are of course excused to have a somewhat different opinion in that matter.

    Even worse, Trump and his Republican confederates in congress are working feverishly to turn back the clock on 100 years of environmental progress. This is UNFORGIVABLE.

    You make it sound as if the Democrats were all that green, but the truth is that Obama Washington never had a federal renewable energy strategy worth mentioning and all initiatives that did occur came from state level (#Texas).

  10. Kenz300 on Sat, 10th Jun 2017 8:47 am 

    Clean energy production with solar panels / tiles and battery storage.
    Clean energy consumption with electric vehicles. No emissions.
    A new solar roof, battery storage, an electric car charger and an electric vehicle.
    Solar panels are now being projected to have a much longer life and lower price than just a few years ago.

  11. bobinget on Sat, 10th Jun 2017 10:24 am 

    ‘Critics of electric cars are the same folks damning books they’ve never read’.

    Trump backers, conspiracy theorists, religious fundamentalists, ICE enthusiasts have more then one commonality. This week’s Senate hearings proves as much.

  12. bobinget on Sat, 10th Jun 2017 10:42 am 

    The death of coal is highly exaggerated.

    When a few people can dig coal or oil or gas from the earth with almost no danger to themselves, we will be doing so for decades to come.

    http://www.swapmeetdave.com/Humor/Workshop/Trencher.htm

    http://www.newsweek.com/why-russia-beating-us-race-control-arctic-560670

    Coal, oil and gas people believe ridding the industry of environmental regulations will free-up industry to market more coal, oil and gas.
    The next day, these same folks complain when markets are flooded, lowering prices below cost of production.

    https://en.wikipedia.org/wiki/Water_injection_(oil_production)

  13. Outcast_Searcher on Sat, 10th Jun 2017 11:40 am 

    Kenz: Well, when a Tesla solar roof for a modest sized house and a couple Powerwall batteries doesn’t cost something like $60,000, be sure and get back to us on how cheap a solar roof is.

    With my $70ish average monthly electric bill, it would never come close to making sense to put on such a roof.

    Oh, and if I want to charge an EV on it and have more batteries to be less dependent on the grid for awhile during cloudy periods — no you’re talking more like $100,000.

    How many middle class folks have $100,000ish lying around to do that? Not many.

    If/when the price gets a LOT cheaper, including installation, figuring in real world battery life, etc. it might make economic sense.

    EV’s at a fairly ho-hum level appear to be doable at roughly $35,000 — based on Bolt and current (few frills or choices) base Model 35 information. That is doable, but isn’t exciting until oil prices get back toward $100 — if/when that may happen.

    So once the tax incentives are gone, if oil stays cheap, then a car like a Corolla will be roughly competitive with an EV.

    The move to EV’s will happen over time as the charging stations are built out, battery life is proven, etc. — but they have a way to go before they’re CLOSE to compelling on a purely economic basis.

  14. Davy on Sat, 10th Jun 2017 12:17 pm 

    “‘Critics of electric cars are the same folks damning books they’ve never read’.”

    Fake green electric car enthusiasts will tell you self-righteously they are carbon free and drive for free. They are typically anti-Trump and say extreme generalizations like this:

    “Trump backers, conspiracy theorists, religious fundamentalists, ICE enthusiasts have more than one commonality. This week’s Senate hearings proves as much.”

    They are incapable of looking in the mirror and act blameless. Blame that their group’s failure allowed Trump. Blame that their political establishment acts like they are green but they are in no way green enough to point fingers at the other side and claim high ground. They are a failure on both counts. Acting green but in reality being fake green. The two Obama terms produced nothing green of substance. The policies were generally market based compromises which is just paint on a rusty gate. They Point fingers and blame within a denial that they are right and just. They failed to lead and lost an election and they now are engaged in a blame game to hide the fact that they are failures.

    This is not support for Trump and Trump backers. I never brag about Trump or his supporters. If I like anything about Trump it was because he ripped open this scab of fake self-righteousness of the elite. Trump and his deplorables are often science deniers and skydaddy blinded. This is horrible in times like ours. They show little respect for Mother Nature. They in many cases don’t respect themselves. Take a walk through Walmart to see this. I show no support for conservative causes. I am accused of this because I react in disgust to comments like the above from a liberal elitist. Both sides of this rotten establishment are clearly failures.

    This comment is in disgust for those who act self-righteous and without blame like the above comment. Those who act green and act like they practice social justice when they are the rich and living as part of the elite class. This is in support for the little guy left out of the gravy train of prosperity. I live with many of these people who are uneducated and never given a chance. The people who the above elitist calls deplorables.

  15. DerHundistlos on Sat, 10th Jun 2017 4:52 pm 

    Clogtard, “You make it sound as if the Democrats were all that green, but the truth is that Obama Washington never had a federal renewable energy strategy worth mentioning and all initiatives that did occur came from state level (#Texas).”

    This nicely summarizes the rantings of a delusional clown. You posses a unique ability to formulate nonsensical arguments that appeal to nobody- a modern version of Don Quixote chasing imaginary windmills except in your case you fail to posses any redeemable qualities.

    I’m sure President Man Baby loves you just as passionately as you love him- laughable, delusional, sad.

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