[ROCKMAN]

Apparently one way to become a liberal pro-environment/anti fossil fuel billionaire is to first make your $billions being a pro-fossil fuel investor:

Reuters – Billionaire Tom Steyer has rapidly become one of America’s most visible environmental advocates, vowing to punish lawmakers who don’t oppose climate change and pledging to spend up to $100 million to put the issue center stage in the Nov. 4 elections. His in-your-face tactics have made him fierce enemies on the right who accuse him of hypocrisy and claim that he made much of his fortune through investments in fossil fuel energy at Farallon Capital Management, the San Francisco-based hedge fund he founded in 1986. Steyer, 56, stepped down as co-managing partner of Farallon in 2012. He has provided few details of the extent of those fossil fuel investments or how he profited from them. He said in July 2013 that when he had left Farallon, which manages much of his estimated $1.6 billion wealth, he had instructed the fund to divest his holdings in fossil fuels. Neither he nor Farallon has said whether that process has been completed. Farallon declined to comment.

Until now, most of the conservative ire against Steyer has focused on Farallon’s energy investment record in the United States. Little attention has been paid to foreign investments such as its forays into Asian coal. During Steyer’s tenure, Farallon helped finance coal project acquisitions in Indonesia andAustralia valued at more than $2 billion and covering some of the region’s biggest mines, some of which swiftly ramped up production afterward, according to a close examination by Reuters of company disclosures and interviews with people involved in the deals. The Asian coal investments were mostly conducted through Noonday – a unit of Farallon set up by Steyer’s deputy, Andrew Spokes, in 2004. Spokes co-led Farallon from 2007 and succeeded Steyer after his departure. In Steyer’s final note to investors in 2012, he said Spokes “embodies values in which I believe and which distinguish our firm.”

People familiar with Steyer’s management of Farallon said that while his main focus was on the United States, he would have signed off on those foreign deals and, as co-managing partner, would have shared in their profits. “The discretion to make or break any investment rested with him,” said a Farallon investor, who asked not to be named. The ramped-up production at the Indonesia mines contributed to Asia’s coal boom as demand for fuel surged in China and India and prices soared, according to industry analysts. Farallon’s investments in Indonesia and Australia included projects that raised concern among local environmental groups over air and water pollution and coal’s role in global carbon emissions, which contribute to global warming. Under Steyer’s stewardship, Farallon grew to become one of the world’s largest hedge funds. Farallon’s regulatory filings show energy currently makes up nearly 9 percent of its overall $19 billion portfolio. “He made us a lot of money and his attitude has always been ‘whatever it will take to make money,’” said one former investor with his fund, who asked not be named because of his ongoing relationship with Steyer.

As Steyer has become a bigger voice in U.S. politics, the Republican party and other conservative groups have sharply escalated their attacks on the big Democratic donor, raising questions about how he made his money. Conservative attacks on Steyer’s record have mainly focused on his fund’s involvement in U.S. energy companies like Kinder Morgan, which has plans to expand an oil sands pipeline to Canada’s West Coast. Just before Steyer left Farallon in 2012, the fund held $125 million worth of Kinder Morgan securities, along with $220 million in shares of Nexen, a Canadian oil sands producer, according to U.S. filings. Farallon’s investments contrast with Steyer’s aggressive campaign against fossil fuels in North America, in which he has targeted politicians who support TransCanada’s proposed Keystone XL pipeline from Canada to the United States. One of Farallon's biggest holdings is in U.S. pipeline company Kinder Morgan, which has plans to expand a major competitor to Keystone — the TransMountain pipeline. Steyer has also lobbied against Northern Gateway, which would carry oil from Edmonton to Kitimat, British Columbia, on Canada's west coast. Curiously, he is not opposed to TransMountain, which Kinder Morgan has sought approval to expand. If that expansion is approved, TransMountain will be the only available outlet for Alberta crude to buyers outside the US. It will leave TransMountain to transport oil directly from the oil sands to export terminals, up to 900,000 barrels a day. And most of that oil will be shipped west to China.

[An amazing epiphany he must have had: in just a year he went from making a fortune investing in fossil fuels to being opposed to them. Except, of course, those that would be shipped via the TransMountain pipeline to feed China's growing appetite. I can't really blame him. Made the big bucks and now gets to hang with liberals who are well known to be much more fun to party with and have much hotter chicks then the Republicans. LOL.]

[Synapsid]

ROCKMAN,

We (heehee) cut out 44% of the crude from the TransMountain pipeline at Sumas, and bring it to our Western Washington refineries.

Er...wait...should I be saying...

[ROCKMAN]

Syn - Don't worry...you're ling to get your fair share of the Canadian nasty as well as "clean oil". I think I also read they are upgrading the capacity of the pipeline feeding Anacortes.

Shell Puget Sound Refinery (PSR) proposes to build a rail spur from the existing adjacent Burlington Northern Santa Fe (BNSF) mainline onto Shell PSR property with equipment to pump oil from rail cars into the refinery. The crude brought in by rail would replace some supply currently brought in by ship and would serve to maintain current production, not increase capacity. The property has a Skagit County Comprehensive Plan designation of Anacortes - Urban Development. It is located within the Anacortes Urban Growth Area and is identified as a Heavy Manufacturing District under the Anacortes Municipal Code. The proposal is a permitted use under Anacortes Municipal Code 17.15.020. The Skagit County shoreline designation is Rural. Shell PSR anticipates that it would receive approximately one unit train per day. Each unit train would include approximately four locomotives, and approximately 102 oil tank rail cars containing crude oil. The facility is being designed to receive a maximum of six unit trains per week, for a total of approximately 612 incoming fully loaded oil cars and 612 outgoing empty tank cars on a weekly basis.

[Synapsid]

ROCKMAN,

That would be some of our Bakken intake, I'm guessing. We get the Canadian oil-sands crude from the north by pipeline (that's the TransMountain cut) and the Bakken comes up the Puget Lowland from the south by rail. No moss growing on our refineries, no sir.

[Graeme]

Three Reasons Investors Are Beginning to Take Sustainability Seriously

I recently attended the annual conference of the CFA Institute, the largest association of investment professionals in the world. This blog post is based on remarks I gave at a panel discussion, “Sustainable and Responsible Investing: Can Markets Save the World?” Notably, this is the first time the Institute has hosted a plenary session on sustainable investing at its annual conference.


But why should members of the investment community care? After all, they are not trying to save the world; they have a fiduciary responsibility to generate returns to their shareholders. Three reasons explain why investors should include sustainability considerations in their decisions, and why doing so is compatible with fiduciary responsibility.

1. Environmental degradation and the impacts of climate change are material business risks

2. Companies that damage the environment can no longer hide

3. Sustainability is a major driver of business strategy and competitiveness

Companies are also talking more about sustainability when they meet their investors. Ceres found that 53 percent of companies surveyed were engaging investors on sustainability initiatives, up from 40 percent in 2012.

wri

[Graeme]

Divesting pensions from fossil fuels finds support

Environmental activists pushing Massachusetts to divest its state pension fund from fossil fuel companies are getting words of encouragement from some of the candidates running for governor.

At least three Democratic candidates are offering full or qualified support for the activists, who have also tried to pressure universities and local governments to pull financial support from the companies in an attempt to raise awareness about climate change.

The activists, including many college students, are holding out hope for a bill that would require the state Pension Reserves Investment Management Board to "sell, redeem, divest or withdraw all publicly-traded securities" in fossil fuel companies.

"In the same way divestment efforts changed the national discussion around tobacco and apartheid, we hope the divestment of fossil fuels will change the national discussion around climate change," said Emily Kirkland, a recent graduate of Brown University and spokeswoman for the Better Future Project.

tri-cityherald

[Graeme]

Weighing the Risks of Investing in Energy Companies

Norway’s economy is highly dependent on oil and gas production, yet the Nordic country’s largest private pension fund manager, Storebrand, worries about the risks of investing in companies that extract fossil fuels. Figuring that tighter regulations on carbon emissions will emerge in the coming years in an effort to combat climate change, Storebrand has decided not to invest in businesses that it believes will be hurt most by those new rules: coal companies and large producers of oil from tar sands.

“The business case is the main driver for what we do; companies with a sound and systematic environmental performance also perform better financially,” said Christine Meisingset, Storebrand’s head of sustainability.

Ms. Meisingset and Storebrand, which manages about 500 billion kronor, or about $74 billion, are among the fund managers beginning to think skeptically about fossil fuel companies —

nytimes

[Graeme]

New York Times Hit Piece on Tom Steyer and Fossil Fuel Divestment

Word came recently that both the Philadelphia Quakers and the Unitarian General Assembly have decided to divest from fossil fuels. It followed by a few weeks the news that the Roman Catholic University of Dayton and Union Theological Seminary, the home of many a great thinker, had done likewise.

In each case I felt a kind of surge of joy, that these historic institutions were helping transform the political and moral landscape, redefining for our time what’s right and wrong. Destroying the climate, they were saying, is incompatible with our evolving ethical sense. We used to think investing in fossil fuel was okay, but the new science has convinced us, and we don’t think that way any longer.

I could, I guess, have felt anger that they waited so long—that for years their investment portfolios had helped drive the expansion of coal and gas and oil, in turn driving up the temperature of the planet for decades to come. But that didn’t occur to me. It was joy only.

It did, however, occur to the New York Times, which for a while last Friday had at the very top of its website a strange story excoriating an investor named Tom Steyer, who more than a year ago divested his holdings in fossil fuel companies, and when he couldn’t and when he knew he couldn’t square his new personal beliefs with the investment mandate of the firm he’d founded, he quit his job.

Even so, the Times noted, “the coal-related projects his firm bankrolled will generate tens of millions of tons of carbon pollution for years, if not decades, to come.” Which is both true and obvious: How could it be any different? Tom Steyer’s decision to divest couldn’t shut down the coal mines he’d helped build; it could only help insure no new ones would be constructed. None of us have the power to travel back in time.

The Times story was a transparent hit job. It drew on the work of a partisan connected to the Koch brothers and writing for the rightwing blog Powerline, which had been insisting for months that Steyer—who not only divested but went on to devote a sizeable portion of his fortune to fighting for climate action—was a “hypocrite,” in fact an “epic hypocrite.” One of the two reporters on the story—Coral Davenport—has in her brief tenure at the Times regularly disdained the grassroots climate movement for action against projects like the Keystone pipeline. (My confident prediction is that when we march in record numbers for climate action in New York City on Sept. 21 she’ll figure out some way to make it all seem small and silly.) The piece on Steyer, that she co-wrote with Michael Barbaro, was not a skeptical but a cynical piece of work: It built a strawman, bent him into an impossible position, and proceeded to light him on fire.

But if the Times should never have run it, the piece does nonetheless allow all of us to think through this question of hypocrisy. Every one of us in the Western world has contributed to climate change. We drive, fly, cool, heat. Perhaps we went to (or, like me, work at) colleges whose endowments are invested in fossil fuels, or perhaps we draw pensions from funds that back Exxon and Shell. If we don’t mine coal ourselves, we likely work for companies that belong to the Chamber of Commerce and hence are active in the fight against climate legislation. On and on it goes, since fossil fuel is knit into the fabric of our society. If, as the Times puts it, Steyer is “shadowed by coal,” so are the rest of us.


None of us, as I’ve said, are perfect. Actually, a few of us are. If you’re looking for people who can never be accused of any hypocrisy, it’s the Koch brothers that you want—if you deny science and disdain democracy, there’s no way for anyone to hold you intellectually or morally accountable. While the Times was busy trying to shame Steyer for the crime of changing his mind, real journalists at the Toronto Star were completing an investigation into the extent of the Koch holdings in the far north. Piecing together all the scattered data, they found that they control an astonishing 1.1 million acres of the tar sands, and that they are huge contributors to all the “thinktanks” and campaigns trying to build Keystone and other pipelines. And there’s nothing even remotely hypocritical about it—it’s just disgusting.

nakedcapitalism

[Graeme]

Fossil Free Indexes US Supports Fossil Fuel Divestment

Late June, the Fossil Free Indexes US was launched by investing research company Fossil Free Indexes. The move come at a time when investors are not only looking to invest in clean technologies, but want to be investing in companies which are themselves not reliant upon fossil fuels.

“FFIUS is the first of its kind in the US,” said Stuart Braman, founder/CEO of Fossil Free Indexes (FFI). “We’re primed to give investors a unique opportunity to invest in the broad market while avoiding the increasing risk of long-term investment in fossil fuels.”

The Index is based upon the Standard & Poor’s 500 (S&P 500) — itself based on the market capitalisations of 500 top companies in leading industries of the US economy — but excludes the largest oil, gas, and coal companies as identified by FFI’s proprietary The Carbon Underground 200.

cleantechnica

[Graeme]

Where Can The Fossil Fuel Investments Go?

Fossil fuels have been a financial cornerstone for decades. More than $5 trillion is invested in 1,469 oil and gas companies and 275 coal companies. Dozens of public and private institutions are now divesting their money because of environmental concerns, strategic planning, or fear that their assets might become be stranded because of emission regulations. A Bloomberg New Energy Finance White paper asks where can the fossil fuel investments go?

Bloomberg concluded that the necessary attributes were found in seven different sectors, ranging from information technology to real estate. Only real estate has been more profitable. Information technology is larger, already worth $7.64 trillion, but pays low dividends.

Three of the world’s four largest companies are IT’s: Apple ($588 billion), Google ($400 billion) and Microsoft ($360 billion).

Other sectors to watch: Pharmaceuticals ($3.9 trn), Food & Beverages ($3.34 trn), Engineering ($1.66), REITs ($1.39), Automobiles ($1.23), and Industrials ($1.17 trn).

Every one of these sectors dwarfs clean energy. There are currently 106 clean energy companies, whose cumulative worth is $220 billion. Bloomberg predicts this sector will grow $2.8 trillion over the next decade, reaching more than half the size of the present fossil fuel market size.

cleantechnica

[Graeme]

Divesting from Fossil Fuels: Last One Out Loses

A new report written by Nathaniel Bullard at Bloomberg New Energy Finance (BNEF) highlights the difficulties large institutional investors would have divesting from fossil fuels. What it does not specifically discuss is that these difficulties could lead to large financial losses for investors who see the difficulty of divesting as a reason to delay.


In contrast, it pays to be first rather than last when divesting from fossil fuels. While it is possible to be too early, at some point the worsening fundamentals of fossil fuel industries and/or a large scale divestment movement will undermine the value of all fossil fuel stocks. Those who divest sooner will have much more money to invest elsewhere than those who delay because divesting is just too hard.

Fortunately, small investors have it easy. Divesting, for once, is a place where the small investor has the advantage on Wall Street.

renewableenergyworld

Interview With Nathaniel Bullard On Fossil Fuel Divestment

Renewable Energy World asked me to write a commentary on Bloomberg New Energy Finance's recent report on the difficulties institutional investors are likely to have divesting from fossil fuels. The report details how the scale, yield, liquidity, and historic growth of the oil and gas sector are impossible to match with any other investment sector.

While this is quite true, much of the other coverage has missed the point. Ironically, I thought Bloomberg News' coverage was some of the worst, because it focused on the least important aspect of fossil fuels as an investment sector: historical growth. While a sector's yield, liquidity, and especially scale generally persist for decades, growth trends are prone to sudden reversals. The fact that oil and gas stocks have done so well over the last five years should prompt all wise investors to start taking some profits, regardless of their attitudes towards the environment.

Instead, I focus on likely future trends for oil and gas stocks, and consider how fundamental factors and the potential growth of the divestment movement may affect the potential future growth of the oil and gas sector. The prognosis is not good.

You can read the whole commentary here: Divesting from Fossil Fuels: Last One Out Loses.

I interviewed the report's author, Nathaniel Bullard, for the piece. He had some interesting points that did not fit into my commentary, so I include the whole transcript below.

altenergystocks

This Approach to Climate Change Doesn't Involve Obama, the Senate or the UN

Stuart Braman is a PhD environmental scientist who teaches at Columbia University and a former managing director at Standard & Poor’s Risk Solutions Group. He said that after seeing McKibben speak in 2012, he wanted to invest in a carbon-free index.

Turns out, there weren’t any. So he founded an effort called Fossil Free Indexes, which earlier this summer published research on how the S&P 500 performs when stripped of the more than 25 companies that hold coal, oil or gas reserves The full energy sector makes up more than 10 percent of the S&P 500.

What happens when you kick out the companies that make civilization go?

Not much. What Fossil Free Indexes shows is a tight correlation between the full S&P 500 and the same index stripped of the fossil fuel businesses:

bloomberg

[Graeme]

160 Environmental Leaders Urge Foundations to Divest From Fossil Fuels

An international group of 160 environmental leaders issued a challenge this morning to those who hold some significant pursestrings. They urged foundations and other charitable givers with combined holdings to divest from fossil fuels and free up billions of dollars to invest in clean energy.

They asked the foundations and givers to invest in clean energy companies, divest from fossil fuels and make grants to clean energy start-ups. They said they believe the December 2015 UN Climate Summit in Paris may be the last chance to save Earth’s environment and that by redirecting their investments, foundations can help build a movement that will put pressure on the negotiators at the summit.

In their Environmental Laureates’ Declaration on Climate Change, published in the International New York Times, the group said, “We, 160 winners of the world’s environmental prizes, call on foundations and philanthropists everywhere to deploy their endowments immediately in the effort to save civilization. The world’s philanthropic foundations, given the scale of their endowments, hold the power to trigger a survival reflex in society, so greatly helping those negotiating the climate treaty.”

The effort was spearheaded by the European Environment Foundation (EEF), which raised the money for the project via crowdfunding site Indiegogo and circulated the document for signatures.

“The world’s philanthropic foundations fund work which improves the lives of millions of people around the world, but if they want that work to last they can’t afford to ignore climate change,” said EEF trustee Dr. Jeremy Leggett, who coordinated the project. “Investing in a clean energy future is the best way to safeguard their work and their finances. We hope this appeal will stimulate vital investment in a clean energy future, demonstrate support for an ambitious climate change treaty, and create space for a tipping point in climate action.”

Signees represented the U.S., virtually every European country, Australia, Chile, Argentina, Brazil, Indonesia, Canada, Haiti, China, Nepal, India, Kenya, Cameroon, South Africa, Tanzania, Kuwait, Egypt and Palestine, among others. They included climate leaders such as Sophia Prize winner and noted author Bill McKibben; Chinese Hillary Laureate and Time Magazine Hero of the Environment Peggy Liu; Australia’s Paul Gilding, winner of the Tomorrow Magazine Environmental Leadership Award; Canadian professor/researcher Paul Schindler, winner of the Tyler Prize for Environmental Achievement for his work on the destruction of freshwater lakes; and Dr. Harish Hande, whose work has focused on using sustainable technologies to eliminate poverty.

ecowatch

[Graeme]

Future Investments in Fossil Fuels Look Dim

Like most central bank governors, Mark Carney, the Governor of the Bank of England, chooses his words carefully.

So the financial community—and government policy makers—sat up and took notice earlier this month when Carney, addressing a World Bank seminar on corporate reporting standards, said he was concerned about investments in fossil fuels.

“The vast majority of reserves are unburnable,” Carney said.

“Tragedy of horizons”

He warned companies, investors and policy makers that they need to avoid what he described as the “tragedy of horizons,” and to look further ahead to meet challenges such as climate change.

Investors are being repeatedly told that money sunk into fossil fuels is not only bad for the climate, but is also potentially seriously dangerous to financial health.

The fundamental idea espoused by a wide spread of influential voices—ranging from theInternational Energy Association (IEA) to finance funds that have many billions of dollars worth of investments under their control—is that, in order to combat climate change, a large portion of the world’s remaining fossil fuel reserves must stay in the ground.

“Not more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2˚C goal,” the IEA says.

ecowatch

Fossil fuel divestment: climate change activists take aim at Australia's banks

Climate change activists will aim to give the big banks a $200m bloody nose on Saturday, in the latest round of what has been an increasingly bitter campaign to force the divestment of companies with fossil fuel interests.

A “national day of divestment” will see more than 1,000 bank customers switch their accounts away from the “big four” banks: ANZ, Westpac, Commonwealth Bank and NAB.

Campaign organisers Market Forces and 350.org claim that the major banks have already lost $250m worth of business from customers in the past year due to their continued financing of fossil fuel projects. They estimate a further $200m will be stripped away on Saturday, deriving the figure from total assets including loans and insurance.

The day of action follows the rancour that greeted the Australian National University’s decision to divest from seven resource companies for ethical reasons.

theguardian

[Graeme]

Fossil fuel divestment campaign targets high street banks

Customers of Britain’s biggest banks are to demand that high street institutions stop using their savings and investments to finance the fossil fuel industry, in a major new divestment campaign launched on Monday.

Blue & Green Tomorrow is currently running a crowdfunder to ensure its survival. Please pledge.
The ‘Divest!’ campaign, launched by the ethical banking reform group Move Your Money, calls on customers to write to their banks and threaten to withdraw their savings, unless they pledge to cease investment in the polluting industry.

A template letter available online gives the big five banks – HSBC, Barclays, RBS, Lloyds and Santander – until the end of January to commit to divestment. Together, these banks have so far issued more than £66 billion in corporate loans, equities and bonds into coal, tar sands, fracking, oil and gas extraction.

Timed to coincide with Good Money Week, the campaign will also feature demonstrations outside the London headquarters of HSBC, Barclays and RBS.

This follows a survey that found 39% of Britons are concerned about their savings and investments being used to fund fossil fuels, while 36% want their bank to stop investing in the sector.

The campaign represents a new approach for the growing global divestment movement, which has so far largely targeted institutions such as churches and universities.

Divestment campaigners have called on such investors to divest from oil, coal and gas firms because of the massive environmental impact that such companies have.

blueandgreentomorrow

[Graeme]

Global Divestment Day: Climate Action Vs Carbon Bubble Risk

The fossil fuel divestment movement is gathering steam, with institutions across the world committing to remove dirty energy investments from their stock portfolios, and in just over two months that energy will come to an international head.

Climate advocates 350.org are organizing the first-ever Global Divestment Day on February 13-14, 2015, organizing thousands of people on five continents to take collective action by demanding their respective institutions stop investing in dirty energy for economic and environmental reasons.

From students demanding their universities divest endowments, to individuals closing accounts at banks who finance fossil fuel development, to faith leaders and people dealing with climate change impacts urging action on a moral basis, 350.org says their action “will show that we are a truly global and growing force to be reckoned with.”

cleantechnica

[Graeme]

Pressure Mounts On Stanford University To Divest From Fossil Fuels

Hundreds of Stanford professors are urging the university to divest its holdings from fossil fuel companies.

In a letter sent Sunday to the university, 300 Stanford professors, including two Nobel laureates, outlined the threat climate change poses to the earth and how the fossil fuel holdings contribute to that threat. They wrote that the world’s top 200 fossil fuel companies have enough fossil fuels in their reserves to release 2,795 gigatons of carbon dioxide, but scientists recommend that the world cap its carbon dioxide emissions to 565 gigatons over the next 40 years if it wants to keep warming below 2°C.

The Stanford professors say that, in order to do its part in helping curb climate change, Stanford should divest its endowment of all fossil fuel holdings.

thinkprogress

[lpetrich]

I've been following renewable-energy development, and I've noticed how news stories on it have been emphasizing more and more its economic value -- wind and solar electricity generation are successfully competing with coal and natural gas. However, renewable substitutes for oil are not as far along.

That will supply an economic reason for divesting from fossil-fuel companies, at least non-oil ones.

[rockdoc123]

[lpetrich]

Hmmm... For clothing, there is wool and cotton and linen and silk and leather and ... shall I continue?

More seriously about divestment, I suspect a "damned if you do, damned if you don't" position from its opponents. "If you don't like the company, then don't buy its stock. You have no right to do anything else.", combined with "you are hurting yourself, and you are hurting lots of innocent people, if you don't buy that company's stock."

[lpetrich]

Apparently one way to become a liberal pro-environment/anti fossil fuel billionaire is to first make your $billions being a pro-fossil fuel investor: ...

All he is doing is a financial version of building renewable-energy infrastructure. It's a bootstrapping procedure. Using fossil fuels to build renewable-energy infrastructure is not hypocritical, especially in the early stages where there is not much renewable-energy infrastructure around.

Think of it this way. When car makers were starting out, would it have been wrong for them to get supplies in horse-pulled wagons? I don't know if there is any record of that, but I would not be surprised.