Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
ROCKMAN wrote:So just my personal ROTD (rant of the day). As always curious how others view such matters.
ROCKMAN wrote:Buddy - You make me look like an amateur when it comes to rants. LOL. Good work.
Tanada – I wouldn’t be surprised to see Chesapeake or Devon go on the sales block next as a result of being hurt by low NG prices. Especially if there is a prolonged dip in oil prices. It wouldn’t be a big shock to see a company like Anadarko pick up one of them or turn around and sell out to one of the majors. Anadarko may be in good financial shape but gets an offer from, say ExxonMobil, that maximize value for the shareholders. Two types of companies are typical acquisition candidates: those doing very poorly but have a significant reserve base and those doing well and have a significant reserve base.
In the oil patch we’ll eat our own. It’s just business…nothing personal. LOL.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
ROCKMAN wrote: San Fran ... Not sure when they picked up that half $billion in oil stocks.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Plantagenet wrote: I won't be surprised if SF government retirees wind up down the road with their pensions being slashed because their pension funds were politically correct but poorly managed.
In December, Seattle was the first city to announce it would divest from fossil fuel investments and now nine other cities have joined in.
The nine cities are: Madison, WI; Bayfield WI; Ithaca, NY; Boulder, CO; Rochester, MN; Eugene, OR; Richmond, CA; Berkeley, CA; and San Francisco, CA.
Petitions for divestment are active 100 other cities and states. Modeled on the anti-apartheid campaigns of the 1980s, the fossil fuel divestment campaign started last fall at colleges and universities and has now spread to over 300 campuses across the country.
Four colleges - Unity, Hampshire, Sterling, and College of the Atlantic - have so far agreed to divestment.
In fact, it's riskier to remain invested in fossil fuels. Companies will plow some $6 trillion to explore and develop reserves over the next decade, but that will be wasted on oil and coal that can't be burned as governments move to limit carbon emissions.
When the campaign began in October, Nobel Prize-winner Desmond Tutu noted, "The divestment movement played a key role in helping liberate South Africa. The corporations understood the logic of money even when they weren't swayed by the dictates of morality. Climate change is a deeply moral issue too, of course ... Once again, we can join together as a world and put pressure where it counts."
Securities of fossil fuels firms, as an economic sector, may soon be on the decline.
Predictions as to when oil and gas will become a smaller part of the investment society makes into its total energy mix, in favor of renewables such as solar, wind and ocean energies, vary, ranging from 2060 on the long side (this prediction from oil industry powerhouse Shell) to 2030 or even sooner on the shorter side (as reported by Bloomberg). But so far, markets appear to be mispricing the risk this presents to fossil fuels companies, and their share prices for now remain high. In our opinion, it’s not too soon to consider divesting from fossil fuels while one might still recover significant value.
Coal, oil, and natural gas, though, are the main sources of energy that have gotten civilization this far (at least since the late 1700s, or the entire industrial revolution), so why are many expecting them to so quickly diminish in importance?
Mostly because of recent innovation and renewables’ efficiency and cost gains. Our ‘next economy’ thesis and methods of portfolio construction assert that energy and material resources we need to host an indefinitely thriving economy exist in more than sufficient quantities (particularly energy), if we would only collect and use them in smart and efficient ways. The innovations required to put world economies on a long term sustainable path largely exist today. For example, the various forms of solar energy collection have become so efficient over the last 20 years that all of civilization’s energy requirements could presently be met by covering 0.3 percent of the earth’s land surface with solar panels and concentrated solar thermal systems. Our models insist that through promoting true sustainability solutions in materials and energy, we can indeed maintain a healthy, thriving biosphere, all while growing our economies and improving standards of living everywhere, for everyone.
This in mind, we put together 10 primary reasons why fossil fuels investments, in next economy terms and indeed in general economic terms, no longer appear to be the attractive source of risk-adjusted returns they have historically been.
Fossil fuels are economically becoming subprime because:
1. Fossil fuels have the capacity to threaten basic systems.
General Assembly delegates voted overwhelmingly Sunday afternoon to adopt the Action of Immediate Witness “Consider Divestment from the Fossil Fuel Industry,” which calls for delegates to “begin a denomination-wide conversation within their congregations about divesting from fossil fuels or exercising shareholder influence.”
During debate on the plenary floor, those at the “con” microphone primarily focused on the probable lack of impact that the UUA divesting from fossil fuels would have, and on the idea that it should have been a Congregational Study/Action Issue rather than an Action of Immediate Witness. Those at the “pro” mic emphasized the moral obligation of UUs as a people of faith to consider the environmental impact of investing in fossil fuels, and also noted that the language of the AIW had been framed specifically as a conversation about both divestment and shareholder advocacy as methods for socially responsible investing.
The topic of divestment and shareholder advocacy has come up several times during the week and was discussed Thursday at a panel discussion called “The Climate Change Challenge to Faithful Investing.” The original intention behind the divestment AIW was to call for the UUA to divest from fossil fuels, but because only a business resolution could call for divestment, legal counsel advised it be redrafted as an AIW. During a miniassembly on Saturday, language was added regarding the possibility of exercising shareholder influence.
The divestment AIW was one of three proposed AIWs delegates chose yesterday from a list of six to add to Sunday’s agenda. Drafts of the three proposed Actions of Immediate Witness are available in today’s CSW Alert! (PDF).
General Assembly delegates voted overwhelmingly Sunday afternoon to adopt the Action of Immediate Witness
Storebrand, a Norwegian financial services group, and Dutch bank Rabobank have become the latest companies to announce they will pull out of the investments in the fossil fuel industry, citing the stability of long-term investments as the major factor.
Storebrand has investments in 13 coal and six tar sands enterprises which it will let go. It said in a statement that it believes these stocks will be “financially worthless” in the future.
“If global ambitions to limit global warming to less than 2 degrees Celsius become a reality, many fossil fuel resources will become unburnable and their financial value will be dramatically reduced,” said Christine Tørklep Meisingset, Head of Sustainable Investments.
“Exposure to fossil fuels is one of the main sustainability challenges facing business, so for us it is a logical and necessary step to adjust our investments accordingly,” she said.
The decision was made public a day after a similar announcement from Rabobank, an ethical Dutch bank with a partnership with WWF. This institution, which specialises in financing agriculture and food businesses, has said it will no longer invest in shale gas or tar sands.
It said it believes that the risks of water and soil contamination from fracking, and the risks to biodiversity, ecosystems and local residents, are too high.
It will also refuse loans to farmers who decide to lease their land for such purposes.
Connie Hedegaard has urged the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the World Bank to take a lead role in eliminating public finance support for fossil fuels.
Although all three of the banks have policies aimed at encouraging lending to renewables and energy efficiency, in practice fossil fuel projects continue to benefit from their support.
Between 2007 and 2011, the EIB invested €15 billion in fossil fuel projects compared to €14.8 billion in renewables, while similarly around half of the EBRD’s annual €6.7 billion of energy lending is still going to fossil fuels.
With a collective annual lending pot of €130 billion, Hedegaard said the banks must “lead by example by restricting conditions for greater public financing of coal, the most damaging fossil fuel, and by pressing for greater transparency in reporting on emissions.”
The World Bank looks set to take its first step in this transition, as a leaked report last month announced the bank would stop lending to coal power projects, except in “rare circumstances” where there were no other options available.
Experts say that two-thirds of the planet’s fossil fuel reserves must be left underground if disastrous levels of global warming are to be avoided.
By continuing to invest in ultimately unburnable fossil fuel assets these banks are contributing to a “carbon bubble” that poses a major risk to economic security.
Hedegaard joins other political figures and a growing chorus of people supporting the divestment movement, pushing the issue up the agenda.
Two weeks ago, President Obama used his climate change speech at Georgetown University to call on U.S. citizens to “convince those in power to reduce our carbon pollution. Push your own communities to adopt smarter practices. Invest. Divest.”
Last week, pension fund, Storebrand, pulled out of 19 fossil fuel companies to “reduce fossil fuel and CO2 exposure and ensure long-term stable returns” stating that such high carbon assets would likely become “worthless financially” in the future.
The bank, Rabobank also announced a blanket ban on loans to firms involved with oil sands and fracking for shale gas due to the financial and environmental risks associated with projects of this nature.
The United Church of Christ also became the latest notable organization to approve a fossil fuel divestment strategy in the U.S., becoming the country’s first national and religious body to do so.
In the UK, the Church of England has also said it would consider divesting from fossil fuels, following a resolution passed by the diocese of Southwark—with the issue now passed onto the General Synod, the legislative body which governs the church.
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