Plus: Shell further positioning in EV space; BP yields to investor pressure; Corporate clean buying reaches new record in 2018
Hi Everyone,
I am hearing that patience for action on climate change is wearing thin and even resulting in long-time friends parting ways (heavy sigh). The 70,000 protesters in Belgium is another proof point. You may have heard me say this before: in an age of increasing polarization, we need to be deliberate in having the will to listen to someone with a different perspective.
A slightly lighter update this week as life got in the way of my usual patterns. This is a hobby after all.
Thanks,
Peter
New insights on investor preferences related to the energy transition – Oxford Study
If you can manage it, this 12 page report is worth the read in my humble opinion: Energy Transition, Uncertainty, and the Implications of Change in the Risk Preferences of Fossil Fuels Investors, the latest paper from the Oxford Institute for Energy Studies. It makes the following key points:
- Contrary to what many think, energy transition risks are NOT a long term issue. Investors are adjusting their perception of risk much faster than the time scale for the transition to be completed.
- Investors are already demanding a much higher hurdle rate for long cycle oil projects, provoking a bias to investing in short term projects with faster payback with knock-on effect of lowering investment in long cycle projects.
- One of the scenarios considered the potential where short cycle projects cannot meet demand and therefore oil prices rise, which could speed the transition and create a new form of ‘lock in’ and path dependency.
- China and India are key to the demand picture and so are important to watch closely.
This has multiple bearings on Alberta’s oil sands with projects that are both long cycle and towards the more intensive end of the spectrum for greenhouse gases, suggesting greater urgency for reducing emissions. Low cost AND low emission producers may still carve a handsome niche when prices rise and demand remains, providing investors haven’t simply made a binary call for zero oil sands in their portfolios. The Energy Future’s Lab’s call for net carbon neutral production and consumption requires charting new pathways that will see investment continue.
Baker Hughes Ponders `Ecosystems’ in Windmills, Solar Panels
Excerpt: Baker Hughes is beginning to talk about a world beyond hydrocarbons. The third-biggest oil-services provider says it’s looking at expanding into goods and services connected with the wind and solar sectors as it prepares for a world that will be far less dependent on hydrocarbons by 2050. And while investors are probably more focused right now on the company’s fourth-quarter earnings report on Thursday, the Houston-based company said it’s not too early to ponder its future three decades in the making. …more from Bloomberg
Shell buys charging company Greenlots as oil majors prep for rise of EVs
Excerpt: With the number of EVs on U.S. roads expected to reach 7 million by 2025, the deal could signal a wave of coming investment by large oil and gas companies to diversify, say electrification experts. …more from Utility Dive
Comment: This story seemed to touch a nerve at Electrek, with some uncharacteristic sentiments expressed towards big oil companies and the lack of trust about the real motivations for these investments in electrification of transport. Check out the comments on the story too.
New report lists steps for Boston to become carbon neutral – Smart Cities Dive
A new study by the city of Boston shows 85% of the buildings that exist today will exist in 2050, making the case for energy efficiency retrofits now. They were not fans of ride sharing, suggesting it increases emissions and is biased to those better off. Lastly, since commuters come into Boston from bedroom communities, they posed the question of how to get those people into transit instead and have those bedroom communities help pay for the transit infrastructure that would make it attractive for commuters.
BP to expand emissions disclosure on oil investments
Excerpt: Unlike other companies, BP has agreed to detail how major future investments in fossil fuels will be consistent with the 2015 Paris agreement to reduce carbon emissions to net zero by the end of the century by phasing out fossil fuels. …more from REUTERS
Corporate Clean Energy Buying Surged to New Record in 2018
Excerpt: Corporations purchased 13.4 gigawatts of clean power through long-term contracts, more than doubling 2017’s total, helped by demand from new industries and previously untrodden markets. …more from BNEF
Oregon Utility Makes $117M Move to Smart Meters
Excerpt: “From other customers with smart meters, they have better insight into their energy use,” said Alisa Dunlap, a regional business manager with Pacific Power in northwest Oregon. “They can take a look when things are spiking.” …more from GovTech
Germany Lays Out a Path to Quit Coal by 2038
Excerpt: Germany will spend tens of billions of dollars to end its use of coal power within two decades, if a plan agreed to early Saturday by representatives of the power industry, environmental movement, miners and local interest groups becomes official policy. …more from NY Times
Biomimicry aims to help cool buildings: Phalanx Insulation among 7 finalists for Ray C. Anderson award
Seven finalists were shortlisted for the ‘Ray of Hope’ award. I couldn’t help be drawn to Phalanx Insulation’s approach to their design to help cool buildings. Check out their video here.
An insulation grid meant to be applied to exterior walls of existing buildings, inspired in part by cacti, Saharan silver ants, and the Saharan camel.
Yes, I love the “objective” comments by Electrek in the Shell article…”Their products cause pollution, high health costs, and death all around the world.” and then, “But I’m still rooting for the demise of any industry which has done such untold damage to the world.”
What about the millions, if not billions, that would have starved (or frozen) to death had it not been for fossil fuels that made it possible for countries like Canada to quadruple our agricultural output. I would speculate. the number of “deaths” saved outweighs the number of deaths caused by multiple orders of magnitude.