
The $47T Death Sentence for Oil and Gas - elorant
https://oilprice.com/Energy/Energy-General/The-47-Trillion-Death-Sentence-For-Oil-Gas.html
======
LatteLazy
I don't think there is anything actually happening here.

IF (and it's a big IF) financing for oil and gas projects was reduced, that
might increase the price, or at least make the price more volatile as supply
couldn't be increased quickly when demand increases. This would be offset by
the fact that as a self financing industry outside finance is more about
managing capital costs than supplying it. It's also worth noting that supply
is at least partly controlled politically (by Opec and the Saudis etc), not by
actual availability. You might stop all new developments and investment and
still find the price falling if the Saudi's decide to turn on the tap.

And it will be very very difficult to actually reduce the supply of capital to
oil and gas companies: many are state funded and new ventures are among those
most likely to receive state funding. Add to that that money is fungible: you
might think your buying Walmart bonds, but then you find out Walmart used the
money to lend $1bn to Exonn and suddenly you funded oil and gas exploration
without knowing it. You need basically EVERYONE to agree to stop, as long as
one bank/hedge fund/Private Equity firm/Big Corporation will still take this
business it will continue (and that firm will become very very rich and
successful).

~~~
SlowRobotAhead
>You need basically EVERYONE to agree to stop,

This is the thing I don’t understand from climate... um... super activists.

We know of no more efficient, safe, and easily convertible storage of energy
than petrol hydrocarbons. So even if everyone else stopped today, someone will
keep using them, and that group will have an advantage over their peers.

Second, if we stop using oil in engines, guess what? It’ll go into lubes, and
plastics, and other forms. We have a material we know no better alternative
for. You know how composites like carbon fiber enable windmills and solar
panels and electric vehicles, and all the new cool things? Carbon fiber is
non-recyclable burnt plastic. It’s very oil heavy in production, they take
plastic bars, spin, spool, and burn them to get the fiber. It’s extremely non-
green, then you have the resins and epoxy that uses oil in its production, and
all the greases, lubes, finishes, etc.

If you agreed to get everyone to stop, it basically can’t stop. Someone won’t
and they’ll do well because of it in the short term. And obviously we’ll need
oil for far more than cars, we use most of it in energy production and cars,
but remove those and we’ll just usher in a different era of plastics and
composites.

Now of course you can argue plastic in a landfill is better than vaporized in
the atmosphere! But to pretend big oil will just “go away” is very foolish.

~~~
coldtea
> _We know of no more efficient, safe, and easily convertible storage of
> energy than petrol hydrocarbons. So even if everyone else stopped today,
> someone will keep using them, and that group will have an advantage over
> their peers._

Or, you know, that group gets thrown to prison or bombed, and problem solved,
how about that?

> _Second, if we stop using oil in engines, guess what? It’ll go into lubes,
> and plastics, and other forms. We have a material we know no better
> alternative for._

Plastics compared to oil energy is a tiny percentage (which, still has its own
problems).

But even if we had to do without both, and without modern conveniences, like
plastics, and carbon fiber, and tons of others, and e.g. go back to a 1900
lifestyle, it still beats dying in a climate apocalypse (and returning to a
1900 B.C. lifestyle).

~~~
mrep
> Or, you know, that group gets thrown to prison or bombed, and problem
> solved, how about that?

Are you really arguing we go to war with every country who doesn't stop using
fossil fuels?

> beats dying in a climate apocalypse

I'm 100% for paying more to switch to 100% renewable energy, but none of the
effects of climate change [0] will in any way result in an apocalyptic future.

[0]: [https://climate.nasa.gov/effects/](https://climate.nasa.gov/effects/)

~~~
coldtea
> _I 'm 100% for paying more to switch to 100% renewable energy, but none of
> the effects of climate change [0] will in any way result in an apocalyptic
> future._

The NASA effects are the Disney version. As many countries have already found
(and many will discover) you can get an "apocalyptic future" with seemingly
small changes.

Changes pile up beyond the immediate ecological impact -- e.g. droughts and
climate disasters mean more immigration, tension between neighborhooding
countries, wars for resources (if wars of oil where bad, wait for wars for
water), increased lack of global collaboration and so on...

~~~
mrep
> The NASA effects are the Disney version. As many countries have already
> found (and many will discover) you can get an "apocalyptic future" with
> seemingly small changes.

What countries have experienced an "apocalyptic future" due to climate change
seeing as you are smarter than NASA?

> if wars of oil were bad, wait for wars for water

How! I am flabbergasted you think the trillion dollar market for oil will be
usurped by water. Pretty much all cities are based around water sources
(rivers usually).

~~~
coldtea
> _What countries have experienced an "apocalyptic future" due to climate
> change seeing as you are smarter than NASA?_

Note that the latter part is an ad-hominem, and what it puts forward (that I'm
"smarter than NASA") was nowhere in my message (not even implied). So I might
not be "smarter than NASA", but you (or at least your comment) are ruder than
needed.

As to the point I made. NASA presents the Disney version for a lot of reasons,
not because of lack of smart people there. Two main ones:

One is that they are a government agency, and need to be political (e.g.
balance the pressure from those that discard the climate impact altogether and
"meet them in the middle").

Second, is that in such a public pronouncement they tend to be conservative
and err on the side of caution.

As for the countries that have already experienced an "apocalyptic future":

[https://www.theguardian.com/environment/2016/may/10/five-
pac...](https://www.theguardian.com/environment/2016/may/10/five-pacific-
islands-lost-rising-seas-climate-change)

Here's another:

[https://eu.usatoday.com/story/news/world/2018/07/24/pakistan...](https://eu.usatoday.com/story/news/world/2018/07/24/pakistan-
one-worlds-leading-victims-global-warming/809509002/)

And the migrant crisis that affects tens of millions (and a project 1 billion
until 2050) is strongly affected by climate change already...

[https://eu.usatoday.com/story/money/2019/07/10/disease-
flood...](https://eu.usatoday.com/story/money/2019/07/10/disease-flood-war-
climate-refugee-crises-happening-now/39669605/)

------
ptah
>Activism is threatening value destruction for all, not only the environment.

how can you draw a distinction. destroying your environment is destroying
yourself. does existing not have value?

~~~
KoftaBob
If you're of the baby boomer age group and older, it's likely you'll be gone
before the worst effects of climate change are in effect, and they know that.

For them, destroying the environment is _not_ destroying yourself. It's
prioritizing short term gain at the expense of their children and
grandchildren.

It's no coincidence that the majority of politicians and corporate leadership
is in this age group, hence the lack of urgency in mitigating climate change.

~~~
meddlepal
Are you sure it's just boomers? I'm in my 30s and I don't care too much
either, 30-40 years from now I'll be in the twilight years. I've been
listening to doom and gloom environmentalists for my entire life telling me we
are X years from destruction.

Here's what's going to happen:

1\. Some places are going to be flooded. The important ones will construct sea
barriers. The others: oh well.

2\. Some places will become infertile while other places become fertile: sucks
that the Midwest will become a desert but Canada is going to be a great place
to grow things in 100 years.

3\. Technology will improve if things get really dire but I'm sure human
ingenuity will pull through.

~~~
agentultra
> 1\. Some places are going to be flooded. The important ones will construct
> sea barriers. The others: oh well.

Most valuable places will be flooded. Sea barriers won't stop it. You're going
to be able to sail over the Guggenheim. Maps of the US will have to be re-
drawn to remove Florida.

> 2\. Some places will become infertile while other places become fertile:
> sucks that the Midwest will become a desert but Canada is going to be a
> great place to grow things in 100 years.

Unlikely. Soil erosion is accelerated by climate change. There are roughly 60
harvests left. Fresh water is going to become extremely scarce. Constant,
slow-moving storms will basically reduce yields on land that is still viable.
Did you notice how much of this year's harvest was off because of the
torrential rains?

The tundra isn't going to become fertile. It's a bubbling mass of methane and
hyrdrocarbons. It barely has any soil. Who wants to try and grow things on a
mushy field, full of mostly dead things, that might explode or re-introduce
you to ancient diseases?

Plus you will have vast tracts of densely populated areas with people that
need to migrate because the wet bulb temperature there is lethal to all
humans. Mass migrations of billions of hungry, thirsty people.

> 3\. Technology will improve if things get really dire but I'm sure human
> ingenuity will pull through.

Not fast enough. I wouldn't rely on it, "sorting itself out." We're already in
the 6th mass extinction. That's not activism, that's just science. We're on
the roller coaster and the time to get off was about 30-40 years ago.

If you look into any carbon sequestration technology out there it's simply not
feasible at scale. Maybe it will be in 30-40 years but we'll already be into
the worst effects of climate change by then.

If we do nothing now it will be worse later than if we try to do better.

The likelihood that you or I will make it to our twilight years in comfort is
very low. It gets lower the more that we delay action to reduce our carbon
footprint and try to slow down or stabilize the feedback loops. Things got
this way because the generation before us didn't do anything about it knowing
full well that this outcome was likely. It was known in the seventies that
this could happen if we didn't reign in emissions. Well... guess what? It
happened. And here we are. It's not the predictions of one person -- there are
thousands of corroborating studies over decades of research.

~~~
meddlepal
> You're going to be able to sail over the Guggenheim. Maps of the US will
> have to be re-drawn to remove Florida.

You made my point for me. Sorry, that's just NOT going to happen. The extreme
hyperbole of the climate change side is not helping matters.

~~~
agentultra
This is worst-case scenario, 2100, 4C based off of IPCC data which is
conservative.

It's _possible_ it won't happen but it's not going to be because we do nothing
today and continue with current emissions trends.

[https://choices.climatecentral.org/#6/25.760/-80.206?compare...](https://choices.climatecentral.org/#6/25.760/-80.206?compare=temperatures&carbon-
end-yr=2100&scenario-a=warming-4&scenario-b=warming-2)

~~~
meddlepal
Once again I refer to this:

> You're going to be able to sail over the Guggenheim

The Guggenheim is 77 feet tall. We're not going to be sailing over it. That's
my point about hyperbole.

All coastal cities will experience some flooding. I've seen projections of 4-6
feet sea rise. That's not insurmountable by sea walls.

That map is useless because it doesn't show projected depths. It gets people
all riled up without also explaining, yea in mid-town Manhattan if we do
absolutely nothing between now and then we'll be under a foot or two of water.

------
jsingleton
> Around 130 international banks, all present at the UN climate change summit
> in New York, have committed themselves to decrease their support and
> investments in the oil and gas sector...

Edit: If you want an action you can take then change your pension fund to an
ethical one that doesn't invest in companies that do harm.

~~~
frankbreetz
[https://news.ycombinator.com/item?id=20998948](https://news.ycombinator.com/item?id=20998948)

~~~
jsingleton
This is a link to Bill Gates' recent comments.

However, with pension funds this is slightly different. Funds have a huge
voice and customers switching investments can influence how they use their
votes. It's very easy to do, so why not do this in addition to all the other
things?

It's also less about removing funds from fossil fuels and more about putting
your retirement savings to better work. If you move your fund to a "future
world" style one then this provides capital to clean energy projects etc. The
ethical funds I looked at even performed better historically than the standard
ones, so it's win-win.

~~~
rootusrootus
> Funds have a huge voice

If they divest, they have no voice at all.

~~~
jsingleton
Most people unfortunately stick with the default investments their employers
choose. So funds will still have a big vote share even if a large number of
concerned people switch, however it is a signal to them.

~~~
rootusrootus
It may be a signal to the funds themselves, but it is not any kind of signal
to the underlying companies whose stock is being held in the fund.

------
alex_young
What possible effect can divestment have on the industry? They still sell a
valuable product everyone buys.

~~~
itemGrey
Yep, I'm fairly sure the jury is out on this, see Bill Gates' recent comments,
[https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1...](https://www.ft.com/content/21009e1c-d8c9-11e9-8f9b-77216ebe1f17)

My thinking would be if they divest from Oil and Gas, they will invest this
capital somewhere else such as Nuclear, or renewable resources.

~~~
allannienhuis
non-paywall: [https://archive.fo/PGRcH](https://archive.fo/PGRcH)

------
darksaints
What I don't understand is the fixation on defunding the investment side, as
opposed to investing in alternatives. If you pull your funding out of oil and
gas, less scrupulous people will take their place and happily rake in the
profits, because the demand isn't going anywhere. But make alternative energy
cheaper, and the demand for oil and gas will disappear.

~~~
SlowRobotAhead
>If you pull your funding out of oil and gas, less scrupulous people will take
their place and happily rake in the profits,

Agreed. You create opportunity for at least a short term advantage.

>make alternative energy cheaper, and the demand for oil and gas will
disappear

IDK, it seems the actual demand for oil will remain high. We’ll shift from
using it in energy production and transportation to plastics, manufacturing,
lubes and other refined oils, aviation which to shift to electric will need
another 50 years of battery tech it seems, etc.

~~~
darksaints
> IDK, it seems the actual demand for oil will remain high. We’ll shift from
> using it in energy production and transportation to plastics, manufacturing,
> lubes and other refined oils, aviation which to shift to electric will need
> another 50 years of battery tech it seems, etc.

Agreed on the uses for oil, but I think planes are a lot closer than you
think, but not via batteries. Fuel cells will be what is used, IMO. All of
their disadvantages that make them a terrible fit for cars are pretty much
null for planes. Electric motors are reaching 15 kw/kg. SOFC designs are now
reaching 2.5 kw/kg power density and > 60% efficiency. With waste heat
recovery, 80% efficiency is on the horizon. All combined, my napkin math
(which could be wrong) shows those power densities are almost double that of
even state of the art jet engines like LEAP.

Which just leaves the fuel aspect. SOFCs, due to their high operating
temperatures, allow for a lot of fuel flexibility. Technically, they could
still use regular jet fuel. While that wouldn't get rid of the fossil fuels,
the much higher efficiencies would result in significant decreases in the
demand for fuel, which have additional efficiencies (It takes a lot of fuel to
fly a lot of fuel).

However, I wouldn't rule out hydrogen. The traditionally cited disadvantages
of liquid hydrogen are significantly minimized for aviation. You don't really
need heavy duty cryo tanks: planes operating at 15km altitudes are already at
-50 degrees C, and the consumption rates would be higher than the evaporation
bleedoff rates. When descending or ascending, temperatures are higher, but
consumption rates are also higher. That means that the optimal insulation is a
weight/bleedoff optimization problem, and I wouldn't be surprised if current
foam insulation technologies were good enough. I've found an example of a
125kL vacuum-insulated tank that only needed a constant 390W of cooling to
maintain zero boil-off [0], meaning that that rate of fuel bleedoff without
cooling is <390W. That is 2-3 orders of magnitude lower than the consumption
rates of jet aircraft, which gives a lot of leeway for reducing the insulation
requirements. And even if it doesn't work, liquified renewable methane might
still work, with its higher boiling point and higher volumetric energy
density.

[0]
[https://iopscience.iop.org/article/10.1088/1757-899X/278/1/0...](https://iopscience.iop.org/article/10.1088/1757-899X/278/1/012012/pdf)

~~~
SlowRobotAhead
You could be entirely right about planes. But... Here is what I know! We're
still largely using 1940s tech when it comes to many planes.

Aside from spaceships, planes are the most likely to kill you when something
goes wrong. So I think that's why they are slow move to new technology.

So maybe fuel cells are the way to go. Maybe hydrogen. But, I still kind stick
with the idea that if the tech was out and fully worked out today, in 40
years, there will still be planes flying around on piston drive ICE drinking
refined kerosene.

------
natch
This article presents one interpretation, and a strongly biased one at that.
Although the headline is generally right when interpreted loosely, the text is
scare mongering to try to give readers talking points on oil's side.

>Removing financial support for hydrocarbon companies will put a major bomb
under the future of emerging economies. ... affecting the global economy ...
blah blah

As the investment swings from oil and gas to renewables, the emerging
economies can also pick up use of renewables. There is no rule saying they are
not allowed to do so. But the writer of this article pretends that cannot
happen.

Sure, the oil and gas crutch will be needed at first, but it can be phased out
eventually, and doing so will create a huge boom in development of renewable
technologies that will provide plenty of economic stimulus to replace the
destructive money that was being dumped into the oil and gas money fire.

~~~
throwaway5752
I've been following the hydrocarbon industry from development stage E&P to
vertically integrated supermajors for the best part of two decades. This
website is not a source of information that I would use.

------
socrates1998
Oil and Gas companies are going to kill themselves because they made the
critical error when they decided they were Oil and Gas companies and not
energy companies.

I don't why none of the large Oil and Gas companies aren't leading the way to
renewables?

You would think at least one or two of them would strategically realize that
as the tech gets better, wind and solar will gradually become the main energy
source.

And you can either hold on to your dying market (not dying now, but it will
eventually).

NONE of them seem to have any real vision for a post oil and gas world.

My guess is that they are fixed on making sure that solar and wind power stays
a small percent of energy consumption rather than being a market leader.

I wouldn't be surprised if in the near future more damming evidence comes out
that proves the major oil and gas companies have been trying to fuck the solar
and wind industries for decades now.

~~~
chimi
You can see the transition they are making to other energy sources in their
advertisements. BP even changed their logo in 2000 to a green sun they call
Helios.

[https://www.bp.com/en/global/corporate/who-we-are/our-
brands...](https://www.bp.com/en/global/corporate/who-we-are/our-brands/the-
bp-brand.html)

------
sailfast
Banks signing letters doesn't really do much - they're still responsible for
making money, and they'll keep working in hydrocarbons. This title is
hyperbolic.

Further, banks typically "invest" on behalf of customers, not by themselves
(are loans investments?). Pretty sure if ARAMCO is going IPO they want a piece
of the business. What about M&A advisory work for hydrocarbon companies?
Brokering corporate bonds?

It's great that folks are signing letters that they understand the problem,
but I don't think one can read any significance into them until behavior
actually changes. What downside is there to signing the letter?

EDIT: That said, I clicked. Not sure I'll ever go to this domain again though.

------
ThomPete
Hurting oil means hurting the alternative energy sector making it more
expensive to produce. All the materials, manufacturing, r&d, infrastructure
installation, maintenance and i could go on heavily rely on oil, gas and coal
to even be possible. In other words death sentences to oil and gas means Death
sentence to alternatives.

and thats just for that specific industry. 80% of what we surround us with and
cool modern living is fossil based. If you welcome the death of oil and gas
you welcome the death of millions.

------
paulsutter
Banks are an important conduit to financing oil and gas projects, but the
banks themselves are not significant investors, so this “death sentence”
narrative is nonsense

A gradual carbon tax, that starts out at a level that’s politically
acceptable, and grows to become massive, is what’s needed

> Around 130 international banks, all present at the UN climate change summit
> in New York, have committed themselves to decrease their support and
> investments in the oil and gas sector the coming years.

------
xiphias2
If banks decrease funding oil, it is because renewables have a higher ROI at
this point.

Saudi Arabia knows this as well, that’s why they want to IPO Aramco.

------
ojosilva
The article does not offer counter-arguments to balance its own hypothesis. It
uses FUD profusely, including threats on "global security", and has a click-
bait title: the $47T is the combined assets of the banks pledging to align
with the Paris agreement.

Yes, the oil and gas industry has rolling financial needs and we can't just
stop depending on fossil from one day to the next, but it's all about creating
a new ethical baseline where the planet, and not short term economic gains,
become the priority.

The fate of fossil fuels has to follow what happened to slavery around 150-200
years ago. Back then slavery was also a huge economy that was considered
absolutely crucial for making the world go 'round, but humanism became the
baseline, changing how society perceived enslavement of human beings.
Abolitionist laws were enacted and conflict followed, including long and
bloody wars sponsored by the affected (land)owners and their partisans. I hope
that's not the case now.

------
planetzero
What about a country like Norway that bases its entire economy on oil? Why
shouldn't they be considered evil too?

~~~
jihadjihad
I wouldn't say it "bases its entire economy on oil." If you're referring to
their sovereign wealth fund [0], your statement is misleading since the fund
was started with monies from Noway's own oil reserves, and the fund actively
excludes companies on ethical grounds.

[0]:
[https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...](https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway)

~~~
selectodude
22 percent of Norway's GDP and 67 percent of their exports are oil and gas.
That's a petrostate.

------
BAReF00t
I _highly_ doubt this is more than lip service.

Thesr organizations are run by certified psychopaths, who don’t care about
being good, but only about _looking_ good. So they can keep doing what they
do. Which is maximizing profit.

I’ll accept it when I have seen, checked, scrutinized and double checked
evidence for at least ten years, for the obligatory sneaky technicalities and
spin.

