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Why We Have To Kiss Off Big Carbon Now
mdsolar writes When the fossil-fuel divestment movement first stirred on college campuses three years ago, you could almost hear Big Oil and Wall Street laughing. Crude prices were flirting with $100 a barrel, and domestic oil production, from Texas to North Dakota, was in the midst of a historic boom. But the quixotic campus campaign suddenly has the smell of smart money.
One of the biggest names in the history of Big Oil – the Rockefellers – announced last September that they would be purging the portfolio of the Rockefeller Brothers Fund of 'risky' oil investments. And that risk has been underscored by the sudden collapse of the oil market. After cresting at more than $107 in mid-June, the price of a barrel of West Texas Intermediate dipped below $50 a barrel in early January. The crash carries big costs: Goldman Sachs warned that nearly $1 trillion in planned oil-field investments would be unprofitable – even if oil were to stabilize at $70 per barrel.
One of the biggest names in the history of Big Oil – the Rockefellers – announced last September that they would be purging the portfolio of the Rockefeller Brothers Fund of 'risky' oil investments. And that risk has been underscored by the sudden collapse of the oil market. After cresting at more than $107 in mid-June, the price of a barrel of West Texas Intermediate dipped below $50 a barrel in early January. The crash carries big costs: Goldman Sachs warned that nearly $1 trillion in planned oil-field investments would be unprofitable – even if oil were to stabilize at $70 per barrel.
And here's the problem with free market capitalism. Now we have abandoned wellsites that nobody wants to cleanup, unemployed oil workers & related fields, and bankrupt communities that were struggling to build infrastructure during the boom now have empty roads & schools. Give it 10-15 years and we'll start the cycle all over again. This carries across to other markets, we've seen it before with the steel belt turning into the rust belt.
Yes, the free market fixes it, but not until the damage is done. You end up with an economic system where capital is rushing from one end to other at the expense of labor. It's like some new era of hunter/gathering nomads; you have people following the buffalo around.
Greed breeds myopia. Always has. Did people investing heavily in oil really think it would either keep going up, or sustain at the price peaks it was at for years? At those prices, it's all but strangling the economy. It started to actually effect just how much people drove!
And there's the problem. Oil is still king of the economy. From home energy, to the dinner table. Oil is still king. I think a good many investors forgot who just has the real power in the world. Guess the Saudis thought they should remind them.
The frustrating thing with this though, is that we still won't see the prices drop at the grocery or market, even though it's cheaper to ship goods and produce. Why pass savings onto the consumer, when you can pad the profit margin for the quarter, and stock-holders. I think a lot of people forget that, milk, bread, fruit, etc... should all be a little cheaper at the moment. It won't be.
The many thousands of wells that are/were planned for completion will simply be postponed until the market responds more favorably, but don't kid yourself, they will become feasible again at some point.
Lower energy costs will fuel the self same economic recovery that will drive World prices back into the realm of profitability.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Grow up, and learn how the world really works.
Nobody is going to come back with a half way narrative, a compromised view of global warming for you to sign up to. Nobody is going to say: "Oh I see you won't agree that 5 degrees of warming is too much - let's say 7.5 degrees is the acceptable limit, deal?" Neither is the issue just going to quietly go away if you ignore it for long enough. It's a simple, brutal fact - the warming just keeps getting more and more obvious.
Grow up, get over it, and get on with it.
Otherwise, you can wait for us to get angry enough to sue you for the damage you've caused, take your stuff, and use the funds to make the necessary changes.
How bout them apples?
I wondered when Saudi Arabia decided not to cut production, dooming OPEC to low prices and ticking off the likes of Russia and other producers with marginal economies, if they where not actually working a long term strategy here. Why are they not cutting production?
First, they repress many of the world's trouble makers by dropping prices to 1/3rd their original. Yes, they hurt some emerging producers who are good guys, but these are pretty small. Russia's economy is in free fall due to this and this will greatly diminish their military and economic ability world wide. Other "bad guys" are getting hurt too.
Second, The will succeed in jumpstarting their largest consumer's economy. The USA has suffered under the burden of higher taxes and higher fuel prices (which amounts to a tax on just about everything.) Yea, there will be segments that suffer, energy production companies and those who own the production facilities will be hurt, but over all your average consumer will have more to spend and moving goods will be cheaper as fuel prices drop.
Third, energy production companies who where looking at $100+ oil for as far as the eye could see just 6 months ago, are now looking at $45 or less. Much of their production is now netting below production costs so NOBODY will be drilling new wells and a whole bunch of companies will be hurting. For the most speculative of them they will go bankrupt in fairly short time. This will greatly depress the USA's ability to develop these resources and reduce future supplies and take years to rebuild the industry.
I'm not saying this is what the Saudi's are up to, but the theory does fit the pieces I'm seeing fall together..
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Sorry, you don't get to invoke Chicken Little on this one.
Climate scientists have been warning of an *impending* (not imminent) disaster for a long time - one that is in fact occurring ahead of schedule because actual fossil fuel consumption rates have accelerated even faster than the worst-case "alarmist" predictions from a half-century ago. Our grandparents were warned that their great-grandchildren would perhaps be faced with some serious environmental problems if they didn't star reducing fossil-fuel consumption. Then our parents were warned that if they didn't start seriously shifting to alternate energy sources their grandchildren would almost certainly be faced with serious problems. Now we're being warned that we're seeing the first "unaided eye" evidence of a slow-motion catastrophe already guaranteed to get considerably worse, and that unless we cut fossil fuel consumption quickly and drastically our children will have a major global disaster on their hands.
The sky *is* falling, and those who actually cared to look have been watching the cracks form and were able to predict the fall with impressive accuracy. They've been trying to warn us for generations, but we're all so damned concerned with today's bottom line that we'd rather sell out our children than pay higher energy prices, even as the first pieces of sky start hitting the ground around us.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
CO2 increases do raise temps. Methane increases do the same. Perhaps not buy a huge amount but at least you agree they do have effect. Water vapor is largely driven by temperature. So the small increase of CO2/methane causes increase in water vapor concentrations....Which causes a large increase as you so deftly note. Now that increase causes more increase. It's called a feedback loop for a reason.
People in cars cause accidents....accidents in cars cause people
Who has more money. Al Gore or the Koch Brothers? And yet the Koch Brothers can't seem to buy even 4% of scientists? If you're claiming scientists are 'bought', then why exactly aren't they singing the tune of the highest bidders?
People in cars cause accidents....accidents in cars cause people
3) And for the good of humanity you want the price to be HIGH Z
Well someone sure is ignoring history!!
Because the cheaper energy of any form has been cheap, the better lives people led. That includes environmentally...
With more power you have more education, more industry, more jobs, more success period. With all that comes more leisure time which means more free time to devote to a healthy Earth.
If you want the best for "humanity" you want cheap energy - from any source.
Renewables will come along, but you can increase viability only so quickly. Until then don't screw people over my artificially limiting their access to energy.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
So arguing that there is no global warming, that the global warming has stopped, that it is not man-made or that it is a non-issue, because it will actually benefit us, is seen as some way of defending Freedom[tm], and many libertarian leaning people and a lot of conservative ones feel a mission to cast doubt on solid science, because defending Freedom is always good work, right? And because the science itself is quite solid (we can actually measure the heat trapping properties of different levels of the components in the atmosphere, and we have a good way to estimate the amount of carbon dioxide and methane we release in the atmosphere), the doubt is cast either on the researchers (they are accused to have an agenda, they are called liars, they are suspected to conspire against us all...), or on the immediate conclusions. Models are called misleading, every new discovery how to more correctly assess an effect gets hailed as proof that the evil climate scientists are wrong again etc.pp..
Try to separate the science and the politics! And yes, denying the science on whatever level is at first an attempt to politice the science.
This is why I've been pushing to argue in favor of reducing fossil fuel use not from an environmental point of view, but from an economic one. People can bury their heads in the sand when it comes to science, but people always listen when money is involved.
Even though the US imports about a third of our petroleum, that's still equivalent to hundreds of billions of dollars per year leaving our economy. If we transition to renewable energies, that money stays around a bit longer.
Renewable energies might have a larger up-front capital cost (but not by much, and it's getting better every day), but the long term costs are overwhelmingly favorable.
With the current crash in oil prices it should be clear that our economy is in the hands of foreign interests. We are hostages to international petroleum markets. Let's develop domestic sources to free ourselves from foreign influence. Remember: There's no reason why oil couldn't have been this cheap all along, and the price only went down right when we were posed to start reducing imports in favor of domestic natural gas production. We're being played!
(Oh, and if we happen to mitigate the environmental damage we're doing in the process and avoid global catastrophe, I guess that'll be a bonus...)
=Smidge=