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'Carbon Bubble' Could Spark Global Financial Crisis, Study Warns (theguardian.com)
An anonymous reader quotes a report from The Guardian: The existence of a "carbon bubble" -- assets in fossil fuels that are currently overvalued because, in the medium and long-term, the world will have to drastically reduce greenhouse gas emissions -- has long been proposed by academics, activists and investors. The new study, published on Monday in the journal Nature Climate Change, shows that a sharp slump in the value of fossil fuels would cause this bubble to burst, and posits that such a slump is likely before 2035 based on current patterns of energy use. Crucially, the findings suggest that a rapid decline in fossil fuel demand is no longer dependent on stronger policies and actions from governments around the world. Instead, the authors' detailed simulations found the demand drop would take place even if major nations undertake no new climate policies, or reverse some previous commitments. That is because advances in technologies for energy efficiency and renewable power, and the accompanying drop in their price, have made low-carbon energy much more economically and technically attractive.
Like I give a shit what will happen in 2035!
Those bubbles could spark much worse and sinister disasters:
https://ibb.co/cc7Ddw
Crucially, the findings suggest that a rapid decline in fossil fuel demand is no longer dependent on stronger policies and actions from governments around the world.
This dangerous trend can and will be stopped: We will use a combination of tariffs, executive orders and obscure WWII-era federal statutes to nationalize the energy sector and stamp out this "change" nonsense, ensuring that fossil fuel jobs in key voting districts will endure for decades to come!
There's a certain greedy advantage to holding this view.
First off, it encourages research into bringing it closer to fruition - which basically saves everyone in the US enormous amounts of money, even fossil fuel folks, since it's easier for them to exit the market than middle eastern and Russian folks tied to those markets.
But more importantly - even if it won't be the dominant factor for a decade or whatever, it will reduce the price of fuels we'll be using to get us to transition away. Or at least reduce their increase in price, as the cost to unearth them goes up in percent.
All that reduces the power of fossil fuel nations to interfere with our political systems, and basically buys us a better footing in the world.
At least in game theory terms, it makes sense to push that as far as you can, if positive outcomes for America over the other fossil fuel producing nations are important to you.
And hey, it's another reason to get rid of Trump as soon as possible. How about that!
Except for Central Banks keeping interest rates too low for too long and all of the QE. Couldn't be that.
read my Sig
[($)]
Dont worry, peak oil should cancel it out nicely ;)
(for the idiots, yes, joking, get a sense of humor.....)
In a 4,5 billion $ pipeline... kill me now plz
[($)]
It seems as though our vaunted financial indicators must be...a trifle off...in some way if a combination of cheaper energy efficiency measures and increase in availability of energy sources cheaper than the current low cost options would have negative effects on the economy.
How do you do that? The cost of a fair amount of energy(and often a lot of petrochemicals that will presumably be cheaper if less demand for using them as fuel means lower cost for purchasing them as feedstocks) is baked into pretty much every good and service imaginable. What sort of ghastly mistake does it take to turn "basically everything has become cheaper to produce" into a financial crisis?
I've read that a mix of lower Energy Reruns On Investment (EROI) I.E higher energy inputs to extract carbon fuels (one barrel of light crude equivalent) and lower ore grades for mining raw materials (more energy to move more rock for less ore) will cause the bubble to burst eventually.
But the true wildcard is the adoption or non carbon energy sources and how much of a market share it will take from carbon fuel sources.
Worse case scenario, carbon fuel EROI will be very low I.E high extraction costs. In a market where carbon fuel prices are trending lower due to drop in market share to green energy!
In a situation like this investors won't put money into oil/gas or mining companies!
Every energy company (except maybe the coal ones Trump supports) diversifies their energy investment. Even Saudi Arabia has been investing in electric vehicle development for over 10 years.
Let's face it.
if you want to see the effects of dropping oil prices look at Venezuela. Yeah, some of those wounds were self inflicted, but the big issue was the sudden drop in oil prices pulling the rug out from under them (plus a drought shutting down their hydro electric dam, folks forget how small they are, that was a big deal).
Now, imagine what's gonna happen when the price of oil gets low enough that the middle eastern countries can't afford to keep up their militaries and their social welfare programs. Don't forget that most of these countries are crazy religious and several of them have big arms and nukes.
The sane thing to do is to provide aid to modernize these countries. Instead we've been putting sanctions on a lot of these countries. We're doing the exact opposite of what we should be doing, and it's exactly what we've always done as a species. I don't have an answer because it comes down to conniving assholes taking advantage of large groups of people who aren't very bright, and I don't have an answer for that.
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would divest themselves from fossil fuel extraction companies starting with coal, then oil and then gas. Oil is an elastic commodity. A small change in demand will result is a large change in price.
Sooo... Sorry Africa. And millenials. And, well, millenial children, if the millenials can ever afford to have any. But driving that hummer sure was fun, and the Koch brothers got to spend most of their lives dipping their wrinkly balls in gold. We'll try to do better next time. Oh... wait...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Most urban dwellers have no idea how vast America is, and the great distances rural people travel to work and to trade. Gasoline and diesel are the only reasonable fuels to travel the American heartland. Heating likewise. Electricity is not an economical way to heat. Carbon fuels are here to stay. They aren't going anywhere.
Almost all the world's oil and gas reserves are owned by National Oil Companies, not by private corporations, and NOCs do what their governments tell them to do.
The bigger issue is that if demand for hydrocarbon falls, then to sustain the level of military spending and social programs that supports a state built around extractive industries they need to produce more, thus crashing prices further.
Saudi Arabia needs a price of about USD60 to maintain themselves, for example.
TLDR : If BP goes bust, it doesn't matter that much because it's Halliburton etc doing the work anyway. But if a country goes broke, there's more issues.
HILARIOUS.
No. What's going to happen is we're going to keep on burning fossil fuels for two or three hundred years until they run out and our civilizations go into permanent decline.
These Chicken Littles are always wrong.
Heavy transport, shipping and planes will be using liquid fuels for longer than cars will.
Cheaper yes, valueless no.
Do this instead of having your wife go to some skeezy gas station in the worst part of town to save a few pennies a gallon.
"All that remains is boilerplate rhetoric from the political class, frivolous nuisance lawsuits, and bureaucratic mandates on behalf of special-interest renewable-energy rent seekers." (Steven F. Hayward) Mr. Hayward is a senior resident scholar at the Institute of Governmental Studies at the University of California, Berkeley. https://www.wsj.com/articles/c...
Just FYI
the NetBSD project, *BSD has losT more startling turn
I spend all of my UBI on oil so I can burn an open flame on my lawn - why you ask? Cause I can
I skip articles containing "Carbon"
And I never reply to comments which contain the string 'FYI'
Who remembers the doom and gloom about "Peak Oil"? Who remembers being told we are heading into a new ice age? Why do we pay attention to this crap. It's just like a new fad diet.
a way to spend Goal here? How can Please moderate has brought upoN TOPS RESPONSIBILITY study. [rice.edu] long time FreeBSD
The authors are a condensed matter physicist and a lawyer. No economists there. So the "global financial crisis" they refer to could be that some countries benefit, others lose, that some companies make higher profits and others go bankrupt. How is that different from today's "crises"? An economist could help.
Global carbon emissions are NOT and never have been a problem.
AGW is a total fraud.
You can conclusively persuade yourself of this noticing that water vapor outguns CO2 by a whopping 100x in heat capacity and a whopping 100x in concentration. Thus it is 10,000x effect of CO2. Any guesses on how to control water vapor on a planet mostly covered in water? I didn't think so.
I was under the impression that the oil bubble was finally what pushed the US economy over the edge and into recession back in the summer of 2008. Are we in another oil bubble now? Maybe or maybe not?
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Price goes down, people can afford more of it, demand goes up.
Price goes up, people can no longer afford it, demand goes down.
The price of petroleum products will only ever keep going up (on average). Humanity won't stop burning oil until there's none left to burn.
If you gave me a choice between a printer and a giraffe with explosive diarrhoea, i'll get my ladder and my raincoat
Place is festooned with neckbeard Donnie Moscow fans. They don't believe humans can affect the climate even in principle. Well, they might do, but they use cowardly motivated reasoning to come with reasons why they don't need to do anything any differently.
Cunts, in other words.
There are some things the author completely fails to grasp:
1) Organic Chemistry is based on oil as the feed stock (including medicine, food additives, makeup, and many more).
2) There is not enough Ethanol found in nature to supply the fuel needs of the world.
3) Wind power is available most when you need it least.
4) Solar still isn't cost effective.
While all of this is going on, you're trying to lift a large part of the world out of poverty, meaning they are going to need plastics, fiber for cloths, medicine, and fuel.
That is because advances in technologies for energy efficiency and renewable power, and the accompanying drop in their price, have made low-carbon energy much more economically and technically attractive.
Oh ... so we don't need to go nuts and go all socialist to handle this, after all.
Despite decades of insisting that we do, and that the only solutions possible just happen to magically align with policies that certain parties favored anyway.
India and China will continue to use fossil fuels. If there is any bubble, it's in green technology, There are lots of unworthy solar stocks etc that are way overvalued. I love Teslas, but that company is also extremely overvalued and wouldn't be surprised to see it have a $5b market cap in a few years which would be much more reasonable since the Model 3 isn't the godsend it was supposed to be... $35k? Lol!
I've been hearing garbage like this for years. The Peak Oil Apocalypse is a similar doomer line of thought by people who don't seem to understand the energy density of liquid fossil fuels. Since we are talking about someone's bullshit cockamamie theories how about we throw this one into the ring? Fossil fuels keep selling until significant amounts of vehicles and equipment becomes electric. At that point, the fossil fuels get cheaper, and as folks transition away jobs open up on the electric side (nowhere did I say we'd stop transporting people & goods). It could very well be a seamless transition based purely on supply, demand, and price dynamics. As tech makes electric cheaper, the shift occurs and no big dislocation occurs at all. Why is it that anytime someone sees a change coming, they say "This is going to result in massive joblessness and blood in the streets!"
So what is America's excuse for using more coal powered electricity per person than China?
Only reason China uses more is because it has more people.
Nope. The bubble is people's interest in climate change. People aren't giving a sh*t about it because they have come to the realization that solving it is too expensive for them.
The US uses more fossil fuels per person than either India or China. It's not even close. China uses more coal for industry, America uses more coal for electricity, way more natural gas, and way way way more oil.
people mellow out once they've got enough food/shelter/healthcare. It's not like we don't have plenty of evidence of this either. Look at Europe. The problems they're having right now are mostly from Muslim refugees being forced to migrate because of bad economic conditions in their countries. They're a problem because they're being forced to move, so they're not integrating into their new countries. It'll be 3 generations until they do.
TL;DR: It's cheaper to drop food than bombs.
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They transformed themselves from a third world hell hole into a first world nation in 50 years. That's incredible when you think about it. A modern miracle they don't get enough credit for. But it was all based on the price of oil. When the petrol dollars dried up they didn't have a 200 year old banking system in place to deal with it.
The Saudis see this coming, btw. It's why they're letting women drive. They're trying to get them into the workforce to keep their economy growing.
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Even if the transition does happen around 2035 (which is doubtful), I would anticipate big businesses to lobby heavily for taxes and bailouts to stave off the inevitable for some time. That move will almost certainly artificially move the bubble burst to the right but the writing will be on the wall.
I welcome our new energy overlords - I'm bored with the old ones.
There's a basic stupidity here. By implied extrapolation, the PR wonks are trying to lump energy technology in with Moore's law, as it applies to silicon: a die shrink only ever gets better (which itself is barely true any more, though it certainly enjoyed a stellar half century).
Environmental energy is not like that. Your fancy new solar technology might be cost effective while there is still more of California to exploit, but hardly ready for prime time in frigid "central" Alberta (the same 55th parallel north also runs through Glasgow, Copenhagen, and Moscow, just for starters).
But no problem, Canada's tiny population has a ludicrously unfair share of the world's ground water (and many powerful rivers associated with this). And if that doesn't get us through, we've still got thorium, too. As for wind power, better hope you get that build soon enough for forestall run-away climate change, or your wind forecasts might prove extremely fickle.
The march of progress is good, but this is shaping up as a long war, and today's low hanging fruit shall ever remain in perilous supply.
Yes, the implied metaphor sucks big time. In truth, the problem here is a lot more like optimizing software than optimizing silicon. Your database is the bottleneck, so you optimize a few key queries—and declare permanent victory.
Celebrating Too Early Compilation
But nope, now you've got other fish to fry. The load balancer, OMG PHP, the Intel Spectre BIOS patch, etc.
Dang it! If only Intel would simply give us the 8 GHz chip we've been waiting for since the thermally untenable Pentium 4 teased us horny.
———
As a side note, the legendary inefficiency of the Pentium 4 almost surely lead to the construction of an entire electrical generation station the world desperately did not need. And now all that extra carbon is part of today's problem, too, likely continuing to bear Intel-legacy climate interest for the next hundred years.
Good grief, Charlie Brownout, are we a feckless, stupid species.
———
Global-foresight triple word score if you bought a Prescott and then configured your 24/7 screensaver to run 3D Pipes.
Intel's Pentium 4 E: Prescott Arrives with Luggage — 1 February 2004
Cuffing Intel upside the head is popular again, lately, but in truth Intel has always been strangely bipolar.
For a while, there, CoreDuo's lurking Spectre saved a lot of carbon (on finite tasks, not counting CPU sinks like 3D Pipes).
Even Steven?
Hard to say.
Markets work.
Except for all the AGW doom mongers who were hoping to use this as a wealth transfer mechanism.
Have gnu, will travel.
And in other news, sometimes big businesses fail to react in time to changes in markets. Obviously, of course, this is a problem for the government, because all Americans value a centrally-planned economy.
(This is a joke, but it's also true, as proven by the Democrats' and Republicans' bipartisan support for the bank bailouts of 2008. I know the Democrats' excuse, but for Republicans, this is one of the many reasons I call them liars whenever they try to imply they're the "conservative" party. They're not. They're left of Democrats on more than 50% of issues, and Trump hasn't changed that, either. Maybe to Republicans he isn't anything like a Republican, but to everyone else, he mostly is a real Republican. And I bet that makes Republicans mad. You people keep voting for leftists and then somehow they end up winning, and somehow it's all someone else's fault! Awwww!!)
"It could very well be a seamless transition based purely on supply, demand, and price dynamics."
Supply is throttled based on psychology. Demand is increased by sales, usually involving manipulation of consumer preferences so they violate transitivity. Thus, prices are arbitrary.
OPEC limit production to maximise profit, which means undersupplying demand and storing up reserves to maximise profiting off surges. And the reason why shale oil is now a thing is because oil is just too expensive to get out because of what you have to put IN to get that stuff OUT. And even if they have a glut, they'll use the reserves and close down pumps because they can't even idle at profit.
It is why Texas is a big wind farm state instead of an oil one.
Moron.
Comment removed based on user account deletion
A crash in fossil fuel prices will certainly be disruptive, but it takes more than just disruption to cause a major financial crash.
Certainly many specific areas will face some pretty severe consequences from such a crash. States where fossil fuel exports make up a large fraction of their economy, such as Alaska or North Dakota, will be hit pretty severely. Nations that are doing similar, such as Saudi Arabia, will get it even worse. But most countries and areas are likely to sail through without dire consequences.
What could cause such a crash to turn into something like the 2007-2008 crash is debt: debt magnifies crashes. That's the reason why the housing bubble had such severe consequences: houses are typically debt-financed. The question, then, is how much of fossil fuel investment is leveraged, and where is that debt held? The answer to that question will determine whether there are wider consequences beyond oil-exporting areas.
Granted, the consequences within oil-exporting areas could be extremely severe if it triggers wars. Which is definitely a possibility in some such areas.
Most urban dwellers have no idea how vast America is
Yeah, we "urban dwellers" don't know how wide the country is. But we do know that it's full of retards who say stupid shit like this.
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A few dozen billionaires become millionaires, a few millionaires go bust and thousands of employees head for the solar and wind industry.
It has happened before, the world didn't end.
There's been no lack of demand for oil, and it's doubtful that this is going to change any time soon.
In fact (as a later item on the slashdot front page today notes):
The World Set a New Record For Renewable Power in 2017, But Emissions [of oil and gas sourced carbon dioxide] Are Still Rising.
This is because energy demands rose faster than deployment of renewable energy sources to supply them, and fossil fuel energy is still cheap.
I expect renewable energy generation to catch up with demand growth and start makng it shrink again. And the driving force for the changeover, of course, will be price: Economy of scale and technological advancement will reduce the price of renewable generation, attracting first new loads, then equipment replacement loads, and possibly eventually changeover of existing facilities. Meanwhile, cost of fossil fuel extraction gradually rises as the cheaper-to-get portions get used up and less-cheap-to-get portions become worth chasing.
I also expect both deployment of renewable generation and load switchover to be gradual. There is an ENORMOUS amount of infrastructure involved, and no percentage in all of it changing at once. (In fact, price signals would push back against sudden changeovers.)
Now that doesn't mean you won't get a market panic sometime in the next SEVENTEEN YEARS, as the article moots. Crowds CAN be driven mad from time to time. (Especially by articles like this. B-) )
But while I don't claim to be any better than the authors of the study at predicting the markets for a generation ahead, I don't see any reason why the currently-visible fundamentals of the markets and the typical vicissitudes of tech deployment should be expected to produce such a sudden crash.
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The stone age didn't end because we ran out of stones, the oil age won't end because we run out of oil.
What a GREAT sound bite. That deserves both an "insightful" and a "funny".
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Global financial crises cycles are now much shorter than the 17 years to come before 2035.