Shell’s Climate Change Strategy: Narcissistic, Paranoid, And Psychopathic

Shell

In an open letter to Shell’s Ben Van Beurden, the UK’s former top climate envoy says now is the time for him to show leadership

Dear Mr. van Beurden – one month ago, at the IP Week dinner in London, you gave a speech calling on your peers, as you put it in your title, to be “Less Aloof, More Assertive” on climate change.

Given your prominence as CEO of Shell and the resurgence of interest in climate, your speech has rightly provoked debate. Perhaps I could set out some reflections that passed through my mind as I studied it.

I feel privileged to be doing so from this platform. I hope the CFE family, and Jean Eudes [Moncomble, CFE Secretary General] particular, will see this as an appropriate way of honouring their invitation.

Your speech, Mr. van Beurden, was after all an appeal to your industry, which is strongly represented here today. Most of what I am about to say applies well beyond Shell.

The title of your speech is intriguing. I have been involved in this debate for twenty years, six of them as the UK’s diplomatic envoy on climate change. During that time many adjectives have been applied to your industry – not always fairly. But nobody has ever accused you of being aloof.

Yes, there have been more strident voices. You have spoken in measured terms, in prose not poetry, with the quiet confidence of those who know they never have to shout to be heard. And you have sometimes chosen to express yourselves behind closed doors, or through others, rather than out in the open.

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Death of US Coal Exemplifies Need for Paradigm Shift for Global Energy System

coal

A new report released Tuesday by the London-based Carbon Tracker Initiative warns that the crash of U.S. coal markets is but a harbinger of things to come for all fossil fuel investments.

The report, The U.S. Coal Crash – Evidence for Structural Change (pdf), found that the slump in coal prices has forced more than two dozen U.S. coal companies into bankruptcy over the past three years.

With the rise of renewable energy and a growing call for countries to adapt their energy infrastructures for a more carbon-constrained future, the authors of the report argue that the crash of the U.S. coal economy “provides an excellent example of how the future may pan out globally and with other fuels as the world moves to a low-carbon economy.”

According to the study, the market’s demise has been driven by a combination of factors, including: lost market share to cheap shale gas, the falling cost of renewable energy sources, and increased environmental protections and industry regulation—driven largely by the Environmental Protection Agency. Further, international markets in Asia have similarly moved to adapt their energy usage in the face of growing concern over carbon emissions.

“The roof has fallen in on U.S. coal, and alarm bells should be ringing for investors in related sectors around the world,” said Andrew Grant, Carbon Tracker’s financial analyst and report co-author. “These first tremors are amongst the clearest signs yet of a seismic shift in energy markets, as high carbon fuels are set to be increasingly outperformed by lower carbon alternatives.”

On Monday, the international market research firm Macquarie Research warned investors that the outlook for U.S. coal producers is “increasingly bleak,” and the sector is likely to undergo “a wave of bankruptcies.”

“We’ve known for decades that coal posed serious health and environmental risks, but now coal has also become an investment risk as countries take serious actions to clear their air and protect the climate.”

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Oil Can’t Match Solar On Cost, Even At $10/Barrel

oil vs solar

One of the biggest banks in the Middle East and the oil-rich Gulf countries says that fossil fuels can no longer compete with solar technologies on price, and says the vast bulk of the $US48 trillion needed to meet global power demand over the next two decades will come from renewables.

The report from the National Bank of Abu Dhabi says that while oil and gas has underpinned almost all energy investments until now, future investment will be almost entirely in renewable energy sources.

The report is important because the Gulf region, the Middle East and north Africa will need to add another 170GW of electricity in the next decade, and the major financiers recognise that the cheapest and most effective way to go is through solar and wind. It also highlights how even the biggest financial institutions in the Gulf are thinking about how to deploy their capital in the future.

“Cost is no longer a reason not to proceed with renewables,” the 80-page NBAD report says.It says the most recent solar tender showed that even at $10/barrel for oil, and $5/mmbtu for gas, solar is still a cheaper option.

The bank says intermittency of wind and solar is not an issue, notes that fossil fuels resources are finite and becoming increasing hard to reach, notes that governments want local supplies and want to disconnect from the volatility of the oil price, and says policy frameworks are seeking to decarbonise economies in response to climate and pollution concerns.

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Bank of England Issues Warning Over Looming ‘Carbon Bubble’ Threat

CarbonBubble_ENG.svg

The Bank of England, one of the oldest banks in the world, has joined the growing ranks of those warning of the

financial risk posed by a “carbon bubble,” which will occur

if urgently needed climate change regulations render coal, oil, and gas assets worthless.

“One live risk right now is of insurers investing in assets that could be left ‘stranded’ by policy changes which limit the use of fossil fuels,” Bank of England official Paul Fisher told (pdf) the Economist’s Insurance Summit 2015 in London on Tuesday. “As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels and related technologies—a growing financial market in recent decades—may take a huge hit.”

Reserves are by definition bodies of oil, gas or coal that can be drilled or mined for financial gain. Currently, regulators allow companies to book them as assets, and on the assumption that they are at zero risk of being stranded—left below ground, “value” unrealized—over the full life of their exploitation.

But several recent analyses have shown that

most existing reserves of fossil fuels cannot be burned

if global warming is to be limited to 2° Celsius, as the world’s nations have pledged. A study in January found that to avert climate disaster, the majority of fossil fuel deposits around the world—including 92 percent of U.S. coal, all Arctic oil and gas, and a majority of Canadian tar sands—must stay in the ground.

Despite such warnings, the Guardian notes, “companies spent $670bn (£436bn) in 2013 alone searching for more fossil fuels, investments that could be worthless if action on global warming slashes allowed emissions.”

The newspaper further cites former U.S. Treasury Secretary

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