{"id":62944,"date":"2024-04-11T09:54:44","date_gmt":"2024-04-11T16:54:44","guid":{"rendered":"https:\/\/energi.media\/?p=62944"},"modified":"2024-04-11T09:54:44","modified_gmt":"2024-04-11T16:54:44","slug":"investors-shareholders-should-step-away-from-risky-fossil-investment-steyer","status":"publish","type":"post","link":"https:\/\/energi.media\/news\/investors-shareholders-should-step-away-from-risky-fossil-investment-steyer\/","title":{"rendered":"Investors, shareholders should step away from \u2018risky\u2019 fossil investment: Steyer"},"content":{"rendered":"<p><em>This article was published by <a href=\"https:\/\/www.theenergymix.com\/investors-shareholders-should-step-away-from-risky-fossil-investment-steyer-advises\/\" target=\"_blank\" rel=\"noopener\">The Energy Mix<\/a> on April 10, 2024.<\/em><\/p>\n<p>It\u2019s time for investors and shareholders to step away from fossil fuels\u2014not for moral reasons, but because they\u2019re a risky business bet, writes billionaire investor Tom Steyer, founder and co-executive chair of Galvanize Climate Solutions, in an opinion piece for CNN.<\/p>\n<p>Despite the warmest February ever captured in weather records (and with March now\u00a0<a href=\"https:\/\/www.aljazeera.com\/news\/2024\/4\/9\/on-borrowed-time-world-marks-new-global-heat-record-in-march\">taking its place<\/a>\u00a0as the tenth record month in a row), U.S. investment behemoths like JPMorgan Chase, State Street, BlackRock, and Pimco have been walking back some of their headline pledges on climate change,\u00a0<a href=\"https:\/\/www.cnn.com\/2024\/04\/04\/opinions\/oil-gas-renewables-investing-steyer\/index.html\">writes<\/a>\u00a0Steyer, a one-time candidate for a U.S. presidential nomination whose upcoming book,\u00a0<em>Cheaper, Faster, Better: How We\u2019ll Win the Climate War,<\/em>\u00a0is now available for pre-order.<\/p>\n<p>\u201cThe leaders of these firms, with a combined more than US$15 trillion under management, did not deny that climate change exists, that humans are its cause, or that its potential consequences are catastrophic,\u201d Steyer says. However, \u201csome might think that, questions of morality aside, fossil fuel investments are just too good to pass up. In the wake of Russian President Vladimir Putin\u2019s invasion of Ukraine, the oil and gas industry has seen its profits soar. Even in the United States, where President Joe Biden\u2019s\u00a0<em>Inflation Reduction Act<\/em>\u00a0is making historic investments in clean energy, oil exports are at an all-time high.\u201d<\/p>\n<p>But that\u2019s today, he stresses. \u201cIf there\u2019s one lesson I\u2019ve learned in decades as an investor, it\u2019s that things change. On closer examination, the simplest argument against funding new oil, gas, and coal projects is not that they\u2019re immoral. It\u2019s that they\u2019re unsound.\u201d<\/p>\n<p>Steyer\u2019s first concern is the long slog required to bring a new oil and gas project online\u201411 years on average according to Global Energy Monitor, 17 years for the biggest oilfields, according to another study. \u201cThis means that when institutional investors bankroll fossil fuels, they\u2019re not just betting that demand for oil and gas will be sky high in the short term. They\u2019re betting that demand will remain sky high 10, 20, or even 30 years from now.\u201d<\/p>\n<p>Although industry associations in Canada and elsewhere are more than happy to push that narrative, the International Energy Agency is\u00a0<a href=\"https:\/\/www.theenergymix.com\/beginning-of-the-end-for-oil-and-gas-as-iea-predicts-pre-2030-peak\/\">projecting<\/a>\u00a0that oil, gas, and coal demand will peak this decade, marking the \u201cbeginning of the end\u201d of the fossil fuel era.<\/p>\n<p>\u201cThe future is famously difficult to predict, and there\u2019s a chance that [the industry\u2019s] prediction will turn out to be correct,\u201d Steyer says. \u201cBut it\u2019s hardly a sure thing,\u201d with renewable energy growing at an exponential rate, a wave of new renewable technologies bringing down costs, global conflicts like Putin\u2019s war prompting countries (<a href=\"https:\/\/www.theenergymix.com\/exclusive-bid-to-revive-doomed-nova-scotia-lng-project-collides-with-germanys-net-zero-plans\/\">particularly in the European Union<\/a>) to urgently sever their dependence on fossil fuel imports, and the fossil industries\u2019 own 1980s-era business model going out of date.<\/p>\n<p>\u201cWhat has changed is that the low-hanging fruit is gone,\u201d he explains. \u201cIn many places where oil is easy to extract, the oil has either already been extracted, or someone is already extracting it. New technologies such as fracking have expanded the amount of oil than can theoretically be obtained, but at a substantially higher cost than traditional drilling.\u201d And extreme oil projects in remote locations, in the Arctic or far offshore, are \u201cmore expensive still\u201d.<\/p>\n<p>Today\u2019s investors are also buying into fossil fuel assets that face\u00a0<a href=\"https:\/\/www.theenergymix.com\/turning-point-climate-ruling-in-eu-court-could-reshape-canadian-climate-law\/\">mounting litigation risk<\/a>. \u201cIn many ways, the fossil fuel industry finds itself where\u00a0<a href=\"https:\/\/www.theenergymix.com\/new-study-outlines-exxonmobils-tactical-shift-from-climate-denial-to-ambiguity\/\">big tobacco<\/a>\u00a0was in the 1990s,\u201d Steyer writes. \u201cThey haven\u2019t yet been forced to pay damages, but if the floodgates open, the projected cost to oil and gas companies could amount to more than $200 billion per year.\u201d<\/p>\n<p>Even now, with clean energy \u201calready winning in the marketplace,\u201d the massive fossil fuel profits that continue to draw big investors depend heavily on the\u00a0<a href=\"https:\/\/www.imf.org\/en\/Blogs\/Articles\/2023\/08\/24\/fossil-fuel-subsidies-surged-to-record-7-trillion\">$7 trillion per year<\/a>\u00a0the global industry receives in government subsidies.<\/p>\n<p>Steyer cites the advice of conservative economist Herbert Stein, who sagely observed that \u201cif something cannot go on forever, it will stop\u201d. Today, when an institutional investor backs a new fossil fuel project, they\u2019re \u201cbetting that our addiction to fossil fuels will go on forever,\u201d Steyer writes. \u201cEven if all I cared about was financial responsibility to my shareholders, I wouldn\u2019t make that bet.\u201d<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>This article was published by The Energy Mix on April 10, 2024. It\u2019s time for investors and shareholders to step away from fossil fuels\u2014not for moral reasons, but because they\u2019re a risky business bet, writes <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/news\/investors-shareholders-should-step-away-from-risky-fossil-investment-steyer\/\" title=\"Investors, shareholders should step away from \u2018risky\u2019 fossil investment: Steyer\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":62945,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[1],"tags":[13,80,14,542,1740,16,2674],"class_list":{"0":"post-62944","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-canada","9":"tag-environment","10":"tag-featured","11":"tag-investment","12":"tag-money","13":"tag-oil-and-gas","14":"tag-tom-styer"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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Bloomberg photo by Eva Marie Uzcategui."},{"@type":"BreadcrumbList","@id":"https:\/\/energi.media\/news\/investors-shareholders-should-step-away-from-risky-fossil-investment-steyer\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/energi.media\/"},{"@type":"ListItem","position":2,"name":"Investors, shareholders should step away from \u2018risky\u2019 fossil investment: Steyer"}]},{"@type":"WebSite","@id":"https:\/\/energi.media\/#website","url":"https:\/\/energi.media\/","name":"Thoughtful Journalism About Energy&#039;s Future","description":"","publisher":{"@id":"https:\/\/energi.media\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/energi.media\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/energi.media\/#organization","name":"Energi Media","url":"https:\/\/energi.media\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/energi.media\/#\/schema\/logo\/image\/","url":"https:\/\/energi.media\/wp-content\/uploads\/2021\/06\/cropped-cropped-EnergiMedia-v3-logo-e1625024297484.png","contentUrl":"https:\/\/energi.media\/wp-content\/uploads\/2021\/06\/cropped-cropped-EnergiMedia-v3-logo-e1625024297484.png","width":302,"height":61,"caption":"Energi Media"},"image":{"@id":"https:\/\/energi.media\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/energimedia","https:\/\/x.com\/EnergiMedia","https:\/\/www.linkedin.com\/company\/energi-media","https:\/\/www.youtube.com\/@EnergiMedia"]},{"@type":"Person","@id":"https:\/\/energi.media\/#\/schema\/person\/07051d0cfb14da284c97fb8ff214caf7","name":"Energi Staff","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/8aab8747a56101912653d395e4d5b76c013eb58c9c0d846ee34f94382c2a3bbb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8aab8747a56101912653d395e4d5b76c013eb58c9c0d846ee34f94382c2a3bbb?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8aab8747a56101912653d395e4d5b76c013eb58c9c0d846ee34f94382c2a3bbb?s=96&d=mm&r=g","caption":"Energi Staff"},"url":"https:\/\/energi.media\/author\/aen-staff\/"}]}},"_links":{"self":[{"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/posts\/62944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/comments?post=62944"}],"version-history":[{"count":1,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/posts\/62944\/revisions"}],"predecessor-version":[{"id":62946,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/posts\/62944\/revisions\/62946"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/media\/62945"}],"wp:attachment":[{"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/media?parent=62944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/categories?post=62944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/energi.media\/wp-json\/wp\/v2\/tags?post=62944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}