March 8, 2018 Read More →

Study: Billions of Dollars in Shareholder Wealth at Risk in Expansion of Oil, Gas and Coal Projects

Financial Times:

Fossil fuel companies risk wasting almost $1.6tn on oil, gas and coal projects that will become uneconomic if the world steps up efforts to tackle climate change, according to an analysis of projected capital expenditure in the energy sector.

The figure represents the difference between the estimated $4.8tn of investment needed to meet global fossil fuel demand between 2018 and 2025 under current climate policies and the $3.3tn that would be required if the Paris agreement on reducing carbon emissions was fully implemented.

The study, by Carbon Tracker, a climate think-tank, illuminates one of the most difficult questions facing the energy industry: how much more capital should be committed to hydrocarbons in an era of increasing competition from renewable power?

Institutional investors are also beginning to focus on the issue at the urging of regulators, led by Mark Carney, Bank of England governor and chairman of the G20’s Financial Stability Board, who has warned of “potentially huge” losses from fossil fuels which could become “literally unburnable”.

Andrew Grant, author of the Carbon Tracker report, said, “Companies that misread the signals and overinvest in marginal oil, gas and coal projects based on a false sense of security could destroy shareholder value worth billions of dollars,” said Mr Grant.

More ($): Fossil fuel groups risk wasting $1.6tn on projects

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