Elephant Stirring:Fossil Fuel’s Stranded Assetts Issue Looming

February 8, 2016



Standard & Poor’s Ratings Services on Tuesday cut the ratings of 10 U.S. oil and gas exploration and production companies, citing the sharp drop in crude oil prices.

Chevron Corp., the second-largest U.S. energy company by revenue, was among the companies that had their credit ratings cut. Its corporate credit rating was cut one notch to double-A-negative.

On Friday, Chevron said it would lay off workers and slash more than $9 billion in capital spending this year after reporting it had swung to a fourth-quarter loss.

Other companies that saw their ratings cut by one notch are: Apache Corp., Continental Resources Inc., Devon Energy Corp., EOG Resources Inc., Hess Corp., Hunt Oil Co., Marathon Oil Corp., Murphy Oil Corp. and Southwestern Energy Co.


Norway’s huge sovereign wealth fund, the world’s biggest, has sold out of 73 companies in the past year because their social or environmental policies could hurt profitability.

The Norwegian state pension fund’s annual report relating to “responsible investment” did not give the names of companies, but it indicated that most were coal or energy companies using coal, as well as those involved in mining, producing cement and heavy construction.

“We want to measure the risk in our investments,” said the head of the fund, Yngve Slyngstad, in a statement on Thursday.

“We expect companies to communicate the impact of their activities on the environment and the factors that could affect their long-term profitability,” he said.

The fund is currently worth around $794bn (£545bn), equivalent to around six annual budgets or more than $153,000 for each of the country’s 5.2 million inhabitants.

Fuelled from Norway’s huge oil and gas revenues, the fund is intended to pay for future generations in the welfare-state after the country’s wells run dry.

Over the past four years it has divested from 187 companies. Those decisions were made for financial reasons, which increasingly take into account social and environmental activities by the company and their impact on profit.





12 Responses to “Elephant Stirring:Fossil Fuel’s Stranded Assetts Issue Looming”

  1. So has the carbon bubble now burst?

  2. Reblogged this on A Green Road Daily News and commented:
    There may be MUCH more stranded with what is coming at us…

  3. Sir Charles Says:

    Australian coal is now asking for “more subsidies”…

    => Is Australian coal finally having its “oh sh*t” moment?

    Meanwhile, below the Graph of the Day: Why solar power is taking over the world

    the beauty of having exponential growth on your side is that very quickly, even the current blue spike will look tiny. In 2020 or 2030 we’ll look back on 2015 and it’ll barely register as the beginning of the curve on the chart.

    • indy222 Says:

      Ah, the simplicity of extrapolation! No need to worry about the costs of manufacture/installation and how they are rapidly shifting from the techno (which was relatively easy to do, given some smart people), and into labor and other components that are not plunging. Solar panels are not silicon transistor chips, which can be packed right up to the quantum limit. Solar panel efficiencies are already close to the theoretical Carnot maximum, and the sun will not magically get stronger (at least we hope not). Even concentrator solar is close to maximum efficiency which isn’t that much better than single-junction, at least if you’re extrapolating with Moore’s Law. Solar costs will still come down some, but the low-hanging fruit’s already been picked.

      • kevinboyce Says:

        While it’s true that a lot of future progress will not be in the area of solid state physics, that really isn’t the only source of reduced cost. Consider optical disc players. When CD players first came out, there were rapid decreases as people learned how to make the lasers and silicon needed to play them. After that, it’s mostly a mechanical problem, and that shouldn’t get any cheaper. Yet here we are now where you can get a Blu-ray player, with two orders of magnitude more storage capacity, for fifty bucks.

        Solar power is similar. There is still lots of room for improvements in inverters and controllers, racking and installation automation and standardization, and institutional barriers.

        Also, I don’t know how you can say we’re close to the theoretical maximum efficiency. The Sunpower X21, at 21.5% is probably the highest panel with significant market penetration, while Brendel et al (1996) get a limit of 85% with carrier multiplication and concentration. Even without concentration you can get 50% with multi-junction cells. Not to mention you could still use the leftover heat for space heat in cold climates or at least for DHW. All of these seem like perfectly cromulent innovation spaces for smart people.

  4. indy222 Says:

    Nice graph on solar – this is why they won’t let those assets be stranded. The Saudi’s can pump oil profitably at shockingly low prices. Getting some profit, some return, is better than nothing. We’re in a “permanent” low energy price regime, but that will only make the gasoline engines and diesel trucks and all the rest that much harder to get rid of, with permanent low oil prices. They may drive the shale oil and frackers “bankrupt”, but they can’t raise oil prices or their shuttered wells will be back online in a couple of months (2 months is the turn around time I’ve been reading, with the modern technology). So, we can enjoy watching the oil CEO’s sweat, but what we care about is CO2 emissions, and I’m not as encouraged as some here.

    Watch the Keeling Curve and when it bends down, then let me know.

  5. redskylite Says:

    I too keep watching the NOAA ESRL CO2 Mauna Loa measurements, lately it is accelerating upwards, maybe partly due to El Nino, but only partly. I also want to see it bending down, but approaching the age of 70 (with a dicky ticker), I’m increasingly sure that I’ll never witness this.

    Today’s University and Washington Post buzz is that we are locked in to tens of thousands of years of climatic upheaval thanks to our discovery of producing energy from burning buried fossils. No surprise there, Prof. David Archer was teaching that years ago. Doesn’t hurt to reiterate the message though. It may slowly sink into the cloth eared indifferent ones.

    Increasingly we will have to adapt to the changes we have made to our Goldilocks paradise. I just hope there are some up sides, (apart from increased beach & surfing days) can’t see any so far.


    • redskylite Says:

      “Ooh, my dicky ticker!” by Monsieur Alphonse – Allo Allo

    • markle2k Says:

      “I too keep watching the NOAA ESRL CO2 Mauna Loa measurements, lately it is accelerating upwards, maybe partly due to El Nino, but only partly. ”

      It’s called Northern Hemisphere Winter. Primary production is nil in the Arctic right now. The forest fires in Indonesia probably didn’t help matter either. But the slowdown in Chinese growth combined with their 5-year plan cycle of expanding renewables hopefully can forestall some future emissions.

      But, that 405.98ppm figure for January 6 sure looks daunting.

    • indy222 Says:

      Yes! I was just about to post this myself. It is so important to get this across. This paper has lots of illustrious climate scientists on the author list, including Solomon, Weaver, and Santer. Yes, it’s not really new, I’d read (can’t put fingers on the link right now) that our actions are going to set climate for 22,000 years or longer. It has indeed been frustrating to see scientific conservatism halting so many studies and discussions to year 2100 and seeing the media leave the obvious question unasked and unchallenged…. i.e. “and then?…”

  6. According to James Hansen, this is what is still possible:

    See graph in the lower right corner. We could continue BAU until 2030 and still keep global average temp below +1.5C. But we need to get our act together before then, as his scenario depends on annual CO2 drawdown equivalent to 2gtC (2031 – 2080) through reforestation and agricultural soil management. You can’t switch to such a regime overnight.

    Technology is not the issue… political will is.

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