It’s been a persistent drumbeat for many years: Fossil fuels are obsolete, and the facilities that produce them, along with any further facilities that might be built for that purpose, will shortly become worthless. These facilities will be “stranded assets.” And any energy company stupid enough to make further investment in fossil fuel extraction or use will inevitably suffer a total loss.
Do you believe that prediction? Those making it are among the aggressive promoters of an energy transition to supposedly superior sources like the wind and sun. The prediction has been widely used in the attempt to bludgeon energy companies into reducing or ending their coal, oil and gas investments. But if fossil fuels were really obsolete, and renewables superior and cheaper, why would such bludgeoning be needed? Wouldn’t the investment just flow naturally over to the wind and solar facilities?
For starters, here is a sampling of some of those staking out the position that fossil fuel assets will shortly become “stranded”:
- Senator Sheldon Whitehouse (D-RI), Chair of the Senate Budget Committee, at a hearing March 29, 2023: “[T]he world is moving away from oil and gas, but truculent and politically connected market actors persist in fossil fuel investments, which crash in value when their unsustainable economics overwhelm the artificial politics that supported them. The operative term of today’s hearing: stranded assets.”
- From an article by Semieniuk, et al., in Nature Climate Change, May 2022: “The distribution of ownership of transition risk associated with stranded fossil-fuel assets remains poorly understood. We calculate that global stranded assets as present value of future lost profits in the upstream oil and gas sector exceed US$1 trillion under plausible changes in expectations about the effects of climate policy.”
- From MIT News, August 19, 2022: “As the world transitions away from greenhouse-gas-emitting activities to keep global warming well below 2 C (and ideally 1.5 C) in alignment with the Paris Agreement on climate change, fossil fuel companies and their investors face growing financial risks (known as transition risks), including the prospect of ending up with massive stranded assets.”
- From the New York Times, March 21, 2022, quoting a speech by UN Secretary General Antonio Guterres: “In his speech, Mr. Guterres said wealthy nations should be dismantling coal infrastructure to phase it out completely by 2030, with other nations doing so by 2040. . . . ‘Their support for coal not only could cost the world its climate goals,’ he said. ‘It’s a stupid investment — leading to billions in stranded assets.’”
Meanwhile, out here in the real world, fossil fuel investments are looking very much the opposite of “stranded.” Here’s a brief summary from AP on May 2 of some major oil company earnings for the first quarter of 2023:
Exxon earned a record $11.4 billion in the first quarter, and Chevron raked in $6.6 billion. Saudi Aramco said in March that it earned $161 billion in 2022, the highest-ever recorded annual profit by a publicly listed company.
And for the full year 2022, here are the earnings of Exxon and Chevron, as reported by NPR:
ExxonMobil earned nearly $56 billion in profit in 2022, setting an annual record not just for itself but for any U.S. or European oil giant. Buoyed by high oil prices, rival Chevron also clocked $35 billion in profits for the year, despite a disappointing fourth quarter.
NPR quotes Exxon CEO Darren Woods as to the reason for Exxon’s recent success: “We leaned in when others leaned out.”
Woods was referring to Exxon’s decision to continue investing in producing oil and gas, while several other oil majors were cutting back and making ridiculous commitments to reduce their “emissions,” as if they had forgotten what business they are in. Leaders in the category of seeking climate virtue were the two European giants, BP and Shell. How has that been working out? Britain’s Daily Telegraph (behind pay wall) reports on June 15 on the latest from those two:
First BP, now Shell. One by one, the oil giants are returning to what they know best – doubling down on fossil fuels and prioritising shareholder returns – in u-turns that inevitably have to come at the expense of climate pledges.
It seems that BP and Shell had been lagging the competition in oil and gas profits, while they invested in various politically-favored green energy projects. No more. Here is the Daily Telegraph describing Shell after its recent pivot:
Shell privately concedes that biofuels, hydrogen, electric vehicle charging and carbon capture storage – the four areas it has earmarked for investment – are at the more speculative and unproven end of the renewables spectrum. The absence of any plans to invest in other, far more established clean energy sources such as wind and solar – which are attracting record investment around the world – is glaring.
And for the latest on coal, you can check out Robert Bryce’s Substack column from June 17. Here are a few statistics provided by Bryce from Vietnam and China:
Vietnam is now getting about 60% of its juice from coal-fired power plants. Since 2009, Vietnam’s coal-fired electricity output has grown tenfold and more growth is on the way. Last year, according to Global Energy Monitor, Vietnam commissioned about 1,900 megawatts of new coal-fired capacity.
Much . . . coal growth is happening in China, which accounts for more than half of all global coal consumption and a shade more than half (52%) of all the electricity generated from coal. Yesterday, June 16, Reuters reported that during the first five months of this year, coal-fired generation in China jumped by 6.6%. And that trend will continue. In February, Global Energy Monitor reported that China permitted about two new coal-fired power plants per day in 2022.
And here is a chart from Bryce showing the overall trend of generation of electricity from coal:
As between oil, gas, and coal assets on the one hand, and wind, solar, and battery assets on the other, I think it’s a very easy call which ones are going to end up “stranded.” On the first day when any government withdraws its subsidies for any wind, solar or battery asset, that asset becomes “stranded.”
Some parts of the world are trying to move away from oil and gas and truculent and politically connected market actors persist in renewable investments which crash in value when their unsustainable economics overwhelm the artificial politics that supported them.
There Senator Whitehouse, fixed it for you.
( Talk about pot, kettle and black? )
It’s called projection – the thing that they worry about for themselves, they accuse others of.
Looking at the graph, I see a grim future that in 10 or 20 years time that same graph will
show prosperity and growth in the same order.
The U.S. at least has plenty of natural gas and is currently using it to displace coal. China is happy to use coal, the cheaper, the better.
The increase in prosperity will overwhelmingly go to the BRISC, plus at least 20 other countries, as has been the case for at least 30 years.
The West will continue to decline in the same manner as their coal consumption graphs.
There is no prosperous future with expensive wind, solar, and batteries, etc., as Europe has proven.
God forbid, if the U.S. continues to be stupid enough to copy the Europeans
“Who Will Have the Last Laugh?”
Well, I know it will not be votres truly. It’s been more than clear where Parliament wants to drag us and with each flaw in their plans that comes to light they double down. So, it’s difficult to see how we can avoid the finale of a very slow car crash.
“the aggressive promoters of an energy transition”
Probably the most dangerous politician in Westminster has to be Ed ‘two kitchens’ Miliband MP. *
“the oil and gas ban is only the tip of Miliband’s energy iceberg. In November last year, ahead of COP27, the UN’s climate-change convention, Miliband announced that a future Labour government would give British taxpayers’ money in reparations to countries, such as Pakistan and the Maldives, as compensation for loss and damage from climate change.
And it doesn’t stop there. There’s also Labour’s green prosperity plan, another rumoured brainchild of Miliband. According to this plan, Labour would borrow £28 billion each year for initiatives to create environmentally friendly jobs and shift us towards Net Zero emissions. After observers pointed out the damaging economic consequences of such a policy, Labour’s shadow chancellor, Rachel Reeves, began flailing around trying to dilute the initiative.”
…
There are reports that the former Labour leader is always in the current leader’s office, and that Keir is close to Ed’s Arsenal-supporting sons. They are also close neighbours in north-west London.
Therein lies a clue as to why Miliband has Starmer’s ear. They are both very much part of the same Labour clique, sharing the same north-west London vision of the world. They see implementing a green ideology as more important than jobs, security and sustaining the economy.”
https://www.spiked-online.com/2023/06/20/ed-milibands-eco-madness/
So it looks very much like we’re going to have empty… stranded… pocketses.
* “News of the Milibands’ culinary extravagance emerged when the Labour leader and his wife, Justine, were photographed by the BBC drinking tea in a small, spartan kitchen at home.”
https://www.theguardian.com/politics/2015/mar/13/ed-miliband-two-kitchens-use-smaller-one
Not even a BBC hack gets into the real kitchen
RIP MegaWatt Valley
Ah! Ed Miliband, failed Labour Party leader. And to think he might have ended up as PM – just too horrible to contemplate…
He still has power of a sort
Another story is apparently from a Labour Lord who has said Labour want to put many more Labour peers into the Lords to ensure their policies get through.
We also keep hearing that Labour want to keep in close step with EU rules and regulations, to create closer ties with the EU, but don’t want, at this point, to rejoin the single market. Give them 2 terms and we’ll be back in the EU, this time without a referendum or a way back out.
It looks like we are on course to eject an utterly incompetent government and replace it with an utterly despicable one. We really need a ‘none of the above’ option on the ballot paper.
And if “none of the above” gets most votes there is a by-election where none of the previous candidates can stand.
The problem isn’t Labour and their crazy policies. They’re having a hard time forming a ruling majority lately. Because crazy policies. So no chance of those proposals being implemented. The problem is the Conservatives (in power since 2010) adopting less-crazy versions of Labour’s proposals thinking they are being rational. The policies are still crazy, but it takes longer for the bad results to manifest.
You have the option of not voting or better still vote for an independent. (independents would mean that parliament could only make decisions democratically).
If you were looking for a perfect image of stranded asses, then look no further than the next image of the UN/IPCC delegates.
My Specsavers appointment is due….
Was that a deliberate typo, Rod, or was it auto-correct striking again?
very intelligent auto-correct?
That was AI improving on a good comment
As the son of a farmer, to me AI is Artificial Insemination.
I like to consider it Antisocial Intelligence or human AI…. 🙂
I’d pay to see Bill Gates depart on a solar powered deep-sea submarine.
There was room for four plus a pilot. so Mann and three others, take your pick.
Two comments in bad taste and unnecessary.
Point accepted, sorry it was. bad taste.
So, China utilizes coal-fired electricity generation to construct solar panels to sell to the idiot CAGW Loonies in US and Europe? Win-win on one side and lose-lose on the other? This not an encouraging view of the future.
“not an encouraging view of the future.”
I’m struggling to remember the last time there was an encouraging view of the future. I think peak optimism came in the 60s and departed in the 70s
Probably peaked with Harold Wilson’s White Heat of Technology in 1963, and had faded along with most of British industry during the 1980s after taking a hit in the 1970s with the 3 Day Week and Winter of Discontent.
If ever a country has Zigged when it should have Zagged since the war it’s Britain
I thought I detected peak optimism with the fall of the USSR and nuclear weapons limitation treaties. Where did it all go wrong…?
I hate to point a finger, but since the late 80s I think American Universities have been shown to be ground zero for the political woes of PC and woke etc. It seems academia here is eager to take up the baton, too.
I thought 1989 was a relief.
Mao sent his out of touch with reality intellectuals to work in the fields- we need to do the same.
The climate alarmists, teachers, you name them; they all have Maoist tendencies – dividing the generations. Out with the old etc.
I recently saw a poll of recent American high school graduates. Seems most of them expect that climate change will cause the end of all life during their lifespan.
where did it all go wrong? exporting most of our industries to China!
It went wrong when the communist ideology infiltrated the education departments of every college and university.
Yes, that had, and has a major impact.
The schools have been hijacked by the radical Left and they are turning out student leftist every year.
As they do, the conversation gets crazier and crazier.
Communism has infiltrated every democracy. All political parties are a communist construct. Independents are the opposite to communists and the antidote.
the Age of Aquarius?
been there done that 🙂
As an Aquarian….
I’d really like to know how you know…..
Some astrologers say the Age of Aquarius began in 2012. But nobody really seems to know when it begins or ends.
“Regarding the date marking the Age of Aquarius, there is no consensus among astrologers. Astronomers have no definitive date either. I’ve seen dates as early as the 15th Century and as late as the middle of the third millennium. Rudolph Steiner believed that the Age of Aquarius wouldn’t arrive until 3573. David Williams claims that the Age of Aquarius arrived around 1844, with the harbinger of the Siyyid `Alí Muḥammad (1819–1850), who founded Bábism.”
https://classicalastrologer.com/2012/12/31/the-quest-for-the-age-of-aquarius/
Great song, though.
“I’d really like to know how you know…..”
Oh, I have lots of stories of “the good old days”. Like, watching clouds in multiple colors moving 10 times faster than normal. 🙂
I saw the Beatles in concert- in Shay Stadium, in NYC in ’65 (?) – even took video of it- probably worth a fortune today! Saw Led Zeppelin 3 times, saw Janice Joplin, Jefferson Airplane, Blood Sweat and Tears, and many more.
“Oh, I have lots of stories “
I’m sure you, like a great many others, do.
But on the age of Aquarius you came up well short
If you mean the idea that there would really be an age or Aquarius, I certainly never believed that- I was just your average stoner. I liked the Broadway play when I saw it on TV. Fun to watch, but crazy ideas. I couldn’t live in fantaslands being firmly rooted on the ground- deep in the forests trying to help keep the lumber industry alive, despite all the forestry haters out there. I found loggers, sawmill people- and farmers to be a cut above those think they’re so awesome because of their advanced education. Such people are in touch with reality- every day- and the weather, like no meteorologist or climate scientist ever could be.
Who said “If you remember the 60’s then you weren’t there”?
Apparently, that’s debated but I found one item that said a comic named Charlie Fleischer. No doubt it got passed around fast. Funny old quote- but I have almost a photographic memory. I wish I could forget about half of what I remember.
Someone that wasn’t there.
Definietely the 1980’s when Ronald Reagan and Margaret Thatcher were elected and the slow tide of socialism that began in the 1920’s in the West began to finally ebb. It was a decade of optimism and prosperity. Leftists have rebranded their efforts and worked it into “climate change”, “equity”, “reparations”, and “social justice”. They never give up on stupid.
China in 2022 was expected to use 4250 million tonnes (Mt) of coal not far short of the 4669Mt used by the whole world in 2000, Add in India and the rest of Asia and that 2000 usage was comfortably passed – 6251Mt. The only places where coal use is declining are the US and Europe.
China now accounts for more than half of global coal demand with its power sector alone using more than one third of global coal consumption.
IEA ‘Coal 2022 Analysis and forecast to 2025’ (Dec. 22)
These were “stranded assets” from the beginning, all the value they ever had was the tax money they were stealing. Remove that and there is nothing but unrecyclable trash and a massive amount of wasted concrete.
it would be nice to see mountains of abandoned solar panels and wind turbines- like those mountains of bikes and EVs in China: https://wattsupwiththat.com/2023/06/20/china-is-throwing-away-fields-of-electric-cars-letting-them-rot/
They can become monuments to stupidity.
Well, there will be lots full of unused EVs here in the US (and probably parts of Europe as well) once the ICE car bans take effect in various states and countries. People, especially those who haven’t paying attention to what their “fearless leaders” have been doing, will show up at a dealership to buy a new car and find to their chagrin that nothing that they want or can afford is available for purchase. Such potential buyers will either leave or ask to see the used car selection. So then, there will be lots of EVs just sitting there in many lots, especially at dealerships in rural areas far from virtue signaling blue urban areas.
I can’t help but wonder what will happen at that point – when dealers are saturated with cars and trucks no one wants or can afford. No car dealer wants to have a lot of old inventory (even last year’s models) just sitting around. Will they sell them for pennies on the dollar just to get rid of them (aka Bud Light)? Will manufacturers take them back? I kind of doubt it will be as extreme as the Chinese EV and bike piles, but I’m thinking what will happen is they will sell for pennies on the dollar, the manufacturers will take a huge loss. And then what? Beg us taxpayers for a bailout? Probably….
OK, here’s the solution- someone will hitch up 4 horses to the front of an old tired EV. Then sell them, saying “travel in luxuy- it’s slow but you won’t be emitting any of that horrible carbon polution- other than what comes out the mouth and butt of the horses”. Now, if I only knew how to use ChatGPT, I’d have it produce that image.
EVs’ second-hand value is tied to the life left in the battery. That’s because it costs too much to ever be worth replacing the battery. There is likely to be no second-hand EV market other than for EVs that have done very little mileage or for wrecking (spare parts).
I recall the first time I visited California as an adult.
Driving through the abandoned relics of early wind-powered electricity generation, I thought “Nice try, but it was almost certainly doomed to failure from the get go.”
Several decades later, my thoughts are less generous.
The ruling class are not yet cognizant of the limitations of solar panels and wind turbines. Those renewables of wind and solar only generate occasional electricity, but are incapable of manufacturing anything for society.
The ruling class in wealthy countries are not cognizant that the planet populated from 1 to 8 billion in less than two hundred years, and that population explosion began right after the discovery of oil. That growth in the population was not just based on crude oil by itself, as crude oil is useless until it can be manufactured into something useable.
Today, through human ingenuity, we have manufactured that useless crude oil into more than 6,000 products that are currently benefiting society and fuels for the 50,000 jets moving people and products, and more than 50,000 merchant ships for global trade flows, and the military and space programs.
But ridding the world of oil, without a replacement in mind, would be immoral and evil, as extreme shortages of the products manufactured from fossil fuels will result in billions of fatalities from diseases, malnutrition, and weather-related deaths.
Shortages of fossil fuel products would necessitate lifestyles being mandated back to the horse and buggy days of the 1800’s, and could be the greatest threat to the planet’s eight billion residents.
It is vital to be careful when using financial declarations as proxies for activity.
A major reason for record profits at oil majors is that they have systemically underinvested in capital expenditures. In the past, capital expenditures would be up as oil prices rise but it hasn’t happened this time around. The net effect is a fairly record breaking decline in reserves with no prospect of the situation changing any time soon.
As for solar PV, wind and battery storage: Unless the IRA (Inflation Reduction Act) is repealed in the face of tens to hundreds of millions of spending by the respective industries – the prospect of “alternative energy” stranding is exceedingly low. IRA furthermore is a PTC – production tax credit – unlike the vast majority of previous federal subsidies of alternative energy which were ITC – i.e. subsidies to install. ITC subsidies can never become stranded because the subsidy is already spent; PTC subsidies could but again, the industries will fight that to the death.
The government will have the last laugh. Once they ban gasoline, my car becomes a stranded asset.
These assets have not been “stranded”; they have been shut down by government fiat while still economical and dependable.
For their myriad war crimes and crimes against humanity (think Nuremberg Codes,) the Western Climastrology elites should be sentenced to five years in Antarctica with only wind and solar as their power sources! That and be stripped of their ocean front estates to begin paying for the damage they have wrought!
The wind mills will soon be stranded assets as new dense energy technology is advanced. See https://brilliantlightpower.com/the-green-summit-new-york-city-on-july-15th/ and https://e-catworld.com/2023/06/14/leonardo-corp-press-release-media-members-invited-to-apply-to-attend-e-cat-ev-event/ as just 2 examples. There are others like them and more that are going to open nuclear energy for wide distribution. Any of these will doom the unreliables if they are not beaten back by the truth of no climate crisis before these new technologies get to market.
Sounds like snake-oil to me…
My thought on this and similar projects is a “10,100, 1,000” rule™.
Get 10 operating and connected to the grid.
Have 100 under construction with full financing in the bank.
Have 1,000 permitted by location with financing committed.
The BLP concept has never been replicated nor observed by independant experts and seems to have all the hallmarks of a scam.
Energy experts have been predicting for several years now that the real stranded assets will be the wind and solar installations, which have shown on numerous occasions that they couldn’t be depended upon for a cheap and dependable energy source. Take away the fossil fuel backup generators and slash the excessive subsidies, and they will be every bit as stranded as the proverbial beached whale.
Subsidies are a real problem, the cover up for bad business and at the same time interfere with good business.
Fossil fuels are obsolete, and the facilities that produce them, along with any further facilities that might be built for that purpose, will shortly become worthless. These facilities will be “stranded assets.”
That’s strange logic because in the next breath the climate changers rattling the tin believe- Other ideas on the table include taxation on fossil fuel profits and financial transactions to raise climate funds.
Paris climate summit opens with call for ‘finance shock’ (msn.com)
Stranded assets don’t make profits numpties and as for their financial transactions taxes won’t they be all on Green ones? How will that help the Great Transition? What in Gaia’s name are these dudes smoking?
A major point that seems to escape the renewable enthusiasts is that you cannot manufacture them without copious amounts of fossil fuels. For example, to make the silica glass for solar panels, the primary materials are about equal parts coal and ultra-pure quartz (ignoring for now all the other less prevalent materials that go into them). Making any high-quality glass product requires access to large quantities of stable, continuous energy. Typically this is coal-fired but could be gas. Electric arc furnaces could be used but I don’t think they are commonly used for solar panels. Electric arc furnaces are commonly used to refine aluminum. Without access to cheap and reliable electricity, they cannot operate. In fact, such furnaces can suffer catastrophic damage if not properly shut down. I know from my background in operating incinerators, it takes several hours to preheat the hearth. I can easily extrapolate it would take many more to heat up a large arc furnace.
And of course, the heavy duty mining equipment needed to harvest the necessary materials are all diesel-powered. I know of no electric, battery powered heavy mining equipment other than prototypes that are far from ready for practical use. They are more suited for showing off at equipment expos.
Concerning EV batteries, the materials required for those (not just ultra pure quartz and coal, but also lithium, rare earths, and copper, to name a few) are mined using the same diesel powered heavy mining equipment. Right now, China dominates the sources for lithium and rare earth metals. If we ever get into a trade war or hot war with them, it would take us many years to develop the mining infrastructure to get at our own sources of these materials. As far as all that goes, we have very few copper mines. This is all a crisis waiting to happen, whatever route we find ourselves on to power our civilization.
But ignoring all these issues, there remains all the petrochemicals oil refining brings us. Everything from plastics needed for computers, smart phones, vehicle bodies and interiors, a major component of most clothing, and a nearly infinite other products. Not to mention pharmaceuticals. Most germane to renewables, wind turbines require lubricants that are needed for all rotating machinery. Whale oil will not do for this purpose, by the way. Even if somehow the dream of powering civilization with renewable energy worked, we could not do without these products.