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State-owned fossil fuel firms’ plan to invest $1.9tn could destroy climate hopes–Guardian In Shock!!

February 12, 2021

By Paul Homewood


Fiona throws her toys out the pram!



The world’s state-owned fossil fuel companies are poised to invest about $1.9tn (£1.4tn) in the next decade in projects that would destroy any prospect of meeting the Paris agreement climate goals.

A large proportion of these investments are likely to become stranded assets, with at least $400bn unlikely to be profitable if the world sticks to its promises to hold global heating to less than 2C (3.6F) above pre-industrial levels, according to a report from the Natural Resource Governance Institute thinktank.

David Manley, the lead author of the report and a senior economic analyst at the thinktank, said: “A lot of the oil industry wants one last party, and they are going to invest trillions. We are worried about how long that party will continue. If the energy transition [away from fossil fuels and into clean energy] is to be fast enough to meet the Paris agreement, the party needs to be over very quickly.”

National oil companies (NOCs) produce about two-thirds of the world’s oil and gas and own about 90% of reserves. They are rarely scrutinised, however, as their state ownership means they can operate secretively, without publishing much detail on their finances or operations, as publicly listed oil companies such as Exxon, BP and Shell must.

While some publicly listed oil companies, including BP and Shell, have bowed to shareholder pressure and vowed to reduce their greenhouse gas emissions and divert at least some investment into green technologies, the power of the NOCs is such that they could easily outweigh the emissions-cutting efforts of other major players with their own investments. Manley said: “We can see some of these NOCs cancelling out the progress made by some of the big oil companies.”

NOCs are generally accountable only to their national governments, and often only a handful of top officials within those governments are responsible for decisions on hundreds of billions of pounds in investment. Such officials tend to be responsible for generating revenues from their state-owned fossil fuel assets, but carry little or no responsibility for climate change targets.

“They are still holding on to visions of being world-class operators and strutting the global stage with these companies,” said Manley. “We are worried that they are not seeing the need to reassess their long-term strategies.”

Many of the countries with NOCs are highly dependent on oil and gas revenues. They should be helped to overcome this dependence, according to Manley. “These countries are often quite poor, and it’s not their fault – it is not as easy as saying to BP and Shell they should shut down,” said Manley.

China, India and Russia are expected to be responsible for the biggest chunk of investment from NOCs. China has signed up to a long-term goal of net zero emissions by 2060, and India has laid out a strong investment plan for renewable energy. Russia is signed up to the Paris agreement, but has not taken a strong stance in favour of climate action at international talks and has worked behind the scenes to scupper some progress at previous talks. 

Perhaps somebody ought to tell the Guardian most of the countries mentioned actually don’t give two hoots about the Paris Agreement, nor are they in any way committed to it.

China, India, Russia, the Middle East and others in Africa and Latin America are concerned first and foremost with their own economies and the wellbeing of their citizens. If that means continuing to drill for oil, then that is what they will do.

Indeed the fact that 90% of the world’s gas and oil reserves is owned by NGOs makes a nonsense of attention handed out to companies like BP and Shell. If disinvestment and other forms of pressure succeed in driving them from the market, NGOs will quickly take their place.

Even if China’s 2060 promise was credible, they and the rest of the world will continue to need oil and gas in ever increasing quantities until then. And that means investing in and developing oilfields for decades to come.

  1. Philip Mulholland permalink
    February 12, 2021 2:27 pm

    More good news.

  2. February 12, 2021 2:30 pm

    Amazing. You can tell the Guardian can barely bring itself to criticise state owned industry. You think it’s the big private enterprise companies until near the end of the article. Then it tells you who is responsible but at the same time says they’re fully committed to net zero, so they aren’t really that bad

    • February 12, 2021 3:54 pm

      Any institution comitted to net zero, privre or state owned, is entirely unrealistic, and bad if not bad and mad.

  3. grammarschoolman permalink
    February 12, 2021 2:31 pm

    Good for them! Now let’s copy them.

  4. John Palmer permalink
    February 12, 2021 2:39 pm

    Paul…I think you meant to call them NOC’s, not NGO’s. Thank goodness that NGO’s have no control over Fossil Fuel assets – much as they’d love to!
    Nice seeing the Grauniad squirming though!

  5. Patsy Lacey permalink
    February 12, 2021 2:52 pm

    Apparently Shell are hedging their bets too

  6. February 12, 2021 2:56 pm

    CO2 is innocent. #HAANDSOFFCO2

  7. Phillip Bratby permalink
    February 12, 2021 3:27 pm

    Without oil, where are the Grauniad readers going to get the thousand one other products made from oil? I forgot, they are going to go back to being stone-aged people.

    • February 13, 2021 9:05 am

      Russia, China, Iran, Saudis etc. won’t be joining any ‘without oil’ club.

  8. Gerry, England permalink
    February 12, 2021 3:55 pm

    On the subject of energy and something that might bear investigation is Mast Energy Developments. I have received an email about their upcoming IPO and it says:

    ‘MED will acquire and develop a portfolio of flexible. small scale, multiple Reserve Power generation plants throughout the UK producing 300MW of safe and clean power through natural gas.

    This will be fed into the National Grid to contribute to stable electricity provision and help prevent future shortages by balancing out the national grid at critical times and thereby reducing future blackouts events.’

    It looks like they are talking about STOR which I thought was mainly diesel powered generators where they are saying gas. I suspect it could be gas powered generator sets instead of diesel.

    • Phillip Bratby permalink
      February 12, 2021 7:54 pm

      Yes, these days they are likely to be natural gas powered, since diesel is so yesterday (and dirty). Some claim to use biogas from AD plants.

    • February 12, 2021 8:01 pm

      Gridwatch quite often shows a few hundred MW coming from OCGT generators, and I imagine that there are quite a few embedded within local distribution networks that may not get reported by National Grid. There is a 45 MW OCGT generator only a few miles from my home.

      This IPO might be worth a punt, given the inevitable further loss of dispatchable power.

      • Duker permalink
        February 12, 2021 8:11 pm

        Trouble is the ‘financial engineering’ will be foremost, with the investors saddled with the unprofitable part of the business and the promoters ensuring they get the cream off the milk until they tip the asset into receivership and its sold for a fraction of the cost to permit and develop.

  9. Mad Mike permalink
    February 12, 2021 3:55 pm

    China has promised to “aim” to be carbon neutral by 2060. There is no guarantee they will fulfil that aim or even fully attempt to achieve it. In any case, the Alarmists say we will be burnt to a crisp before then so any efforts the Chinese make will be irrelevant.

    Thankfully the NOC’s have seen the reality of the situation and will provide the oil and gas that we will definitely need in the coming years. Just imagine what trouble we would be in if this investment wasn’t made and the renewables were all we had.

    • 1saveenergy permalink
      February 12, 2021 4:33 pm

      ” the Alarmists say we will be burnt to a crisp”

      yes, on a sunbed in the Maldives, watching the coral grow !

  10. Penda100 permalink
    February 12, 2021 4:31 pm

    So in the future will we have countries (let’s call them the First World) that have decided to continue to use fossil fuels, growing their wealth and lifting their people out of poverty and hunger. Then there will be a second group of countries that have decided to forego fossil fuels, depending for their energy needs on renewables. Whose wealth is destroyed by their inability to run a modern economy without a secure electricity supply, whose people become impoverished through providing higher levels of subsidy to the ineffective renewables operators and, because of their inability to compete and earn foreign exchange, are increasingly forced to revert to subsistence farming. Of course the First World might be generous and award foreign aid to some of the second group of countries. Can anyone think of a suitable name for this group?

    • Stuart Brown permalink
      February 12, 2021 6:49 pm

      Zeroth world?

  11. John Fuller permalink
    February 12, 2021 4:40 pm

    Oil is still, and will remain, the most important commodity on the planet. Also the “stranded assets” claim, popular with environmentalists and former heads of the Bank of England, who don’t have a clue how oil field developments are financed. There will be no stranded assets.

    • Brian Jackson permalink
      February 12, 2021 6:32 pm

      Yes John u r right.
      There will be no stranded assets, and these investing oil companies are well wise to the situation, where only us idiots in the west will abandon so called fossil fuels. The rest of the world will carry on using them – increasingly. The £400bn invested will pay off handsomely.

  12. Gamecock permalink
    February 12, 2021 4:45 pm

    ‘A large proportion of these investments are likely to become stranded assets’


    ‘with at least $400bn unlikely to be profitable if the world sticks to its promises to hold global heating to less than 2C (3.6F) above pre-industrial levels’

    ‘If’ is doing a lot of work there.

    ‘according to a report from the Natural Resource Governance Institute groupthinktank.’

    This Natural Resource Governance Institute:

    ‘The transition from fossil fuels to renewable energy is a global imperative.’

    It’s going to happen, so don’t be investing in fossil fuels! You’ll be sorry!

    • John Palmer permalink
      February 12, 2021 5:16 pm

      Yes, GC…. “if”, “could”, “may well” and “likely” do most of the heavy-lifting for non-scientific, greenie journo’s and their NGO chums these days.

  13. dennisambler permalink
    February 12, 2021 5:29 pm

    “..if the world sticks to its promises to hold global heating to less than 2C (3.6F) above pre-industrial levels”

    Do they really believe that governments can control global temperatures? I think some of them really do, that’s what makes them so dangerous.

    What are “pre-industrial levels”. Hansen originally mentioned 1750, then it went to 1850, 1860, 1950, to suit their constantly revised data sets. The different and changing parameters, without scientific explanation, are described very well by Jamal Munshi:

    The standard doctrines are available at NASA, where they still talk of 1750 as the start of the industrial revolution:

    “Before the Industrial Revolution started in the mid-1700s, the global average amount of carbon dioxide was about 280 ppm.” – Ed Hawkins at Reading
    “The UN Paris Agreement on climate change aims to ensure increases in global temperature are less than 2°C above ‘pre-industrial’ levels, with an aspirational 1.5°C limit. However, the ‘starting line’ of the pre-industrial era is not defined by the UN agreements, or by the Intergovernmental Panel on Climate Change (IPCC).

    So there has been no definition of pre-industrial, yet they talk of controlling temperatures within 2 deg C, now 1.5 deg C of pre-industrial, which could be 1750, 1850, or even 1720, as Ed Hawkins is proposing. In 1985, the main protagonists were advocating just 1 degree increase above pre-industrial, which again wasn’t defined.

    On this shaky edifice, trillions of dollars have been expended, with more to come. The politicians in Paris had no clue what they were signing up to and now Western “leaders” blindly follow the dictates of that document and in our case, Ed Miliband’s Climate Change Act, ably driven along by Lord Deben and Co.

    • Gamecock permalink
      February 13, 2021 12:39 pm

      “In 1985, the main protagonists were advocating just 1 degree increase above pre-industrial, which again wasn’t defined.”

      Even if defined, we don’t know what it was. Any alleged global mean temperature for before 1979, the beginning of satellite measurement, is a complete fabrication. We just don’t know what temperatures were. Long-term monitored thermometers are rare. Yeah, you got ’em in London, but most of the world doesn’t have them.

  14. markl permalink
    February 12, 2021 5:35 pm

    They’re just taking a page out of China’s AGW book. Make promises, do a little virtue signaling, throw some money at the Green crowd, and continue doing what you’re doing. The only difference is the media ignores China’s actions and vilifies the fossil fuel industry.

  15. Dr Ken Pollock permalink
    February 12, 2021 5:51 pm

    Just in case anyone reading this has not seen my earlier posts, please note that the driving force behind the Paris Agreement, Christiana Figueres, does not know the difference between energy and electricity.
    On page 55 of her book, co-written by Tom Carnac-Rivett, “The Future We Choose”, she writes “already more than 50% of the energy in the UK comes from clean power”. We did generate about 50% of our electricity from renewable sources for a few summer months. Not the same as our energy use.
    If you can write that in a book, praised to the skies by the good and great on the end pages, what chance have we got of a sensible energy policy for the world?
    Oh, sorry! Most of the world is more sensible than that. It is just the UK, the USA (under Sleepy Joe) and some of the EU that might follow this line.
    The rest of the world takes our handouts and seeks to follow us in industrialisation. That way lies prosperity, the prosperity we jeopardise by our obsession with climate change.

    • Malcolm Skipper permalink
      February 12, 2021 8:01 pm

      Ah, Dr Pollock, the Royal Institution on its website proclaims “… now broadcast on national television every year, the Christmas Lectures are the UK’s FLAGSHIP SCIENCE SERIES” (my caps).
      In the third lecture, Dr Shine tells us “another way of storing energy is to CONVERT EXCESS RENEWABLE ENERGY … INTO A GAS” and then “We are going to TURN ELECTRICITY … INTO A GAS” which means “We can TURN HYDROGEN BACK INTO ELECTRICITY.”
      The days of alchemy are not yet over – or does the enthusiasm for ways to save the planet in a live broadcast mean that sometimes you get the science a bit muddled?

      • Duker permalink
        February 12, 2021 8:16 pm

        Good point. Its the same mind set of medieval alchemists who were convinced they could turn lead into gold.
        The situation was similar to now in that lead back then was very useful and gold had decorative value only

      • Ken Pollock permalink
        February 12, 2021 9:51 pm

        I watched those lectures. They were a travesty and shamed all involved. You need go more than the revival of the Mann hockey stick! And the pH of the oceans – quote a figure and talk about acidification without explaining 8.1 is still alkaline!!! The BBC and the RI should be condemned for the whole mess.

      • Malcolm Skipper permalink
        February 12, 2021 10:46 pm

        I had some e-mail correspondence about the acidity. LECTURE 1 “… it also caused the oceans to become VERY ACIDIC (during the PETM).”
        ME: I queried this since pH then was 7.3-7.4
        RESPONSE: “The PETM issue was factually correct”
        ME: (To pin this down) “My students set up nails in test tubes under different conditions to see what causes rusting One solution had a pH = 8 and they said the nail was in acidic conditions. Is that correct?”
        RESPONSE: “Yes. I believe it’s correct. Or at least not incorrect.”
        At that point I gave up.

      • Duker permalink
        February 13, 2021 4:52 am

        You are right on the PETM of course
        “In the last 150 years or so, the pH of the oceans has dropped substantially, from 8.2 to 8.1–equivalent to a 25 percent increase in acidity. By the end of the century, ocean pH is projected to fall another 0.3 pH units, to 7.8. While the researchers found a comparable pH drop during the PETM–0.3 units–the shift happened over a few thousand years.”

        Hyperbole instead of the actual change ‘projected’ of -0.3 pH units

      • Malcolm Skipper permalink
        February 13, 2021 10:33 am

        DUKER Hyperhyperbole!! This part of the thread is OT but my concern was use of language. ‘Acidification’ and ‘acidifying’ are processes but ‘acidic’ describes a state.
        MY QUOTE: “One solution had a pH = 8 and they said the nail was in acidic conditions. Is that correct?”
        RESPONSE: “Yes. I believe it’s correct. Or at least not incorrect.”
        When I retired 2 yrs ago from teaching chem, a solution of pH = 8 was alkaline. Since then, apparently, describing pH = 8 as acidic is now “correct”, “or at least not incorrect”. An answer you couldn’t get wrong at GCSE!
        The (flagship) RI lectures teach (lecture). For the audience, ‘very acidic’ probably conjures up sulphuric acid. During this correspondence the DT carried an article ‘Sea acidity leads to mussel fatigue’. Nice pun (?) but along with carbon (dioxide) being a pollutant, the oceans are now acidic.

  16. Ian Miller permalink
    February 12, 2021 9:49 pm

    Climate Change / Save-the-Planet” Religion controlling of behavioural and thought processes. is simply the Trojan Horse successfully enabling international acceptance for Totalitarian Communism. Communists know full well how unpopular their real aim is, so through deception they hope that people unaware of who their enemy is, they will succumb at every attempt to resist them.

    • markl permalink
      February 12, 2021 10:53 pm

      +1 And Not A Shot Is Fired.

      • February 12, 2021 11:27 pm

        Are you suggesting, Markl, that the Covid developmemt/release is an act of war?,

  17. John Winward permalink
    February 13, 2021 7:45 am

    “They are rarely scrutinised, however, as their state ownership means they can operate secretively, without publishing much detail on their finances or operations, as publicly listed oil companies such as Exxon, BP and Shell must.” Guardian enters brainlock.

  18. 2hmp permalink
    February 13, 2021 8:10 am

    Common sense is rare but it has found a home here.

  19. Ben Vorlich permalink
    February 13, 2021 11:57 am

    This is all done Ar5e about face. Surely the way to encourage people to insulate their homes is to make the cost of energy prohibitively expensive first?

  20. Allan Shelton permalink
    February 13, 2021 4:21 pm

    I would still like to know something regarding CO2.
    If 0.04% CO2 can “trap heat” to keep our global temperature at approximately 15C degrees,
    and 0.08% CO2 will increase global temperatures by 2C degrees, then why not insulate our houses with 100% CO2 in bags, and replace the inert gas in our all weather windows with 100% CO2, then surely there will be plenty of “trapped heat”, and all that back radiation will lower our heating bills to next to nothing.

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