Climate Rules Could Put $1.1 Trl In Oil Investment At Risk

Posted by Joseph R. Fonseca
Wednesday, May 07, 2014

 

Investors could spend up to $1.1 trillion over the next decade on oil projects and assets that never reach production if governments enforce measures to curb climate change, a report by Carbon Tracker Initiative said.

The Carbon Tracker report, released on Thursday, could help funds and other investors avoid putting their money in oil assets that remain buried forever.

The $1.1 trillion, around 15 percent of the decade's total global oil and gas spending at current rates, is earmarked for projects to 2025 that require a market price of at least $95 a barrel to break even.

That investment is at risk if governments enforce plans to curb the global rise in temperatures to 2 degrees Celsius, which scientists say is the threshold for avoiding the worst effects of climate change.

Almost 200 nations have endorsed that goal and are due in 2015 to sign up to cut greenhouse gas emissions to help meet it.

Those measures will cut demand for fossil fuels including oil and lower prices and revenues, according to the report.

"Gambling on a $95/bbl oil price on behalf of shareholders is risky, given that oil prices have dropped to $40 per barrel twice in the last decade," James Leaton, Carbon Tracker's research director, said in a statement released on Thursday.

The International Energy Agency (IEA) said last year that even under current policies half of proven fossil fuel reserves would be left undeveloped to 2050 and that this percentage would increase as governments impose tougher curbs.

The oil industry is coming under increasing pressure from investors to reduce exposure to high-cost, risky projects and also to report the risks to their business from climate policies.

"The Carbon Tracker report will be useful to investors engaging oil companies on whether they are using shareholder capital prudently as we transition to a lower-carbon future," Anne Stausboll, chief executive of Calpers, the largest U.S. public pension fund in the United States, said in a statement.

HIGH EXPOSURE

Benchmark Brent crude is trading at around $107 a barrel and has mostly held above $100 for the past three years.

Spurred by the historically high prices, companies have increased exploration in areas such as the Arctic and ever-deeper coastal waters.

The private sector is the major funder of these high cost projects, exceeding state-owned producers such as Russia's Rosneft and Saudi Aramco.

Smaller independent producers have the highest percentage exposure, but big firms including Exxon Mobil Corp, Royal Dutch Shell and Total have significant parts of their portfolios at risk, Carbon Tracker said.

Many companies say they are addressing climate policies by focusing on energy efficiency and low-carbon technologies such as renewable power generation and carbon capture and storage.

Exxon, the world's largest publicly traded oil company, has said there is little risk to its reserves because they will be needed to meet expected growth in energy demand.

The Carbon Tracker Initiative is funded by several U.S. and European foundations, including the Rockefeller Brothers Fund and the Joseph Rowntree Charitable Trust.

(editing by Jane Baird)


Technology

Royston Debuts Engine Diagnostics Service

Diesel power specialist Royston has expanded upon its traditional engine service and repair business with the introduction of a new engine diagnostics, health check and consultancy service.

MN100: Pacific Power Group

The Company: Established in 1958, Pacific Power Group has been a trusted partner for the marine power needs of the Western U.S. for more than 50 years. PPG provides

Wärtsilä BWMS for Three Maersk Tankers

Maersk Tankers A/S of Denmark has selected Wärtsilä's Electro Chlorination (EC) Ballast Water Management System (BWMS) for three new 50,000 DWT medium range (MR)

Contracts

Hanjin files for Receivership, Ports Turn Away Vessels

Hanjin says asks court for its assets to be frozen; Hyundai Merchant looking to buy Hanjin's "good" assets. South Korea's Hanjin Shipping Co Ltd filed for court

Electric Boat Wins $300 Mln Virginia-class Submarine Contract

US-based General Dynamics subsidiary Electric Boat won a contract for more than $300 million to maintain design and engineering specifications for Virginia Class submarines,

Banks Halt Support for Hanjin

A bankruptcy would be biggest ever for a container shipper. Hanjin Shipping Co's banks are halting support for the South Korean company, its lead creditor said,

Legal

Hyundai Merchant Marine to buy Hanjin's 'Good' Assets

South Korea's financial regulator said on Wednesday that Hyundai Merchant Marine Co Ltd will seek to acquire healthy assets of troubled shipper Hanjin Shipping Co Ltd.

Hanjin files for Receivership, Ports Turn Away Vessels

Hanjin says asks court for its assets to be frozen; Hyundai Merchant looking to buy Hanjin's "good" assets. South Korea's Hanjin Shipping Co Ltd filed for court

Hanjin Shipping to File for Court Receivership

South Korea’s biggest container shipping line Hanjin Shipping Co has decided to apply for court receivership after lenders halted all support, says a report in Bloomberg.

Finance

Hyundai Merchant Marine to buy Hanjin's 'Good' Assets

South Korea's financial regulator said on Wednesday that Hyundai Merchant Marine Co Ltd will seek to acquire healthy assets of troubled shipper Hanjin Shipping Co Ltd.

APM Terminals to invest $70 mln in Port Elizabeth Terminal

The Port of New York and New Jersey is the largest port on the US East Coast and third largest in the United States with 6.37 million TEU handled in 2015.  In 2014,

Hanjin files for Receivership, Ports Turn Away Vessels

Hanjin says asks court for its assets to be frozen; Hyundai Merchant looking to buy Hanjin's "good" assets. South Korea's Hanjin Shipping Co Ltd filed for court

Environmental

Arctic Sea Ice Melt Continues

As of August 14, Arctic sea ice extent is tracking third lowest in the satellite record, according to the National Snow & Ice Data Center (NSIDC). The southern

Wärtsilä BWMS for Three Maersk Tankers

Maersk Tankers A/S of Denmark has selected Wärtsilä's Electro Chlorination (EC) Ballast Water Management System (BWMS) for three new 50,000 DWT medium range (MR)

Doing Business Differently to Meet Sustainability Targets: DNV GL

Pressure is mounting on the global oil and gas industry to reduce environmental footprint at the same time as the industry is under significant cost pressure.    Since

Energy

3sun CEO Chairs Offshore Wind SIG

3sun Group, specialist provider of products and services to the global energy industry, is reinforcing its ongoing commitment to the offshore wind industry with

Hanjin files for Receivership, Ports Turn Away Vessels

Hanjin says asks court for its assets to be frozen; Hyundai Merchant looking to buy Hanjin's "good" assets. South Korea's Hanjin Shipping Co Ltd filed for court

Jt Study by MOL, Yokohama University for Improving Ocean Shipping Market Forecast

Mitsui O.S.K. Lines, Ltd. today announced that the company and its subsidiary MOL Information Systems, Ltd. have signed a contract with Yokohama National University

News

Arctic Sea Ice Melt Continues

As of August 14, Arctic sea ice extent is tracking third lowest in the satellite record, according to the National Snow & Ice Data Center (NSIDC). The southern

Hyundai Merchant Marine to buy Hanjin's 'Good' Assets

South Korea's financial regulator said on Wednesday that Hyundai Merchant Marine Co Ltd will seek to acquire healthy assets of troubled shipper Hanjin Shipping Co Ltd.

APM Terminals to invest $70 mln in Port Elizabeth Terminal

The Port of New York and New Jersey is the largest port on the US East Coast and third largest in the United States with 6.37 million TEU handled in 2015.  In 2014,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Offshore Oil Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1452 sec (7 req/sec)