Guest “I couldn’t make this kind of slate up if I tried” by David Middleton
“Restricting oil supply is the key to lowering demand”
INTERVIEW: Follow This founder Mark van Baal speaks exclusively with 💥Energy Flux💥
Oil prices could rise high on robust demand for Covid, but don’t expect supply-side pressures to ease. Follow This, the Dutch advocacy group whose climate resolutions are convincing investors, is doubling its campaign to force international oil companies to cut Scope 3 emissions this decade. Outspoken founder Mark van Baal believes this will not happen unless shareholders oblige the IOCs to stop exploration and invest in renewable energy. He told Energy Flux that it was up to the Western IOCs to lead the oil industry into a post-crude future – while ignoring short-term market signals.
Oil is the new tobacco. ESG investing is the talk of the town on Wall Street. The provision of services such as underwriting or advanced computing for IOCs is frowned upon – let alone the financing of their exploration and production activities.
Combined with the insatiable demand for commodities that are fueling the global economic recovery, these factors help keep oil prices high. Still, IOC shareholders are increasingly voting to tie the hands of Big Oil bosses who hope to make record profits at a time of structural market constraints.
Amsterdam-based advocacy group Follow This has been instrumental in fueling this movement by piquing shareholders’ appetites for change. The organization has achieved notable victories at the Chevron and ConocoPhillips annual general meetings this year, and support for its climate resolutions is growing among BP and Shell shareholders.
Mark van Baal insists that stirring up discontent among typically conservative institutional shareholders is the only viable way to cut emissions.
Translation: “Mark van Baal firmly believes that stirring up discontent among typically conservative institutional shareholders is the only feasible route to“ free unicorn ponies for everyone.
Mark Van Baal, you won a Billy Madison Lifetime Achievement Award with a Ron White Oak Leaf Cluster Tailcoat!
Guess what happens to assets sold …
A $ 140 Billion Asset Sale: Investors Benefit From Big Oil’s Push To Net Zero
Pressure on listed oil companies could have unintended consequences, thoughAuction goes to private or stateown company.
Anjli Rawal, Financial Times
Thu, 08/07/2021 – 3:00 a.m.
One company’s move away from fossil fuels is an opportunity for another to double up.
Under heavy pressure from investors and activists to take more action on climate change, some of the world’s largest oil and gas companies are putting billions of dollars in assets up for sale.
From a distance, people like Brian Gilvary, the boss of Ineos Energy, a branch of the private British chemical company, observe. While many energy companies are trying to switch from oil to gas and lower-carbon technologies, Ineos is buying up unwanted fossil fuels.
Hart Energy (subscription required to read full article) Link to original Financial Times article
Smaller, more aggressive companies will snap up these assets.
To make things even more hilarious …
July 8, 2021 8:45 am EDT
Can one man’s vision take the slate industry out of the ESG desert?
David Blackmon Sr. Energy Contributor
As the consolidation of the upstream, E&P sector of the US slate business continues to heat up, there is debate as to whether it is happening too slowly, just fast enough, or too fast for the benefit of the industry. Based on what he told me in a recent interview, Ben Dell, CEO of DJ Basin producer Civitas and Managing Partner at private equity firm Kimmeridge Energy Management, can be put on the side of “too slow”.
“That all coincides with this ESG narrative,” continued Dell, “and you can discuss which came first, but I think it was accelerated by COVID. But you have finally reached a turning point in the industry where you are beginning to see what I call the three pillars of reform to actually make the sector investable again. This is important because this sector has a long way to go. It won’t be ready in 10 years – probably not in 50 years if we’re brutally honest – and there is still a lot of profitability going on. “
Dell’s three pillars include:
1) Establishing a profitable business model that generates a return above the cost of capital and returns free cash flow to investors;
2) Establishing a corporate governance model that is aligned with the goals of investors and that bases executive compensation on key figures that are in line with these goals; and
3) Achieve net zero on emissions.
On this third point, Dell asks: “One of the things I ask people is: If all E&P were net zero with no carbon footprint, or if you could save carbon for a dollar, would you change the energy infrastructure you have today? And most people say ‘no’. “ he said. “Because why should you change it? It works well, it’s very functional. Why should you invest trillions of dollars in something else when what you already have works? “ Good question.
“The question now arises for E & Ps whether they have an operating license?” Dell continued. “In my opinion, when you are net zero, you deserve your operating license. If the entire E&P range is net zero, why shouldn’t you have it? What’s the argument at this point? Then it’s just politics, and some people will say, well, I just don’t like that. Some people just hate the industry, and you can’t really address that. But that’s not a really strong, convincing argument over time. So my goal is to be net zero.”
Dell believes that the entire E&P industry, and ultimately every step in the oil and gas supply chain, must reach net zero in order to retain its license to operate in the United States. “We saw Devon commit by 2050, Diamondback did it, everyone will eventually follow suit. It’s inevitable, ”he said.
“We want to be at the forefront of this movement. We want to set standards. And if you can, you want to attract capital for a lower cost of capital because if you can trade at a premium it can only help accelerate consolidation by eliminating the weak performers in the pool. “
Most oil and gas companies could achieve Scope 1 and 2 net zero emissions by injecting modest amounts of CO2 into depleted reservoirs and / or saline aquifers or through improved oil extraction operations. Some oil companies like Denbury are already on the way to a net zero, if not even “carbon negative” oil production according to Scope 3. See Energiewende: Blue Oil Edition.
If Little Oil were able to snag Big Oil’s assets and then hit something near net-zero carbon emissions, the war on fossil fuels would be debunked for what it is: a bunch of weepier Enviromarxist Greentards calling for free free unicorn ponies for everyone.