Billions In Worthless Assets Plague The Oil & Gas Industry

davfor

Here is some helpful advise for investors like me who think climate change poses a 21st century threat to civilization as we know it.

Investors, pension funds and companies need to get ahead of the financial risk from climate change, as many fossil fuel assets risk becoming worthless.

...the predicament amounts to a “tragedy of the horizon,” which refers to the fact that the problem of climate change is a long-term one, which makes it difficult to convince investors and companies to act. The problem is, once the real-world climate problem becomes impossible to ignore, there will be draconian policies put in place. And, in financial terms, once it becomes impossible to ignore, a sharp loss in value becomes impossible to avoid.

...companies are vulnerable in different ways. U.S. shale drilling, for example, may not be all that exposed to this financial bubble. The bulk of a shale well’s production occurs in just a few years, allowing them to dodge the government restrictions and demand risk that likely lie in the future.That’s not to say that shale is not littered with its own set of financial problems, but the problem of stranded assets is a deeper problem for long-lived oil and gas projects. That includes Canada’s oil sands, LNG, offshore oil drilling and pipeline projects.

https://finance.yahoo.com/news/billions-worthless-assets-plague-oil-200000603.html