The FT has reported that:
Norway's $1tn oil fund should sell out of oil and gas shares, the country's government has recommended, in a move that will send shock waves through the energy sector.
The world's largest sovereign wealth fund, which owns about $37bn in energy shares, should sell out of companies that solely explore and produce oil and gas in a bid to reduce the risk to the Norwegian economy of a sustained fall in oil prices, according to the country's finance minister.
I welcome this. And I note the superficial argument. And I do not believe it.
There is excellent, and wholly rational reason for not investing in oil now. It is that the worth of any company is dependent upon its future revenues. And these companies are as a result valued upon the basis of their supposed reserves. But the fact is that those reserves are going to have to stay in the ground if there is any hope at all that the world can survive climate change.
Norway is selling out of oil because it knows it has no future. It's a wise move. But they daren't give their reason though because it also spells the end for their own oil industry. Some little white lies (or maybe oily black ones) are being told as a result to justify this intensely logical course of action.
Maybe they should invest in the Green New Deal instead.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Surely it shouldn’t be investing in oil and gas anyway for the circular reason that the fund (of stocks) is being built for the time when oil and gas no longer earn revenue for Norway? It would be daft for the fund to decrease in value just when it’s needed, if the drop in value of oil is widespread and affects its own investments.
Do you really think that China and the fast growing Emerging Market economies are going to deliberately cut oil consumption? They are not. Do you America and Russia will? No they won’t..of course over time when technology improves there will be a substitution into other energy forms but nothing material in your lifetime.
Yes, I do actually
Go to Beijing and Delhi and you will literally see why
Whether they should or will are two different things
https://www.google.co.uk/amp/s/oilprice.com/Energy/Crude-Oil/Chinas-Growing-Oil-Demand-Has-Created-A-Geopolitical-Dilemma.amp.html
So Chris, presumably you are happy to see the world heat up to the point where there is nothing left by misery. Richard and I on the other hand have children…
In fact the Chinese are not stupid and are rather known for taking a long view.
Well it makes a lot of sense to diversify away from oil as their economy is leveraged into the oil price already. Also it is only the exploration companies, which are inherently risky and not the oil majors. Seems a sensible decision..
Maybe the GND?
It’s got to be.
But nevertheless, I am impressed and not surprised that the canny Norwegians are thinking ahead.
Sorry you haven’t managed to address Corbyn’s speech today or maybe you think Brexit is more important than climate change.
I have been teaching all day
Give me a chance
I have now read it
It was so wrong
And it was so wrong in its timing
There will be a blog tomorrow unless I am too tired to do it
Even in the event of a rapid move to alternative energy sources, we’re still going to be using a lot of oil.
Recycling obviously has its place but there aren’t any other feedstocks on the horizon which could replace our reliance on oil when it comes to the plastics which we use for so many things.
By all means we need to cut down on plastics use (and disposal) and improve recycling levels, but we’re still going to be using a lot of oil even if we stop burning it.