Time May 23/30 2022 pp42-46 |Climate|”Why We Can’t Quit Oil” “We Know Where We Need To Go. Now We Just Need To Get There” by Justin Worland
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Summary by 2244
Big oil was on the ropes during the pandemic struggling to eke out profits but now with the invasion of Ukraine by Russia and the allies’ sanctions oil is riding high again. During the pandemic “energy was the worst-performing sector in the S&P500 stock index” but is now “the best-performing sector.”
To “meet the targets set in the Paris Agreement…oil production needs to fall by 75% by 2050” but as the industry has said this won’t happen voluntarily. Currently with abundant profits, the big oil companies will focus on increasing shareholder profit by engaging in massive stock buybacks and issuing dividends rather than investing in a “pivot toward green initiatives.” The position of the oil companies is that after years of denial and influence-peddling they “publicly acknowledged the science of climate change [but note] that society had failed to act.”
Surprisingly, investors came to the rescue such that by 2020…”some $17 trillion in investment had flowed into so-called ESG investments-short for environmental, social and governance.” Yet “the scale of the industry’s changes doesn’t match the science.”
With pressure on supply due to the invasion of Ukraine some argued that this moment was an “opportunity for the energy industry to change course.” But Americans now are more concerned by the current economic impact, of high fuel prices, on their household budgets than about climate change.
Politicians aren’t helping either as “Republicans opposed to climate legislation have used the spike in oil prices to blame the Biden Administration’s climate initiatives for hurting consumers.” And backers of Biden say “blame Putin.”
The author, Justin Worland, concludes “When oil is truly no longer a good investment, its reign will come to an end.”