Oil and Money
When the world’s largest and historically most successful companies start writing down assets by billions of dollars and cutting revenue forecasts by large percentages, the world takes notice. In this week’s Top 5, Big Oil’s Nightmare Is Coming True, the worst case scenario for the oil industry is becoming reality.
First off, I want to express my sincere sympathy for the people and communities who will be hardest hit by this trend. I personally know many people employed directly or indirectly by the fossil energy sector. We’ve had heated debate about climate change for years and while I have thought this day was coming for a long time, I do not wish them hardship in any way. Organized and well-funded campaigns of disinformation have made many people think things will stay the way they always were, but change is here, and it is hard to accept. When it’s your livelihood on the line, it’s even harder to take.
The devaluation of big oil’s business is not simply a temporary downturn in the oil market like we have seen in the past. These huge companies are now acknowledging that a substantial amount of their oil reserves will be left in the ground. The notion of stranded assets has been discussed for years and now the majors (and their investors) are recognizing the reality of the situation. No longer can these massive companies make money in spite of themselves.
In the week this story first ran, Shell had devalued their portfolio by $22 billion and British Petroleum (BP) devalued theirs by $17 billion. BP has even gone so far as to announce it will transition to a low carbon company in the near term. Danish Ørsted already made the transition, moving from the past as an oil and gas leader, to completely renewable energy. In 2017, they rebranded from DONG Energy (Danish Oil and Natural Gas) to Ørsted. Shell recently announced a major restructuring of their company in order to prepare for the coming energy transition. Other large fossil energy companies such as Exxon have also come under scrutiny, with some industry analysts saying that its assets are overvalued by $37 billion.
Industrywide, these same analysts think that a day of reckoning is coming as the devaluation of oil assets will increase to another $300 billion, even after a $450 billion hit in the past 15 years. When combined with long term increases in alternative energy sources, the electrification of the transportation industry, and the potential liability from climate and health lawsuits, the writing is on the wall. It is time to divest from fossil fuels.
Green Sand Sucks (Carbon)
Unfortunately, reducing carbon emissions will not be enough to stave off the effects of global warming. Scientists all agree that the only way to avoid the worst effects of climate change is to capture and sequester atmospheric carbon. In the article Can manufacturing green sand beaches save our planet? The writer explores new technology to capture carbon. Well actually, not a new technology at all – it is an age-old process that comes from the erosion of volcanic rock whereby the minerals contained in the rock capture carbon from the air as the rock is moved and eroded by the action of the ocean. The scientists who have analyzed this process have teamed up and started Project Vesta. Project Vesta aims to mine and distribute on beaches a specific type of sand that contains a large quantity of olivine, a green silicate that weathers quickly. A pilot project is now measuring the effects of the process on an isolated beach in the Caribbean. While there are always risks when deploying a process like this in nature, one secondary effect is the reduction of acidification of water as the olivine dissolves. Ocean acidification from dissolved carbon is yet another looming threat to fish and coral around the world.
Competition for The Ocean Cleanup
Dutch inventor Boyan Slat has enjoyed much limelight for his ingenious, automated devices intended to clean the World’s oceans of floating plastic waste. Meanwhile, the team at Ocean Voyages Institute has set a new record for the single largest cleanup of waste in history. The American group collected an astounding 103 tons of waste from the Pacific gyre in a 48-day trip from Hawaii. The team uses custom-designed GPS transmitters and ship-based drone aircraft to locate large debris fields. They have found that due to ocean currents, the plastic is often concentrated by type. For example, the group found that currents often concentrate ghost nets, discarded fishing nets that while no longer of use to fishermen are known to entangle and drown fish, turtles, and marine mammals. The team consists of several former members of the Sea Shepard Society that are focussed on direct action using a combination of hard work, traditional techniques, and modern technology. The results speak for themselves.
Rewilding vs. Replanting
“I’m not an enormous advocate of the planting of trees” says Sebastian Cox. The furniture designer uses only English timber in his creations and is one of many who share the opinion that rewilding – the act of allowing nature to repopulate areas damaged by development – is a far superior idea than that of simply planting trees. Cox, who harvests the wood from his own managed woodlot in Kent, England, understands that wood is simply stored atmospheric carbon. He intends to store 100 tons of carbon in the furniture he makes each year. But rather than simply planting lots of trees that are of a single species, he focusses on rewilding his wooded lands. Rewilding ensures biodiversity and encourages multiple species to repopulate areas that have been previously damaged. It is a growing trend (no pun intended) in Britain. In Wales, a woman was recently vindicated after years of removing non-native plants from a wild area near her home. Rewilding compares to simple tree planting which focusses on planting trees only – often with a single species (monocrop) that may or may not be indigenous to the area. Areas that are planted in monocrops certainly provide carbon capture and material for human consumption such as food and building materials but are often devoid of other life such as beneficial ground cover, birds, and animals. All of these living creatures have a role to play in the health of an ecosystem and while humans are smart, our hubris has shown to be one of our great failings as a species. Rewilding is simply giving mother nature an opportunity to do what she does best; heal the earth.
Tree Planting for the People
While Sebastian Cox is able to focus on rewilding, it is obvious that not everyone has the ability to manage large tracts of land in the same way. Thankfully, most of us do have the ability to plant a tree somewhere. On planting trees and how anybody can contribute the author explains how to go about it. If done in a sustainable and measured way, tree planting can work in conjunction with native plants and animals to provide a low cost, easily accessible way to contribute to the global efforts of climate change mitigation. In some countries there are national programs that mandate tree planting, such as the Philippines who recently passed House Bill 8728, or the ‘Graduation Legacy for the Environment Act’ that forces students to plant 10 trees upon graduation from high school. The law will ensure that at least 175 million new trees would be planted each year. In the course of one generation, no less than 525 billion trees will be planted under this initiative. Timely in its nature, the Philippines has lost almost 1/3 of its forests to logging and development.
If it were up to me, this type of tree planting law would be enacted in every country on the planet. If so, we could collectively reverse the damage done in the last century and set the stage for a new path forward. A path that is healthy and constructive provides for all of us, weak or strong, poor or rich. I truly believe this is the future for humanity. I believe we are now seeing smart people all over the world laying the groundwork for one of the biggest shifts in human history. It will be an interesting time ahead and an amazing time in history to be alive.
Happy Eco News, July 20, 2020
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