The international Group of 20 – the alliance of countries, known as the G20, with the world’s 20 largest economies and banks – reportedly has commissioned a study of the looming plight of fossil-fuel companies and its ground-shaking impact on the global economy.
The International Energy Agency, a 29-country membership organization, has estimated that two-thirds of mineral assets held by these companies could be rendered worthless by pending climate deals and the growing momentum of green-energy movements in high-consumption countries such as China and the US. Those assets represent about $6 trillion in investment by the companies owning them.
If the current push to cap carbon emissions succeeds – the so-called “two-degree” deal would limit emissions to levels that would halt the planetary temperature rise at just 2 degrees Fahrenheit – the fossil-fuel economy could begin to collapse. That would take large chunks of the global financial system, from pension funds to major banks, with it. According to the British newspaper The Telegraph, G20 officials, with France leading the charge, are pressing for a formal inquiry into the consequences.
Saudi Arabia, owner of the world’s largest petroleum reserves, isn’t waiting for a study. Saudi oil minister Ali al-Naimi told the Business and Climate Summit conference in Paris last month: “In Saudi Arabia, we recognize that eventually… we are not going to need fossil fuels… in 2040, 2050 or thereafter.” He then announced that the kingdom planned to become a global power in solar and wind energy, eventually exporting electricity instead of oil.
TRENDPOST: The fossil-fuel industry’s slow death is gathering speed. China forecasts that as much as 57 percent of its energy needs will be met by renewable sources by 2030 and 86 percent by 2050 — all without a loss of economic momentum. ExxonMobil’s first-quarter profits in 2015 plunged 46 percent, due largely to lower oil prices. Globally in 2014, renewable-energy installations accounted for more new energy resources than oil and gas discoveries.
The fossil-fuel industry is no longer an assured investment. Market growth will continue in renewable and exotic power technologies, while oil, coal and their hired politicians fight to keep themselves from being marginalized. The economic consequences’ rollout will be long, broad, partly unpredictable, and unavoidable. This is an arena where small, green-based and environmentally friendly businesses can thrive. Construction workers retrained in the installation and maintenance of green energy systems will thrive.