Arjun, this is a terrific video. You are absolutely right that many corporations "do what they have to" on ESG-matters which may or may not align with their better judgement. Government (and related agencies) make policy proclamations without any consideration of costs and benefits. The approach is geared to reducing CO2 emissions, period. If this destroys the economy, ruins the electric grid, causes widespread misery in the population (especially the poor), so be it. It's what Rob Henderson calls a "luxury belief".
And this doesn't even get to the issues of 1) questions over the integrity of the US temperature record, which has been well documented by Tony Heller; 2) is the climate ultimately a self-balancing system (see Lindzen, et al "the iris effect"); and 3) the role of the sun in climate fluctions.
In 1979 the scientific community was convinced that a new ice age was upon us. Enough said.
To be fair to people advocating for reducing/eliminating financing for O&G projects in the developed world, I'm sure they want to eliminate financing for Russian/Chinese/Indian projects as well, but they cannot apply political pressure there. Their position isn't contradictory or nonsensical, it's just applying pressure where possible.
When I ask this explicit question of friends in the enviro community, the standard response is "we have no real ability to impact those other countries." That may well be true but I don't believe it means that domestic companies should be substituted simply due to a lack of access to pariah states.
Unfortunately it seems like an adverse selection process where the most ethical and responsible companies, by virtue of being responsive to pressure, are pressured, and the least aren't.
I sense a bit more emotion within the first few minutes of your video. I concur. I hate to get down in the dumps early on a Saturday morning, but that which you've revealed here, along with other items I've watched or read the last few days, is extremely troubling.
A week ago today, I drove right by two refineries.....Cheyenne, WY and Sinclair, WY. I get it. There are obvious consequences to fossil fuel extraction, processing and utilization. It's not to be denied. But this climate ideology has simply gone bonkers. A is 100% bad. B is 100% good (clean, green and sustainable!). No debate. End of story.
I'm torn as to how much of this is ignorance vs. purposely deceptive behavior.
The WSJ had an interesting article this morning on the topic of homeowners and auto insurance. Rates are skyrocketing. People are upset. There are obvious reasons why this is happening. Those who need these policies just don't want to accept it. Who wants to pay more for anything? Meanwhile, the climate crazies simply ignore the ultimate secondary and tertiary effects of what they propose. Cost will indeed be one of those things.
As a 45-year veteran of the insurance industry, I can tell you the reason for the homeowners insurance problem is rapid development in catastrophe-prone areas of the country (building in the wildland-urban interface in California, rapid growth in Florida and Texas, etc.). These areas have a long record of severe weather and while a changing climate may be making things worse, it by no means accounts for more than 5% of the change. Take a look at Florida hurricane history. There have been many, many severe hurricanes in Florida over the past 200 years. What's changed is rapid development along the southeast coast, Tampa, and Naples. The industry is very competitive and long periods of benign catastrophe loss experience is met with price reductions; conversely, a period of elevated catastrophes is met with surging prices.
And the industry is all too happy to blame it on climate change.
Thanks for this spot on commentary. I have no insurance industry experience per se, but I understand the risks you’ve highlighted here. I’m constantly explaining to people the concept of underwriting. Example….auto insurance. All these sophisticated sensors cost more money to fix if damaged by a collision.
Another one I use to make a point, pertinent to what you’ve written, is the New Madrid earthquakes of 1811-1812. Imagine the losses today vs. 200 years ago when nothing was there.
Or how about all of the people moving to Charlotte, NC. The city was expanded by dredging and landfill; it is dead center of hurricane alley; and it's a earthquake fault. So if you are an insurer, how much do you have to make each year to pay for the 1/100 event that could cause $ billions of damage?!
Thank you Douglas. I find the Barclays statement to be that terrible mix of virtue signaling and a really bad slippery slope. Already we are hearing that on-the-ground bankers are saying the new policy is just for enviros and doesn't mean anything. Yet its all there in black-and-white. The video has been tagged with a climate change health warning on YouTube! ridiculous. It is basically reporting of facts which frankly was my greater concern (always trying to provide fresh perspective and was more concerned that I hadn't).
What is really troublesome is that the person who tagged your video could be half of your age and is not qualified to make an informative and objective judgement. Some people act religiously by claiming that climate change caused by fossil fuel is scientifically settled and cannot be questioned at all. The statement itself is un-scientific, as Richard Feynman said: "Question authority. No idea is true just because someone says so. Test ideas by the evidence gained from observation and experiment. If a favorite idea fails a well-designed test, it is wrong."
"Religion is a culture of faith, science is a culture of doubt."
"It is imperative in science to doubt; it is absolutely necessary, for progress in science, to have uncertainty as a fundamental part of your inner nature. To make progress in understanding, we must remain modest and allow that we do not know. Nothing is certain or proved beyond all doubt."
Anyway, the news was not all bad, at least, in the US last week.
Thank you Tonyforever being the one to point out the YouTube tagging. I suspect it is algorhythm generated...though perhaps prompted by someone who reached out to YouTube complaining?
Excellent material as always Arjun. I think it's always the mark of quality analysis when an analyst makes the normative v. descriptive distinction 100% clear, and tries to avoid blending the two kinds of statements as much as possible, making it perfectly clear at the outset which kind of argument he or she is making (always resisting the temptation to slip one's political biases into descriptive arguments, or worse, even fool ourselves with our own biases into making financial decisions. I should know, I have lots of experience with that!). You keep the distinction clear, which I really appreciate.
essentially, all other categories are growing: Diesel, pet chem, LPG in particular. Gasoline was only 16% of Norway's oil demand (25% of global, 45% here in US) and it is now down to 7%. For Norway, oil demand is driven by "industrial uses" of oil more than personal driving. In the US, we are of course a consumer economy first and foremost, which by nature will be less energy intensive.
BTW, noted the use of the term “energy evolution”. We should hear that term more - it’s more accurate than energy “transition” …
Arjun, this is a terrific video. You are absolutely right that many corporations "do what they have to" on ESG-matters which may or may not align with their better judgement. Government (and related agencies) make policy proclamations without any consideration of costs and benefits. The approach is geared to reducing CO2 emissions, period. If this destroys the economy, ruins the electric grid, causes widespread misery in the population (especially the poor), so be it. It's what Rob Henderson calls a "luxury belief".
And this doesn't even get to the issues of 1) questions over the integrity of the US temperature record, which has been well documented by Tony Heller; 2) is the climate ultimately a self-balancing system (see Lindzen, et al "the iris effect"); and 3) the role of the sun in climate fluctions.
In 1979 the scientific community was convinced that a new ice age was upon us. Enough said.
All great points Pyrrho. And I would refer readers to your comments on the insurance industry below, given your background that you note below.
To be fair to people advocating for reducing/eliminating financing for O&G projects in the developed world, I'm sure they want to eliminate financing for Russian/Chinese/Indian projects as well, but they cannot apply political pressure there. Their position isn't contradictory or nonsensical, it's just applying pressure where possible.
When I ask this explicit question of friends in the enviro community, the standard response is "we have no real ability to impact those other countries." That may well be true but I don't believe it means that domestic companies should be substituted simply due to a lack of access to pariah states.
Unfortunately it seems like an adverse selection process where the most ethical and responsible companies, by virtue of being responsive to pressure, are pressured, and the least aren't.
Great piece as always Arjun. It’s great to see you fired up about this lunacy. Arjun Murti for Secretary of Energy!!!
thank you NTX Oilman!
Absolutely one of the best out there.
Super Psyched for more Super Spiked.
Howard, that is very kind of you to say. Thank you!
I sense a bit more emotion within the first few minutes of your video. I concur. I hate to get down in the dumps early on a Saturday morning, but that which you've revealed here, along with other items I've watched or read the last few days, is extremely troubling.
A week ago today, I drove right by two refineries.....Cheyenne, WY and Sinclair, WY. I get it. There are obvious consequences to fossil fuel extraction, processing and utilization. It's not to be denied. But this climate ideology has simply gone bonkers. A is 100% bad. B is 100% good (clean, green and sustainable!). No debate. End of story.
I'm torn as to how much of this is ignorance vs. purposely deceptive behavior.
The WSJ had an interesting article this morning on the topic of homeowners and auto insurance. Rates are skyrocketing. People are upset. There are obvious reasons why this is happening. Those who need these policies just don't want to accept it. Who wants to pay more for anything? Meanwhile, the climate crazies simply ignore the ultimate secondary and tertiary effects of what they propose. Cost will indeed be one of those things.
Have a great weekend.
As a 45-year veteran of the insurance industry, I can tell you the reason for the homeowners insurance problem is rapid development in catastrophe-prone areas of the country (building in the wildland-urban interface in California, rapid growth in Florida and Texas, etc.). These areas have a long record of severe weather and while a changing climate may be making things worse, it by no means accounts for more than 5% of the change. Take a look at Florida hurricane history. There have been many, many severe hurricanes in Florida over the past 200 years. What's changed is rapid development along the southeast coast, Tampa, and Naples. The industry is very competitive and long periods of benign catastrophe loss experience is met with price reductions; conversely, a period of elevated catastrophes is met with surging prices.
And the industry is all too happy to blame it on climate change.
Thanks for this spot on commentary. I have no insurance industry experience per se, but I understand the risks you’ve highlighted here. I’m constantly explaining to people the concept of underwriting. Example….auto insurance. All these sophisticated sensors cost more money to fix if damaged by a collision.
Another one I use to make a point, pertinent to what you’ve written, is the New Madrid earthquakes of 1811-1812. Imagine the losses today vs. 200 years ago when nothing was there.
Or how about all of the people moving to Charlotte, NC. The city was expanded by dredging and landfill; it is dead center of hurricane alley; and it's a earthquake fault. So if you are an insurer, how much do you have to make each year to pay for the 1/100 event that could cause $ billions of damage?!
Excellent example
Thank you Douglas. I find the Barclays statement to be that terrible mix of virtue signaling and a really bad slippery slope. Already we are hearing that on-the-ground bankers are saying the new policy is just for enviros and doesn't mean anything. Yet its all there in black-and-white. The video has been tagged with a climate change health warning on YouTube! ridiculous. It is basically reporting of facts which frankly was my greater concern (always trying to provide fresh perspective and was more concerned that I hadn't).
What is really troublesome is that the person who tagged your video could be half of your age and is not qualified to make an informative and objective judgement. Some people act religiously by claiming that climate change caused by fossil fuel is scientifically settled and cannot be questioned at all. The statement itself is un-scientific, as Richard Feynman said: "Question authority. No idea is true just because someone says so. Test ideas by the evidence gained from observation and experiment. If a favorite idea fails a well-designed test, it is wrong."
"Religion is a culture of faith, science is a culture of doubt."
"It is imperative in science to doubt; it is absolutely necessary, for progress in science, to have uncertainty as a fundamental part of your inner nature. To make progress in understanding, we must remain modest and allow that we do not know. Nothing is certain or proved beyond all doubt."
Anyway, the news was not all bad, at least, in the US last week.
https://www.bloomberg.com/news/articles/2024-02-15/jpmorgan-state-street-decide-to-leave-industry-s-biggest-climate-group
Thank you Tonyforever being the one to point out the YouTube tagging. I suspect it is algorhythm generated...though perhaps prompted by someone who reached out to YouTube complaining?
Excellent material as always Arjun. I think it's always the mark of quality analysis when an analyst makes the normative v. descriptive distinction 100% clear, and tries to avoid blending the two kinds of statements as much as possible, making it perfectly clear at the outset which kind of argument he or she is making (always resisting the temptation to slip one's political biases into descriptive arguments, or worse, even fool ourselves with our own biases into making financial decisions. I should know, I have lots of experience with that!). You keep the distinction clear, which I really appreciate.
Thank you so much Investor, really appreciate your observing at least my attempt to be clear on those points!
essentially, all other categories are growing: Diesel, pet chem, LPG in particular. Gasoline was only 16% of Norway's oil demand (25% of global, 45% here in US) and it is now down to 7%. For Norway, oil demand is driven by "industrial uses" of oil more than personal driving. In the US, we are of course a consumer economy first and foremost, which by nature will be less energy intensive.