Blood & Gore Try to Scare You Out of Your Energy Investments

Ha!  Al Gore has come out in the WSJ and directly contradicted one of my 5 realities for investors going forward.  I said:

3) Global Warming Is Dead - From a policy perspective that is.  The climate will do what it does but there ain't gonna be a re-ordering of the global economy cooked up by the warmists.  If you've been scared out of energy investments by the incessant bleating of global warmists, you've got to get back in.  The world needs energy and it can't afford phony energy, so get invested in energy that works.  So don't invest in solar or wind or any of that garbage (if any of it does turn out to actually work, the Exxons of the world will wind up owning it ultimately anyway).  Furthermore, those in thrall to the religion of climate change will wake up; expect Europe to drastically improve its competitiveness by jettisoning decades of wrong-headed warmist policy.

Al "Release my Chakra" Gore and co-author David Blood tell carbon source investors that their assets are worth alot less because much of the value will be stranded. (Blood & Gore, could be the title of a horror flick, and what they have to say, on the surface, is scary!)

Here is the relevance of carbon to investing: There is consensus within the scientific community that increasing the global temperature by more than 2°C will likely cause devastating and irreversible damage to the planet. Reliable measurements make it clear that we will easily cross this threshold in the near term at our current rate of CO2 emissions. So in an effort to avoid it, the International Energy Agency has calculated a global "Carbon Budget" that accommodates the burning of merely one-third of existing fossil fuel reserves by 2050. Put differently, at least two-thirds of fossil fuel reserves will not be monetized if we are to stay below 2°C of warming—creating "stranded carbon assets."

Oddly, Gore and Blood don't have the conviction that these assets are going to get marked down via normal processes, so they go on to urge investors to a) pressure Boards, 2) divest carbon and 3) invest in renewables.  They're scaremongering and urging people to action.  They might as well have commercials running on late night cable along with all the "BUY GOLD" hokum.

The truth is that investors, companies and Board of Directors have been assiduously evaluating just this question for many years now and their informed decisions are contrary to ole' Chakra Al's view.  Certainly developing countries like China and Brazil have been plowing tens of billions into hydrocarbon assets.  Capital is flowing into - and being rewarded handsomely - "tight" hydrocarbon extraction, both oil and gas.  Previously skeptical and environmentally rigid nations are warming to fracking and more exploration.  Even voters are realizing the value of hydrocarbons to their economies and are voting out environmental zealots (i.e. Australia).

Al Gore seems to think he's educating people and doing them a favor.  Trust me, people with alot more money and alot more brains have been on the case for a long time, and they think Al is simply wrong - they are plowing time, energy and money into hydrocarbon energy at an accelerated pace.

Gore and Blood's piece amounts to a rearguard salvo after the battle has been lost.  Nice try at a scare on Halloween fellas, but the world has moved on.