Solarsense's Snape sees sense in solar
Free-falling oil prices and OPEC's aggressive cartel strategy have signalled the beginning of the end for fossil extraction. Our argument; pull UK money out of oil without delay.
The Guardian reports that Copenhagen is withdrawing the city's £700m investment fund out of coal, oil and gas holdings.
The paper says if the Mayor's proposal is approved, the Danish capital will become the country’s first investment fund to sell its stocks and bonds in fossil fuels. The moves hint at an urgent realisation; money in fossil fuels is now dead cash.
The Guardian writes that some 80 per cent of the world’s known coal, 50 per cent of its oil and 30 per cent of its gas reserves will have to stay in the ground if dangerous global warming is to be avoided. Remember, in COP21, the world has endorsed this reality.
These metrics are widely understood within the solar lobby. But there are yet deeper reasons to switch financial support from fossil to solar.
Oil prices are falling because OPEC, the cartel of oil producing countries including Saudi Arabia and Venezuela, is deliberately keeping prices low to maintain market share.
The result of this aggressive strategy? It stops being commercially viable for other countries to extract oil competitively. If the OPEC price is $30 per barrel, and the price of production in remote, dangerous and expensive competing locations is $30 per barrel, why would any firm take the risk to break new ground?
A telling example surrounds Brazil's pre-salt oil reserves. 'It’s one thing when oil is $130 a barrel, but a very different situation at $60 a barrel,” a government source told this Guardian report. “Brazilians were expecting to export pre-salt oil and earn a great deal of money. But it’s actually very expensive to extract and also very dangerous because of the environmental risks.”
With all this in mind, ongoing investment in oil feels tantamount to madness. Achim Steiner, UNEP Executive Director and Under-Secretary-General of the United Nations, writes that tackling the two biggest emitters of greenhouse gases, energy and land use, will require the redirection of $1 trillion per year until 2050.
It's imperative this realignment of funds gets underway now.
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