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We’ll all pay for turning Big Oil into a pariah

The Telegraph

We’ll all pay for turning Big Oil into a pariah


If nothing else, the apparent contradiction in aims highlights a basic truth about “Big Oil”; like it or not, the world remains overwhelmingly dependent on hydrocarbons for its energy needs; however fast we invest in alternatives, that’s not going to change for some time to come.

Both of Britain’s oil majors, BP and Shell, have ambitious plans to transform themselves into clean energy enterprises, yet to the fury of Extinction Rebellion activists, the bulk of their investment is still heavily focused on oil and gas. As it is, they are arguably not investing nearly enough in hydrocarbons.

Rather it is that the likes of BP and Shell have become pariah companies, and are shunned accordingly in much the same way as the tobacco giants were 20 years ago; once a core holding for any pension or investment fund, few mainstream money managers any longer want anything to do with them.

As with tobacco, their place is increasingly taken by the less squeamish at rock bottom prices.

But despite the superficial parallel, there is a key difference. Tobacco is an indulgence, and serves no useful social purpose. However much we might wish it otherwise, oil and gas will long remain our primary source of life enhancing energy.

And yet the industry is being driven underground by politicians and regulators too cowed to stand up to the hysteria of the climate change activists. The enemy within is almost as bad as the holier than thou pressures from without; oil company boards, together with those of their bankers, are these days stacked with well meaning do-gooders more focused on bowing to the campaigners than the demands of shareholder value.

The history of companies that attempt to jump from one horse to another is not good. Nearly always, value ends up destroyed. Virtually all past attempts by BP at “green investment” have failed.


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