This Is The Beginning Of The End Of The Fossil Fuel Industry

Oil and coal companies are either going to have to invest in renewables, or perish.

02/12/2015 11:41 PM AEDT | Updated 03/12/2015 3:04 AM AEDT

The fossil fuel industry is at a crossroads.

Oil and gas giants such as Royal Dutch Shell, ExxonMobil and BP continue to reap stupendous profits from selling products that contribute to the high levels of carbon emissions causing climate change. Like the tobacco industry before it, these companies have poured money into lobbying and misinformation campaigns to escape restrictive regulations.

But, as world leaders gather in Paris for the month-long COP21 climate talks, the fossil fuel industry's future is in jeopardy. There may be an abundant supply of oil, gas and coal and -- at least for now -- a strong demand for these products, but there is a growing urgency among business leaders and policymakers to stem usage before the effects of global warming worsen dramatically.

“We are going to look back at some point in the future and see 2015 as a real turning point for the industry,” Andrew Logan, director of oil and gas program at the sustainable business nonprofit Ceres, told The Huffington Post. “Either companies will see the writing on the wall and realize that their business-as-usual approach is a fool’s errand -- that’d be the optimistic outcome -- or they up doubling down on the business-as-usual approach and end up sowing the seeds of their own financial demise down the road.”

The fossil fuel industry's centuries of pumping carbon emissions into the air may finally be getting snuffed out.

Oil prices have been volatile this year. A glut of oil, driven largely by the increased production in the United States, sent the price per barrel of crude plummeting. The price of West Texas Intermediate crude was just $41.85 per barrel on Dec. 1. In a note to clients on Nov. 19, Goldman Sachs warned investors that oil could drop as low as $20 per barrel.

That has left Big Oil financially vulnerable. Profits sank across the industry. Oil giants have been forced to scale back costly research projects. In September, Royal Dutch Shell called off drilling exploration in the Alaskan Arctic.

“We’re at a time in the history of the industry where most companies still have a lot of projects on the books that are older, cheap and throwing off a lot of cash,” Logan said. “But they have nothing more to invest in other than things that are expensive and high-carbon. The industry has to decide whether it takes the money it’s generated and plows it back into the high-carbon, risky assets, or it does something else with it that’ll get it on a different path.”

Coal, still the biggest generator of electricity in the U.S., hasn’t fared much better. Industry giant Alpha Natural Resources went bankrupt in August. Though consumption remains high in China, the infamously smog-choked country has begun cracking down on coal. A growing number of universities and cities -- including New York -- are divesting from coal.

"Either companies will see the writing on the wall and realize that their business-as-usual approach is a fool’s errand -- that’d be the optimistic outcome -- or they up doubling down on the business-as-usual approach and end up sowing the seeds of their own financial demise down the road."

“It’s definitely the beginning of the end,” Naomi Ages, a climate campaigner and attorney at GreenPeace USA, told HuffPost. “From a financial side, the fossil fuel industry is seeing it’s not sustainable to continue with this business model. They’re going to have to invest in renewables.”

But it’s not enough. Global demand for oil continues to grow. And, even with pledges from 150 countries to cut emissions, the International Energy Agency still projects that global temperatures would rise by 2.7 degrees above pre-industrial levels by 2100. Many scientists predict that an increase more than 2 degrees Celsius, or 3.6 degrees Fahrenheit, would make the climate unsustainable for human civilization as it is today.

“Science tells us that there is one path for us to be able to have a stable planet and a safe stable economy, and that is to get onto a below 2 degree path -- that is fundamental,” Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, said in a statement last week.

That’s why a strong deal in Paris is needed to accelerate the shift to a low-carbon economy, powered by renewables such as solar, wind and water.

As it is, the movement to make that transition has gained steam. Big banks are slashing lending to coal mining companies. The number of companies putting a price on their own carbon emissions, thereby creating a financial incentive to wean off fossil fuels, has tripled since last year. An unlikely coalition of corporate giants -- including Goldman Sachs, Johnson & Johnson, Starbucks and Walmart -- signed a commitment to transition 100 percent to renewable energy, with several setting a goal of under a decade.

The clock is ticking. 

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  • Donald "It's Cold Outside" Trump
    "It’s snowing & freezing in NYC. What the hell ever happened to global warming?" -- March 2013

    “I believe in clean air. Immaculate air. But I don't believe in climate change." -- Sept. 2015

    "It's really cold outside, they are calling it a major freeze, weeks ahead of normal. Man, we could use a big fat dose of global warming!" -- Oct. 2015
  • Ben "This Always Happens" Carson
    Erik Kabik Photography/ MediaPunch/MediaPunch/IPx
    “There’s always going to be either cooling or warming going on. As far as I’m concerned, that’s irrelevant. What is relevant is that we have an obligation and a responsibility to protect our environment." -- Nov. 2014

    "Of course there's climate change. Any point in time, temperatures are going up or temperatures are going down. Of course that's happening. When that stops happening, that's when we're in big trouble." -- Sept. 2015
  • Marco "Oh But The Jobs" Rubio
    “We are not going to destroy our economy, make America a harder place to create jobs, in order to pursue a policy that will do nothing, nothing to change our climate, to change our weather." -- Sept. 2015

    "America is not a planet." -- Sept. 2015
  • Ted "You Climate Blasphemers, You" Cruz
    “If you look at satellite data for the last 18 years, there’s been zero recorded warming. The satellite says it ain’t happening.” -- August 2015

    “Climate change is not science. It's religion." -- Oct. 2015
  • Jeb "Well Maybe, But I'm A Republican" Bush
    "The climate is changing, whether men are doing it or not." -- June 2015

    “I don't think it's the highest priority. I don’t think we should ignore it, either." -- August 2015
  • Carly "I Worked With Scientists And They're All Wrong" Fiorina
    "I believe if you're going to go to science, you need to read the fine print. And here's what the scientists say: A single nation acting alone can make no difference at all." -- Sept. 2015

    “The only answer to this problem, according to the scientist, is a three-decade global effort, coordinated and costing coordinated effort. It's impossible, are you kidding? A three-decade effort, costing trillions of dollars, coordinated with current technology? It’ll never happen.” -- Sept. 2015
  • Mike "Um, Kaboom" Huckabee
    "Science is not as settled on that as it is on some things.” -- June 2015

    "A volcano in one blast will contribute more than a hundred years of human activity." -- August 2015
  • Chris "Sure, But Nah" Christie
    "I think global warming is real. I don't think that's deniable. And I do think human activity contributes to it."* -- May 2015

    *But Christie has adamantly opposed New Jersey joining into a multi-state greenhouse gas initiative, calling it "a completely useless plan.” -- Sept. 2014
  • John "It's Your Kids' Problem" Kasich
    “We don’t want to destroy people’s jobs, based on some theory that is not proven.” --August 2015

    "Do I believe there is something called climate change? I do. Do I think that human beings affect it? I do. How much? Not enough for me to go out and cost somebody their job." -- Oct. 2015
  • Rand "Doesn't Really Know" Paul
    "Not conclusive." -- April 2014

    "Not sure anybody exactly knows why." -- April 2014

    "Alarmist." -- April 2014

    "I don't want to shut down all forms of energy such that thousands and thousands of people lose jobs.” -- April 2015

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