Biden Administration, Wall Street Impede New Oil and Gas Investments
The oil and gas industry is looking to the future with caution, and plans for expanding production of fossil fuels appear to be limited.
At the Enercom Energy Investment conference in Denver this week, the oft-repeated mantra among CEOs was that they will use the bulk of their profits to pay down debt and return money to investors through stock buybacks and dividend payments, with significantly less emphasis on major new capital investments. In addition, executives highlighted their commitment to environmental, social, and governance (ESG) principles for producing cleaner energy and addressing social justice issues.
As Democrats in Congress prepare to allocate $369 billion via the Inflation Reduction Act to subsidize electric cars and wind and solar energy, America’s oil and gas producers face an uphill battle. A shrinking supply of capital, a hostile regulatory environment, and shortages of materials and labor are creating significant hurdles against new drilling.
“I don’t want subsidies for our industry; we don’t need subsidies in our industry,” Chris Wright, CEO of Liberty Energy, told The Epoch Times. “We just don’t want barriers standing in the way of us providing the energy that people in the world want and need.”
Wall Street Steps Back from Fossil Fuel Financing
Among those barriers are banks and investors cutting back financing for new fossil fuel projects, due to both economic and political factors. In line with the ESG movement, 114 banks, collectively representing 38 percent of global banking assets, signed the Commitment Statement of the UN Net-Zero Banking Alliance, in which they pledged to “transition” their lending portfolios to reduce greenhouse-gas (GNG) emissions and reach net-zero GNG emissions by 2050 or sooner. American banks that signed this pledge include JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley.
Another global money club, Climate Action 100+, is “an investor-led initiative to ensure the world’s largest greenhouse gas emitters take necessary action on climate change.” It has 700 investment companies as members, representing $68 trillion in assets, and includes asset managers such as BlackRock, State Street, Fidelity, Invesco, Fisher, and PIMCO; insurers such as Aegon, Allianz, and AXA; state pension funds like CalPERS, CalSTRS, New York State Common Retirement Fund, New York City Pension Funds, and Maryland State Retirement and Pension System; and university endowment funds from Harvard, MIT, and University of Rochester, among others.
In response, West Virginia and Texas recently barred banks that discriminate against fossil fuel companies from getting municipal banking contracts in their respective states. On July 28, for example, West Virginia State Treasurer Riley Moore announced that JPMorgan, Goldman Sachs, BlackRock, Morgan Stanley, and Wells Fargo would be placed on a Restricted Financial Institution List because they “are engaged in boycotts of fossil fuel companies, according to new state law, and are no longer eligible to enter into state banking contracts.”
“Each financial institution placed on the Restricted Financial Institution List today has published written environmental or social policies categorically limiting commercial relations with energy companies engaged in certain coal mining, extraction or utilization activities, rather than considering the financial or risk profile for each company,” Moore said in an official statement. “While the ‘Environmental, Social and Governance’ or ‘ESG’ movement might be politically popular in California or New York, financial institutions need to understand their practices are hurting people across West Virginia.”
Last week, 19 state attorneys general sent letters to BlackRock CEO Larry Fink declaring that his efforts to impose the ESG agenda on companies whose shares it owns run counter to its fiduciary obligations to pensioners, intentionally harm America’s energy companies, and, to the extent that financial companies collude in this effort, raise anti-trust concerns. BlackRock is the world’s largest asset manager, with approximately $10 trillion in assets under management.
In a letter to Fink, Arizona Attorney General Mark Brnovich wrote, “BlackRock appears to use the hard-earned money of our states’ citizens to circumvent the best possible return on investment, as well as their vote. BlackRock’s past public commitments indicate that it has used citizens’ assets to pressure companies to comply with international agreements such as the Paris Agreement that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States.”
Global ESG Clubs Leave Oil and Gas Industry ‘Starved for Capital’
Oil and gas executives say the push to divest from fossil fuels by global organizations like Climate Action 100+, the UN Net-Zero Banking Alliance, and the Glasgow Financial Alliance for Net Zero is having its intended effect.
“Our industry is being starved for capital,” Anthony Gallegos, CEO of Independence Contract Drilling, told The Epoch Times, noting that banks are increasingly unwilling to provide revolving lines of credit or asset-based lending facilities [ABLFs] to the oil and gas industry. “There’s probably a third as many banks today that are willing to provide revolvers and ABLFs to [oil and gas] service companies compared to what there would have been six years ago,” he said. “There are investors, there are endowments, there are limited partnerships, some of which have historically invested in energy, that today have a mandate that they cannot make investments in fossil fuel industries.”
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Climate Change, Is t Impacting Key European crops
A search of Google news for the phrase “climate change,” today turns up a story in Trade Finance Global (TFG) which claims climate change is harming key European crops, exacerbating a food crisis created by Russia’s invasion of Ukraine. This claim is wrong. In the story, TFG made the all too common, yet scientifically unjustifiable, mistake of conflating a single season’s suboptimal weather with long-term climate change. Data shows over the past 30 years, the period over which climate change is measured, each of the crops discussed in the TFG article have increased dramatically.
In the article titled, “‘Heatflation’ warning as 2022 EU crop harvests affected by climate change,” TFG reporter Lisa Mendes writes:
As much of Europe bakes in the latest heatwave, fears are growing about what’s being dubbed ‘heatflation’ – climate change-driven staple crop losses that could see already inflated food prices reach new highs this autumn, deepening the cost-of-living crisis.
A lack of spring rainfall, combined with drought and freak storms, have spoiled crops in Italy, France, and Spain, with many farmers and agricultural associations warning that this year’s continental crop yields will be significantly smaller than usual.
Already, continental yields of crops such as soybean, sunflower, and maize were 9 percent below average, according to an EU bulletin published last month.
Attributing a single year’s weather events and crop declines to climate change is illegitimate. As explained in numerous previous Climate Realism posts, here and here, for example, weather is not climate.
The National Oceanic and Atmospheric Administration clearly defines weather as “[R]eflect[ing] short-term conditions of the atmosphere while climate is the average daily weather for an extended period of time at a certain location. … Weather can change from minute-to-minute, hour-to-hour, day-to-day, and season-to-season.”
The standard period for recognizing a change in climate is an average change or trend in conditions for a location or region of 30 years or more, as defined by the World Meteorological Organization.
There has been no consistent trend or change in Europe’s climate over the past 30 years. Also, although farmers may be reporting below average production for the crops discussed in the TFG article this year, as history shows, and as any long-time farmer or farm family could tell Mendes if she had asked, it is common for crop production to wax and wane along with variable weather conditions from year to year. A single down year for crop production is not evidence of climate change.
Data from the U.N. Food and Agriculture Organization undermine any claim that climate change has negatively impacted the production of corn (maize), soybeans, or sunflowers across Europe amid modest warming since 1990. FAO’s crop tracker finds for Europe, between 1990 and 2020:
Maize production increased by more than 127 percent;
Soybean production grew by more than 218 percent;
Sunflower production expanded by more than 184 percent.
Europe crop production
Europe is suffering under a heatwave and associated drought. However, such events have been common throughout the continent’s history. A single year of hot, dry weather conditions does not constitute proof of climate change, nor does a single year’s crop decline. Weather and crop production are both notoriously fickle, as Mendes and TFG should know. Real world data indicate long term weather conditions have not significantly changed across Europe, and crop production has, in fact, increased. The idea that climate change is causing “staple crop losses” is just false.
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Weather, Not Climate Change, Caused Yellowstone Flooding
An article in the Billings Gazette claims that severe flooding in Yellowstone National Park will become more common and frequent due to climate change. This claim is false. Data does not show any increase in flood events amid modest warming. The atmospheric river event this spring was not unprecedented, and weather events themselves cannot be proof of climate change.
The article, “The Yellowstone flood was a historic disaster. Climate change means it won’t be the last,” written by Casper-Star Tribune reporter Nicole Pollack, propagates unsubstantiated claims from climate alarmists. She neglects to mention any of the conflicting data.
Pollack says the odds of having an extreme flooding event are higher today than they ever have been. She quotes several scientists who repeat the same idea, that climate change makes “bigger, faster” floods more likely than before. Besides this being an unfalsifiable and untestable claim, it also conflicts with what the United Nations Intergovernmental Panel on Climate Change (IPCC) says about flooding.
Climate at a Glance: Floods points out that the IPCC says there is only “low confidence” that there is even a “sign” of change to the frequency or severity of flooding. It has “low confidence” that climate change impacts flooding at all. Some regions of the world have seen more flooding, others less, it cannot be attributed to global climate trends.
A study looking at flooding in the U.S. and Europe in the Journal of Hydrology says that “The number of significant [flooding] trends was about the number expected due to chance alone.”
Despite population growth in areas near water sources like rivers and lakes, the cost of flooding the U.S. as a proportion of GDP has gone down over time. (See Figure 1 below)
Two events coincided to create this June’s Yellowstone flooding: the heavy rain due to an atmospheric river event, and preexisting late-season snowpack. Since global warming is supposed to reduce springtime snow extent, it can’t be blamed for the latter.
As for the former; atmospheric river events, as explained by meteorologist Anthony Watts in a Climate Realism post, “Science Demonstrates Media Claims the Washington and British Columbia Floods Were Caused by ‘Climate Change’ Is False,” are not always caused by warming, either. Such was the case with flooding in British Columbia during the fall of 2021, where weather was cool to normal along the path of the atmospheric river. The same can be said for Yellowstone—a cool spring was present when the river formed. These are localized weather events, not climate, which is an average of weather over a 30-year period.
Also notable is that most of the flooding caused by this most recent atmospheric river was in Montana, where the precipitation trend has been relatively stable since 1900, according to data from the National Oceanic and Atmospheric Administration. The same dataset shows that the state record for highest annual precipitation is still held by the year 1927.
Every time an interesting or record-breaking weather event happens, the media and alarmists flock to attribute it to climate change, regardless of what the long-term data show. As opposed to educating the public, all this kind of coverage does is confuse and frighten people. The goal is likely to scare people so badly, they will end up supporting government policies that are supposed to somehow stop bad weather from happening. Climate alarmism can only exist where real data is ignored or hidden. In this case, data on flooding simply does not back up the story.
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96% of U.S. climate data is corrupted
A new study, Corrupted Climate Stations: The Official U.S. Surface Temperature Record Remains Fatally Flawed, finds approximately 96 percent of U.S. temperature stations used to measure climate change fail to meet what the National Oceanic and Atmospheric Administration (NOAA) considers to be “acceptable” and uncorrupted placement by its own published standards.
The report, published by The Heartland Institute, was compiled via satellite and in-person survey visits to NOAA weather stations that contribute to the “official” land temperature data in the United States. The research shows that 96% of these stations are corrupted by localized effects of urbanization – producing heat-bias because of their close proximity to asphalt, machinery, and other heat-producing, heat-trapping, or heat-accentuating objects. Placing temperature stations in such locations violates NOAA’s own published standards (see section 3.1 at this link), and strongly undermines the legitimacy and the magnitude of the official consensus on long-term climate warming trends in the United States.
“With a 96 percent warm-bias in U.S. temperature measurements, it is impossible to use any statistical methods to derive an accurate climate trend for the U.S.” said Heartland Institute Senior Fellow Anthony Watts, the director of the study. “Data from the stations that have not been corrupted by faulty placement show a rate of warming in the United States reduced by almost half compared to all stations.”
NOAA’s “Requirements and Standards for [National Weather Service] Climate Observations” instructs that temperature data instruments must be “over level terrain (earth or sod) typical of the area around the station and at least 100 feet from any extensive concrete or paved surface.” And that “all attempts will be made to avoid areas where rough terrain or air drainage are proven to result in non-representative temperature data.” This new report shows that instruction is regularly violated.
https://climaterealism.com/2022/07/study-96-of-u-s-climate-data-is-corrupted/
***************************************My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
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Jim Hansen and his twin
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