Writing is On the Wall for Fossil Investment, Leggett Warns
When he read that French oil and gas giant Total’s solar subsidiary had signed a deal to provide power to the second-largest metro system in Latin America, energy investment blogger Jeremy Leggett saw the writing on the wall for fossil fuels—and investors still holding their stock.
“I have often been assured by defenders of the energy incumbency in London that ‘renewables can never run the Tube,’” Leggett observes. However, Total’s 100-megawatt solar installation near Santiago, Chile, due to come online next year, will make the South American capital’s metro “the first public transportation system in the world to run mostly on solar energy.” (Editor’s note: Not exactly. Solar will supply about 42% of the energy Metro Santiago needs to move its 2.2 million passengers a day; wind will supply another 20%. Wind has provided much of the power moving Calgary’s LRT cars for more than a decade.)
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But Total is an exception, Leggett argues, in an industry that has so far mostly failed to see that technological history is no longer on its side. Marshalling the evidence of solar prices falling to become “cheaper than any other form of power today” in one recent auction in Dubai, major economies like Germany running on nothing but clean electricity for a day at a time, and renewable jobs and investments eclipsing those in oil and gas, Leggett accuses traditional energy companies of a “wasteful defence” of the status quo.
“A study for the Investor Responsibility Research Center Institute showed that the top 25 investor-owned electric utilities spent over $400 million lobbying against clean energy in the past four years,” Leggett notes. “Had they deployed that capital embracing the future rather than defending the past, they could have accelerated the revolution considerably.”
ExxonMobil, he adds, epitomized the even deeper degree of denial among oil and gas companies: CEO Rex Tillerson recently asserted that ending oil production was “not acceptable for humanity.”
But investors are beginning to react, Leggett notes. When Tillerson made his remark, Anne Simpson, representing California’s giant CALPERS public employees’ pension fund, shot back that “this is their Kodak moment. If they want to still be in business in 30 years, they have to understand the changes that are taking place.”