Story of the Week: October 2021

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October 30, 2021 — Let's be clear — Canada should not
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October 30, 2021 — Let's be clear — Canada should not "move past" oil and gas

Let's be clear — Canada should not "move past" oil and gas by Bill Bewick Appeared in the National Post on October 22, 2021 Gina's Thoughts Bill Bewick's article succinctly outlines why Canada should not move past oil and gas. Canada has the third-largest proven reserves in the world. Canada is a leader in responsible oil and gas production. Growing global demand for oil and gas should be met by Canadian companies and not "Russia, Saudi Arabia, and other unjust regimes". Canada is also a leader in environmental performance in sectors like oil and gas. And in addition to all of the above, a strong oil and gas sector in Canada is an enormous contributor of taxes and royalties to governments - monies that pay for countless public services. "Neither the productivity nor the exports will be replaced by far less profitable solar and wind power, for which Canada has no special advantages". Every leader, director, or member of University governing councils, public pension plans, or any other institution contemplating divestment - and indeed every Canadian - should read this article, commit the facts to memory, and unapologetically promote Canada's oil and gas sector.
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October 23, 2021 — Energy Crisis 2021: How Bad Is It. And How Long Will It Last?
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October 23, 2021 — Energy Crisis 2021: How Bad Is It. And How Long Will It Last?

Energy Crisis 2021: How Bad Is It. And How Long Will It Last? by Christopher Helman Appeared in Forbes on October 19, 2021 Gina's Thoughts The author states that "the world has run headlong into an energy crisis" and gives a combination of factors that led the world into "this mess". The decade-long fossil fuels divestment movement is one of these factors. "The ESG and carbon divestment craze has so demonized fossil fuels that institutional investors and governments have cut them out of portfolios entirely, and have instead been flowing capital to more socially acceptable low-carbon alternatives." Therein lies the problem: renewable energy has not proven sufficiently scalable to pick up the slack and there has been chronic underinvestment in the Canadian hydrocarbon sector. As economist Ed Yardeni put it, "Renewables aren't ready for prime time. The rush to eliminate fossil fuels is causing their prices to soar and disrupting the overall supply of energy." Hydrocarbons are going to be a large and reliable part of the energy mix for a long time to come. It is time to invest in the Canadian hydrocarbon sector, not divest.
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October 16, 2021 — Hedge funds cash in as green investors dump energy stocks
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October 16, 2021 — Hedge funds cash in as green investors dump energy stocks

Hedge funds cash in as green investors dump energy stocks by Laurence Fletcher and Derek Brower Appeared in The Financial Times on October 7, 2021 Gina's Thoughts A section on the InvestNow website titled "Why Divestment is Wrong" reads, "The usual consequence of divestment is often a mere transfer of ownership of divested shares from one investor to another." Or in other words, for every seller of shares there's a buyer of shares. In this case the "ESG-embracing" big institutions are the sellers of oil and gas shares and the buyers are hedge funds. "Hedge funds have been quietly scooping up the shares of unloved oil and gas companies discarded by environmentally minded institutional investors, and are now reaping big gains as energy prices surge." For the sellers, big returns are being left on the table, demand for hydrocarbons is increasing, and underinvestment in and divestment from the hydrocarbon sector is stifling innovation and affecting supply. All of these consequences underscore the need for increased investments in the sector, not divestment.
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October 9, 2021 — Quebec pension giant Caisse to exit remaining oil-producing assets, setting up $10-billion green fund
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October 9, 2021 — Quebec pension giant Caisse to exit remaining oil-producing assets, setting up $10-billion green fund

Quebec pension giant Caisse to exit remaining oil-producing assets, setting up $10-billion green fund by Jeffrey Jones Appeared in The Globe and Mail on September 28, 2021 Gina's Thoughts "Canada's second-largest pension fund will jettison its oil-production holdings, which make up 1 per cent ($4 Billion) of its portfolio, by the end of next year to keep it from contributing to growth in global supplies." What the Caisse failed to measure in this divestment decision is demand. Demand for oil and gas has risen over the past "decade of divestment" and is expected to keep rising. If the oil and gas that society wants and needs is not provided by Canadian listed private-sector companies with their exemplary environmental standards, it will come from state-owned suppliers from such countries as Saudi Arabia, The Gulf States, Russia and Iran. You can be sure these suppliers won't maintain the high standards employed here in Canada. The result will be a dirtier environment, not a cleaner one. The Caisse should be investing in the growth of Canadian hydrocarbon supplies, not divesting from them.
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October 2, 2021 — Gas crisis shows why we must stop demonising fossil fuels
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October 2, 2021 — Gas crisis shows why we must stop demonising fossil fuels

Gas crisis shows why we must stop demonising fossil fuels by Merryn Somerset Webb Appeared in The Financial Times on September 24, 2021 Gina's Thoughts I scream, you scream, we all scream for ice cream! The chain of events that the author writes about is this: First, natural gas price increases make the fuel unaffordable for two of the UK's big industrial fertiliser plants, forcing them to shut down (natural gas is the feedstock for ammonia, which is used to make fertiliser). Carbon dioxide is captured from ammonia production, so the plant shutdown creates a shortage of CO2 in the UK. CO2 is used to make dry ice that supermarkets use to keep food cool in their delivery vans - so no CO2, no ice cold delivery vans, and no ice cream! The author contends that we can live without ice cream but what about the things that really matter? Oil and Gas fuel every other industry and the ice cream example shows just how reliant we are on fossil fuels. InvestNow agrees with the author's message that "we should stop demonising fossil fuels - evangelising about ESG, following the trend to divest from shares in oil companies and kiboshing new projects with regulation, high financing costs, and the like." The focus should be on investment and innovation within the energy sector. A decade of ESG and the divestment movement have only raised costs for all: Hydrocarbons still make up 80 per cent of the global energy mix and demand is rising - a decade of ESG and divestment nonsense has done nothing except raise costs, hurt competitiveness, drive off investment and kill jobs. If we invest in Canadian oil and gas instead of divesting from it, we can have our ice cream and eat it too.
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