May 7, 2022 - Which energy assets will be stranded?

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May 7, 2022

Which energy assets will be stranded? by Terence Corcoran
Appeared in the Financial Post on May 4, 2022

Gina's Thoughts

Corcoran turns the concept of stranded assets on its head.  Stranded assets is a term Mark Carney, former Governor of the Bank of Canada and the Bank of England used to describe coal, oil and gas that should be divested of and left in the ground.  "If fossil fuels persist and continue to dominate the world energy market, other assets could end up stranded, particularly energy assets that are already non-viable and cannot survive today without massive injections of state funding."  US investment giant Warren Buffett is betting big on oil and gas and he is not alone.  "In March, the Financial Times reported that global banks poured US $750 billion into fossil fuel finance.  On the markets, the S&P/TSX Capped Energy Index has doubled over the last year from 120 to 240 and rose another nine points to 250 on Tuesday -- its highest point since 2014 -- after Imperial Oil nearly tripled its quarterly profits and Brent futures hit US$106 a barrel.  In the U.K., the Conservative government continues to talk of boosting North Sea oil and gas activity."  Canadian oil and gas companies have been reporting very promising financial results.    With growing energy demand and an underinvestment in new supply, fossil fuels are nowhere near being obsolete or stranded.

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