The Oil Industry Has a $500 Billion Bubble Problem

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Prices are soaring. But if Big Oil takes the bait in pursuit of profits, it could end up screwed.

a mirage as governments finally get their act together on climate changefrom Carbon Tracker, a London-based

think tank, found that if the industry takes the bait and tries to wring more oil and gas out of the ground, it could end upFrom a business standpoint, the industry clearly sees dollar signs with high prices and rebounding demand. But could create whatnightmare scenario if they go ahead with projects which deliver oil around the time that demand starts to declineWorld leaders are well aware at this point that the end of the fossil fuel era needs to start, and soon.

“As the world transitions away from oil and gas, [companies] run the risk of destroying significant value as a result of failing to deliver the expected return results,” said Mike Coffin, co-author of the report. “For investors, this means ensuring that they engage with companies and that companies are ultimately stewarding that capital appropriately, and are not investing and wasting money on products that run the risk of becoming stranded assets as demand falls away in the next decade.

 

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