Fossil fuels as a financial bubble has oil companies wondering if they'll flame out
From gold to dot-coms, 1630’s Dutch tulips to 2000’s U.S. real estate, again and again the world’s economies have been sucked into a period of intense enthusiasm followed by devastating financial losses.
Now some financial analysts are asking whether fossil fuels, the stuff from which the world derives about 97 percent of its energy, is a financial bubble in the making.
Termed the carbon bubble, the theory goes that as the world’s governments attempt to slow global warming by cutting carbon emissions, vast quantities of oil, natural gas and coal will be abandoned underground in favor of renewable sources like wind and hydro power. When that happens, Texas companies like Exxon Mobil, Hunt Oil and Energy Transfer Partners could watch their value plummet as the world’s thirst for fossil fuels abates.
The proposition has been circulating for years amongst environmental activists and fringe groups of investors. But now the likes of HSBC and the Bank of England have assigned teams to assess the theory’s potential, forcing coal and oil companies to take notice.
Read more: http://www.dallasnews.com/business/energy/20150513-fossil-fuels-as-a-financial-bubble-has-oil-companies-wondering-if-they-ll-flame-out.ece
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