Private Equity Firms Ploughing Billions Into Fossil Fuels, Analysis Reveals (theguardian.com) 23
Private equity firms are using US public sector workers' retirement savings to fund fossil fuel projects pumping more than a billion tonnes of greenhouse gas emissions into the atmosphere every year, according to an analysis. From a report: They have ploughed more than $1tn into the energy sector since 2010, often buying into old and new fossil fuel projects and, thanks to exemptions from many financial disclosures, operating them outside the public eye, the researchers say. In many cases they are mortgaging workers' futures by taking the money they have put away for old age and investing it in assets that risk serious damage to the climate, the report claims.
"Public sector workers' money, through national, state, and retirement pensions, provides much of the capital for private equity firms' energy investments, but there is limited disclosure to the pension fund managers that the deferred earnings of their beneficiaries have potential climate impacts," it says. Researchers at Americans for Financial Reform Education Fund, Global Energy Monitor and Private Equity Stakeholder Project assessed the holdings of 21 private equity firms, overseeing a combined $6tn in assets under management. Together, the analysis found that the 21 firms were funding projects responsible for releasing more than 1.17bn tons of CO2 equivalent (tCO2e) a year.
"Public sector workers' money, through national, state, and retirement pensions, provides much of the capital for private equity firms' energy investments, but there is limited disclosure to the pension fund managers that the deferred earnings of their beneficiaries have potential climate impacts," it says. Researchers at Americans for Financial Reform Education Fund, Global Energy Monitor and Private Equity Stakeholder Project assessed the holdings of 21 private equity firms, overseeing a combined $6tn in assets under management. Together, the analysis found that the 21 firms were funding projects responsible for releasing more than 1.17bn tons of CO2 equivalent (tCO2e) a year.
Climate? What climate? (Score:2, Insightful)
It's all about the money, sonny! Let the future take care of itself - we've got yachts to buy and early retirements to fund! Tomorrow? What's that?
They Work (Score:1, Insightful)
There's a reason to invest in Things That Work.
Yeah "renewables" are cool.... but most should be called "unreliables."
They NEED the backups. The "renewable" backup is HYDRO.
NUCLEAR would be good, too - a decent breeder reactor setup would be great!
But failing that, it's still down to carbon to deal with the load.
It might not be what many want to hear, but plugging ears changes NOTHING.
I am NOT saying "petrochemicals/coal forever" but... recognize that even in a transition away from them, we'll need them fo
Re:They Work (Score:5, Informative)
Renewables get more reliable the more of them you have. The current gen offshore wind farms are starting to rival nuclear for reliability in Europe. Exceeding it in some cases, due to not having so many single points of failure.
But that's besides the point. Fossil fuels are causing problems, and we need to get off them as soon as possible. If they are looking like good investments, then clearly the system has failed to properly price them. Costs must be getting externalized.
Re: (Score:2)
> Costs must be getting externalized
That would be the cost of artificial sequestration to extract the released carbon from the atmosphere. It's a huge expense that we're just ignoring.
When hydrocarbons are pulled out of the ground, they should be taxed not just to recover the carbon afterwards, but more on top of that to cover the removal of the last ~100 years of unfettered CO2 release.
Do that and you'll get the true market price on oil.
Re:They Work (Score:4, Informative)
> There's a reason to invest in Things That Work.
> Yeah "horseless carriages" are cool.... but most should be called "unreliables."
> They NEED the horses as a backup. The "horseless" backup is STEAM.
> It might not be what many want to hear, but plugging ears changes NOTHING.
> I am NOT saying "horsepower forever" but... recognize that even in a transition away from them, we'll need them for a while.
> I'd LOVE to be able to rely on non-equine sources... alas, we are NOT there yet - and not even close.
There's no need to be such a Luddite. Plenty of countries are going to 100% renewables. Batteries are so cheap and so EFFECTIVE that they can fully replace and improve on the performance of peaker plants, both in physical performance and financial.
It might not be what you want to hear, but plugging ears changes NOTHING.
The world is going renewable - the world HAS to go renewable. Because fossils are not renewable, they'll run out, and destroy us on their way out the door.
We are seeing the first effects in storms, droughts, wildfires, floods. No need to go down that road - renewables are cheap and abundant.
Re: (Score:3)
There's a reason to invest in Things That Work.
Things that work in the long term, right?
Right?
Selling out the future for shiny shiny today is unsustainable by definition.
Re: They Work (Score:2)
Strange take (Score:5, Insightful)
The source of funding for the fossil fuel industry is not private equity. It's all of us. It is everybody that drives a gas/petrol vehicle, heats their home with natural gas, or consumes hydrocarbons in any of the ways that they power our economies. This article is a stupid attempt to cluck and shame entities that provide capital to business that are satisfying a demand that we all help to create.
PE is also one of the largest funders of utility-scale solar and wind projects in the developed and developing world.
Re: (Score:2)
I rate it as... So what?
Public employee pension managers financial responsibility is only to the people who pay into those pensions, not whiny elitists. They invest money solely to fund the retirements of their members. If virtue signalers want it to change, I suggest they improve ROI on their preferred projects and quit trying to shame the money managers who are working to support retirees on fixed incomes.
Re: (Score:2)
This kind of shaming is what you do when you know you are losing in the marketplace.
Ironically, there is a profit motive here also, driving the media coverage. Everything has to do with money. Anyone believing that virtue has anything to do with this is not worth listening to.
Re: Strange take (Score:2)
Another lame Guardian article from msmash (Score:5, Informative)
Pension managers invest pension funds so they can pay pensions in the future. That's their job, and the employees rely on them to do it well.
Private equity funds provide a vehicle for investing in things through private equity fund managers. That's their job, and the private equity investors rely on them to do it well.
When you buy into a private equity fund you know full well what type of investments they will be making, it's all disclosed up front. So this notion that pension fund managers are unaware of what they are buying is nonsense. The way this article is spun it's like the big bad private equity funds are somehow just grabbing pension money somehow and funneling it to their pet projects.
Re: (Score:3)
"The report traces a trend of private equity firms swooping in as large oil and gas firms seek to shed older and dirtier assets and the bigger banks increasingly regard them as risky investments. Thanks to limited disclosure rules, regulatory loopholes and complex corporate structures, some of the dirtiest assets have come to be owned by relatively obscure investment outfits, the report says."
So the asset managers do not know what they are buying and these particular assets are especial
I'm a bastard (Score:4, Interesting)
I think we should be going full throttle on weaning humanity off of oil, and spending a lot of money on closed-cycle tech and artificial sequestration... but none of that is happening any time soon.
I have significant investments in the energy sector, majority petrochemical, because what is 'significant' to me is a drop of piss in the ocean compared to the market as a whole. I will never make a difference as an individual and I'm not going to ignore the likely returns.
But give me a politician who will legislate what needs to be done so that everyone is aligned to the same purpose and I not only won't complain about the lost investment potential, I'll vote for them. Enthusiastically.
The Dick Cheney theory (Score:4, Insightful)
This is basically the Dick Cheney theory: he who controls that last 50 million barrels of oil will win control of as much of the Earth as they want. Which includes not really being concerned about the condition of the parts of the Earth they don't want, and not understanding the interconnectedness of all people and regions of the planet.
Re: (Score:2)
50 million barrels? That's about 4 days of U.S. production. Even in a post-apocalyptic world, that's not enough for world domination.
Re: The Dick Cheney theory (Score:1)
The hard, ugly truth is (Score:2)
Every single country uses vast quantities of fermented dinosaur. Countries that can't mine it themselves are holding out fistfulls of cash in order to buy it from some other country. Maybe that will change. Next century. But not anytime soon.
If the civilized world steps back from hydrocarbon extraction and sales, less civilized countries will step in and fill the gap coughRUSSIAcough. The same amount of carbon will get
Point yer pitchforks thataway? (Score:1)
Seems like the play here is to rile up pitchfork yielding enviro mongers and point them at the funding source for evil sources of energy?
juvenile.
they'll burn it all, be prepared to cope with it (Score:1)
That sounds like Eloi talk to me.