A New Golden Age for Big Oil or a Golden Goodbye?
By Andy Rowell
Goldman Sachs, the investment bank at the heart of the global economy still doesn't get it.
The bank, once famously described as "a great vampire squid wrapped around the face of humanity," has a blinkered and fundamentally flawed vision when it comes to the future of the oil industry.
Monday, Bloomberg reported that the hugely influential investment bank had issued a report on the "Seven Sisters," the world's largest oil companies and the bank argues that having "survived a life-changing crisis," the companies are "now poised to reap the rewards."
Having shed costs as prices plummeted, Big Oil is now "in a sweet spot with rising oil prices and low operating costs, leaving them with the biggest cash-flow growth in two decades and boosting earnings," according to Goldman's report.
Goldman's Michele Della Vigna told Bloomberg: "We see this as the start of a new golden age for Big Oil's reborn Seven Sisters," with a "favorable environment for returns in the commodity."
This analysis is dangerously defective in that it seems to envisage a world where Big Oil can carry on drilling unimpeded for decades. But the bank has forgotten about climate change, stranded assets, shareholder actions and the growing number of lawsuits against Big Oil for their role in climate change, widely seen as the #Exxonknew scandal. Indeed, recently Arnold Schwarzenegger said he was planning on suing the companies for "murder."
Schwarzenegger to Sue Big Oil for 'Murder' by @Andy_Rowell of @EcoWatch: https://t.co/5ZSwRmm9YA— Michael E. Mann (@Michael E. Mann)1520960013.0
Furthermore, the website Business Green reported last week about another report, produced jointly by the environmental think tank E3G and the Oxford Sustainable Finance Programme. The top line says it all: "New research released today suggests the only commercially viable future for oil majors in a carbon constrained world is a gradual winding down of their operations or a quick sell off of assets."
The report had simulated a scenario under which the Seven Sisters had to shift their business models in line with what was agreed in Paris—a 2 C warming—which could put a whopping $2.3 trillion of oil and gas industry projects at risk as they are "incompatible" with a 2 C world.
As Business Green reported "It found that oil firms' best chance of commercial survival is to rapidly diversify from fossil fuels into alternative technologies such as renewable energy, and gradually retire upstream fossil fuel assets."
This is far from a new dawn as you can get. "Out of five possible strategies, only 'managed decline' and 'first one out' are commercially viable options for International Oil Corporations," said Business Green.
Indeed, Monday one of the Seven Sisters, Royal Dutch Shell, produced its annual "Sky scenario" report which outlined how we might collectively achieve the Paris agreement emission targets.
"Introducing Sky—an ambitious scenario to hold the increase in the global average temperature to well below 2 C. This requires a complex combination of mutually reinforcing drivers being rapidly accelerated by society, markets and governments," said Shell.
Shell outlines, amongst others, "a change in consumer mindset means that people preferentially choose low-carbon, high-efficiency options to meet their energy service needs," a "step-change in the efficiency of energy use," plus carbon pricing, a massive increase in renewables, and unprecedented expansion of Carbon, Capture and Storage and vast reforestation.
No doubt others will pick apart Shell's plans for being unrealistic and flawed, especially around its own continuing investment in fossil fuels and issues such as carbon pricing and Carbon, Capture and Storage, but the main point is that the company's own analysts believe that the days of Big Oil are numbered.
And pressure is building day by day for the companies to divest: Monday, the Financial Times reported that shareholders are "preparing a renewed push" for Shell to "adopt more ambitious goals for tackling climate change." The company is expected to face a shareholder resolution at its AGM calling for a "radical shift" away from fossil fuels.
Mark Van Baal of Follow This, who is leading the shareholder action, told the Financial Times: "More and more institutional investors want companies they invest in to commit to Paris. Because they foresee that they cannot make a decent return on their capital in a world economy disrupted by devastated climate change."
Maybe someone should tell the Goldman Sachs vampire squid that too, before they advise too many investors about this wonderful new golden era for Big Oil. Because that era is now history.
Reposted with permission from our media associate Oil Change International.
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The ghoulishly named ogre-faced spider can "hear" with its legs and use that ability to catch insects flying behind it, the study published in Current Biology Thursday concluded.
"Spiders are sensitive to airborne sound," Cornell professor emeritus Dr. Charles Walcott, who was not involved with the study, told the Cornell Chronicle. "That's the big message really."
The net-casting, ogre-faced spider (Deinopis spinosa) has a unique hunting strategy, as study coauthor Cornell University postdoctoral researcher Jay Stafstrom explained in a video.
They hunt only at night using a special kind of web: an A-shaped frame made from non-sticky silk that supports a fuzzy rectangle that they hold with their front forelegs and use to trap prey.
They do this in two ways. In a maneuver called a "forward strike," they pounce down on prey moving beneath them on the ground. This is enabled by their large eyes — the biggest of any spider. These eyes give them 2,000 times the night vision that we have, Science explained.
But the spiders can also perform a move called the "backward strike," Stafstrom explained, in which they reach their legs behind them and catch insects flying through the air.
"So here comes a flying bug and somehow the spider gets information on the sound direction and its distance. The spiders time the 200-millisecond leap if the fly is within its capture zone – much like an over-the-shoulder catch. The spider gets its prey. They're accurate," coauthor Ronald Hoy, the D & D Joslovitz Merksamer Professor in the Department of Neurobiology and Behavior in the College of Arts and Sciences, told the Cornell Chronicle.
What the researchers wanted to understand was how the spiders could tell what was moving behind them when they have no ears.
It isn't a question of peripheral vision. In a 2016 study, the same team blindfolded the spiders and sent them out to hunt, Science explained. This prevented the spiders from making their forward strikes, but they were still able to catch prey using the backwards strike. The researchers thought the spiders were "hearing" their prey with the sensors on the tips of their legs. All spiders have these sensors, but scientists had previously thought they were only able to detect vibrations through surfaces, not sounds in the air.
To test how well the ogre-faced spiders could actually hear, the researchers conducted a two-part experiment.
First, they inserted electrodes into removed spider legs and into the brains of intact spiders. They put the spiders and the legs into a vibration-proof booth and played sounds from two meters (approximately 6.5 feet) away. The spiders and the legs responded to sounds from 100 hertz to 10,000 hertz.
Next, they played the five sounds that had triggered the biggest response to 25 spiders in the wild and 51 spiders in the lab. More than half the spiders did the "backward strike" move when they heard sounds that have a lower frequency similar to insect wing beats. When the higher frequency sounds were played, the spiders did not move. This suggests the higher frequencies may mimic the sounds of predators like birds.
University of Cincinnati spider behavioral ecologist George Uetz told Science that the results were a "surprise" that indicated science has much to learn about spiders as a whole. Because all spiders have these receptors on their legs, it is possible that all spiders can hear. This theory was first put forward by Walcott 60 years ago, but was dismissed at the time, according to the Cornell Chronicle. But studies of other spiders have turned up further evidence since. A 2016 study found that a kind of jumping spider can pick up sonic vibrations in the air.
"We don't know diddly about spiders," Uetz told Science. "They are much more complex than people ever thought they were."
Learning more provides scientists with an opportunity to study their sensory abilities in order to improve technology like bio-sensors, directional microphones and visual processing algorithms, Stafstrom told CNN.
"The point is any understudied, underappreciated group has fascinating lives, even a yucky spider, and we can learn something from it," he told CNN.
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