We have seen that divesting from oil companies is a moral question but it is also a sound economic advice as more and more financial analyst are saying, to the point of ” fossil fuels are the next subprime danger “ as I blogged last year.
Now here comes another nail in the coffin. To Marketwatch :
Yes, the overhyped shale boom was supposed to make America energy independent, investors happy. Wrong. Risks are rocketing, volatility increasing. Why? Big Oil is vulnerable, they’re running scared, making bigger, costlier, deadlier and dumber bets that threaten the global economy. Worse, Big Oil is in denial about their high-risk, self-destructive gambles.
(…) Graham says the next bear will hit around election time 2016. The third $10 trillion stock crash early in this new 21st century. Listen to the 15 sell warnings targeting the energy industry:
1. Revenues dropping: “Global oil glut, prices plunging.”
2. Costs rising: “Price of oil tumbling, cost of finding it is not.”
3. Drillers lying: “73 shale drillers telling investors reserves are 163.5 bbl, about five times the 33 bbl the drillers are actually reporting to the SEC.”
4. Investors selling: “Rockefeller oil heirs abandoning fossil fuels, along with 180 other philanthropies, pension funds, and hundreds of wealthy individuals.”
5. Government hurting: “Facing tough state budget, West Virginia needed revenue, letting oil and gas companies frack 14 miles under Ohio River.”
6. Earthquakes fracking: Next door in the “State of Ohio, a study warns that shale-oil fracking has triggered 400 earthquakes.”
7. Risks rising: “Top 20 oil projects put $91 billion of investors money at risk.”
To discover the full list, please go to the original article.
So for 2015, do yourself and your hard earned money a favor : divest from fossil fuels companies before it is too late.
With this money now free, you will find insulating your home a sound and profitable investment. In that old article, I outlined no less than seven reasons why you should do so.
And if you already have done so, why not invest in energy efficiency and renewables companies ? Crowdfunding a solar energy or wind power installation in your home country or overseas might also be a good idea to make money while contributing to the rise of low carbon energy sources.
Image source : Flickr.