The Renewable Gas Ask : Part K

Reviewing the range of actors or agencies that will possibly or probably demanding Renewable Gas, it seems that money could make the world of Energy Transition turn around.

12.   The Investment Community (Continued)

Divestment, the process of taking investments away from certain classes of stocks and shares based on a range of criteria, is something that has been happening for decades or longer. Ethical investors have been pulling out of guns, weapons, tobacco, slavery, South Africa and other questionable holdings.

Of late, with the firming up of ambition for action on climate change, a range of shareholders are increasingly keen to make sure their capital is not supporting net carbon dioxide and methane emissions. Especially significant are aggregated investors from financial organisations, such as banks; and social organisations, such as churches, universities and local authorities.

Some may question the actionability of calls for change, but the words have been spoken, and influence will be felt, particularly as data is accumulated over time.

There has been a major exit from coal, and there will likely be an exit from firms dealing with other firms that do coal.

As it becomes clear to investors that major energy companies are speaking with green lips, but have carbon-spewing hearts, or are not making their transitions to low carbon resources in a decent timescale, assets are being withdrawn and placed with clean technology operators.

As the volume of divestment increases, a major problem with emerge : since almost everybody holds energy stock, it will be impossible for every investor group to divest away from the petroleum, Natural Gas and coal in their portfolios.

Demand for cleaner energy investing will definitely outstrip supply. There is a risk that funds will be removed from the real assets of energy, and placed in virtual or service-based commodities elsewhere; thereby placing stock markets at high risk of implosion, should there be an economic or financial crisis.

Investors want solid securities : bricks and mortar, mining, infrastructure, energy, food, water – these are the bedrock of the economy. Any clean energy stocks that open up will be flooded.

It is clear that a real possibility exists that divestment will trigger oil and gas companies to get serious about Renewable Gas. Renewable Gas technologies are within the skill set, and even the back catalogue of patents, of oil and gas companies. Back in the 1970s and 1980s, oil and gas companies matured a number of relevant synthetic gas processes. Back in the 1930s, synthetic gases and oils were already developed on a grand scale.

It will be necessary, however, to make sure that coal doesn’t sneak back in under the cover of synthetic gas. Renewable Gas needs to be resourced from biomass, renewable electricity, water, air and recycled carbon dioxide. Gas that is synthesised from coal, oil or Natural Gas is just not renewable.

For investors to ask for Renewable Gas of the oil and gas majors is not an ask too remote or too difficult.