For years I’ve considered investors and executives in the fossil fuel industry to be lazy and stupid. They could make more money in the long term with clean energy, and yet they entrench themselves in their ways and opt to poison our discourse and slow down human progress.
I apologize if this thought experiment is messy. I got out of the shower with these thoughts and started writing. To separate clean energy from renewable energy, I will define the following:
- Renewable items can be “farmed” on demand, using natural processes that exist on the planet
- Non renewable items are created slowly, at a fixed rate, and cannot be created on demand. This includes fossil fuels and precious metals.
Those entrenched in fossil fuels oppose the alternatives that take away their power. Since fossil fuels are extractive and non renewable items, there exists a fixed amount of it on the planet. There is value and power from controlling this scarce resource.
Renewable energy can be created on demand by anyone with the means to do so. Solar and wind energy cannot be monopolized as both can be harvested planet wide by anyone with the resources to set up a “farm”.
In an alternate universe, if it was possible to harvest and store energy in the form of oil and gas, it would not be as attractive. Likewise, if it was possible to limit access to wind or sunlight, the rich and powerful would have an incentive to do that.
If people can recognize this difference, they will be more likely to ignore fossil fuel talking points and not act against their own self interest
I don’t think this is it. It’s simply a question of return on investment.
If I had oil industry related investments, I would want:
Now if I am a small investor, it would make sense for me to slowly sell off my oil assets and invest into green energy IF: – I believe that there are investment opportunities in green energy that will give me a better return on investment than my current oil investments.
Whenever I sell an investment to pivot to some other investment, I undermine the value of my current investment. How’s that? Because I’m increasing the supply of my investment asset. This lowers the price.
Basically, if my oil stock was worth x, and if I put it for sale on the market, it’s now worth x-y, where y is some positive number.
Again, if I’m a small investor, y will be tiny as I’m not really increasing the supply of the oil stock by much.
BUT. If I’m an oil oligarch… Well, y is going to be VERY HIGH. It does not make monetary sense for me to sell off my assets and move them to green energy. I don’t necessarily have confidence that my losses (y) would be recouped through the ROI from green energy.
I’m a selfish, unempathetic asshole. I want to maintain my wealth. Therefore, I take the cheaper way out -> influence the government to delay green investment, so that demand for oil doesn’t fall.