This recommendation is probably going to be a little controversial. I’ve found an oil company that sees the writing on the wall and is committing to tapering off its upstream oil exploration and production activities in order to fund green energy projects and transition to a green future. Purists will dislike that the company will remain a net emitter of carbon for decades. I see a pathway forward to a near term future where billions are spent by industry per year on green projects instead of the few hundred million we see now.
I intend to show that this transition essentially guarantees the company will earn a low risk 12.5% in share holder return per year for decades while deleveraging their balance sheet and reducing litigation and regulation risk. I suspect when the competition sees what this move does for their bottom line, there will be a rush to replicate the model. This is how we get trillions of dollars in investment capital redirected from fossil fuels to renewables.
Continue reading “Green energy investing in an unlikely place”