Advanced BioFuels USA

(Morgan Stanley)  As the world embraces a low-carbon economy, should investors change how they view fossil fuel investments?  —  … Most investors interested in establishing a fossil-fuel aware portfolio can follow a four step roadmap to evaluate and apply this framework:

Excerpt from The Washington Post:  The industry is under pressure after lending billions to energy companies that are now grappling with falling oil prices and plummeting profits.

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Investors have also become concerned about the billions Wall Street lent to into oil and gas companies over the last few years. The industry is faltering as a glut of crude drives down prices and sends dozens of energy companies into bankruptcy. The number of energy sector bankruptcies during this downturn could surpass the level reached during the financial crisis, according to Deloitte, the auditing and consulting firm.

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Still, some banks have begun setting aside more money to cover potential energy sector losses. Citigroup set aside $588 million to deal with loan losses during its fourth quarter, about half of which it expects to go towards the energy sector.

Financial reform requirements mean that banks have larger financial cushions to withstand heavy losses on loans to the energy sector, analysts say. “Of course, should oil prices fall to $20 [per barrel] and stay there for an extended period, which we don’t foresee, then the story changes for the worse,” Oja said.

Even if Wall Street is prepared to withstand weakness in the U.S. economy, falling oil prices, or low interest rates, analysts say, the bigger threat may lay overseas. READ MORE and MORE (Fortune) and MORE (Reuters)

However–Excerpt from The Nation:  The disconnect between rhetoric and action suggests that something is not clicking in the minds of the current crop of university presidents. These administrators are eager to give speeches about climate change, but at the same time they refuse to draw down their investments in fossil fuels—even when this is exactly what’s been prescribed by experts. University presidents’ defense of the status quo is so pervasive that the website run by the Independent Petroleum Association of America to urge against divestment is plastered with quotes not from oil magnates but—you may have guessed it—university presidents.

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So universities are urging the world not to change in needed ways. But this isn’t all. Strangely, they are also giving political cover to the fossil-fuel industry. In 2013, for example, a Harvard trustee infamously told students that, rather than asking Harvard to draw down its investments in fossil fuels, they should instead “thank BP” for its renewable-energy work. The spoiler is that while there may have been renewable-energy work going on at BP 30 years ago, today there isn’t much.

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So when faced with one of the gravest threats civilization has ever encountered, what does Harvard do? Well, apparently it increases its research budget by 0.1 percent! Other universities are following Harvard’s underwhelming lead. The University of Toronto,  after rejecting the mildest form of divestment imaginable, established a three-year research fund of $250,000 per year, which again appears to be only about a 0.1 percent boost of its research spending.

Universities are downplaying the seriousness of climate change in a big way. In a recent interview in which she was pressed on fossil-fuel investment, Harvard’s President Faust argued that, unlike apartheid and cigarettes, fossil fuels are not “so heinous that we want nothing to do with it.” This only makes sense if you don’t think about it. Cigarettes addict and kill their users. Fossil fuels have the capacity to cause drought, famine, war, the destruction of Earth’s major cities, mass extinctions, the spread of diseases, and so on. The administration of McGill University downplays climate change as merely “a source of stress for human and planetary well-being” and minimizes its concern further by proclaiming that it’s “unconvinced that grave injurious impact resulting from the activities of…fossil fuel companies…has occurred at this time.” The McGill administration even claims that it is “persuaded that the beneficial impact of fossil-fuel companies offsets or outweighs injurious impact at this time.”  READ MORE