A New Green Deal — Investing In The Energy Transition

As seen on Forbes.com on April 24th, 2019

ByJoel Moser

Investment in the energy transition has grown up; no longer occupying the small socially responsible corner of Wall Street, it has become a central market-based destination for capital all along the risk spectrum, from infrastructure to private equity to venture, as new and improved technologies and consumer demand combine with government tax and regulatory policies around the world to drive robust business models that deliver lower carbon fuels and power and lower carbon industrial and commercial enterprises.

Gone are the days of windmills on milk cartons. Consumer choices are echoing though the global economy and political choices have moved the markets. Finally, in several sectors, hard economics, based in part upon technological breakthroughs, have become aligned with carbon reduction objectives.

Big business is now backing carbon reduction in big ways starting with big oil itself which is putting capital into low carbon initiatives. Perhaps most emblematic of this trend is American big oil’s use of captured carbon dioxide in enhanced oil recovery, instead of water, effectively returning massive amounts of carbon permanently into the ground where it came from. The amount of industrial carbon capture taking place will likely soar when implementing regulations are issued for “Q45” US tax credits, passed on a bi-partisan basis, also leading to more lower carbon products such as methanol, an alternative fuel.

While anti-fracking activists may not welcome increased use of natural gas, the reality is that natural gas has rapidly displaced coal for the American power grid, and liquid natural gas, along with increased methanol exports, will further decrease the use of coal globally as new liquefaction facilities are permitted and built.

Gas is also the ideal baseload energy source that will facilitate the increased use of wind and solar energy until utility scale batteries are developed, and the continued investment in this resource is key to an ultimate renewable power transition. Meanwhile, methanol is in increasing use as a bunker fuel for shipping, displacing diesel.

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