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In just two decades, the total value of the energy being produced via fossil fuel extraction has plummeted by more than half. Now $3 trillion of debt is at risk.
Via Willy De Backer
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Rescooped by michel verstrepen from The Great Transition |
Scoop.it!
Via Willy De Backer
Willy De Backer's curator insight,
April 24, 2016 5:45 AM
Another brilliant must-read analysis by Nafeez Ahmed of the financial collapse of the global oil industry and how it will bring down the capitalist economy.
Stephane Bilodeau's curator insight,
April 24, 2016 11:14 AM
"In February, the financial services firm Deloitte predicted that over 35 percent of independent oil companies worldwide are likely to declare bankruptcy, potentially followed by a further 30 percent next year—a total of 65 percent of oil firms around the world. Since early last year, already 50 North American oil and gas producers have filed bankruptcy.
The cause of the crisis is the dramatic drop in oil prices—down by two-thirds since 2014—which are so low that oil companies are finding it difficult to generate enough revenue to cover the high costs of production, while also repaying their loans. Oil and gas companies most at risk are those with the largest debt burden. And that burden is huge—as much as $2.5 trillion, according to The Economist. The real figure is probably higher.
(...) the total value of the energy being produced via fossil fuel extraction has plummeted by more than half. And it continues to decline.
This is because the more fossil fuel resources that we exploit, the more we have used up those resources that are easiest and cheapest to extract. This compels the industry to rely increasingly on resources that are more difficult and expensive to get out of the ground, and bring to market."
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