WHEREAS: Many companies have adopted goals including limiting global temperature increase to 1.5¡ C and reaching net-zero global greenhouse gas (GHG) emissions by 2050.
The International Energy AgencyÕs (IEA) Net Zero 2050 Roadmap (NZE) offers a normative, not scientific, energy sector path for net zero GHG emissions. The IEA urges no investment in new fossil supply projects to achieve net-zero: ÒAs a share of total energy supply, [fossil fuels] fall from 80% in 2020 to just over 20% in 2050.Ó1
In line with such assumptions, and similar assumptions included in the IPCCÕs report series2 and elsewhere, the Company has a near-term goal to reduce GHG emissions by 50% by 2030 and aims to reach net-zero by 2050.3
The Company brags about Òlead[ing] the largest planned coal exit in the country, having retired 7,500 megawatts of coal since 2010.Ó4 It is Òtargeting energy from coal to represent less than 5% of its total generation by 2030 and a full exit by 2035É.Ó5 Meanwhile, the Company will have invested more than $2 billion in solar energy by 2024.6
These investment decisions presume the normative IEA NZE is possible and is based on true assumptions, but it is unclear what, if any, analysis the Company has done to protect company assets should NZE prove unsound.
A 2023 study by the Energy Policy Research Foundation (EPRF) found that net zero advocates have misconstrued the IEAÕs position on new oil and gas investment, and that the IEA has made questionable assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, economic growth, and technology maturity.7
The EPRF study found, ÒOil and gas play irreplaceable roles in modern civilization that are not reproducible with low- carbon alternatives. The attempt to substitute them with inferior, less efficient, energy sources will have enormous micro- and macroeconomic consequences and profound geopolitical implications.Ó8
NZE advocates speak in terms of fossil fuels as stranded assets, but no consideration has been given to whether the true stranded assets might be the assets spent on expensive renewable energy options based on faulty assumptions. Should the EPRFÕs study prove true, our Company stands to lose its renewable energy investments, plus the costs of reverting back to reliable energy sources such as coal. Additionally, it appears that most countries are not really going to outlaw reliable and affordable energy, further making current net-zero stranded-asset theory non-sensical.9