THE CARBON WAR

We have good quality assets 5
In the BHP Billiton boardroom in a tower block near Victoria I deliver
Carbon Tracker’s stump 15-minute position statement to four senior executives
of the company.
The body language among the mining execs is not good. They shift in
their seats as I set out the case. They are Australians, forced to listen to a Pom.
Experience tells me that this contact session will be less polite than most.
When I have finished, the senior exec allows hardly a space after my final
full stop.
Well mate, he says, his accent thick. We have good quality (“qualidee”)
coal assets, close to market. And we also have gas resources, unlike most of our
competitors. We’re well diversified. So where is our problem exactly, d’ya reckon?
I look at him, attempting a poker face, processing this.
His response is consistent with what we are finding with other companies.
Their first line of defence is not to question the carbon arithmetic of
80% unburnable reserves, 20% burnable. It is to argue that their reserves are
in the 20%.
You may well be right, I say. But we would need to do a deep-dive into
data, company-by-company, to know for sure, would we not?
And that’s what we intend to do at Carbon Tracker, in the year ahead, I add.
We will be providing data to help your investors look company by company.
Fossil fuel by fossil fuel. Fossil fuel species by fossil fuel species. Fossil fuel
project by fossil fuel project. Fossil fuel province by fossil fuel province.
Meanwhile, I continue, we have noticed an interesting thing, in presentations
like this. The first line of argument tends not to be a defence on behalf
of your entire industry, but one specific to the company – that your particular
set of assets can be burned safely.
You can’t all be right, can you?
London, 2 nd August 2013
In an appropriate office in the citadel on Threadneedle Street, Mark Campanale
and I sit drinking tea with Andy Haldane, the man responsible for the stability
of the capital markets. He is Deputy Governor of the Bank of England, and
chair of the Financial Policy Committee, the body set up by the Bank, in the
blinding hindsight of the financial crisis, to scan the horizon for potential
future shocks to the financial system. Mark and I are trying to persuade him
that potential over-valuation of the fossil fuel companies that are the backbone