Recorded on October 5, 2023
Episode 96 of the PetroNerds podcast is another heavy hitting podcast from PetroNerds with NYU Stern adjunct professor Paul Tice. He has 40 years of Wall Street experience and he talks with Trisha Curtis about the policies and complexities of “ESG” (environmental, social, and governance).
This is an incredible discussion and Paul and Trisha Curtis do not hold back. Trisha asks Paul a myriad of questions related to ESG, the energy transition, public companies, and access to capital. At the time of recording on October 5th, 2023, WTI was $82.36, falling from nearly $94/barrel on September 27th, 2023.
Trisha asks Paul to walk listeners through ESG compliance by companies, those required and not required, and what it is actually achieving. He talks about the UN promulgated club and ESG requirements which is driving significant moves in the publicly invested space for strict ESG compliance.
The UNPRI has strict membership compliance and is organized by the UN and is moving the needle on strict ESG compliance including requirements to implement UN sustainability goals and the Paris Climate Accords. Trisha asks about BlackRock, StateStreet, and Vanguard and the board room debacles in May of 2021 with Exxon, Chevron, and Shell. She also asks and touches on the UN backing of China’s so-called “Green Belt and Road” and human rights violations.
Paul gets into the fiduciary responsibility problems by applying ESG to funds and portfolios after they have been built and then trying to push these companies to change their behavior. Trisha asks Paul to offer some clarity on the pull back in green investing and the ESG push in the past year that many have heard about….is it real?
They get into the subsidies behind wind, solar, and EVs, the auto strikes, and the massive transfer of wealth taking place in the sphere of very poor forms of energy being forced into economies by the government. Paul talks about the problem of ESG investments losing money in the short term and the real problems behind their promise that these ESG compliant companies and investments will make money in the future.
Paul talks about how the energy transition and ESG is not driven by economics and reality but by politics. Trisha talks about why it is so important for oil and gas companies to really understand what is taking place in the ESG and investment space and the world and geopolitics so they can push back and properly invest in oil and gas. Trisha asks about the legalities and fiduciary responsibility and ESG and the lack of capital access that ESG push is creating.
Paul talks about how important the credit markets are to focus on for ESG and the access to capital. He predicts governments in Europe and entities like the UN will declare a global climate emergency which will then be used to limit capital access to traditional fuel companies including oil and natural gas. Trisha asks how we educate and push back on all of this and stay positive despite the massive forces mounting against all of energy as well as the oil and gas industry.
He explains that the industry, and all energy CEOs more broadly, need to speak out more and have more courage to defend the industry and their company and move away from the acceptance of the energy transition. Paul explains that the goal of the ESG movement and the energy transition is to shut down the oil, gas and coal industry in the US and the world.
Trisha pushes everyone in the oil and gas industry, from CEOs to pumpers, to be vocal about what they do for a living and care about it and talk about it. Paul Tice says “defend yourself” and start talking frankly about climate.