Bill Gates foresees a near decadent future for the oil giants and advises against investing in the shares of big oil: for what reasons? The explanation of the US billionaire.
Bill Gates’ latest advice on investments came from Glasgow, where he spoke at a briefing on the sidelines of Cop26: if you are looking for a selection of long-term profitable stocks avoid big oil.
As the world moves away from fossil fuels and adopts cleaner, more renewable energy sources, the oil giants that have dominated markets for more than a century could be in trouble, according to the co-founder of Microsoft.
The prediction of Bill Gates on oil giants, because they will fall in 30 years?
Bill Gates’ prophecy about the oil giants
Gates’ words, reported by CNBC, were clear:
“Some of these giants will fall. 30 years from now, some of these oil companies will be worth very little. “
This is how the co-founder of Microsoft ruled on the near future of the crude oil giants, strengthening his fervent support for renewable energy and green technologies.
Companies like ExxonMobil, BP, and Royal Dutch Shell have seen their share prices fall over the past five years, especially at the start of the Covid-19 pandemic, which crippled oil demand and caused huge losses for even the largest. gas and black gold companies.
ExxonMobil, the largest oil and gas producer in the United States, lost $ 20 billion in 2020. The company still has a market value of $ 275 billion, but as countries like the US are pushing for sustainable energy policies and the auto industry is moving towards an electric future, investors are becoming more and more doubtful about the fate of oil stocks.
The line recently dictated by the IEA has been to stop any new investment in fuel fields and to focus resources on clean energy, so little funded yet.
In this context of change, the large oil companies that direct their activities towards forms of renewable energy are the only ones that have a chance to survive, Gates said during the briefing.
In Glasgow, the billionaire recalled that big oils could move their businesses relatively easily from fossil fuels to cleaner energy sources. Low-carbon hydrogen – which, when burned, emits less carbon into the air than today’s greenhouse gases – is a possible example.
“We have a pipeline infrastructure in the United States that can probably be adapted to transmit hydrogen,” Gates said.
Meanwhile, to give a further signal of his commitment to the fight against climate change, the philanthropist wrote in the book How to avoid a climate disaster, which in 2019 sold all his “direct interests in oil and gas companies.”
Because Gates sold big oil stocks
Gates explained in his book why he was late in embracing the divestment strategy. The theory is that dumping a company’s stock, for whatever reason, is unlikely to have any real impact on the stock price because someone else is likely to buy it cheap and still take the profits home.
“I didn’t see how divestment alone would stop climate change or help people in poor countries,” Gates wrote. “It is one thing to divest from companies to fight apartheid, a political institution that would (and has responded) to economic pressures. Another thing is to transform the world energy system, an industry worth about $ 5 trillion a year and the basis for the modern economy, simply by selling the shares of fossil fuel companies. “
The final decision was dictated by moral reasons: “I don’t want to profit if stock prices go up because we don’t develop zero-carbon alternatives “
To that end, Gates has focused on investing money in companies that are attempting to expand cleaner alternatives. Over the past decade, he has had personal resources in climate technology companies by developing everything from advanced nuclear reactors to machines that capture carbon dioxide from the air. It launched Breakthrough Energy Ventures in 2017, a $ 2 billion fund that invests in early-stage climate startups.
In this context, his suggestion resounded: do not invest in the big oil companies, they are destined to lose value.