13 September | Online

At some point in the life of the oil industry, the cost of their asset retirement obligations will exceed all future cash flow from oil and gas. Reserve depletion and the energy transition are bringing this point ever closer in time.

The problem is, the oil industry hasn’t been saving for retirement, so the money to settle asset retirement obligations must come from future cash flow. But CTI research shows that 90% of booked reserves––the source of future cash flows––cannot be burned if we are to meet emissions reduction goals and prevent catastrophic global warming. Unless industry starts holding back profits to pay for retirement, the $trillion+ cost will have no source of funding other than the $trillion+ pool of reserves that must not be burned, which is to say, no real source of funding at all.

Join us to discuss the framework of ‘Holdback’ introduced in our recent piece, “Event Horizon,” to start giving a clearer shape to the concepts of stranded assets and stranded liabilities, and what that might mean for investors as the energy transition progresses.