293: The End of Oil? Inside the Hidden Decline of Fossil Fuels | Earth Day Special

Paul: [00:15:30] Here's Mark. Mark Campanale. What a joy to have you here on outrage and optimism. And just before you joined us, I went through your distinguished history with our dear friend Tessa Tennant, who introduced us in the year 2000. In December, in the Royal Festival Hall, where you told me there was a big problem with stranded assets. Quarter of a century ago. I remember, do you remember that conversation? Probably not, but I do.

Mark Campanale: [00:15:57] Yeah, no, I do. I also remember sitting in Tessa's kitchen with you. Where where we talked. I talked about supply and you talked about demand, and we didn't quite get on the same page, but it was a great conversation. If you've got a yeah, you've got a very good memory. Have we been talking about this for 25 years?

Paul: [00:16:13] Yeah, a quarter of a century. And also, by the way, I also complimented you on the incredible link between you and Bill McKibben thesis and how this whole stranded assets movement grew up across the universities of the world and want to come on and ask you, actually, about the much more recent stuff that you're the Substack from your incredible colleague. But just before that, can you introduce yourself and the work of Carbon Tracker. With all the history behind it. But like right now, just for our listeners as a headline.

Mark Campanale: [00:16:39] So Carbon Tracker, we're a non-profit financial thinktank, and we've been around for about 15 years. And the idea really came from something that goes back all that time, oh, 25 years ago, when a number of us were thinking about supply, fossil fuel supply and what happened if a fossil fuel supply, particularly for listed companies like companies on the stock market like Exxon and Chevron, exceeded the remaining carbon budget, or what we could burn. And we thought that we should investigate that. And the idea was we just took the top 200 traded companies in the New York Stock Exchange, the London Stock Exchange. And we looked at their reserves, worked out how much CO2 was in the reserves, add it all up and said, look, if we were to burn all of that coal and oil and gas, how many degrees of warming would it take us to? And it was way beyond, you know, what the science was saying was allowable. And, and, uh, so we realized that the first thing we spotted was that the companies like Shell and Exxon, they weren't just like 5% of the problem, but all of those companies together that took 200 were a multiple of the problem.

Mark Campanale: [00:17:46] And so we ended we came up with this phrase on burnable carbon. And then this other analysis we did was on wasted capital and stranded assets and said, look, if we can't burn what we've got and most of it has to stay in the ground, why, why are we spending all these billions and trillions and going to find more? And that was the stranded assets argument. And you know what? When we set up the organization, we weren't setting up an organization. We were answering a question, and we wanted to know the answer to that question. Once we published this paper, we thought, oh, it's done. Now we can go back to our jobs in the city. We don't need to worry about it. But somebody Naomi Klein gave me a copy of this report. I'm vulnerable to Bill McKibben, and he wrote about it in rolling Stone magazine. Global warming is terrifying. New math. And so there's this little group of London analysts I didn't know there was. There was only three of us produced this report. And then he went on, launched the divestment campaign, and this whole thing really took off. And here we are still around.

Paul: [00:18:43] A small point in there, I think, is the part of the genius of that collaboration between you and Bill McKibben. Was it was kind of catnip to journalists. I felt that you had written half a story, and every single journalist in the world wanted to write the rest of the story. They were kind of like, well, this means, this means, this means and, you know, the amount of media that came out of that. I've never seen anything like it in the whole history of the climate change movement. But I've got to challenge you on one thing, Mark. This is based upon people acting rationally. I know about a few episodes ago of Outrage Moctezuma, I accused Laura Clarke, the chief executive of Planet Earth, of of causing Trump to come into the white House because of her lawsuits backed by fossil fuel authoritarianism. Maybe I actually have to accuse you of getting Donald Trump into the white House, because fossil fuel authoritarianism in North America now is trying to disprove your thesis and say, drill, baby, drill, we're going to burn forever. And these limits on carbon emissions aren't important.

Tom: [00:19:34] We have told Paul he must stop accusing guests of having facilitated Donald Trump's entry. Just that fire? Yeah.

Mark Campanale: [00:19:44] Do you know one thing? That there was a pivotal moment that guy who worked at HSBC now writes for the Financial Times. He was a Financial Times columnist, Stuart Kirk. Yeah. And it was that article where he said, you know, so what if it's 3 or 4 degrees of warming? Does it really matter? And that was the pivot point of the big anti ESG or woke capitalism. The pushback. And and many of us who've been working on climate, you know, including yourselves have seen the force of the pushback. And it was aimed at financial institutions. Now, why were they doing that? Because central to what we were saying is that it's not in the interests of investors to destroy the value of your pension fund because of climate catastrophe. And so the investors and we saw this at Paris Christiana, when a lot of the investors turned up properly for the first time, rallied around and said, look, we believe in the science. We support what governments are doing. And then that led to the Glasgow Cop to the launch of the AG fans and the leadership of Mark Carney and many others and Michael Bloomberg around the Glasgow Finance Alliance for net zero.

Mark Campanale: [00:20:46] And, uh, what happened rolled on 2 or 3 years is that the elected officials said, look, we we're the ones who make up climate policy, not you lot. You know, you private sector owners of these companies, get out of the way. We're the ones who decide what these companies do, not their shareholders. So, you know, there's courts who are reporting you remember the unbearable carbon. But funnily enough, it just says nothing about divestment in the at all. Actually, what it says is that financial regulators and the Financial Stability Board and central banks and pension fund trustees, they're the ones who are in these companies. They're the ones who have to pull it together. And we've got to get what you know why? Here's something that I don't know if you spotted this, but Saudi Aramco raised $6 billion in bonds on the London market in July. 6 billion. 2 billion of those bonds were dated 2065. Yeah. I mean, we've got this insane man.

Paul: [00:21:36] They very much are selling themselves as the last barrel.

Mark Campanale: [00:21:39] Yeah. And so why are we allowing people's pension funds to be filled with all this kind of garbage? Really? Fossil fuel garbage.

Paul: [00:21:47] So you are now asking for a 2065 oil and gas company bonds to be divested. Now, Mark, I also did give a shout out in your intro before you joined because you did lobby Mark Carney, I think, and he became one of the first central bank regulators to talk about this. Is that is that fair? I mean, we're going to come on to the key issue in just a moment, but a quick answer. Do you think that the central government regulators have responded to this call.

Mark Campanale: [00:22:12] Under Mark Carney leadership and lately, more lately, with the support of Michael Bloomberg? Central banks is so important to this. And yes, you're right. So Mark Carney, when he chaired the G20 and the financial stability world rather than the G20, he invited Carlton himself to come and present to all the central bankers in one of those big kind of rooms that you get in the city, with all the bankers sitting around these tables and me in the middle trying to do this little projection on the stranded assets. God knows what they're made of. But yeah, so he was so important because he then went on to give his tragedy the horizon speech.

Paul: [00:22:44] Yes, very important.

Mark Campanale: [00:22:45] Speech that was so important. And he he mentioned there's a couple of things in there that were really important. Of course, he used the phrase on the carbon, the stranded assets. But he also used this phrase, say's law, which a lot of people missed, which is an economic idea that supply creates its own demand. Mm. And he said essentially he said it was the supply of fossil fuels that creates its own demand. Well, of course everyone else is saying it's the demand for fossil fuels that creates its supply. He was very clever in citing this piece of economic theory, saying, look, because he's right. I think that in many ways we create the conditions through supply and financing of the fossil fuels that allows for its continued use.

Paul: [00:23:22] Just before you came on, I said to Christiana, what do you think is the key? The key thing we have to focus on and, and Christiana said 50 years down to 25 years. So I'm going to.

Christiana: [00:23:30] Start three 2323.

Paul: [00:23:34] And we're all practicing our kind of like staying back skills. And Christiana is demonstrating that sometimes you need to come in and correct and still stay back. So that's good. That's really good. It's an evolving process. We're going to put the link to the Substack in the show notes. But your colleague right Harry Benham, Harry Bannon, he's been saying if I understand correctly.

Mark Campanale: [00:23:53] Harry works for BP and shell for 25 years. So he's a he knows what he's doing. Good old Harry.

Paul: [00:23:58] So he's saying, if I understand correctly, that oil and gas companies might be quietly shutting themselves down. And in his analysis, can you talk us through that?

Mark Campanale: [00:24:07] Yeah. Okay. So Goldman Sachs and Forbes, about a year and a half ago, published this study that said that the stranded assets argument had been running around rampant in the financial community and had been us and our allies Is asking the shareholders to tell the companies, don't invest in overexpansion for all these projects that we won't need. And. And since then, there's been a significant decline from 2014 to today in new capital expenditure and exploration. And Goldman's actually said the results of this stranded assets argument is the global oil and gas reserves have fallen from 50 years to 23 years.

Paul: [00:24:45] As Cristiano pointed out quite correctly. Thank you.

Mark Campanale: [00:24:49] Yes. And the latest figures, which come from Goldman's, but also looking at the extrapolation of looking at the accounts. So Harry's been checking out the accounts of the companies and they've been looking at the reserves replacement, the number of years. How are you replacing the reserves that you burn? Because of course oil's in constantly running down. So it depletes naturally. So shale oil will deplete rapidly. When it's first year oil wells will deplete, you know, 6 or 7% per annum.

Paul: [00:25:16] I mean, there's one bar chart in the article which shows the, you know, the cash flow, essentially the amount of money the company's got to expend on things. And it shows that the the capital investment has gone below 50%. Now that more than 50% is going out.

Mark Campanale: [00:25:30] They're cashing out. Yeah, they're paying it out. And share buybacks dividends and retiring debt. And I mean, here's the thing to note is like Shell's production is down. What is it a third in five years. And the listed European majors are down to the last seven eight years of reserves. And the US majors like Exxon, whose production is down a bit, and Chevron, probably on reserves, live from 12 to 14 years, so that these oil companies are self liquidating. The real, real question, which you may be asking next is, is why?

Paul: [00:26:01] Well, I mean, I've got three questions. One is should we be celebrating? Next question is are renewables going to be able to fill the gap? And the third question is what are the political implications.

Mark Campanale: [00:26:08] Yeah, there's a lot in there. So the political implications is that energy security and independence. It was only, what, 50, 60, 70 years ago that many countries were self-sufficient in their own energy. I mean, the big expansion of fossil fuels has really been in the last 50 years. It was America's export of liquid fuels to burn and becoming the the globe's major export, along with the Saudis, that created dependency. And what's the part that politics has changed in the last 18 months? Two years, really, probably triggered by the Ukraine war, is a new, new understanding of what we mean by energy independence and energy security. And it now means coming off of fossil fuels, because if you rely on the Russians for your for your gas, or you rely on the gates of Hormuz being open to take your Middle Eastern oil into Europe or Panama or whichever, then that doesn't give you much energy security. And I think there's a growing realization with policymakers that that's true. And also, the Chinese know that if they want to dominate the trade and the politics is the world, you've got to destroy the petrodollar. You've got to get the world off oil and trading oil in dollars And that exporting electrification like mad to the rest of the world for political reasons as well as economic reasons. And they know that the future is is electric. And right now, just today's papers has all been about the Chinese discussing with the Vietnamese new trade, because the US has put in what is 100% tariff on China, 150% tariff in China. This has opened up a whole new alliances of the Chinese with Southeast Asia. And then beyond that, as sub-Saharan Africa.

Paul: [00:27:46] We've gone something like 13 or 15 minutes without mentioning Donald Trump. I think we've done really well, but eventually it happens. It's just.

Tom: [00:27:53] Like a default.

Paul: [00:27:54] Position you can't get. Have you ignored my two other questions? First of all, should should we be celebrating?

Mark Campanale: [00:27:59] Well, look, there's a worrying thing here that if there's a supply crunch, our prices go up. And if our prices go up, that's not great for consumers, for anybody. If you can't match the supply with a replacement energy. So we've got to scale up. We've got to scale up renewables.

Paul: [00:28:15] Is it scaling up? Is it going to meet? Can we get the grids on that?

Mark Campanale: [00:28:18] I looked so. Have you. Do you read the IEA's new study this week, which is talking about just the growth of renewables? And I was just reading the latest from Ro motion, which is the number of electric vehicles sold globally in March 2025 was 1.7 million worth, 4 million sold in Q1. So the EV market grew by 30% compared to last year and increased by 40% compared to the month before last. And you've got Chinese market growth year on year, up 3,536% in Q1. So you've got this huge growth in particularly in EVs and a complete transformation. You know, BYD, such an important company globally. Now, who would have heard of them just a few years ago and is, you know, how many millions of cars EVs are producing. So there's there's a chance for demand destruction for oil and the replacement of liquid fuels with electrification. My only hope is, is this pool, which is that something like in Europe. I'm not sure about the rest of the world. 70% of cars are sold on lease and you can hand back your car after like three years.

Paul: [00:29:27] Now, I heard you talk about this in other podcasts. The leasing could should spin it much faster.

Mark Campanale: [00:29:31] Well, look, he could do so. What happens if we're encouraged and or everyone goes back and says, I don't want my internal combustion engine anymore because it's really expensive to run and so on. Give me an EV car because it's really cheap to run and operate, and I can plug it in the house. And if I can make my own energy off the roof, or I can store it in a battery from super cheap energy at nighttime, and then boost my car for going to work during the day. And maybe lots more people will come off of internal combustion engine cars and trade it in for an EV.

Paul: [00:30:01] Okay, so one more question is really tough question. It's not on your core topic, right. But just before you came on we were talking about price earnings ratios. Now I looked actually over a few months ago, both the value of Tesla and separately, the value of BYD and certainly in the last six months. At one time or another, either of those companies was worth more than all the internal combustion engine car companies combined. Now, here's my question for you. People like the conservative leader in the UK, Kemi Badenoch, has said, you know, we can't afford to go to net zero. Why is the gigantic of value creation in something like electric vehicles not seen as the sustainability gold mine? Sustainability, just printing money, sustainability, making people fabulously rich? Why doesn't that narrative connect?

Mark Campanale: [00:30:45] So listen, what we're talking about is why why do financial markets price things in a particular way? So what you did mention here is that they price earnings multiple of a European or major is one. Is it 4 or 5 times earnings. And you've got these EVs on insane multiples. And the reason for this is it's very simple. Do you remember when Amazon was worth more than Walmart, even though they only had a 10th of the revenues of of Walmart? It's because Amazon was clearly going to be the winner. And so what markets do is they discount the future today. And they go well actually we think that the oil age is ending. We think electrification is going to happen and it's going to be dominated by technology, IP rich companies like a BYD or possibly a Tesla. If you're talking, you know, before last. And so they're they're happy to give them these insane evaluations, a bit like Nvidia of, uh, over chips is that the market loves all these growth companies and very similar you saw with, um, Netflix with a 10th of the revenues of blockbuster. And we used to go into a video store and borrow a video with a 10th of the sales, and Netflix was worth far more than blockbuster.

Paul: [00:31:51] Yeah. No, the stock markets got the memo about the value of the internet a long time ago. So I think when it comes to something like a Netflix replacing a blockbuster, people get there very quickly when in terms in terms of the sales of Amazon retail exceeding the sales of Walmart, you know that this was priced in by the stock market ahead of it happening. So what you're saying essentially is these very high stock market valuations for BYD and Tesla and the low, relatively low price earnings ratios for European oil and gas majors shows that the stock market can see what's happening, essentially, and is communicating that to us. My question to you is why don't people talk about sustainability as a kind of gold rush, a money making machine, because it appears to be one.

Mark Campanale: [00:32:28] Well, look, if you're buying the shares of some of these oil majors, people are buying them for their cash yield because they're paying out high levels of cash when they make profits. The challenge that's facing the oil majors is that most of the cheap oil is gone. So one of the reasons why there's not much investment in exploration is all the cheap stuff is gone. We used it up and we burnt it. And the stuff you have to go and find is in difficult places. And so you need a very high oil price to make money on your capital expenditure, to actually make a return on equity. So investors are not sure. So if you're producing a barrel of oil and it costs you 50 bucks to produce it, you really want oil to be at 60, 70 to to to make it worth the hassle. Now for the oil price because demand falls, what happens if the oil price falls below your production costs? You get a negative return on capital. And that's what's been happening in your own industry before the Ukraine war is it just wasn't making the money that investors had hoped that it would. So the other thing you got to remember about renewable energy, the whole point about the fossil fuel industry is you've got huge numbers of buyers, you've got limited sellers. That's why we have OPEC. It's a it's a cartel that controls prices and supply.

Paul: [00:33:34] We were discussing that before you came on.

Mark Campanale: [00:33:36] Yeah. Well so so what you want to do is you want to keep prices high. You want to control supply and you want your world to be dependent on. And that's how cartels operate. Beauty about wind and solar is you can't put a tariff on wind or solar. And you you've got multiple sellers and you've got a perfect market. So what happens in those situations is you compete away these super profits. And so the marginal return to the investor or to the next person bringing it on gets lower and lower. And you see these super profits being competed away. And so renewable energy, if you produce it at a dollar and you sell at a dollar five and you're getting a 5% return. It's very different to what happens in the oil industry, where if you can produce at five bucks and sell at 80 bucks, you're going to do that every day of your life for the rest of your life for as long as you can. And that's why people love it. It's the opportunity to make these super, super returns when you can. And what renewables is doing is just destroying that market. And you have to think about it very differently, because I don't want to see a world of high prices for renewables, obviously a world of low prices for renewables. I want to see energy getting cheaper. And and Dorian Farmer, who's this great economist at the University of Oxford, he came up with this study last year that said if the world moved to a really super low cost renewable energy, the world's going to save $11 trillion from the switch. And the mistakes that people are making is the upfront cost of renewables might be high, but the operational cost is wind is free and sunny is super low. And so the message of Badenoch and everyone else who criticized net zero is, look, once you pass the hump of investing in this new technology, you're going to have very low operating costs, and that's what we should be looking forward to. I'm an optimist.

Christiana: [00:35:16] Yay! That's why you're here. Paul, are we allowed to ask a question? I tried to find.

Paul: [00:35:21] In the chat the thing saying, please, Christiana and I saw I have I heard myself admonish you. Please, Christiana, I have a last question for Mark, but not until you and Tom have really finished with him.

Christiana: [00:35:31] Oh, well, that could take several days.

Paul: [00:35:33] Go for it.

Christiana: [00:35:35] Mark, I wanted to put you for a moment into the big headlong tale, mindset and framework and suggest that one of the conclusions from what you've just shared with us is that the big head of oil and gas is over, that they are beginning to see that the expiration date of their industry is printed on every barrel, and every barrel is coming at a higher and higher cost. There is less tolerance, less demand. So they can see that they are no longer in, let's say, the in the monopoly of fuels as the competition with renewables increases. But my sense is that while they have accepted perhaps that their big head times are over, they are moving their strategy toward the long tail via petrochemicals and plastics. And that is one of the reasons, if not the main reason, why the plastics treaty is having such a hard time. Because the resistance there is the those who produce the the fossil fuels, what they are resisting taking all of, you know, just cutting it down to the very basic. Is there resisting any agreements that would curtail production? They're fine with playing around with consumption because we know that consumption is much more difficult to change.

Christiana: [00:37:15] That's behavior change of millions of people. So that's much more difficult. So, you know, they're fine if we dabble in that, but that what they really don't want is any agreement that curtails production. But what they're trying to protect their is their their long tail. This they know that their opportunity is no longer transport. It certainly is not energy production, electricity production. So they are turning to what was before perhaps a much more insignificant use of their products, but one that would give them a long time to to Peter out, if you will. So I just wondered whether in your analysis. You have. You have considered this. And if you see it as a long tail. How much of a long tail? What? How how do they use that to extend their expiration date? And what can we do about it, Mark? Because if they've lost two battles electricity and transport, they are definitely for just for their own survival. Hanging on to petrochemicals and obviously plastics is as the major petrochemical.

Mark Campanale: [00:38:35] Yeah. Well look you're absolutely right. And we're seeing this playing out in the media now, which is you know, today's stories is about Elliott Management taking 5% of BP telling it to stop investing in renewables. Doubled down on traditional business. And you've got another bunch of investors coming back going. No, we we want you to stick to your climate strategies. You've got a battle of what is the future of these companies. And petrochemicals is one of the things they've I've been telling the shareholders. There's a lot of opportunity for. And in fact, 50% of forecasts, demand by OPEC for um, for oil and gas is in plastics, which particularly in the global South, which I just don't think is going to materialise. They've got to give investors some hope. What what are they going to become. And that's a very clear question. But I actually want to make things something very clear, Christiana, which is if we're if you remember the um, production get report, which is very important, there's still a big fossil fuel overhang. There may be investing in less, they may be producing less like shale is off its its peak production and is declining and others are declining. And they're trying to replace it with with LNG. They're looking for other markets, whether it's LNG or plastics. But we've still got a big fossil fuel overhang. And, uh, you also know in previous guests who I'm a huge fan of, which is the parabola, is I think that, uh, we need some kind of global agreement, uh, to allow all countries to agree. How are we going to unwind that? How are we going to orderly wind down production? Because every country wants to be the last producer.

Christiana: [00:40:03] Yeah.

Mark Campanale: [00:40:04] I remember a trip to Canada I gave where Trudeau gave a speech and we said, we want to be the world's last producer of oil and gas. And I went to Argentina to debate the central bank on on their reserves. And they said, we want to be the last producer. And then I went to Norway. I did a lot of travel, unfortunately. And the Prime minister of Norway says that Norway completely supports the Paris Agreement, like the other two countries did. But we want to be the last producer. So you've got this insane battle.

Christiana: [00:40:28] And Saudi Arabia says that constantly.

Paul: [00:40:31] Saudi Arabia can actually see some justification because it's $10 or less to get it out of the ground.

Mark Campanale: [00:40:36] Yeah. So they're all every country wants to be a last producer in a declining market at a time when so much potential production has to be left in the ground, we need some kind of proper discussion, in whatever form of the concept that's complementary to what you've achieved in the Paris movie. That allows countries to say and companies to say it's okay to to wind down. We've still got this hanging out of oil and gas licenses. Admittedly, it's the difficult stuff now, but countries are still trying to generate their revenues from from oil and gas. And just even now, the UK were debating whether to hand out more licenses in the courts and the government's in the North Sea. Yeah. Over Rosebank and, and we've got to have a proper conversation about what happens to these companies and these countries dependent on these revenues as we wind down, as we achieve these targets. China's getting it right. China's going. We're getting off of fossil fuels. We've got these plans for 2050, 2060, which are completely off. And we're going to explore our technologies to the rest of the world to help decarbonize. And America is resisting it. Europeans are wanting to go with it. You know, it's it's an interesting time.

Tom: [00:41:44] So Mark on that. On the politics. I mean, just as Cristiano pointed out, you know, we have this long tail. Fossil fuel companies may be declining. They may be closing themselves down to a degree, but they're going to be around for plenty long enough to cook the climate and blow past our climate goals. We also know that the political objectives that they've had over decades have stopped so much progress at the international level, at the national level, and there's no indication that that's going to stop. And actually, in this slightly changed world where they might be entering a more nuanced, revenue generating set of opportunities, it's not clear they're going to stop stopping us from making progress. So what would you say? I mean, you're a sort of deep political strategist and a thinker around how do we build campaigns to try and address some of these challenges. Given that it is now urgent that we try to actually get these fossil fuel companies out of lobbying so we can move forward. The context they're operating in is changing. What should we do to enable us to move forward?

Mark Campanale: [00:42:37] I think it was the Sharm el-Sheikh cop where I wandered into a meeting, was outside the cop and it was it was organised by parliamentarians for a fossil fuel future, fossil free future. And the meeting was packed. I thought I'd arrived at the real cop. They're all sitting around talking about how how can we countries and they're all, you know, elected representatives, participants, how can we get off of fossil fuels. And I thought, well, this is this is the real conversation. And then there was another meeting I went to, which was all about, you know, folks from being yap and and so on and RMI and Amber and Carbon Tracker talking about how we can rapidly scale up the clean technologies. Where are we with really what's going to be cheaper? And then there were other meetings where of the investor, the Institutional Investor group, and Climate Change series. You know, folks like my own like Carbon Tracker, all talking about how we can scale up and deploy capital from the pension funds. And somehow we need to bring all these conversations together, which is how do we mobilize the capital we know is there that we need to be c deployed to build this clean, energy, secure future, whilst at the same time enabling this orderly winding?

Paul: [00:43:42] Yeah. But Mark, you bring those organizations together and you get accused by US state attorneys general of colluding against the oil and gas industry, which you kind of are.

Mark Campanale: [00:43:50] Well, if we're talking about deploying capital for what we need to build this positive story. Is it collusion? Well, look, you know, a marketplace where investors invest and trade. You're kind of saying that the markets are a collusion because you're agreeing somebody is agreeing to sell something to somebody else, and you're building something together. And investors pool their money together to buy back a a low carbon transition fund. You know, I don't think this is solution. This is the market operating properly.

Paul: [00:44:17] I mean, you could say Netflix colluded with the film industry to to get rid of the DVDs or something. I mean, it's kind of silly.

Mark Campanale: [00:44:23] Well, you're making the same kind of arguments, but look, so much has been achieved. But like somebody reminded me today, it's okay. We've got to 1 trillion or 2 trillion, but we need to be deploying 3 trillion, 4 trillion. There's so much more ambition, so much more we need to do and and to get it done as soon as we possibly can. All the signs are good. I feel positive, but we also know, as Christiane, you're right, that you've got very, very powerful players that are trying to delay action and we have to call them out, and calling them out is becoming even more difficult. So one of the things Carbon Tracker has just released is our Paris maligned.

Paul: [00:44:56] Maligned.

Mark Campanale: [00:44:56] Maligned. Yeah. Do you like that?

Paul: [00:44:58] It's great that Paris maligned.

Mark Campanale: [00:45:00] Yeah. That you can download and look at, which looks at all the different companies and why they're not aligned with the Paris Agreement. And what we do is we get the institutional investors that we work with to sit around and talk about this, and they want the conversation like it's like, I don't it's confidential. But last Monday we had a really interesting roundtable with RBC, which is is one of the world's biggest backers of oil and gas and, and their team, their transition team and their economists. And they had some Canadian pension funds in their London office. And we had a really good, positive, open discussion. So investors are keen to know they want to get to the bottom of this.

Paul: [00:45:32] Well, Mark, thank you for your work doing this, helping investors get to the bottom of it. And they and they are in in a sense it sounds like they will, particularly with this recent research, which I think is inspiring about this kind of voluntary wind down in the oil and gas industry. We've got to go now. Super last question. You spent 25 years doing this.

Mark Campanale: [00:45:49] 35 years?

Paul: [00:45:50] 35. Oh my God. And you're only 40. So you must have started when you were 5 or 10 or something over that period of time. What's made you outraged or optimistic? Short answer. And then we've got to go.

Mark Campanale: [00:46:01] Outrage has always been the the most, the worst cynical behavior of the fossil fuel companies and how they manage to destroy the politics. Christianity got it absolutely right. And I watched Kyoto in the theater last week. The great play, and that cynicism has upset me all the way. But when you meet them in person, they're delightful is that they're just it's what they do that you have to look at, not what they say. Yeah. What keeps me optimistic is, is we've seen this, um, you know, the price of, of of battery storage and the price of renewables has collapsed in the last ten years. And I was an investor. I did my first, uh, renewable energy investment deal 30 years ago. And now it's a great place to be investing because, I mean, I used to know everybody by their first names. I was investing in clean energy. Now there's you know.

Paul: [00:46:49] 2.1 trillion market. You're not going to know everyone by their first name.

Mark Campanale: [00:46:53] And so that gives me great optimism that it's normalized. It's not curious. It's kind of really interesting. And the technologies are just getting better and better. And people are building at scale. You look at the pipeline of battery storage being built in China and in Europe. It's amazing.

Paul: [00:47:08] I mean, we're just going to have to find better words. Mark, we cannot have a pipeline of battery storage. But on that bombshell, Mark Campanella, thank you very, very much indeed for helping us all.

Mark Campanale: [00:47:19] Christiana. Thank you Tom.

Paul: [00:47:20] Thanks, Mark. Thank you. And thank you for coming today.

Christiana: [00:47:23] But thank you so much for the really, really groundbreaking ground shaking work that you do.

Tom: [00:47:33] Mark Campanile has this brilliant ability. Every time you listen to him. The transition just makes so much beautiful sense. And he sort of describes the underlying economics and the dynamics of the way the energy system is transitioning. The insights that he's able to generate. I mean, just that that, you know, it sounds simple. Now we explain it here, but the fact that fossil fuel companies are not replenishing their reserves, they're taking the capital that is provided by that income, and they're returning it to shareholders. And that equates to a company shutting itself down. There is a lot of information and nuance and detail that has to go in to actually providing that level of insight. And if Mark hadn't done it, the world probably wouldn't realize what was happening. And so it's an enormous service that he provides.

Christiana: [00:48:14] Yeah, I agree. I mean, the the analysis that he does is really it's just so razor sharp and it looks at everything that we all look at all the time, but from a completely different perspective. And then he puts it forward in such a compelling way. So truly such gratitude to him. Over the years, I remember asking him for input, even when I was at the Secretariat or thereafter, and he always has such, such clairvoyance, I think, of where where we're moving. And I honestly left that conversation with a deep sadness about why. Why do these fossil fuel companies not transition? Why did they decide after those unprecedented profits that came from the Ukraine invasion? Why did they choose to bring down their debt, pay dividends? You know, do share buyback. Why? Why did they not take the high road and really put all of that unexpected cash and unearned, honestly cash into the transition of the energy sector? I mean, you can say, okay, well renewables is not their core business. Et cetera. Et cetera. And you know when. Okay. But they could have.

Tom: [00:49:39] I think and I think the other interesting question there Christiana, is did they ever intend to do anything different? Because there was a moment when, you know, you and I felt like there was some sincerity inside the fossil fuel movement. And what I don't know now is. Were we just idiots, you know? Was there never any intention or when it came down to it and the capital arrived? Did they then make a different decision? There's a lot in there that is quite painful to unpack.

Paul: [00:50:07] But I think you are both a little bit doing the journalistic thing of making it a binary, you know, and actually, I'm not for a moment forgiving a fossil fuel executive, but they would argue, and there's a lot of evidence that BP and shell were coming in the most enormous pressure from their shareholders, particularly activist shareholders, who were looking for higher short term dividends to roll back on renewables investment. So I think a group of shareholders and the predominance of management in these companies together let our societies down. But I just wanted to add that bit of nuance in there.

Christiana: [00:50:41] Yeah, it's a good point.

Paul: [00:50:43] And in between those two competing parties, you actually get a kind of what I call a responsibility vacuum. Like no one's taking responsibility for really what's happening. And that's an enormous pity because it could have been different. And I think the oil and gas companies could have gone to their shareholders and said, friends, this is the situation. This is what we're going to do. If you support us, click here on our website. If you're against us, click here on the website. Because we're we're putting the future of this company in your hands. You own us, but we want it to be a public discussion about the future we take. And then the shareholders would would be in the spotlight the same way the executives are. And then we might get some transparency and then we might get better decisions 100%.

Tom: [00:51:22] Well, I mean, there are books or plays or maybe operas to be written about at that moment and the sort of tragedy of it I always I really appreciated Mark reminding us about this concept that Mark Carney also talked about and is sort of established in the energy markets. That supply actually creates the demand. And I think that's such a helpful way to think about this moment that we're in, is that complicated dynamic between supply and demand of energy in the economy. And it's not the case the simplistic way that oil and gas companies have encouraged us to think about it, which is, well, we just, you know, get rid of demand and supply takes care of itself. It's a much more nuanced and complicated system than that.

Christiana: [00:51:58] I mean, the company that does that par excellence is Apple.

Tom: [00:52:02] Mhm. Yeah.

Christiana: [00:52:03] Right. They anticipate what people are going to want. And then they offer you something that you haven't even imagined. And all of a sudden in three seconds you go like that's what I've always wanted. But actually three seconds ago you hadn't even imagined it.

Tom: [00:52:17] But but I understand it in innovation. And I mean, that's the Henry Ford quote, right? If I ask my customers what they want their to sell a faster horse. But in energy markets, I hadn't quite actually made that thought that it's the supply of additional supply. It brings down costs that changes demand. The world changes as a result of it. So even in commodities, supply creates demand.

Paul: [00:52:35] But the new US energy secretary has gone to enormous lengths to give these impassioned speeches about people in the developing world needing energy and how fossil fuels are going to provide it. And Christiana, I think on a previous podcast, you absolutely called that out and said, what a load of rubbish. If the, you know, these gigantic fossil fuel companies, we're going to solve problems of global poverty. They would have done it over the last 50 years and they haven't. And I really think it's important to call that out because, you know, once again, judge people by what they do and not what they say. And Mark is assuming science based policy from governments. Governments don't communicate that particularly, for example, the current government in North America. But I think what's so amazing about what he told us today is investors do see science based policy coming in around the world. They see the trends in electrification, they see the direction that the world is going in, and they are supporting the fossil fuel companies they know to run themselves down. And so maybe it's not a cause for celebration, but I think it's it should give us more optimism and more confidence that our work is going better and allow us to kind of, sort of redouble on the back of that good news.

Christiana: [00:53:48] Right.

Paul: [00:53:49] You look very thoughtful. Just before we go.

Tom: [00:53:51] Christiana Christiana, feeling sad about the fossil fuel companies and the future that they had the power to create and they didn't.

Christiana: [00:53:58] I'm just.

Speaker8: [00:53:58] I'm sad.

Christiana: [00:54:00] Sad is exactly the feeling. It's like, wow, they had it in their hands and they didn't take it. They will have to live with those consequences.

Paul: [00:54:10] For a long time.

Christiana: [00:54:11] Anyway, Paul, you did a great job. Thank you very much. It was.

Christiana: [00:54:15] A really, really wonderful.

Christiana: [00:54:16] Interview and Mark is brilliant.

Tom: [00:54:19] Happy Earth Day, everybody.

Paul: [00:54:20] Happy Earth day. Be Earth day. I mean, it's where we live. It's where we come from. And it's a very nice planet. Let's keep it that way. Yeah. We'll see you next week.

Tom: [00:54:29] Thanks, everyone. Bye.

Christiana: [00:54:30] Bye bye.