Publications: Notes at the Margin

Patrick Pouyanne's Ponzi Scheme (October 23, 2017)


Last week, Patrick Pouyanné, chairman and CEO of the French oil multinational Total, inadvertently and unintentionally provided a vivid characterization of the Ponzi scheme being pursued by big energy. Ironically, a week earlier the French bank BNP had noted the scheme and moved to shield itself and its investors from its impacts.


This development has very important implications for the longer-term price of oil and other energy resources. Oil and gas prices will likely rise, probably dramatically once or twice in the coming decade, because the investments the industry, especially some executives such as Pouyanné, sees as necessary will not be forthcoming. The underinvestment will cause the price spikes. The price spikes in turn will hasten the move away from hydrocarbons toward renewables, inevitably speeding the world’s decarbonization.


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