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New York’s Pension Fund to Sell All Fossil Fuel Stocks Within 5 Years

Solar rises as emerging market’s renewables investment hits record high. The price collapse in renewable energy technology and deployment drove record investment in emerging markets in 2019, going from $24 billion invested in 2018 to $32 billion invested in 2019. The IEA mentioned the importance and growth of solar energy, calling it the “king of electricity.” Transitioning most of our energy uses to clean electricity is necessary to meet our 2050 climate goals. To further this, New York State’s pension fund is planning to sell all its fossil fuel stocks in the next five years and all the shares from companies that contribute to climate change. New York will also push companies they do invest in to take more action to reduce their pollution.

The U.S. Energy Information Administration reported that natural gas storage inventories was reduced by 91 Bcf this week, which is the largest weekly withdrawal so far this season. Stocks are 309 Bcf higher than last year at this time and 260 Bcf  above the five-year-average. The January 2021 NYMEX natural gas contract is trading up at $2.45 while the January 2021 crude oil contract is up $0.63 at $46.15.

Natural gas pricing plays a key role in electricity power pricing due to the increasing reliance on natural gas fired generators as nuclear, coal, and oil generation is retired and mothballed. As the marginal unit of generation, gas prices are directly correlated to power pricing (more so in some regions such as NYC vs. others such as parts of PJM). We keep an eye on natural gas market fundamentals in order to provide insights into forward power pricing for our clients. Gas production has grown and surpassed any speculation that production would not be able to keep up with demand due to LNG and Mexican exports.