Oil Investors May Be Running Off a Cliff They Can’t See

A major threat to fossil fuel companies has suddenly moved from the fringe to center stage with a dramatic announcement by Germany’s biggest power company and an intriguing letter from the Bank of England.

A growing minority of investors and regulators are probing the possibility that untapped deposits of oil, gas and coal (valued at trillions of dollars globally) could become stranded assets as governments adopt stricter climate change policies.

The concept gaining traction from Wall Street to the City of London is simple. Limits on emissions of carbon dioxide will be necessary to hold temperature increases to 2 degrees Celsius, the maximum climate scientists say is advisable.

Without technologies to capture the waste gases from combusting fossil fuels, a majority of known oil, gas and coal deposits would have to stay underground. Once that point is reached, they become stranded.