UNITEDSTATES

SECURITIESANDEXCHANGECOMMISSION
WASHINGTON,D.C.20549

Form10Q

(MARKONE)

QUARTERLYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIES
EXCHANGEACTOF1934

FORTHEQUARTERLYPERIODENDEDMarch31,2015

TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIES
EXCHANGEACTOF1934

FORTHETRANSITIONPERIODFROMTO.

CommissionFileNo.00033066

FOSSILFUELASSETS,INC.
(Exactnameofregistrantasspecifiedinitscharter)

Delaware
(StateorOtherJurisdictionof
IncorporationorOrganization)

Global
(Addressofprincipalexecutiveoffices)

703200509
(I.R.S.Employer
IdentificationNo.)

AllZipCodes
(ZipCode)

(281)8675309
(Registrantstelephonenumber,includingareacode)

Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecurities
ExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),
and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes

No

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,every
InteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationSTduringthepreceding12months(or
forsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).Yes

No

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anonacceleratedfiler,orasmaller
reportingcompany.Seethedefinitionsoflargeacceleratedfiler,acceleratedfilerandsmallerreportingcompanyinRule12b2
oftheExchangeAct.(Checkone):

Largeacceleratedfiler

Acceleratedfiler

Nonacceleratedfiler

Smallerreportingcompany

(Donotcheckifasmallerreportingcompany)

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b2oftheExchangeAct).Yes

No

NumberofsharesofthecommonstockoftheregistrantoutstandingasofApril28,2015:69,410,744shares.


FOSSILFUELASSETS,INC.

SHOULDYOUDIVESTYOURFOSSILFUELASSETS?

RecentDevelopments

AccordingtotheGuardian,Morethan200institutions,worthover$50bn,havecommittedtodivestfromfossilfuels,including
universities,localauthorities,faithorganisationsandpensionfunds.Acoalitionofphilanthropicfoundations,includingtheheirstothe
Rockefelleroilfortune,startedtopullouttheirinvestmentslastyear,whilecitiesdivestingincludeSanFrancisco,SeattleandOslo.
Theworldslargestsovereignwealthfund,NorwaysGovernmentPensionFundGlobal(GPFG),recentlyrevealedithaddropped114
companies,includingtarsandsproducers,onclimategrounds.TheWorldCouncilofChurchesandtheQuakermovementinBritain
havemadecommitmentsnottoinvestinfossilfuels,butcampaignstargetingtheChurchofEnglandandtheVaticanareongoing.

Thatsalotofdivestment.Anditbringsuplegitimatequestionsaboutthechangingtideoffossilfuelinvestmentandthelegitimacyof
assetpositionsinoilandgascompaniesthataresubjecttotheslewofpolicymaking,humandecisionmaking,andbusinesspractices
risks.Thisdocumentquestionswhetherthesesignificantrisksaretrulyincorporatedintooilandgascompanymarketvaluation,or
whetheravaluationshortfallisgrowing.Givenincreasedglobalvolatility,andtheincreaseddifficultyinfullyunderstanding,
reporting,andpreparingforsystemicrisks,ourcurrenttoolsforriskmitigationandevaluationseemlesscapablethanever.Takeas
anexamplethatSECfilingshavesystematicallyfallenshortofaccuratelyreportingthekindsofrisksassociatedwithdeepwater
drillingandtheincreaseinextremeinclementweather.

Itstheopinionoftheauthorsofthisdocumentthatdivestmentoffossilfuelassets(regardlessofpoliticalaffiliationoragenda)isa
prudentfinancialdecision,basedoffofaclearheadedeconomicanalysisoftheincreasedriskprofile(andlackofadequaterisk
reporting)ofoilandgascompanies.

DisclosureRegardingForwardLookingStatements

InvestorsrelyontheU.S.Securities&ExchangeCommission(SEC)toregulatethefilingandreportingoffinancialdocuments
relatedtotheperformanceofpubliclytradedcompanies.Buthowmuchisreallybeingreported?AnassessmentbyCeresofthe
worldstenmostprominentoilandgascompaniesfoundthatnotonehadmettheirstandardforhighqualityriskassessmentreporting
(whichisbasedoffoftheSECsInterpretiveGuidanceonclimateriskdisclosureandinvestorexpectationsofdeepwaterdrillingrisk
reporting).

Thenatureofriskrelatedtooilandgasdrillingisbecomingmorecomplexandintractableascompaniesmustcontendwiththenew
landscapeofemissionsregulation,globalagreements,andmorefrequentextremeweatherevents.Theseissuesareonlyfurther
compoundedbytheincreaseinhighriskunconventionaldrillingactivitiesespeciallydeepwaterdrilling.BPhasprovedthatthe
assessmentofrisk,levelofinternalcontrols,andpotentialforfutureunforeseeableeventsisontherise,andthatcurrentreporting
standardsareinsufficient.

Takethisquotefromthe2011Ceresreportonriskdisclosurequality,Thisreportdoesnotincludeany
Excellent
ratingforany
categorybecausenocompanyprovidedreportingofthisqualityonitsriskandopportunities.Sowhilecompaniesaremaking
extensivecapitalinvestmentsrelatedtoclimatechangeanddeepwaterdrillingthatcarrymaterialfinancialrisks,
theyaregenerally
failingtoadequatelydisclosethemconsistentwithSECrulesandgrowinginvestorexpectations.

The2011reportgoesonthepointoutthatBPandTotal*providedrelativelybetterdeepwaterdrillingdisclosurethantheother
companiesinthestudy.Butthereaderwillnoticethatdespitetheseimprovementsinreporting,andthelessonslearnedfromthe
Macondoincident,thatthesefactorsdidnothelptomitigateBPsDeepwaterHorizondisaster.

BelowisasummaryofCeres2011reportoftheriskmitigationreportinglandscapeforthelargestoilandgascompanies,fromthe
perspectiveof:regulatoryrisks,physicalrisks,indirectrisksandopportunities,GHGemissions,emissionsmanagement,andclimate
governance.AndinthissummaryofCeresresultswethinkyoullfindampleargumentforwhycurrentreportingpracticesshould
castdoubtonfossilvaluationsandthelikelihoodthatallpricingconsiderationsaretrulyaccountedforinoilandgasstocks.

*ListofCompaniesStudiedinCeresReport:Apache,BP,Chevron,ConocoPhillips,Eni,ExxonMobil,Marathon,Shell,Suncor,Total.

RegulatoryRisks

Regulatoryriskistheriskassociatedwithexistingandproposedlawsthatmayimpacteachcompanysoperatingefficiency,and
includespotentialimpactstofinancialperformanceandcompanyoperatingpractices.Goodregulatoryriskreportingtakesinto
considerationanypotentiallymaterialrisksassociatedwithregulatoryaction.


GoodRegulatoryReporting
Eni,Suncor
FairRegulatoryReporting
Apache,BP,Chevron,ConocoPhillips,Marathon,Total
PoorRegulatoryReporting
ExxonMobil,Shell

PhysicalRisks

TheSECstandardsforphysicalriskreportingincludeanyimpactsthatcouldbetheresultofweatherchanges,increasesinstorm
intensity,sealevelrising,andtemperatureextremesthatmayimpacttheregistrantspersonnel,physicalassets,orsupplychain.
Physicalriskreportingisespeciallyimportantforregistrantsthatoperateassetsconcentratedoncoastlinesorwhoseassetssubjectthe
companytoincreasedinsurancepremiumsordeductibles(suchasassetscontainedinfloodzones).

FairPhysicalRiskReporting
:BP
PoorPhysicalRiskReporting
:Apache,ConocoPhillips,Marathon
NoDisclosure
:Chevron,Eni,ExxonMobil,Shell,Suncor,Total

IndirectRisks&Opportunities

Indirectrisksandopportunitiesreportingcentersaroundtechnologicalandcompetitiveconcernswherenewtechnologies,changesin
marketconditionsordesires,andincreasedcompetitionmaymateriallyimpactcompanyoperatingperformance.Specificallyforoil
andgascompaniesthiscanmeandecreasesinthedemandforproductsthatproducesignificantgreenhousegasemissions,demandfor
loweremissionsproducts,andincreasedemissionsinnovations.

GoodIndirectRisks&OpportunitiesReporting
:BP
FairIndirectRisks&OpportunitiesReporting
:Chevron,Eni,Shell,Suncor,Total
PoorIndirectRisks&OpportunitiesReporting
:Apache,ConocoPhillips,ExxonMobil,Marathon

GHGEmissions

Partofanalyzingfutureregulatoryrisksisanunderstandingofcurrentandexpectedgreenhousegasemissions.Withoutan
understandingofhistorical,present,andprojectedemissionstrendsinvestorsarelefttowonderaboutthenatureofregulatoryaction
thatmightexistforpastandfutureoperatingbehaviors.

GoodGHGEmissionsReporting
:Eni
FairGHGEmissionsReporting
:BP
PoorGHGEmissionsReporting
:Shell,Suncor
NoDisclosure
:Apache,Chevron,ConocoPhillips,ExxonMobil,Marathon,Total

EmissionsManagement

Gooddisclosureofemissionsmanagementincludesoutliningtimelinesforemissionsreductioninitiatives,emissionstargets,and
effortstoprofitfromemissionsreductiontechnologiesandoperatingpractices.Theoutliningofprojectsdesignedtoreduceemissions
canhelpinvestorsbetterunderstandthecompanysriskprofileaswellasoperatingopportunities.

GoodEmissionManagementDisclosure
:Eni
FairEmissionsManagementDisclosure
:BP,Marathon,Shell,Suncor,Total
PoorEmissionsManagementDisclosure
:Chevron,ConocoPhillips,ExxonMobil
NoDisclosure
:Apache

ClimateGovernance

Thelastriskassessmentcategoryinvestorsneedformakinganinformedinvestmentdecisionisrelatedtoclimategovernance,which
isthedisclosureofdetailsrelatedtointernalclimatechangegovernance,andboardengagementonclimaterisksandopportunities.
Thismayincludereportingaboutexecutivecompensationrelatedtoclimateriskmitigationandcorporateclimateobjectives.

FairClimateGovernanceDisclosure
:BP,Shell,Suncor
PoorClimateGovernanceDisclosure
:Apache,Chevron,ConocoPhillips,ExxonMobil,Marathon,Total
NoDisclosure
:Eni

Summary
Asyoucansee,noorganizationhadanexcellentratinginanyoftheriskmitigationcategorieslistedabove.Thislackofreporting
depthleavestheriskassociatedwithincreasedvolatilityandunconventionalpracticessquarelyinthehandsofinvestors.Highly
knowledgeableinvestorsmaybeabletoovercomereportingshortfalls(andsupplementthemwithindustryknowledgeand

experience)butmostinvestorswillberequiredtotakeontheunreportedrisks,unlesstheydivesttheirassetsaltogether.

AssetImpairment

ClimateTechniquesUsed

800,000yearIceCoreRecordofAtmosphericCarbonDioxide(CO2)
Antarcticicecorerecordsofcarbondioxide(CO2)thatnowextendback800,000yearsatDomeC(EasternAntarctica7506'S,
12324'E,3233masl)andover400,000yearsatVostok(HigheraltitudeEasternAntarctica7828'S,10652'E,3500masl)indicate
climatechangesthataretheresultofanthropocentricactivities.Thecollectiveperiodofrecordisfrom~137to795,000yearsBefore
Present(B.P)(Beforeyear1950)

Thoughthereisanacknowledgedleveloftemporaluncertaintythatincreaseswithcoredepth,thedifferenceislessthan5%ofthe
trueageatmaximum.Overthetotaltimeperiod5%isnotsignificantenoughtoinvalidatethegathereddata.

TheanalysisofthisdataindicatesthattheatmosphericlevelsofCO2asmeasuredinppmv(partspermillionbyvolume)hasvaried
between170ppmvand300ppmvwhichcorrespondstotheglacialperiodsatthelowerendandinterglacialperiodsatthehigherend
ofthemeasurement.

Thehighestpreindustrialmeasurementexistsaround330,000yearsagoat298.6ppmv.Currentmeasurementsin2010indicate
valuesof386402ppmv.Withanestimatedincreaseofabout2ppmv/year.

IceCoreRecordreference:
Lthi,D.,etal.2008.EPICADomeCIceCore800KYrCarbonDioxideData.IGBPPAGES/WorldData
CenterforPaleoclimatologyDataContributionSeries#2008055.NOAA/NCDCPaleoclimatologyProgram,BoulderCO,
USA.AccessedfromtheCarbonDioxideInformationAnalysisCenter,OakRidgeNationalLaboratory,U.S.DepartmentofEnergy.

GlobalSeaLevelData
Globalsealevelroseabout17centimeters(6.7inches)inthelastcentury.Therateinthelastdecade,however,isnearlydoublethatof
thelastcentury.Sealevelriseiscausedprimarilybytwofactorsrelatedtoglobalwarming:theaddedwaterfrommeltinglandiceand
theexpansionofseawaterasitwarms.Datahasbeenderivedfromcoastaltidegaugedata,andcanbeusedtoshowhowmuchsea
levelchangedfromabout1870to2000.

SeaLevelreference:
Church,J.A.andN.J.White(2006),A20thcenturyaccelerationinglobalsealevelrise,GeophysicalResearch
Letters,33,L01602,doi:10.1029/2005GL024826.Theglobalsealevelestimatedescribedinthisworkcanbedownloadedfromthe
CSIROwebsite.

GlobalTemperatureRise

AllthreemajorglobalsurfacetemperaturereconstructionsshowthatEarthhaswarmedsince1880.
Mostofthiswarminghasoccurred
sincethe1970s,withthe20warmestyearshavingoccurredsince1981andwithall10ofthewarmestyearsoccurringinthepast12
years.Eventhoughthe2000switnessedasolaroutputdeclineresultinginanunusuallydeepsolarminimumin20072009,surface
temperaturescontinuetoincrease.

Theoceanshaveabsorbedmuchofthisincreasedheat,withthetop700meters(about2,300feet)ofoceanshowingwarmingof0.302
degreesFahrenheitsince1969.

OceanAcidification
SincethebeginningoftheIndustrialRevolution,theacidityofsurfaceoceanwatershasincreasedbyabout30percent.Thisincreaseis
theresultofhumansemittingmorecarbondioxideintotheatmosphereandhencemorebeingabsorbedintotheoceans.Theamountof
carbondioxideabsorbedbytheupperlayeroftheoceansisincreasingbyabout2billiontonsperyear.

Theeffectsofthisfactorhavethehighestvolatilityassociatedwithitastheoceansystemismassivelycomplex.

FinancialImpacts
Oneofthelargestfinancialimpactsthatmayresultfromtheinvestmentinfossilfuelassetsisthatdevaluationandassetimpairment.
Partofwhatisimportantaboutthetechniquesaboveisthattheyhighlighttheconsistencyinclimatefindings.Touseonebodyof
researchinparticular(Dr.JamesHansensresearch,whichhasbecomethegoldstandardforclimatecapacitythresholds)thereis
overwhelmingagreementthatariseintemperaturemorethan2Cwouldleadtodisastrousglobalconsequencesintermsofclimate
volatilityandquality.Takeasanexampletheexpectedclimatechangesinthefollowinggeographies:

Northeast
.Heatwaves,heavydownpours,andsealevelriseposegrowingchallengestomanyaspectsoflifeintheNortheast.
Infrastructure,agriculture,fisheries,andecosystemswillbeincreasinglycompromised.Manystatesandcitiesarebeginningto

incorporateclimatechangeintotheirplanning.

Northwest
.Changesinthetimingofstreamflowreducewatersuppliesforcompetingdemands.Sealevelrise,erosion,inundation,
riskstoinfrastructure,andincreasingoceanacidityposemajorthreats.Increasingwildfire,insectoutbreaks,andtreediseasesare
causingwidespreadtreedieoff.

Southeast
.Sealevelriseposeswidespreadandcontinuingthreatstotheregionseconomyandenvironment.Extremeheatwillaffect
health,energy,agriculture,andmore.Decreasedwateravailabilitywillhaveeconomicandenvironmentalimpacts.

Midwest
.Extremeheat,heavydownpours,andfloodingwillaffectinfrastructure,health,agriculture,forestry,transportation,airand
waterquality,andmore.ClimatechangewillalsoexacerbatearangeofriskstotheGreatLakes.

Southwest
.Increasedheat,drought,andinsectoutbreaks,alllinkedtoclimatechange,haveincreasedwildfires.Decliningwater
supplies,reducedagriculturalyields,healthimpactsincitiesduetoheat,andfloodinganderosionincoastalareasareadditional
concerns.

Whatdothesepredictedphenomenahavetodowiththefinancialviabilitytoinvestinginfossilfuelassets?Mostestimatesoffossil
fuelreservesreportthatwecansafelyburn565gigatonsoffossilfuelsbeforewereachtheearthscarryingcapacityandtheclimate
changesasdescribedabove.Buttheproblemisthattheworldcontainsapproximately2,795gigatonsoffossilfuelreserves.Andas
wecontinuetoobservemoreseverweatherandtoengageinaglobaleconomywithglobalregulatoryconcerns,thelikelihoodthata
significantportionoftheearthsreservesbecomesunburnableseemsimminenttotheseauthors.Andwiththecurrentvalueoffossil
fuelreservesvaluedintooilandgasequitiesitslikelythatwellseeaprecipitousfallinthevalueofthesecompanies.Andlikethe
financialcrisisof2008itslikelythatthisprecipitousdeclinewillnotbepredictable,butinsteadwilloccurquicklyascriticalmassis
reachedinclimatesentimentandtheneedforaction.

Itsforthisreasonthatwerecommendthedivestmentoffossilfuelassetsasastrategyformitigatingthepolitical,regulatory,and
financialriskassociatedwiththisassetclass.

GlobalTemperatureandOceanAcidificationReferences:
https://www.ncdc.noaa.gov/indicators/
http://www.cru.uea.ac.uk/cru/data/temperature
http://data.giss.nasa.gov/gistemp
T.C.Petersonet.al.,"StateoftheClimatein2008,"SpecialSupplementtotheBulletinoftheAmericanMeteorological
Society,v.90,no.8,August2009,pp.S17S18.
I.Allisonet.al.,TheCopenhagenDiagnosis:UpdatingtheWorldontheLatestClimateScience,UNSWClimateChange
ResearchCenter,Sydney,Australia,2009,p.11
http://www.giss.nasa.gov/research/news/20100121/
http://science.nasa.gov/headlines/y2009/01apr_deepsolarminimum.htm
L.Polyak,et.al.,HistoryofSeaIceintheArctic,inPastClimateVariabilityandChangeintheArcticandatHigh
Latitudes,U.S.GeologicalSurvey,ClimateChangeScienceProgramSynthesisandAssessmentProduct1.2,January2009,
chapter7
R.KwokandD.A.Rothrock,DeclineinArcticseaicethicknessfromsubmarineandICESATrecords:19582008,
GeophysicalResearchLetters,v.36,paperno.L15501,2009
http://nsidc.org/sotc/sea_ice.html
http://www.pmel.noaa.gov/co2/story/What+is+Ocean+Acidification%3F
http://www.pmel.noaa.gov/co2/story/Ocean+Acidification
C.L.Sabineet.al.,TheOceanicSinkforAnthropogenicCO2,Sciencevol.305(16July2004),367371
CopenhagenDiagnosis,p.36.

OffBalanceSheetArrangements
Ifyoufindyourselfconcernedaboutthequalityandaccuracyofclimateandunconventionaldrillingriskreporting(aswedo),there
arestepsyoucantake.Prudentinvestorswhowouldliketolimittheirdownsideriskrelatedtooilandgasexposurecanstartby
divestingassetsfromdirectpositionsinoilandgascompanies.Andwhiletherearemorethan200coal,oil,andgascompaniesthat
aresubjecttoclimateandregulatoryrisks,alargeportionofriskcanbemitigatedbydivestingfinancialassetsfromthetoptenoiland
gascompanies.Thestepsarelistedbelow.

Step1:FindOutHowMuchYouHaveInvested
Onetechniquefordivestingfromoilandgasinterestsistoworkwithyourfinancialadvisortoidentifyallinvestmentsinalistof200
coal,oil,andgascompanies.IdentifyingtheseinterestscanbetrickybecauseofthenatureofindexfundslikeS&Pindexes,which
holdpositionsthroughouttheentireS&P500.

Tocalculatehowmuchyouhaveinvested,firststartwithanydirectinvestmentpositions.Thenuseapproximationstrategiesto
understandwhatportionofyourindexedfundsareinvestedinoilandgas(asanexample,welldiversifiedmutualfundsand401Ks
typicallyhavearound10%infossilfuelinvestments).

Besuretocheckalldirectholdings,indexedfunds,retirementfunds,401Kholdings,andmutualfundholdings.Thisthorough
assessmentofyouroilandgasexposurewillgiveyouanoverviewoftheentireexposuretoyourassetportfolio.

Step2:DiscussYourDivestmentOptionswithYourCustodian

Onceyouunderstandyourfossilfuelexposureyoucanbeginaconversationwithyourfinancialcustodianabouthowtobestdivest
yourassets,andchooseamoreappropriateriskprofile.Toensurethatyoukeepasdiversifiedofariskportfolioaspossible,youcan
workwithyourcustodiantoinvestinfundsthatmaintainthesameriskprofileasS&Pcompanieswithoutdirectfossilfuelexposures.

Overtheyearsorganizationshavedevelopedfossilfuelfreeinvestmentsfunds.TheseorganizationsincludeGreenAmericaslistof
fossilfuelfreeinvestmentoptions,andTheForumforSustainableInvestmentfreeresourcesonmanagersandmutualfundsthatare
fossilfuelfree.

Step3:EvaluateWhichFeeStructureWorksBestForYou

Becauseaguidingprincipleofthisdocumentisthatafossilfuelfreeinvestmentportfoliocontainsalowerriskprofilethananormal
diversifiedportfolio,costandfeesmustbetakenintoaccount.Itcanbetruethatfossilfuelfreeindexesincludehighermanagement
fees.Tomakesureyouremakingthemostprudentevaluation,besuretocalculateyourexistingfeestructure,thetaximplicationsof
liquidatingcurrentpositions,andthefeestructureofanynewfundsyouareconsidering.

Beawarethatthereareavarietyoffundsandmethodsfordivestingfromfossilfuelswithavarietyoffeestructures.Timespent
choosingthefeestructurethatisrightforyoucanoftenresultinverylittlechangeinyouroverallfeeexpenditure.