• 9 minutes WTI @ 67.50, charts show $62.50 next
  • 11 minutes The EU Loses The Principles On Which It Was Built
  • 19 minutes Batteries Could Be a Small Dotcom-Style Bubble
  • 1 hour Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 2 hours CO2 Emissions Hit 67-Year Low In USA, As Rest-Of-World Rises
  • 9 hours Saudi Fund Wants to Take Tesla Private?
  • 10 hours Starvation, horror in Venezuela
  • 14 hours Is NAFTA dead? Or near breakthrough?
  • 14 hours Are Trump's steel tariffs working? Seems they are!
  • 13 hours How To Explain 'Truth Isn't Truth' Comment of Rudy Giuliani?
  • 11 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 5 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 1 hour China goes against US natural gas
  • 4 hours Saudi PIF In Talks To Invest In Tesla Rival Lucid
  • 5 hours Film on Venezuela's staggering collapse
  • 9 hours Corporations Are Buying More Renewables Than Ever
Alt Text

Europe’s Untapped Lithium Sources

The British Isles have a…

Alt Text

Richard Branson To Invest In Elon Musk’s Hyperloop One

Britain’s Virgin Group boss has…

Chris Dalby

Chris Dalby

More Info

Trending Discussions

Oil Giants Gassed Out On Renewable Energy

Oil Giants Gassed Out On Renewable Energy

Could the future of renewable energy be reliant on the efforts of big oil companies? They would certainly like you to think so.

In the first decade of the 21st century, it seemed like the likes of BP and ExxonMobil had realized that the winds of change were blowing as they begun massive investment programs in renewable source of energy. Renewable Energy World reports that from 2000 to 2010, American oil and gas companies contributed 20% of all US investment in renewables, amounting to around $9 billion. The Deepwater Horizon disaster in 2010 shattered BP’s public image, but it came in the middle of the British company’s 10-year commitment to invest $8 billion in renewables from 2005-2015. It achieved this two years ahead of schedule in 2013.

Given the scope of this environmental disaster, one would expect BP to double down on this strategy. Not so, according to BP Alternative Energy CEO Phil New, who says that ‘BP hasn't made a public commitment on future spending for alternative energy. The financial commitment we made in 2005 has allowed us to cast a wide net in search of businesses that could be financially self-sustaining, and a good fit for BP.’  He then adds  that BP has built up a profitable wind business in the US and is working to maximize its financial and operating performance. Clearly, BP’s range of wind farms did not initially fit the bill since they tried to sell them off for just over $3 billion in early 2013 before reversing course and deciding to keep them in August of that year. Loren Steffy, author of Drowning in Oil, does state that BP’s now infamous ‘Beyond Petroleum campaign, was always more about marketing than commitment, and that the aborted wind farm sale was intended to help pay off legal costs related to Deepwater Horizon.

Shell’s performance has not been particularly inspiring, either. In November 2013, outgoing Shell CEO Peter Voser said that “it would be stupid from the oil and gas industry to say that renewables will not play a major role in the energy system of the next few decades. Today´s investment levels into wind and into solar have very rapid growth.  This is quite a startling turnaround from the same Peter Voser who, upon becoming Shell CEO in 2009, ordered the company to abandon all investments in wind, solar and hydropower for not being economical. 

Related Article: Buffett Says He Will Double Investment In Renewables

Of the big five oil companies, Chevron perhaps had the best track record of investing in alternative forms of energy. Although its investments were second to BP’s during the latter’s decade-long commitment, Chevron blazed ahead in the private development of geothermal energy.  Its Salak and Darajat fields in Indonesia, as well as Tiwi and Mak-Ban fields in the Philippines, have a capacity of 1.34GW. However, much like its peers, Chevron is moving away from renewables. In January, employees of Chevron’s renewable energy group were wined and dined in celebration for having doubled their projected profits in 2013, reaching $27 million. But as compared to Chevron’s total profits of $21.4 billion, this was seen as risible. Employees were told the giant was pulling investment from the division and encouraged to update their resumes.

The argument is well-established. Oil companies have invested in renewable energy sources in waves, based on international agreements, or technology breakthroughs, or PR pressure. Their efforts have spawned lovely advertising campaigns such as ‘Beyond Petroleum’ or Chevron’s ‘We Agree.’ Big Oil must turn a profit, say its lobbyists. Given joint first quarter of 2014 profits of $23 billion for ExxonMobil, BP, Chevron, Shell and Total combined, and with cash reserves of $68 billion between them, this hardly seems worth pointing out. It is fine for oil companies to leave renewable energy R&D to specialized firms, although their involvement would certainly speed things along. But investing in misleading global advertising campaigns is just raising false hopes.

By Chris Dalby for OilPrice.com




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News