• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 7 hours Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 1 hour Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 6 hours Instagram Now Banning Photos Of People At Gun Ranges, Claiming They Promote "Violence"
  • 2 hours Let's shut down dissent like The Conversation in Australia
  • 2 hours Pepe Escobar: “How The Houthis Overturned The Chessboard”
  • 12 hours Famous Manufacturer of Anti-Ethanol Additives Proves Ethanol's Safety and Benefits
  • 18 hours Collateral Damage: Saudi Disruption Leaves Canada's Biggest Refinery Vulnerable
  • 1 day Hong Kong protesters appeal to Trump for support.
  • 1 day Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 14 hours Trump Accidentally Discusses Technology Used In The Border Wall
  • 9 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 15 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
Alt Text

European Carmakers Face Perfect Storm

Much stricter emission caps, high…

Alt Text

Oil Prices Must Drop Sharply To Compete With EVs

The long-term breakeven oil price needs to…

Alt Text

Home Energy Storage Capacity Breaks Records In US

As costs for battery storage…

Chris Dalby

Chris Dalby

More Info

Premium Content

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




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play