In the eyes of many investors and climate activists, ExxonMobil is the worst of them all—it is nowhere near the recent climate pledges of its European rivals and it has been accused of covering up the science that has been warning of the effects of global warming for decades.
Yet, it was Exxon that funded a solar power company in the 1970s when the Arab oil embargo led to long lines at gas stations in the United States and American oil companies sought to diversify into other forms of energy as they thought oil, and growing dependence on OPEC oil, could be a threat to their business and existence.
In what can be seen as a highly ironic history twist, it was Exxon that helped the solar industry to take off, thanks to Big Oil’s deep pockets to fund research into solar panels and solar cells and how to make those cells work efficiently on Earth, not only in space missions where they were used half a century ago.
By funding research into solar energy and technology, the Big Oil of the 1960s and 1970s helped to forge the solar power industry as we see it today—one of the fastest-growing energy sources on Earth, Andrea Hsu writes for NPR.
Exxon funded Solar Power Corporation, which was set up in 1968 as the first solar energy company for terrestrial applications, thin film research, and manufacturing and marketing of silicon modules. Photochemist Elliot Berman, now 89, founded Solar Power Corporation and approached Exxon in 1970 with his ideas about solar energy.
“The real breakthrough of Elliot — with the help of Exxon — was planting the flag of photovoltaics throughout the world,” John Perlin, author of the book ‘Let It Shine: The 6,000-Year Story of Solar Energy’, told NPR.
A 1970s Exxon ad, ‘Energy for a Strong America’, featured solar power alongside coal and nuclear power in Exxon’s then efforts to boost oil and gas production in America and expand and develop other sources of energy.
But Exxon shut down Solar Power Corporation in the middle of the 1980s after chemical engineer Adam Louis Shrier, who was in charge of unconventional energy sources, wrote in a report that the solar business would need at least another decade to become self-sufficient, let alone make money on its own. Related: Is This The End Of The Lithium-Ion Battery?
Today, even with thriving global solar power industry, Exxon believes that the answer to climate change risks is to invest in research and development (R&D) in finding yet-to-be-discovered comprehensive and scalable solutions that would mitigate global warming, rather than putting money into wind and solar farms.
Unlike the major European oil and gas companies, Exxon doesn’t see the existing low-emission solutions as “comprehensive enough,” according to Exxon’s chief executive Darren Woods.
Yet, the U.S. supermajor uses now-cheap renewable energy in its business. Oddly enough, this clean energy powers Exxon’s operations in the Permian in West Texas—its key priority development project for the next few years. Exxon has entered into two power purchase agreements (PPAs), under which the U.S. major will buy 500 MW of solar and wind power from the U.S. unit of Denmark’s Ørsted in the Permian, Ørsted said in November 2018. According to Exxon, the agreement with Ørsted made the supermajor one of the top 10 corporate wind and solar buyers in 2018.
Meanwhile, the global solar market is booming this year, after a muted 2018 due to the Chinese subsidy cuts that shocked the industry.
This year, global solar photovoltaic (PV) installations are expected to reach a new high of 114.5 GW, a 17.5-percent increase from 2018, Wood Mackenzie research showed in July.
In the U.S. alone, utility solar pipeline soared to a new record of 37.9 GW, the U.S. Solar Market Insight Report by WoodMac and the Solar Energy Industries Association (SEIA) said earlier this month.
“It’s no surprise that the U.S. solar pipeline is surging as costs continue to fall and solar becomes the lowest cost option for utilities, corporations and families,” Abigail Ross Hopper, president and CEO of SEIA, said.
According to WoodMac, oil majors could find the best returns in renewables in offshore wind projects and ultra-large solar PV tenders, thanks to their big financing power.
However, the returns in solar and wind of between 5 percent and 9 percent are much lower than returns from conventional upstream oil and gas, 21 percent, or North American onshore oil, 33 percent, the energy consultancy reckons.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- OPEC’s No.2 Prepares For Oil Export Boom
- Brent Oil Falls Below $60 After Saudis Restore Production
- Oil Pirates: The Gulf Of Mexico’s Billion Dollar Problem