As nations around the world design economic stimulus packages to lead their domestic economies on a road to recovery in a post-pandemic world, the United States is dragging its feet on including green energy in its recovery plan. While a large number of studies suggest that green energy will be a profitable and reliable sector to invest in to help the suffering job market, the United States is falling far behind on this major energy opportunity. Now, some very surprising blue chip corporations are calling on the U.S. government to change its tune and include green energy in its stimulus packages designed to help the nation recover from the economic devastation wrought by the novel coronavirus pandemic. As The Hill reported this week, “McDonald's and Pepsi are calling on Congress to include green energy in the next COVID-19 relief package, arguing the coronavirus recession poses long-term damage to the renewable energy industry.”
The two massive corporations are not alone in their stance. In a letter sent to congressional leaders on Tuesday, more than 30 U.S. companies wrote that, "without support, our businesses will be less able to use our buying-power to drive job creation and economic growth in the renewable energy industry." The open letter cited data and analysis that had recently been published by BW Research Partnership, which found that “18 percent of clean energy workers filed for unemployment in recent months.” In order to help counteract this trend, these blue chip companies are petitioning Congress to design and instate a direct pay option, “such as a cash grant, for the production tax credit and the investment tax credit - two credits for electricity generated using resources like wind and solar,” as paraphrased by The Hill.
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Yes, the renewable energy sector, like so many others, has been hit hard by COVID-19. But unlike the long suffering shale oil and gas industry, renewable energy holds considerable hope for the future. Yes, it’s true that it’s better for the planet and that we will need to dig into the global clean energy transition if we have any hope of avoiding catastrophic climate change. But it’s also true that it simply makes good economic sense to be forward-thinking when it comes to investing, and renewables seen to have a brighter future than fossil fuels. Heck, even Saudi Aramco admits that peak oil is just around the corner. “Like many industries hit hard during the pandemic, renewable energy is suffering from supply chain disruptions, construction and permitting delays and a constrained tax equity market, the letter said, adding that renewable energy is a key source of job creation,” writes the Hill.
And the economic titans that are McDonalds, Pepsico--and many of the other companies that cosigned the letter to congress--are not alone. This week Halliburton also announced that it will be moving away from U.S. shale, in what is possibly the sector’s coup de grace, and taking a “fundamentally different course.” The additional signatories, alongside McDonalds and Pepsi, included Levi Stauss & Co., Adobe, Hewlett Packard Enterprise and the Renewable Energy Buyers Alliance, (which boasts a roster including Amazon, Apple, AT&T, Comcast, Bank of America, Best Buy, Microsoft and Starbucks.)
While it seems clear that the private sector is seeing the writing on the wall and moving their money toward clean energy, the public sector, at least in the United States, has been slow on the uptake. “Energy-related provisions,” writes The Hill, “have largely been left off the coronavirus-relief priority list on Capitol Hill. While Democrats have discussed including funding for renewable energy projects in recent months, the energy industry has not found a place in the $3 trillion in relief funding approved by Congress since the pandemic began.”
But with names like this supporting a green stimulus, not to mention the deep pockets that come along with them, all of that could change.
By Haley Zaremba for Oilprice.com
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Moreover, it is objectionable for the media along with environmental activists and oil and gas asset divestment campaigners to keep ramming green energy down our throats whether we like it or not.
Why not let green energy compete with other sources of energy for a share in a market already undergoing diversification rather than resort to fake news, militancy and exercising pressure on the global oil industry to divest of its oil and gas stocks just because of dogma. The global oil industry knows very well where its bread and butter lie. When it finds a more lucrative alternative to oil and gas, it will move away on its own volition.
And don’t try to mislead readers by giving the impression that the oil service giant, Haliburton, is moving away from US shale and taking a “fundamentally different course” insinuating that it is toward the green energy. This is plain disinformation. Haliburton is leaving a sinking ship to look for new fortunes in other oil-producing nations where its expertise is needed rather than sink with the US shale oil industry.
The notions of zero emissions by 2050 and imminent global energy transition during the 21st century are illusions. The global oil industry’s commitment to zero emissions by 2050 has more to do with burnishing its environmental credentials and far less to do with a real declaration of intent.
The industry knows full well a zero emission is unachievable throughout the 21st century and that its core business will remain oil and gas well into the future. That is why the world’s largest economies and the global oil industry are still spending big on oil and gas projects.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London