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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Why Amazon Is Suddenly Courting Big Oil

For years, Big Tech has been a vocal advocate of powering their data centers with renewable energy, while the multi-billionaire founders of companies like Amazon, Microsoft, and Facebook have teamed up to invest in new technologies for cheaper energy in an emission-free future.

Amazon has said in the past that it remains committed to achieving 100-percent renewable energy usage for its global infrastructure.

Yet, in a somewhat ironic move, Amazon has been increasingly courting Big Oil, pitching its cloud services to the oil and gas industry, to help oil and gas companies optimize production, reduce time to first oil, and improve profitability.  

For Amazon Web Services (AWS), the pitch to oil and gas is also about profitability, and is business as usual, despite the company’s pledged support for renewable energy.

Two years ago, Amazon launched a concerted effort to book oil and gas industry clients, according to internal documents seen by Gizmodo. “Positioning for Success in Oil & Gas” was the title of a presentation at AWS’s annual Sales Kick-Off event in February 2017, Gizmodo’s Brian Merchant writes.

According to an internal Amazon database of ‘Oil and Gas Key Accounts’ for 2018, which Gizmodo has viewed, the tech giant has enlisted dozens of Big Oil names as potential and existing clients—and those names include U.S. supermajors ExxonMobil and Chevron, as well as Saudi Arabia’s state oil giant Aramco. BP, Shell, ConocoPhillips, Hess, Halliburton, Schlumberger, and Woodside are also on Amazon’s accounts list, though they are listed as ‘lighthouse accounts’—treated as early adopters of Amazon’s services for oil and gas—a field in which the tech firm is in early stages of business development, according to Gizmodo.   

Amazon’s sales pitch to the oil and gas industry at the 2019 CERAWeek in Houston last month was that oil companies still spend money on their own data centers and on those centers’ operations, even if all prices are low and firms seek savings.

“All that cap ex, you can’t throw it out the window and sell it overnight if the price of oil goes down,” Bill Vass, vice president of engineering at Amazon Web Services, told CNBC in March, noting that most of Amazon’s customers reach 22-45 percent savings with the cloud.  Related: Has Brazil's Oil Boom Been Overstated?

Some may view Amazon’s foray into enlisting Big Oil accounts as an ironic discrepancy between the technology firm’s pledge to make its operations greener and helping oil companies pump more and more barrels of oil, more profitably. 

Environmentalists sure do. According to a Greenpeace USA report from February 2019, “Tech giants like Amazon have made promises to power their data centers with renewable energy, but a closer look into the heart of the internet reveals their rapid growth is driving more investment in fossil fuels.”

“If Amazon and other internet companies continue their rapid expansion of data centers in Virginia, but allow Dominion to continue with its strategy to use rising data center demand to justify significant new investment in fossil fuel infrastructure, they will be responsible for driving a massive new investment in fossil fuels that the planet cannot afford,” Greenpeace said in its report “Clicking Clean Virginia – The Dirty Energy Powering Data Center Alley.” The environmentalist organization goes as far as asking “Is AWS Breaking its 100 Percent Renewable Commitment?”

Amazon, for its part, says that it is “Keeping up with our commitment to 100% renewable energy” and that AWS exceeded 50 percent of renewable energy usage for 2018.

Earlier this year, Amazon set an ambitious goal to have 50 percent of all its shipments net zero carbon by 2030.

The company has been investing in wind and solar farms in recent years, including in a wind farm in West Texas oil town Snyder in 2017.

While Greenpeace says that it appears that Amazon’s renewable commitment has stalled, the firm announced just this week three new renewable energy projects—wind farms in Ireland, Sweden, and the U.S. Related: Trump’s Executive Order Is A Gamechanger For Oil Shipping

“We expect more projects in 2019 as we continue toward our goal of powering all AWS global infrastructure with renewable energy,” said Peter DeSantis, Vice President of Global Infrastructure and Customer Support, Amazon Web Services.

Amazon founder and CEO Jeff Bezos is part of the group of billionaire founders of Breakthrough Energy alongside Bill Gates, Marc Benioff, Richard Branson, and Jack Ma. Breakthrough Energy is investing in new technologies “to find better, more efficient and cheaper energy sources.”

Environmentalists point to the discrepancy between Amazon’s clean energy commitments and its help to oil companies to pump more oil, but for the tech giant, its own renewable energy usage goals do not appear misaligned with profiting off Big Oil clients of its services.

By Tsvetana Paraskova for Oilprice.com

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