Saturday, April 25, 2009

Oil Giants forgetting Green ideas

Oil Giants forgetting Green ideas

US Government plans to spend $150 billion in the next ten years on the quest for a clean energy future. However, Giant oil companies have forgotten their Green initiatives: Shell stopped its projects related to wind, solar and hydrogen. Shell’s only efforts in renewable energy will focus on Biofuels. British Petroleum has significantly reduced its renewable energy research.

Green energy seems to be only a PR/advertising tool for Oil Giants. Since 2004, Shell invested $1.7 billion on alternative energy sources but its investment in oil and gas sum $87 billion. The top five oil companies have contributed with about 10% of the total amount spent on renewable sources, the remaining 90% was invested by corporate investors and capital funds.

In my opinion, Federal Government is doing a good job providing funds to provide incentives for the development of clean energy alternatives. In my opinion, it would be more effective to establish a price on CO2 emissions: Oil companies would really focus its efforts towards clean energy sources because their profits could be damaged if they don't avoid pollution.



abhishek gaurav said...

I agree with you on the PR stuff but you should consider the fact the investment into renewables drains out as soon as the economy starts doing bad. this is one thing we saw in the course. if the oil prices are high the profits can reinvested into renewables. but if the prices are low and people are also losing their jobs..who cares about renewables. although i will agree with you oil giants use this renewables stuff just for PR, but we should be cinsiderate

Khan said...

Investing in renewable and alternative energy resources has been one of the least priority for major oil companies. You have to understand that the reason for mind-numbingly small investment into renewables is that with easy oil (cheap to produce and good profit margins), a major will never risk investing in renewables which they consider as a sideline business rather than a mainstream business.
Shell has frozen investment into the renewable business and Exxon's chairman Tillerson says "to hang the future of the country’s energy on those alternatives alone belies reality of their size and scale". Moreover BP's beyond petroleum remains to be a tool for enhancing companies image as a green company with little investment in renewables (this was practically demonstrated to me when i visited BP's headquarter in Sunbury, England last summer).
Therefore you have to understand these factors when you hint at major oil companies not serious about investing in alternative energy. After all their business was based on oil, rather than alternative energy and future seems favorable for oil business as fossil fuels will power the world economy in 2050 (80% world energy supplies). So the only one left to invest in the new (renewable ) business is the government itself. WHEN ceo of Chevron and Exxon hint that it is not realistic that conventional energy resources will be replaced completely by alternative and green energy resources, they mean business and they know how to do it.

Rohit said...

Conocophillips also had ambitious renewable plans where they burnt their fingers. Some say they lost Billions with their renewable plans and are now getting rid of it all together.. Co.s like Exonn mobil are acting wise by not risking as much.. at least till the winners in technologies are picked..

andrés said...

I think big O&G companies still feel the change is too far away. A price on CO2 emissions will not be very effective unless the authorities find a way not to transfer this burden to the consumer. We know that demand is affected by price, but it is also true that price is greatly affected by perception. If people get really used to higher prices (the tax difference) then emissions will not be reduced and major oil and gas will still not have incentives to go green.