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Oil Companies Step into the Sunlight

It has been fashionable in green circles to portray oil companies as a major part of the multinational axis of evil that feeds global warming, contributing to the destructive exploitation of our planet, driven by their greed for profit. This blogger has been of the opinion that, ironically, oil companies are among the best equipped to handle the technological challenges that face large scale deployment of renewable energy technology. Compare the technical challenges of setting up large offshore wind farms or drilling from a deep-sea oil platform; installing ocean energy conversion devices, wave generation or tidal flow streams in rough coastal waters; think of the setting up of large scale solar thermal plants or solar PV farms under Saharan conditions. All of these ventures require a high degree of engineering skills and huge amounts of capital; all of which are in plentiful supply at oil companies.

There are visionary leaders among the oil companies who see that the transition to lower carbon fuels was inevitable. BP for one, under the leadership of John Browne, briefly tried to recast itself in the late 1990s as a company “Beyond Petroleum,” but the initiative was defeated by market forces, the world’s insatiable demand for more and bigger cars, and the success of the oil companies themselves in finding ever more efficient ways of secondary and tertiary recovery of oil from wells that had long been considered pumped dry. And now another development to slow the adoption of renewables, the plentiful availability of natural gas through fracking. In addition to being awash in natural gas, the US is set to overtake Saudi Arabia as the world’s second largest oil producer, behind Russia.

Despite all these seeming setbacks to renewables, it is increasingly accepted by research and advisory groups within the oil companies themselves that the large-scale transition to renewable sources of energy is inevitable. BP notes in its 2012 annual report that oil demand has fallen in six of the last seven years, as has coal. Here is a link to several scenario studies by Shell that postulate what the transition could look like. The energy output from renewables worldwide today has reached the level forecast for the year 2025 by the International Energy Agency in 2000,  I would similarly argue that Shell’s renewables forecast for the year 2070 will probably be achieved by the year 2050, if not earlier. Predicting future developments is always uncertain, of course, but it is the strength of our collective beliefs and actions today that will determine our tomorrows.


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