Politicians may be talking about a “Green New Deal”, and how environmental technologies will kick-start the economy out its current crisis, but one of the world’s largest oil companies does not agree.
In a hugely important decision, which will have serious ramifications for both the company and wider energy debate, Shell has said that it will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic.
Windfarms may have featured prominently in the company’s adverts until recently, but Shell will no longer be investing in the technology.
Controversially the company plans to invest more in biofuels and trying to “green” fossil fuels through CCS – carbon, capture and storage. It hopes to use the unproven technology to somehow reduce the CO2 emissions from its investments in Canada’s dirty tar sands.
Shell’s top executives at the company’s annual strategy presentation said Shell, which is currently the world’s largest buyer of crop-based biofuels, would develop a new generation of non-food based fuels which are considered to be less harmful to the environment.
In a damning indictment of what the oil giant thinks of current renewable technologies, Shell argues that they did not offer attractive investment opportunities. Linda Cook, Shell’s executive director of gas and power, said: “If there aren’t investment opportunities which compete with other projects we won’t put money into it. We are businessmen and women. If there were renewables [which made money] we would put money into it.”
Shell said biofuels fitted its core business of providing fuels, logistics, trading and branding. Cook added: “It’s now looking like bio¬fuels is one which is closest to what we do in Shell. Wind and solar are interesting [but] we may continue to struggle with other investment opportunities in the portfolio even with big subsidies in many markets. We do not expect material investment [in wind and solar] going forward.”
I think someone should tell Shell they have backed the wrong horse…
If the recent run up in gasoline prices at the pump has taught us anything it’s that as long as we are at the mercy of other countries or other companies for our energy needs we will always be helpless hostages to their price manipulations.
Don’t be under the illusions that encouraging allowing Shell or Exxon or BP to drill for more oil is going to bring the price at the pump down.
These companies have discovered that they make record shattering profits when there is a shortage of gasoline.
That’s why they’ve trimmed their refinery output even while they’ve got oil tankers filled to the brim with cheap oil sitting idle off the US coast.
When there’s a lot of gasoline profits go down. When theres a shortage of gasoline profits go up.
If Americans don’t like the high price of oil, the only alternative is to find another energy source. Investing in oil only prolongs the pain.
Technically they’re right. The ARE a business, and as a business they have an obligation to their shareholders to make smart business decisions. Only time will tell whether renewables have a good business case. I own stock in both conventional oil industry companies (not Shell) and in “green” companies – mostly PV makers. So far I’ve done a lot better on the oil companies.
The BIG problem here is government policy. Both the oil companies and the renewables get various sorts of benefits via the taxpayer. The oil companies get the billions we spend on the military protecting their supplies and routes – solar gets all sorts of tax credits. (etc, etc) so in BOTH industries government policies distort the business logic so much that profits or even survival are at the whim of the politicians.
I got a lesson in this when I moved into my current home in 1998 and found it was equipped with solar pre-heating systems for my hot water. The company that made it came into being during the tax breaks of the Arab Oil Embargo era, and disappeared when the tax breaks went away. There was no one around here who could do maintainence on the system so we had to remove it!
It’s about time someone exposed the big banks and Wall Street for the manipulating fraudsters that they are. An insider’s club report showed last week a simple step by step strategy to spying on the big bank’s trades so we can profit with them.
Veteran report – May be useful to know why we never have the freedom to do what we want to do.It is sure the big banks dont want us to see this.