Behind Petroleum - All the Way to 2050

by Emily Gertz

Published April 09, 2009 @ 08:00PM PT

BP wants us to think it's "beyond petroleum" -- when actually it's mired in dead dinosaurs.  After nearly a decade flogging a wholesome green sunflower logo and "we're the good guys" adverts, BP (nee British Petroleum) is retreating from renewables.  

The corporation just cut 620 jobs of an original 4,400 in its solar business.  It's nixed a $67 million expansion of its solar manufacturing operation in Maryland.  And it's canceled plans to build wind farms and a pilot carbon capture and sequestration project in the UK.  In 2007, BP began to expand its stake in Canadian tar sands as a source of oil.

Still, it's not exactly fair of me to put BP on the hot seat: all the dirty energy majors are retracting their investments in clean energy.  They're citing weak oil prices and the credit crunch, but most important of all, they say, is that oil, coal, and gas will supply 80 percent of the world's energy for the next 40 years.  

And simply put, that's where the money is, so why stick our necks out to create a different inevitability? , One that might, possibly, be slightly less wildly profitable? 

As the intrepid Jad Mouawad reports in The New York Times this week (emphasis mine),

The great bulk of their [the oil companies'] investments goes to traditional petroleum resources, including carbon-intensive energy sources like tar sands and natural gas from shale, while alternative investments account for a tiny fraction of their spending. So far, that has changed little under the Obama administration.

...“The scale of their alternative investments is so mind-numbingly small that it’s hard to find them,” said Nathanael Greene, a senior policy analyst at the Natural Resources Defense Council. “These companies don’t feel they have to be on the leading edge of this stuff.”

Perhaps not surprisingly, most investments in alternative sources of energy are coming from pockets other than those of the oil companies.

In the last 15 years, the top five oil companies have spent around $5 billion to develop sources of renewable energy, according to Michael Eckhart, president of the American Council on Renewable Energy, an industry trade group. This represents only 10 percent of the roughly $50 billion funneled into the clean-energy sector by venture capital funds and corporate investors during that period, he said.

“Big Oil does not consider renewable energy to be a mainstream business,” Mr. Eckhart said. “It’s a side business for them.”

Shell, for example, said it spent $1.7 billion since 2004 on alternative projects. That amount is dwarfed by the $87 billion it spent over the same period on its oil and gas projects around the world. This year, the company’s overall capital spending is set at $31 billion, most of it for the development of fossil fuels.

And this is apparently still the operating strategy, despite the fact that the Obama administration "wants to spend $150 billion over the next decade to create what it calls 'a clean energy future," per Mouawad. "Its plan would aim to diversify the nation’s energy sources by encouraging more renewables, and it would reduce oil consumption and cut carbon emissions from fossil fuels."

What could shock the dirty energy behemoths into changing their ways?  

Let's skip right over ethics and social responsibility as effective motivators.  While as individuals some in these multinationals are surely both ethical and responsible, these are clearly not factors Big Oil or Big Coal consider central to increasing shareholder value.

How about getting a jump on the wealth that will be created along with the clean energy future?  Again, actions demonstrate that this is not compelling enough for the likes of BP, Royal Dutch Shell, or Exxon Mobil.  

So what's left? Making them pay up for something that they and all of us have taken for granted.  We've been using the oceans, forests, and in particular the atmosphere, as free dumping grounds for the nasty side effects of relying so heavily on hydrocarbons for our power: melting ice caps and ice sheets and glaciers, heat waves and other extreme weather, species extinctions, disease, discomfort, and more.  

Ignorance is no excuse.  We've known for at least two decades, by the standards of drawing conclusions from modern scientific research findings, that burning coal, oil, and gas is destabilizing the climate.

Creating a price for carbon emissions is essentially charging for the services that oceans, forests, and the atmosphere provide in soaking up greenhouse gas. Since we're acolytes of the free market, that charge is posited as a sort of commodity, a credit, that we can buy and sell.  That's the "trade" part of cap and trade.

And since the bill for those services is long overdue (global warming is the balance due notice), the price of carbon needs to be high enough to motivate a big reduction in carbon pollution. Given the unpredictability and fundamental amorality of the market, setting legal limits on how much carbon pollution we'll allow, while limiting the credits available, will help establish a price for carbon that is daunting enough to spur the massive shifts in the energy economy that we need.  That's the "cap" part.

Sounds okay, right?  We pay for all sorts of valuable natural services, from dollars by the pound or the ton to dump wastes in properly lined landfills, to dimes and quarters in the parking meter for taking up valuable open space when we park our cars.

Keep that in mind as the no-sayers flood the airwaves and the internets with distortions about the comprehensive climate and energy bill starting to wend through Congress.  Cap and trade is nestled in amid incentives and directives that  (however inevitably imperfect the legislation is certain to be) lay the foundation for a perfectly realistic, achievable, much more appealing and survivable 2050, than the future envisioned by BP, Royal Dutch Shell, and all the dirty energy majors.

Image courtesy of The Bus Project.