Fuel for Thought
How Do US & European Oil Companies Differ on Renewable Energy?
Oct 25 2020
Where BP, Equinor and other European energy companies are investing heavily in renewables and low-emission projects, American counterparts such as Chevron and Exxon are staying firmly focused on fossil fuels. The disparity reflects the different approaches each continent is taking towards climate change, a global issue that is shrinking glaciers, prolonging droughts, intensifying tropical storms and increasing the severity of wildfires.
The change in European attitudes is fuelled by plummeting oil prices and growing concerns about the climate crisis. In response giants such as Royal Dutch Shell and BP have started to sell off oil fields and start to shift the focus towards renewable energy. In comparison, American-owned oil and gas titans such as Exxon Mobile and Chevron are amplifying investments in fossil fuels.
Politics and climate change
Politics is playing a pivotal role in the different approaches, with European leaders such as Boris Johnson calling for urgent action against climate change. Meanwhile, President Trump has openly labelled climate change a “hoax” and claims many environmental regulations are unnecessary and threaten the national economy.
“Despite rising emissions and societal demand for climate action, U.S. oil majors are betting on a long-term future for oil and gas, while the European majors are gambling on a future as electricity providers,” says David Goldwyn, president of international energy advisory consultancy Goldwyn Global Strategies (GGS) and a senior State Department energy official in the Obama administration. “The way the market reacts to their strategies and the 2020 election results will determine whether either strategy works.”
Transition will be “gradual” says Chevron
Moving forward, energy experts say the decisions made by oil and gas giants will heavily influence whether the world can meet goals outlined in the Paris Agreement goals and keep global temperature rises to less than 2 degrees Celsius above pre-industrial levels.
Barbara Burger, president of venture capital arm Chevron Technology Ventures, asserts the transition away from fossil fuels will be slow but steady. The branch currently receives around 1% of Chevron’s capital and exploration budget, which is being invested in innovative start-ups like modular fusion nuclear reactor manufacturer Zap Energy. “We need breakthrough technology, and my job is to go find it,” says Burger. “The transition is not an 11:59-on-Tuesday event. It’s going to be gradual, and evolving and continual over decades.”
Traditional energy companies will die out, warn analysts
While some analysts are confident oil and gas companies can transition to renewable energy, others maintain the future is dim. As the world moves towards green energy, Oxford University economist Dieter Helm says new technology advances will render traditional energy companies obsolete. “These companies, in the end, will die,” he says.
To find out more about the latest initiatives being introduced to combat climate change don’t miss ‘Clean Burning Marine Fuels Making A Difference To Air Quality.’
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