Oil taking on green sheen

The companies that drill black gold are going a little bit green: taking stakes in renewable energies that are growing rapidly, enabling oil firms to diversify revenue and show commitment to fighting climate change. In the past, such swings have been written off by environmental campaigners as greenwash, and just as likely to be reversed once low oil prices go up again. But analysts say that, even though only a tiny percent of oil majors’ investment goes into renewables, the interest this time seems to be sustained, and underpinned by solid profit. “It is not a purely economic trend” driven by low crude prices, said Francis Perrin, president of SPE, which publishes a number of energy-related publications. “It’s more profound: it’s the adaption of certain oil industry majors to a certain number of energy and economic upheavals.” Perrin suggested oil companies were more cognisant of the threat posed by climate change and the potential that renewable energy will become big business. Already present in the manufacturing of solar panels via its unit Sunpower, France’s Total earlier this year invested in a US company that installs mini wind turbines for homes and businesses. Italy’s ENI plans to invest 1 billion euros ($1.1 billion) over the next three years in solar projects, while Shell, BP and Statoil are concentrating on wind power. In the US, Chevron is switching its bets from geothermal to biofuels, although ExxonMobil remains lagging in the green energy field.

 Profitable = sustainable

With the price of crude in the doldrums, “the priority for oil companies is creating value” said Jerome Sabathier, head of the economics department at IFPEN, a French government body that supports research into the renewable energies, the environment and transportation. Most oil companies are trying to cut costs and reduce their debts, selling off non-strategic assets. Interestingly, though, they have been loath to sell off renewables, which have been a source of growth. Perrin said the interest isn’t only due to low crude prices, however. “The trend started before oil prices began to tumble in the summer of 2014 and will continue if they rebound,” he said. While oil companies have been slashing investment as they seek to cut costs, the chief executive of Total, Patrick Pouyanne, noted the company has continued to allocated $500 million per year on renewable energies.

 Read more: http://www.dhakatribune.com/bangladesh/environment/2016/11/14/oil-taking-green-sheen/

Posted by admin on Nov 15 2016. Filed under Bangladesh Exclusive. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry