In the past few weeks and months, global warming has been on the world stage, perhaps more than any other time in recent memory. Droughts in California, flooding in India and deadly bushfires in Australia have all graced headlines of late and global climate change is without doubt partly to blame. In Paris, world leaders convened for the United Nations conference on climate change in an almost desperate attempt to stem the flow of carbon dioxide into our atmosphere. Going green is on the agenda.
But through it all, the oil companies keep pumping, the pipelines keep flowing, the cars keep driving and the gas keeps guzzling. Despite warnings from nearly every major scientific body plus countless presidents, prime ministers, kings and congresses about the inherent dangers of burning fossil fuels and the threat it poses to the planet, the oil companies won’t stop. And nor will their profits.
Naturally, this has led to complacency on the “environmental responsibility” front on the part of these energy companies – Exxon has spent hundreds of millions of dollars over the last decade on green energy and environmental research. And while that may seem like a colossal amount, it is dwarfed when you discover that the sum’s but a minuscule fraction of the hundreds of billions in overall profits that Exxon walks away with each year. Because why bother with the future of humanity when your present is full of cash? Why save the planet when you’re already on top of the world?
Big energy has a big agenda but a simple premise: keep pumping oil until the oil runs out, or the people’s will to buy it diminishes – whichever comes first. But is there another way? Is it possible to have your cake and eat it too? Is it possible to produce green, renewable energy and make a profit while doing it? Can the big oil companies save the world, and stay on top of the world? Simply put, I think yes, they can.
So if we start with the premise that yes, it is possible to produce green, renewable energy and make a profit while doing so, the critical next question is: how do you do it? Well, to start with, we have to look deeper into the reason why oil companies are sticking with fossil fuels. At first it may seem as though profit is the only driver, but in reality there is a second element and that is investment. Going green is going to take a lot of green.
Right now, we have a petrol infrastructure. Not just in the west but all across the planet, we are primed to pump gas. Pipelines, tanker fleets, innumerable gas stations and of course, an even greater number of vehicles – from jet fighters to lowly sedans – are all there in support of and supported by the petrol infrastructure. And building this system was neither cheap nor easy. In fact, it was the combined effort of hundreds of companies and it’s taken us a full century to get here: a gas station on every corner and a gas-powered car in every garage.
So, we have a massive, expensive fossil fuel network which took decades to build, but herein lies the problem: such a system is not fully compatible with any type of green energy systems we might put in place. Switching to electricity for cars would require a totally new system, while switching to more environmentally friendly hydrogen fuel would require a massive overhaul of the present system. Neither of these things is something oil companies want to be involved in.
With this initial barrier to entry in place, it becomes easy to see why oil companies refuse to go green to the levels they need to in order to protect our planet’s future. Because they not only have to shift all of their production infrastructure away from fossil fuels, but also the entire global distribution infrastructure.
However, one oil company could decide to change its ways. One of the giants could dedicate its full resources to converting to renewable energy, spending perhaps hundreds of billions of dollars repurposing old facilities, building new ones and creating an infrastructure which supports renewables. But if the others didn’t follow suit, their effort would be hopeless, because even the largest oil company is dwarfed by the global demand for energy.
And therein lies the solution. If oil companies want to make money going green, they must do so in exactly the opposite way by which they emerged: through working together. As fossil fuel resources become increasingly scarce and global warming’s effects become increasingly acute, the companies will have no choice but to adapt. However, by that time so many others will have had the opportunity to act, to plan for a future the oil companies will not be able to be a part of. Thus, in the short term, this massive effort will result in significant loss for the oil companies – not to mention the inevitable competitive and antitrust issues – but such is often the case when investing in the future.
So, rather than being defeated by their own competition and a desire to control resources in the present, the oil companies have a unique opportunity: to work together to create a renewable infrastructure that the public actually wants, for the future these companies have known is coming for far longer than they ever admitted.
Creating renewable power for an ever growing and ever complex world, where new technology is constantly emerging, will be a monumental task. It is a task which may also take the power of governments, and it will certainly take time and money, but it cannot happen unless the energy companies can dedicate themselves to a greener future.