Are oil company–sponsored windmill ads about to disappear from our TV screens? Oil giant Shell has decided to abandon investments into renewable energy like wind and solar. A Shell executive told the Guardian that the company will no longer put money into investments that “struggle with other investment opportunities in [Shell’s] portfolio even with big subsidies” (see article).
Instead, Shell wants to focus its money on developing non-food biofuels and carbon capture and sequestration (CCS). The company has significant operations in the Alberta oilsands, and oilsands petroleum is already proscribed by one piece of U.S. legislation: section 526 of the U.S. Energy Independence and Security Act (see article).
George Monbiot, a strong supporter of renewable energy, claims Shell’s decision is in part because of the low carbon prices under the European Union’s Emission Trading Scheme (ETS). He’s absolutely right. Carbon prices would have to be in the punitive range for wind and solar to be anything close to competitive with coal and nuclear or even gas. As I have said many times, the whole idea of a cap and trade scheme as opposed to a carbon tax was to give politicians the wiggle room necessary to keep carbon prices low. That is the only way the ETS was politically salable.
Shell’s decision is the right one, for two main reasons. First, as Monbiot points out, “greenwash,” i.e., oil companies’ communications about how green they are, is just public relations (see article). When PR isn’t backed up with anything meaningful, people soon realize it’s just… PR. Even major investment in wind and solar won’t reduce carbon emissions from large-scale power systems. And since it’s not profitable anyway, Shell must have wondered why play the game at all.
Second, as I mentioned in “Guessing between the lines” and other posts, the only airy-fairy part of CCS is the S: sequestration. CCS will soon give way to CCR: carbon capture and recycle. In CCR, captured carbon is recycled into synthetic hydrocarbon fuels.
Shell understands, and for decades has been profiting from, the hydrocarbon fuel business. And, since carbon capture is the necessary prelude to CCR, Shell’s money will go in part to solving the technological part of that problem.
Does Shell’s abandoning of renewable electricity mean that those feel-good oil company ads featuring lovely music and impressive wind turbines will no longer grace the airwaves during the Sunday political talk shows? Probably not. As I said last week, the drive to renewables is at bottom a natural gas–industry ploy. The ploy has worked remarkably well in Ontario, and it seems to be working at the national level in the U.S.
There could be no better investment inthan to invest in becoming energy independent! We need to utilize everything in out power to reduce our dependence on foreign oil including using our own natural resources. Create cheap clean energy, new badly needed green jobs and reduce our dependence on foreign oil.The high cost of fuel this past year seriously damaged our economy and society. The cost of fuel effects every facet of consumer goods from production to shipping costs. It costs the equivalent of 60 cents per gallon to charge and drive an electric car. If all gasoline cars, trucks, and SUV’s instead had plug-in electric drive trains the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.We have so much available to us such as wind and solar. Let’s spend some of those bail out billions and get busy harnessing this energy. Create cheap clean energy, badly needed new jobs and reduce our dependence on foreign oil. What a win-win situation that would be for our nation at large! There is a really good new book out by Jeff Wilson called The Manhattan Project of 2009 Energy Independence Now. http://www.themanhattanprojectof2009.com
Thanks for your comment Sherry, and welcome to my blog.
I like your point that it costs the equivalent of 60 cents per gallon (that’s roughly 19.5 cents per litre, in Canadian currency) to run a car on grid electricity.
But remember that happy cost is based on CURRENT electricity retail rates. Those rates will rise dramatically if renewables like wind and solar enter into really widespread use: don’t forget that they require parallel backup natural gas generation because they are intermittent.
If we want low-carbon baseload electricity from fuel that is available in great quantities in North America, there is no avoiding nuclear energy. Yes, put money into green jobs and let some of those green jobs be in wind and solar generation, but make sure nuclear qualifies as green. It is our best, some would say only, hope of major emission reductions from electricity generation.