Big Oil Lets Sun Set on Renewables
Shell has quietly shed most of its solar power, while BP is buying into dirty tar sands
Shell, the oil company that recently trumpeted its commitment to a low carbon future by signing a pre-Bali conference communique, has quietly sold off most of its solar business.
The move, taken with rival BP’s decision last week to invest in the world’s dirtiest oil production in Canada’s tar sands, indicates that Big Oil might be giving up its flirtation with renewables and going back to its roots.
Shell and BP are among the biggest producers of greenhouse gases in the world, but both have been keen to paint themselves green through a series of clean fuel initiatives.
BP, under its former chief executive, John Browne, promised to go “beyond petroleum” while Shell has spent millions advertising its serious interest in the future of the environment.
But at a time when interest in solar power is greater than ever, with the world’s first “solar city” being built at Phoenix, Arizona, a small announcement from Environ Energy Global of Singapore revealed that it had bought Shell’s photovoltaic operations in India and Sri Lanka, with more than 260 staff and 28 offices, for an undisclosed sum.
The sell-off, to be followed by similar ones in the Philippines and Indonesia, comes after another major disposal executed in a low-key way last year, when Shell hived off its solar module production business. The division, with 600 staff and manufacturing plants in the US, Canada and Germany, went to Munich-based SolarWorld. Shell has however formed a manufacturing link, with Saint-Gobain, and promised to build one plant in Germany.
The Anglo-Dutch oil group confirmed yesterday that it had pulled out of its rural business in India and Sri Lanka, saying it was not making enough money.
“It was not bringing in any profit for us there so we transferred it to another operator. The buyer will be able to take it to the next level,” said a spokeswoman at Shell headquarters in London.
The oil group said it was continuing to move its renewables interests into a mainstream business and hoped to find one new power source that would “achieve materiality” for it. Shell continues to invest in a number of wind farm schemes, such as the London Array offshore scheme, which has government approval. Shell has also been concentrating its efforts on biofuels, but declined to say whether it had given up on solar power even though many smaller rivals continue to believe the technology has a bright future.
Environmental groups have always accused Shell of using clean energy initiatives as “greenwash” to deflect criticism from its core carbon operations, especially tar sands. The latest pull-out has annoyed rival business leaders at London-based Solar Century and local Indian operation, Orb Energy, who fear the impact of a high-profile company selling off solar business. Jeremy Leggett, chief executive of Solarcentury and a leading voice in renewable energy circles, said Shell was undermining the credibility of the business world in its fight against global warming.
“Shell and Solar Century were among the 150 companies that recently signed up to the hard-hitting Bali Declaration. It is vital that companies act consistently with the rhetoric in such declarations, and as I have told Shell senior management on several occasions, an all-out assault on the Canadian tar sands and extracting oil from coal is completely inconsistent with climate protection.
“This latest evidence of half-heartedness or worse in Shell’s renewables activities leaves me even more disappointed. Unless fossil-fuel energy companies evolve their core activities meaningfully, we are in deep trouble,” he said.
Damian Miller, former director of Shell Solar’s rural operations and now chief executive of Orb Energy, said Shell was missing an opportunity by pulling out at a time when renewables markets were starting to mature in the developing world. He alleged some customers were complaining of being abandoned by Shell and worried about the servicing of equipment they could expect from Environ. “We see former Shell customers who are highly disappointed not to be receiving proper service for the solar systems they have invested in. These customers have often invested 20-30% of their annual income in a system to ensure they have some minimum amount of lighting and access to radio, TV, or a fan,” said Miller.
He added that the oil majors, including Shell, had invested time and energy in promoting their plans for renewable energy in the press and on TV, but were not able to lead the transformation the world needs towards renewable energy and energy efficient solutions.
Shell declined to comment on these criticisms or talk about where its priorities lay. But the chief executive, Jeroen van der Veer, did make a number of comments last summer which could have paved the way for a change in policy. Alternative energy sources such as renewables will not fill the gap, he argued, forecasting that even with technological breakthroughs they could give supply only 30% of global energy by the middle of the century. “Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems,” he said.
Meanwhile, BP has been accused by Greenpeace Canada of lining itself up to help commit “the biggest environmental crime in history”. This follows its decision to swap assets with Husky Oil, giving it an entrance ticket to the Alberta tar sands, which are said to be five times more energy-intensive to extract compared to traditional oil.
John Browne, the group’s former chief executive, had said BP would not follow Shell into tar sands as he established an alternative energy division and pledged to take the group “beyond petroleum.” The new boss, Tony Hayward, has pointed the corporate supertanker in a new direction although his public relations minders insist BP remains committed to exploring the potential of renewables.
“Tony Hayward has been part of the management team at BP for many years and has endorsed the low-carbon strategy that involved BP creating its alternative energy business late in 2005. We are spending $8bn (£4bn) over ten years and are pressing ahead with 450 megawatts of wind production capacity in the US,” said a spokesman. “The tar sands deal in Canada does not represent a change in direction, it was just a very good opportunity which represents a broadening of the portfolio.”
Greenpeace climate campaigner Joss Garman said: “If Shell is to survive the climate change age… it needs to become not just an oil company but an energy company. One wonders if Shell’s executives have noticed what’s happening in Bali or if we’ll see slick adverts on TV boasting about their retreat from renewables. Probably not.”
© 2007 The Guardian
This might sound counter-intuitive. But, to me this confirms the theory that we already experienced “peak oil” moment in 2006.
You can almost feel the desperation of the oil companies. They know that the old model of pumping unlimited amounts of energy into economy is over. They also know that the resource wars are about to escalate.
Reasoning here is that the winning side will have best access to the “black gold”. Any army without oil is just a bunch of hungry foot soldiers.
At the end of the day, it was always about “power”. In every sense of the word.
The automobile industry of the 1900’s did not need the railroad industry of 19th century to finance its growth, and I’m sure the Solar industry will do fine without the big oil companies owning some companies. Once the new silicon foundry companies come on line in a year or two, so the Solar industry gets away from using scrap silicon from the chip industry, solar will really take off. Raising capital will be no problem when Solar is growing at 50% per year.
In 20 years, some Solar behemoth might buy Shell just to shut it down completely, like the auto companies used to buy electric trolley companies in the U.S. in the early part of the 20th century just to shut them down. Payback is a bitch.
Oil, OIl Oil, and Oink Oink OInk,,,does anyone really think there is a shortaage of oil? the facts are it is a hoax! Oil does not come from dinosours, but from the molten bonding of carbon and Hydrogen deep in the earth, of course as the Book of Revalations says ,,”..out of the Black Hole comes the Destroyer…” No doubt…interesting that in the Greek;- destroyer is Apollyon, in Aramaic,- Abbadon, which interestingly enough is the name of the largest oil port in the world,,, thus goes life, fight ,fight fight Wars and greedy pigs you will always have with you, imature earthlings. you will not see the stars till you grow up…atmospheric carbon build-up, should alert us plain and simple, but like cigarettes, those that smoke can’t quit, solutions are easy, low-level satalites, with long light weight tubes acting as exaust vents, for the whole planet is one small one, I have a book of solutions , call me I’ll send a limo, come and get ja!
Bali goes on as the Rio conference, which I attended went on, Agenda 21, Kyoto Protocol, and so many organizations and NGOs which I work with trying to reduce the harm multinationals, the G8, WTO and the varied alliances that are aimed at increasing human misery for greeter profit go on. WE need to reduce toxins reduce the economic and carbon footprint on this globe is shouted everywhere because we are very clear on the fact that we must do this if the human race is to survive. We have responsible people on the globe doing all they can to fight against the power elite to end this madness that we see happening.
I have been watching the advertising con-job these big oil companies have been using to try to obscure the fact that they are doing something but we know that they are not! We know that are trying to look green over their black profits which will as it is heading exterminate life on this planet.
The oil companies say that renewable in their wisdom will only account to 30 percent of the energy budget for the globe, but even that much, but I am certain it could be greater, coupled with conservation and increasing populations who want to go back to the most efficient lives possible would make the difference in keeping the carbon footprint down while breakthroughs in new conserver technology are brought on line.
These corporate con-men are selling us death and destruction of this planet. They are the most irresponsible of the corporate voice and the most cynical. We need their investments not in advertising to hoodwink the world to believe that they care but their resources invested into green solutions to the reduction of the use of the hydro carbons in the ground or a sequestration of the carbon if the resource is to be used.
The entire condition of life on the planet is skewed. The need for ever larger and more of everything is based on a conception of economics that is out of touch with survival strategies for the human population.
We are going down the road to extinction along with the systems we have created that have put us out of touch with all life including our own.
The end for wall street and its ideas of value and reason for being which is endless growth can not continue. There is no such thing as perpetual motion or growth. When we experience growth that is out of control in the human organism it is called cancer and we die. On that note since 1970 the incidence cancer has increased 100% in people over 60.
the idea of human valuation is based on money and thinness; that too is out of touch with human needs for survival. All systems are reaching critical mass. The giant human extinction process has begun. It may lead to the end of all life on this planet.
For nearly a century, both the right and the left have depended on Big Oil for everything even to the point of accepting their bribes. None of this be a surprise when 70 years ago, Big Oil worked very hard to outlaw the very plant that would have put petroleum out of business, HEMP. I thought that unlike the right the left could actually learn from history and reframe the issues and debates but now I see that they are no better than the right. Why don’t you all take a hard look at all the bribes supposedly left-leaning pols are taking from Big Oil.
Big oil is addicted to the easy money from oil. It cannot manage properly renewable energy sources. There is a fundamental definite conflict of interest between the energy resource types. In order to promote renewable energy sources, governments need to properly tax the profits of Big Oil corporations, and ultimately the users of such resources, being us. Carbon taxes are necessary to fund renewable energy sources. We all need to make the big switch. Therefore the money needs to make the big switch. If the renewable business is not profitable enough, then it is a sign that governments have not implemented the policies required to make it so. Major corruption and influence from the big dollars of oil, weighing on the politicians, is a major part of the problem
I don’t get it. Hemp is used all over the rest of the world, yet every country uses oil. How come it doesn’t replace oil where it’s legal?
There’s stuff on this subject in the Nobel
Peace Prize ceremony’s two speeches. I recommend for people who don’t get the regular email from Democracy Now to google that site and go there for today’s broadcast. The ceremony in its entirety has a feel you will never receive from any journalistic account.
We should rejoice in Shell’s dumping of their solar energy sector. Build your own and break away from the oil and electric companies. We have no choices in oil/gasoline purchases. Scarcely more in electricity. If the oil co.s take over solar and renewables we’ll be not much better off in the future.
Wait until Shell gets all their equipment into Canada and takes the first scoop of sand…then short their stock, big time. Moola.
The oil companies drill for oil in the taxpayer’s pocket. Solar energy government gifts were not competitive with the lucrative tax treatment the oil business gets. They also know that the US must be MORE desperate for oil for them to extract a larger chunk of the economy.