Big Oil Making Big Investments in Renewable Energy

Posted by Carol Sonenklar on September 22, 2009 at 10:56 am

Algae--one of several renewable energy sources that have attracted the interest and investment of Big Oil. (image: arabianoilandgas.com)

You may be surprised to learn who some of the biggest investors in alternative energy sources are, as reported by Rana Foroohor in Newsweek: Big Oil. All of the major oil corporations have invested significantly in renewable energy, signaling that renewable technologies may very well come to mass market sooner rather than later. More important, it is a sign that major players in oil recognize that green energy is the future of their industry.

For too long, Big Oil’s claims of going green were little more than PR and marketing campaigns. Now those claims have some real money behind them: ExxonMobil is planning to grow green algae to fuel cars; Chevron has unveiled the world’s largest carbon-sequestration project in Australia; and in recent months, Valero, Marathon, and Sunoco have all made purchases that put about 7 percent of the U.S. ethanol business in the hands of the oil industry.

Oil companies have finally recognized that green energy and conventional fossil fuel energy can co-exist, and even complement each other. Since oil companies are among the biggest users of energy, they are starting to think creatively to save on energy costs: Valero, for example, is building windmills to power oil refineries, and Chevron is using solar power to extract hard-to-reach oil.

Don Paul, a former Chevron executive who now runs the University of Southern California’s Energy Institute says that Big Oil’s key assets—giant pipes, huge swaths of land with existing industrial-use permits, geo-engineering expertise, and extremely deep pockets—are “tailor-made for developing and delivering biofuels.”

Foroohor writes that this shift in Big Oil’s attitude is due to three factors: the coming regulation on carbon emissions; President Obama’s green stimulus programs; and China’s massive investment in alternatives. Together, these will create a huge market for renewable energy.

These new investments by the oil companies will help to speed up continuing R&D on already-advanced green energy technologies like the ones highlighted in the green energy documentary Fuel.

Heating oil users are well positioned to reap the benefits of the oil industry’s strides in the renewable energy sector.  Exxon’s development of green fuels from algae, for example, will certainly speed up availability and lower the cost of the biofuel-blended heating oil products like Bioheat.

Foroohor concludes that historically, when Big Oil spends a dollar on research, it will spend many hundreds more to bring a product to market. That’s good news for our pocketbooks and our planet.