Illustration: Sarah Grillo/Axios
Oil giants have said for years that they would lead the way in the energy transition, investing in everything from renewable energy projects to climate tech startups.
- Now some of them sound more like speed bumps.
Driving the news: BP plans to “recall” some of the company’s renewable energy initiatives, due to disappointment with the return on investment, according to the WSJ.
- Dutch rival Shell said it would keep renewables investment at 2022 levels, despite huge profits.
- Exxon CEO Darren Woods has argued that the energy transition “is no game for startups,” despite the energy industry’s significant participation in venture capital rounds for startups. climate technology.
Zoom out: We are guilty of a little confusion here. European energy companies have focused most of their investments on large-scale renewables, such as solar and wind, while US energy companies have focused more on decarbonization technologies (capture, storage, etc.) .
- The commonality, however, is that the two seem to be making some sort of 2009-era argument that ROI is lacking.
The big picture: There is justified skepticism that the oil majors are genuinely interested in the energy transition, given that they continue to make billions of dollars burning old-fashioned dinosaurs.
- As proof, critics would point to the amount of capital invested in renewable energy and/or climate technologies, compared to oil and gas spending.
Anticipate: There continues to be growing political and societal pressure to decarbonize, regardless of the legacy industry’s short-term spending strategies.
- These recent statements may make new entrants less likely to partner with incumbents or accept their investment. They could also trigger a brain drain.
- Or maybe the oil majors will backtrack again, as quickly as they are now, deciding that their own survival depends on it.
