Oil Companies Wisely Steer Clear Of Most "Renewable" Sources Of Energy

The major oil companies are not known for being stupid, or they would not still be in business. Why would (or should) they invest in technology beyond their areas of expertise and in ways they consider un-economic? They are not in the business of drilling dry holes.

Unless of course they are owned by the government, like General Motors (GM) perhaps. Then the government can force them to waste their talent and resources. If the government imposes this insane "cap and trade" tax and other punitive measures on the oil and gas industry, America is in bigger trouble than we can imagine.
Peter

Oil Giants Loath to Follow Obama’s Green Lead
By JAD MOUAWAD (source)
The Obama administration wants to reduce oil consumption, increase renewable energy supplies and cut carbon dioxide emissions in the most ambitious transformation of energy policy in a generation.

But the world’s oil giants are not convinced that it will work. Even as Washington goes into a frenzy over energy, many of the oil companies are staying on the sidelines, balking at investing in new technologies favored by the president, or even straying from commitments they had already made.

Royal Dutch Shell said last month that it would freeze its research and investments in wind, solar and hydrogen power, and focus its alternative energy efforts on biofuels. The company had already sold much of its solar business and pulled out of a project last year to build the largest offshore wind farm, near London.

BP, a company that has spent nine years saying it was moving “beyond petroleum,” has been getting back to petroleum since 2007, paring back its renewable program. And American oil companies, which all along have been more skeptical of alternative energy than their European counterparts, are studiously ignoring the new messages coming from Washington.
“In my view, nothing has really changed,” Rex W. Tillerson, the chief executive of Exxon Mobil, said after the election of President Obama.

“We don’t oppose alternative energy sources and the development of those. But to hang the future of the country’s energy on those alternatives alone belies reality of their size and scale.”

The administration wants to spend $150 billion over the next decade to create what it calls “a clean energy future.” Its plan would aim to diversify the nation’s energy sources by encouraging more renewables, and it would reduce oil consumption and cut carbon emissions from fossil fuels.

The oil companies have frequently run advertisements expressing their interest in new forms of energy, but their actual investments have belied the marketing claims. The great bulk of their investments goes to traditional petroleum resources, including carbon-intensive energy sources like tar sands and natural gas from shale, while alternative investments account for a tiny fraction of their spending. So far, that has changed little under the Obama administration.

“The scale of their alternative investments is so mind-numbingly small that it’s hard to find them,” said Nathanael Greene, a senior policy analyst at the Natural Resources Defense Council. “These companies don’t feel they have to be on the leading edge of this stuff.”
Perhaps not surprisingly, most investments in alternative sources of energy are coming from pockets other than those of the oil companies.

In the last 15 years, the top five oil companies have spent around $5 billion to develop sources of renewable energy, according to Michael Eckhart, president of the American Council on Renewable Energy, an industry trade group. This represents only 10 percent of the roughly $50 billion funneled into the clean-energy sector by venture capital funds and corporate investors during that period, he said.

“Big Oil does not consider renewable energy to be a mainstream business,” Mr. Eckhart said. “It’s a side business for them.”
Shell, for example, said it spent $1.7 billion since 2004 on alternative projects. That amount is dwarfed by the $87 billion it spent over the same period on its oil and gas projects around the world. This year, the company’s overall capital spending is set at $31 billion, most of it for the development of fossil fuels.

Industry executives contend that comparing investments in oil and gas projects with their research efforts in the renewable field is misleading. They say that while renewable fuels are needed, they are still at an early stage of development, and petroleum will remain the dominant source of energy for decades.

In its long-term forecast, Exxon says that by 2050, hydrocarbons — including oil, gas, and coal — will account for 80 percent of the world’s energy supplies, about the same as today.

“Renewable energy is very real,” David J. O’Reilly, the chief executive of Chevron, said in a speech in New York last November. “We need it. It will be an essential part of the future I envision. But it’s not realistic to suppose we can replace conventional energy in a timeframe that some suggest.”

Chevron has spent about $3.2 billion since 2002 on “renewable and alternative energy and energy efficiency services,” according to Alexander Yelland, a spokesman. It plans to spend $2.7 billion in the three years through 2011 on a variety of projects, including a business that helps improve energy efficiency for companies and government agencies, he said.

Despite Washington’s newfound green enthusiasm, industry executives argue that replacing any significant part of the fossil fuel business will take decades, at best. Just to keep up with growth in demand for conventional sources of energy, producers will need to invest more than $1 trillion each year from now to 2030, according to the International Energy Agency.

“Many of these companies see the world is changing,” said Daniel Yergin, the chairman of Cambridge Energy Research Associates and a historian of the industry. “But the challenge for a very large company is to get critical scale. People tend to forget the scale of the energy business.”

The world consumes about 85 million barrels of oil a day. The United States alone would require six times its arable land — and 75 percent of the world’s cultivated land — to supply its needs with ethanol made from corn, according to calculations by Vaclav Smil, an energy expert at the University of Manitoba.

More realistic, and modest, targets are proving tough to reach. Congress’s ethanol mandate, which requires oil companies to use 36 billion gallons of ethanol by 2020, cannot be achieved, experts say, without major technological advances that are still years away.
To increase supplies, most companies are looking to tar sands in Canada or converting coal or natural gas into liquid fuels, technologies that emit far more carbon dioxide than conventional oil does.

Shell, a major investor in Alberta in Canada, says that traditional oil supplies will not be enough to meet the growth in the world’s energy needs over the next half-century. In 2007, BP invested in Canadian tar sands, prompting criticism that it was “recarbonizing” itself.
John M. Deutch, a professor at the Massachusetts Institute of Technology and a former director of central intelligence, said there was little point in criticizing oil companies without first establishing federal rules that set a price on carbon dioxide emissions. Once that happens, he said, companies will adapt their strategies.

“What role will oil companies play in the future in alternatives to conventional hydrocarbon? The correct answer is nobody knows,” Mr. Deutch said. “The important thing is for the government to establish a carbon policy. You can be absolutely confident that oil companies will pursue that, as will any other companies.”

One area where companies are increasingly focused is the development of liquid fuels from plants. BP said it would soon build a demonstration plant in Florida for a type of ethanol made from plant material; Shell has worked with several firms since 2002 to develop ethanol from nonfood crops. Last year, it signed agreements with six companies, including one in Brazil, and decided to drop its other renewable efforts to focus solely on biofuels.

“Biofuels feels closest to our core business,” said Darci Sinclair, a company spokeswoman.
Other areas also hold significant promise for the industry, like technologies to capture carbon dioxide emissions and store them underground, and energy-efficiency programs, especially in the transportation sector. Exxon, long the most skeptical of the oil companies toward alternative energy investments, is working on long-term programs to improve fuel economy and reduce emissions.

In the end, many analysts say they believe that oil companies are waiting for a winning technology to emerge. Alan Shaw, the chief executive of Codexis, a biotechnology company in Silicon Valley that works with Shell, said oil companies were not blind to the new political reality but they were also in the business of making a profit.

“Don’t lose heart with Big Oil,” Mr. Shaw said. “They aren’t at a point where they are ready to invest yet, but they are getting there. I think in the next 10 years, they will invest hundreds of times more than they have in the past 10 years.”

Offshore Drilling For Oil and Gas: A Good Thing In Many Ways

There are many myths perpetuated by the mainstream media, and lacking any other information, the public generally accepts what we hear on the nightly news, and read in most popular publications. The following essay about offshore drilling dispels several of these myths.

First, I admit I have always assumed offshore drilling and production platforms were pretty "dirty" affairs, with unavoidable oil and gas leaks, and other pollutants finding their way into the ocean. According to this article, Louisiana, with 3,200 production platforms, has never had a major oil spill. It seems the major oil spills come from the shipment of oil in tankers, not from the production of oil.

Then there is the issue of the benefits to the marine fisheries by the "artificial reef" environments created by these oil and gas production platforms. Apparently the fish and fishermen love them! Who would have thought it? Not our ever-vigilant "environmentalists apparently. The article makes a strong case for opening up other offshore areas of the United States for oil and gas exploration and production.
Peter

The Environmental Benefits of Offshore Drilling
Humberto Fontova
Monday, June 02, 2008
source
Louisiana produces almost 30 per cent of America's commercial fisheries. Only Alaska (ten times the size of the Bayou state) produces slightly more. So obviously, Louisiana's coastal waters are immensely rich and prolific in seafood.

These same coastal waters contain 3,200 of the roughly 3,700 offshore production platforms in the Gulf of Mexico. From these, Louisiana also produces 25 per cent of America's domestic oil, and no major oil spill has ever soiled its coast. So for those interested in evidence over hysterics, by simply looking bayou-ward, a lesson in the “environmental perils” of offshore oil drilling presents itself very clearly.

Fashionable Florida, on the other hand, which zealously prohibits offshore oil drilling, had its gorgeous "Emerald Coast" panhandle beaches soiled by an ugly oil spill in 1976. This spill, as almost all oil spills, resulted from the transportation of oil – not from the extraction of oil. Assuming such as Hugo Chavez deign to keep selling us oil, we'll need increasingly more and we'll need to keep transporting it stateside – typically to refineries in Louisiana and Texas.

This path takes those tankers (as the one in 1976) smack in front of Florida's panhandle beaches. Recall the Valdez, the Cadiz, the Argo Merchant. These were all tanker spills. The production of oil is relatively clean and safe. Again, it's the transportation that presents the greatest risk. And even these spills (though hyped hysterically as environmental catastrophes) always play out as minor blips, those pictures of oil-soaked seagulls notwithstanding. To the horror and anguish of professional greenies, Alaska's Prince William Sound recovered completely. More birds get fried by landing on power lines and smashed to pulp against picture windows in one week than perished from three decades of oil spills.

For fear of oil spills, as of 2008, the U.S. Federal government and various states ban drilling in thousands upon thousands of square miles off the U.S. Coast. These areas, primarily on the Outer Continental Shelf, hold an estimated 115 billion barrels of oil and 633 trillion cubic feet of natural gas. This leaves America 's energy needs increasingly at the mercy of foreign autocrats, despots and maniacs. All the while worldwide demand for oil ratchets ever and ever upward.
"Environmentalists" wake up in the middle of the night sweating and whimpering about offshore oil platforms only because they've never seen what's under them. This proliferation of marine life around the platforms turned on its head every "environmental expert" opinion of its day.
The original plan, mandated by federal environmental "experts" back in the late '40s, was to remove the big, ugly, polluting, environmentally hazardous contraptions as soon as they stopped producing. Fine, said the oil companies.

About 15 years ago some wells played out off Louisiana and the oil companies tried to comply. Their ears are still ringing from the clamor fishermen put up. Turns out those platforms are going nowhere, and by popular demand of those with a bigger stake in the marine environment than any "environmentalist."

Every "environmental" superstition against these structures was turned on its head. Marine life had EXPLODED around these huge artificial reefs: A study by LSU's Sea Grant college shows that 85 percent of Louisiana fishing trips involve fishing around these platforms. The same study shows 50 times more marine life around an oil production platform than in the surrounding Gulf bottoms.

An environmental study (by apparently honest scientists) revealed that urban runoff and treated sewage dump 12 times the amount of petroleum into the Gulf than those thousands of oil production platforms. And oil seeping naturally through the ocean floor into the Gulf, where it dissipates over time, accounts for 7 times the amount spilled by rigs and pipelines in any given year.

The Flower Garden coral reefs lie off the Louisiana-Texas border. Unlike any of the Florida Keys reefs, they're surrounded by dozens of offshore oil platforms.
These have been pumping away for the past 50 years. Yet according to G.P. Schmahl, a Federal biologist who worked for decades in both places, "The Flower Gardens are much healthier, more pristine than anything in the Florida Keys. It was a surprise to me," he admits. "And I think it's a surprise to most people."

"A key measure of the health of a reef is the amount of area taken up by coral," according to a report by Steve Gittings, the National Oceanic and Atmospheric Administration's science coordinator for marine sanctuaries. "Louisiana's Flower Garden boasts nearly 50 percent coral cover. In the Florida Keys it can run as little as 5 percent."

Mark Ferrulo, a Florida "environmental activist" uses the very example of Louisiana for his anti-offshore drilling campaign, calling Louisiana's coast "the nation's toilet."
Florida's fishing fleet must love fishing in toilets, and her restaurants serving what's in them. Most of the red snapper you eat in Florida restaurants are caught around Louisiana's oil platforms. We see the Florida-registered boats tied up to them constantly. Sometimes us locals can barely squeeze in.

In 1986 Louisiana started the Rigs to Reef program, a cooperative effort by oil companies, the feds and the state. This program literally pays the oil companies to keep the platforms in the Gulf. Now some platforms are simply cut off at the bottom and toppled over as artificial reefs; over 60 have been toppled thus far.

A few years back, Louisiana Wildlife and Fisheries officials were invited to Australia to help them with a similar program. Think about it: here's Australia, the nation with the Great Barrier Reef, the world's biggest natural reef, the world's top dive destination – they're asking help from “the nation's toilet” about developing exciting dive sites by using the very structures that epitomize (in greenie eyes) environmental disaster.

America desperately needs more domestic oil. In the process of producing it, we'd also get dynamite fishing, dynamite diving, and a cheaper tab for broiled red snapper with shrimp topping.

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