“Running on empty: Big Oil needs a bigger vision” (The Globe and Mail)

Eric Reguly (The Globe and Mail):

About 15 years ago, BP PLC, the oil and gas giant formerly known as British Petroleum, doused itself in green and invented a cheery new starburst logo adorned with “Beyond Petroleum.” The message: BP would evolve from a fossil fuel company into a broad-based energy supplier with a thriving portfolio of renewable energy projects. The move earned praise from environmentalists, even if they knew BP’s hydrocarbons business would never go gently into the night.

Just a few years later, however, BP quietly abandoned “Beyond Petroleum” and put its U.S. wind farms on the auction block. Today, BP’s literature doesn’t mention renewables much, and the company evidently thinks fossil fuels will endure forever. It predicts that renewable energy, excluding hydro power, will account for just 8 per cent of total world energy demand by 2035.

The de-greening of BP already looks like a bad move, not only because last December’s Paris climate change conference took a serious step toward a low-carbon future, but because the Western world’s oil companies are in danger of vanishing as oil companies. To survive, they will have to cut back on expensive drilling and get going on renewable energy. Geology is working against them, and so is increasing global oil market competition.

[…]

The Western biggies have nothing going for them at the moment. Yet their strategy is to keep drilling like mad for oil, apparently in the belief that prices and demand will rebound. A better idea would be to diversify their energy portfolios in recognition that they can’t compete with OPEC’s low-cost producers and that the oil era is coming to an end, even though it could endure for another few decades.

Investments in renewable energy and innovation seem not just sensible, but a question of survival. The oil companies, of course, will resist. They will argue that they do only one thing well – drill wells – and that the renewable energy game should be left to companies like Tesla, Vestas, Suntech and General Electric. That would be a mistake. BP’s “Beyond Petroleum” was years ahead of the curve. Time to resurrect it.

Full article here