Oil Industry Is Remodeling To Align With Renewable Growth

Many multinational oil companies are no more fossil fuel centered companies. They have now ventured into renewables not by choice but due to harsh ground reality in front.

Oil giants like Shell, Total and Mobil have been investing in alternative energy in recent times. They have recognized the urgent need to do so following predictions by leading experts and their own in-house analysis teams.

Renowned Energy expert, Professor Paul Stephens says that the business model that sustained Oil companies during the 20th century is no longer viable. As a result, they are faced with the choice of managing a gentle decline by downsizing or risking a rapid collapse by trying to carry on business as usual. The only way forward for these companies lies in diversifying into green energy, drastically reducing their operations or consolidating through mega-mergers.

Excepting the ground reality, Shell, Europe’s largest oil company, has established a separate division called New Energies, which brings together its existing hydrogen, biofuels and electrical activities and will also be used as a base for a new drive into wind power.

It has been 15 years since British Petroleum (BP) rebranded itself “Beyond Petroleum” to signal a shift towards renewable power. BP currently operates 14 wind farms with about 2.2 gigawatts of total capacity in seven US states — one of the largest renewable energy businesses owned by a large global oil company. In 2015, its share of the power from those turbines was about 4,400 gigawatt hours.

French oil company, Total, is stepping up its investments in clean energy. it has recently bought battery manufacturer, Saft for $1 billion.and has also purchased a majority share in Sunpower, a leading solar concern.

ExxonMobil recently announced its plans to invest in fuel cell technology in order to build “carbon capture and storage facilities” for eliminating greenhouse gas emissions from power installations.

Most of the fossil oil industry will go away in  another 10 to 20 years. The refining part of the oil industry will shift over to waste gasification, pyro and Fischer–Tropsch type processes for all the hydrocarbons we need for the chemical industry. That will be about 10–20% of the entire oil industry today. The offshore deep extraction part of the business has already started doing offshore wind work.

The oil industry is already transforming itself to become an energy industry. They have lots of capital and land rights. They understand commodity markets, long-term amortization, and getting free subsidies from governments. In fact we may never run out of fossil fuels, the world will just stop using it for energy ones the renewable energy industry figures out a way to over come the current challenge of making it reliable and available as and when needed.