Shell oil company which has made a big deal out of its commitment to alternative energy for the past decade, has decided to deemphasise its investment in wind, solar and hydro technologies. Their rationale is economic and we may therefore conclude that the drop in consumption symptomatic of the economic recession is driving this decision. I can just imagine the suits in a room saying “we’ve got to cut it!”. Shell may also presume that they can buy alternative businesses in the future.
Their exit is a shame, both for us and for Shell. It is always encouraging to see traditional businesses investing in Big Picture initiatives, especially alternative energy. They will compromise an opportunity to leapfrog their competitors. On the other hand, it does mean that the market place is less difficult for other businesses more committed to the rationale of energy security.
Shell’s media release didn’t mention it. Here’s the Guardian’s coverage: Shell dumps wind, solar and hydro power in favour of biofuels. And the first few paragraphs excerpted:
Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today. It plans to invest more in biofuels which environmental groups blame for driving up food prices and deforestation.
Executives at its annual strategy presentation said Shell, already the world’s largest buyer and blender of crop-based biofuels, would also invest an unspecified amount in developing a new generation of biofuels which do not use food-based crops and are less harmful to the environment.
The company said it would concentrate on developing other cleaner ways of using fossil fuels, such as carbon capture and sequestration (CCS) technology. It hoped to use CCS to reduce emissions from Shell’s controversial and energy-intensive oil sands projects in northern Canada.
The company said that many alternative technologies did not offer attractive investment opportunities.