The Dernogalizer

March 17, 2009

Shell-Shocked

Filed under: energy — Matt Dernoga @ 11:10 pm
Tags: , , , ,

It’s a shame that after a couple of posts involving businesses making the right decisions in the renewable energy market and taking action on climate change, I end up having to break the news that Shell has eliminated all investment in renewables besides biodiesel.  It’s not as though Shell was doing very much anyways, they have invested 1.7 billion dollars over the past 5 years in renewables.  In comparison, they spend 32 billion total on investments in 2008 alone.  Still, this is a sign that Shell is moving in the opposite direction of a lot of businesses and corporations.  While we’re seeing an increase in renewable energy output and investment amongst companies, Shell is taking theirs away.

Obviously I’m not one of the “experts” in Shell making these kinds of multi-billion dollar decisions, but I have to wonder what is going through their minds.  Let’s assume the obvious, which is that Shell has no moral conscience at all when it comes to climate change or environmental protection.  Their bottom line is more important than the public good.  I got it, they’re a business.  Unfortunately expecting a moral conscience of some corporations is expecting too much.

But even if you’re only thinking of your bottom line, how do you come to this conclusion that not only will we not invest much money in renewables, but we won’t invest ANYTHING.  I can see how this would’ve been a good move in 2000 when we had oilmen coming into the Whitehouse.  There were lots of calls for increased drilling, removal of environmental protections, and no action on climate change.  At this point, putting all the eggs in the oil basket might make sense.  But let’s look at what the state of things are now with the next 8 years in mind, as opposed to the last 8 years.

We’ve got an anti-drilling Democratically controlled Congress and Whitehouse.  Environmental regulations are going to be popping up all over the place.  If you look at the stimulus, the overwhelming majority of the money relating to energy was clean energy.  There was also a record amount of money invested in mass transit.  Whatever tax breaks the oil companies got during the last 8 years are likely going to be removed.  There are now new and far reaching tax breaks at the Federal level for solar, wind, geothermal, biodiesel, and plug-in hybrid-electric cars.  These kinds of credits are also showing up all over the states.  My own state of Maryland has a 10k credit for solar, similar incentives for other alternatives, and my county Prince Georges County has a 5,000 dollar property tax credit.  General Motors and Toyota are coming out with plug-in hybrids within the next few years.  Other auto companies are taking a stronger look at it them, and are introducing more hybrids.  Oh, and the US and other countries around the world either have passed or are about to pass climate change cap and trade policy that will inevitably drive up the price of gas and decrease consumption.

I could go on.  Hopefully you get the point.  What are you thinking Shell?  The problem I see with this when you’re purely looking at a bottom line is that the trends are moving in the opposite direction of Shell’s actions.  It’s not smart investment to put none of  the $$$ into renewables when you consider the trends I listed above.  I predict that Shell is going to find itself at a big competitive disadvantage a few years from now when they suddenly realize they “want in” on this clean energy economy, but other companies beat them to the investment, research, and start-up and have achieved greater economies of scale and efficiency.  At this point, entry into the clean energy market will hurt Shell, and they will look back on their decision in 2009 to cease renewable energy investment as poor planning.

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4 Comments »

  1. […] This has been cross posted from: here […]

    Pingback by Shell-Shocked | CCAN Blog — March 17, 2009 @ 11:16 pm | Reply

  2. […] market out that that is currently doubling EACH YEAR, which is ridiculous.  Perhaps companies like Shell(yes I know they aren’t American based, I’m just making fun of them) should read the […]

    Pingback by Solar has 110% Growth in 2008 « The Dernogalizer — March 20, 2009 @ 3:25 pm | Reply

  3. […] couple months ago, I took Shell to task over their decision to eliminate investment into renewables besides biodiesel.  I think what I […]

    Pingback by Exxon Wrong « The Dernogalizer — May 28, 2009 @ 4:51 pm | Reply

  4. I will be linking to your site great article.

    Comment by Reverse Merger — June 8, 2009 @ 8:31 pm | Reply


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