Oil and Gas Industry Leaders Place Their Bets on Renewable Energy
Who better to know the real story of the future sustainability and cost of oil than the leaders of oil companies? In a recent study sponsored by the consulting firm Deloitte only 17% of 50 senior oil and gas company executives believe that fossil fuels will be the most sustainable fuel source in 25 years’ time; 23% think it will be the cheapest. In 25 years most oilmen place their bets on renewable energy as the cheapest and most sustainable fuel.
About face for oil
The sentiments expressed in the study come from the same industry leaders that have in the past sought to downplay either the viability of renewable energy sources or the need to transition to a new energy economy, while dismissing outright the reality of climate change. The future was oil, baby, oil.
The number of oil executives that still think oil will be the cheapest energy source in 25 years has dropped a full 48 percentage points to the current 23%, according to the Deloitte study – that’s worse than president Bush’s approval rating.
The times they are a’changin’.
Oil company execs can see the writing on the wall. Not only in terms of a new administration ready to spend billions in renewable energy projects, but also in the reality of a dwindling supply of “cheap and easy” oil. There may be lots of oil to be had in tar sands and oil shale, but those projects are economically tricky with oil trading at $140 a barrel, let alone $45 – with the added bonus that those methods of extraction bring with them environmental catastrophe.
You can stand in the way of progress only so long. Then reality takes over.
Concern about foreign oil
Gary Adams, vice president for Deloitte’s oil and gas division, says that most oil company executives think their industry should play a significant role in helping America transition to a new energy economy: “…more than half of the executives in our study felt that petroleum companies should work toward helping America transition to the use of more renewables and other alternative fuels,” Adams said in a press release.
Three in four industry leaders expressed “strong concern” about America’s dependence on foreign oil, a concern shared by just about everyone else in the country (with legendary oilman T. Boone Pickens leading the charge).
Nothing you and I didn’t already know
In a separate study of registered voters across the country, Delloitte found almost everybody agrees with the newly converted oil company executives. An overwhelming percentage of voting citizens believe that renewable energy is the way of the future, and that oil will ultimately be unsustainable and more costly than alternative sources within 25 years. Virtually no one likes importing 70% of our oil from foreign sources.
The concern from the oil industry, according to the report, is realistic expectations for that change:
“It’s clear from our survey that most voters believe renewable energy is the way of the future,” said Adams. “While this is very important, many voters may not understand the current costs and complexities of developing renewable energy.”
Renewable energy – are you feeling confused?
Adams further states that there is confusion among voters about the real costs of renewable energy: “Right now, renewables simply are not as cheap as fossil fuels, which adds to the challenge of satisfying the public’s desire to move away from conventional oil and gas in a short time period.”
Adams stresses the need on the one hand for a comprehensive energy strategy promoting investment and development of renewable energy, while on the other pushing for domestic exploration and development of oil and gas as a sort of “bridge loan” to fill the gap. Says Adams: “The world will be primarily reliant on fossil fuels for at least two generations — the bridge to tomorrow’s new energy future depends on this. The key is to have a sensible plan to transition to a new, cleaner energy era. It is also clear that the oil and gas industry needs to do more to educate the public on the challenges ahead.”
There is no doubt, as Adams says, that there are costs and complexities involved with transitioning an entire economy from oil to renewable energy. Its an enormous task, and one made all the more urgent by the appalling lack of leadership in energy policy of the past eight years. Need we be reminded that it wasn’t all that long ago that president Dick, er, vice president Dick Cheney said “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy”.
It was never really clear to me what did, in Bush and Cheney’s mind, constitute a sound, comprehensive energy policy. Obviously nothing to do with personal virtue.
But all that is nearly behind us now. From the average voting citizen to oil company executives (if driven by different motives than you or I) are chomping at the bit for change.
Despite the “confusion” and complexities Adams speaks of, I think the American public is ready to step up to the challenging road ahead. I see enormous momentum for change and a great upwelling of talent and innovation coming to bear that may bring along the transformation to a new energy economy quicker than Adams suggests, despite the ongoing recession (perhaps to some degree spurred on by it). In some cases, wind and solar are already at or within a few years of grid parity.
There is certainly a long way to go before we are free of the “addiction”, but let now be our “bottom”. Whatever the time frame or cost, there is no turning back. Everyone knows that; from the oil company CEO’s to Joe Q. Public.
We live in revolutionary times.
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