Oil and Gas Industry Leaders Place Their Bets on Renewable Energy

  • Published on December 16th, 2008

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’.

Reality bites

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.

Image credit: iStockPhoto

About the Author

is an online publisher, editor, and freelance writer. He is the founder of GlobalWarmingisReal.com and the History Blog Project, as well as publisher and site director for the HippieMagazine.com. Tom also contributes to numerous environmental blogs, including TriplePundit, Ecopolitology, Sustainablog, and Planetsave.   Tom's work has led him to Europe, Africa, Latin America, Canada, the South Pacific, and across the United States. His home base is San Francisco, California.
  • Pingback: Coal Reserves May Not be as Abundant as Previously Thought()

  • Pingback: Time to Think More Deeply about UK Energy Security : Red, Green, and Blue()

  • Dennis Dale

    President Elect Obama,

    I am so excited with your aggressive goals to save our mother earth. I believe your Energy and Environment Team is just the ticket. I have dedicated over 30 years to just this cause. I come from a background of making do with what you’ve got and have a lot of practical experience of doing just that.
    I have very strong feelings on some of the ways we could make this TRANSITION easy. It is because of the oil pushers that auto manufacturing companies are in trouble. I would hope you might agree with me that bailing out Chrysler, Ford and GM would be more like playing back in the oil cartel’s game. Instead wouldn’t it be wiser to help the new companies that have already made a commitment since the seventies to a greener earth. Why bail out the corporate monsters that blocked this so needed change? Instead let’s reward the dedicated creative people that are already making a difference!
    Through creative thinking can we take the negative and turn it into a win, win, win? You bet we can!
    So how many SUV’s etc. do we have NOT SELLING? Isn’t this why our auto companies are in trouble? If these vehicles could be sold wouldn’t that bail them out? WIN! We also have companies dedicated to a greener earth that produce the compressed natural gas CGN kits that are a proven technology and if they could step up mass production the cost would go down. WIN! What kind of a TRANSITION could this vehicle provide? A CNG conversion added to a gasoline vehicle makes a BI-FUEL VEHICLE. The beauty of this is, if you can’t find a CNG station, you can still run on gasoline. WIN!
    Let’s take a look at an emergency vehicle. As I pointed out to our Sheriff, due to his concerns of CNG not having the power to chase down the bad guys and the availability of CNG stations particularly in remote emergency situations, this is the perfect TRANSITION vehicle to alternative energy vehicles. WIN!
    Think also our county Sheriffs and Highway Patrol probably log more miles on, than any other entities. So we have not only created a better carbon footprint but in many states CNG is cheaper than gasoline. WIN! WIN!
    As we are finding out fuel from corn may not be the best move and where CNG use might raise heating costs I think it is a better solution in the over all picture. Natural Gas has many sister gases such as Landfill gas, Anaerobic gas, Peat bog gas, Sewer gas, Coal gas (Gasification of coal burns cleaner) and Bio-gasification (which I feel may be one of our biggest TRANSITION SAVERS.) I BELIEVE ALL OF THESE GASES CAN BE BLENDED WITH, THANSFORED IN THE SAME GAS LINES AND COMPRESSED THE SAME AS NATURAL GAS.
    Keep in mind I’m not saying that is the solution to Global Warming but rather a VARY VIABLE AID IN OUR TRANSITION TO BETTER ALTURNITIVE ENERGY.
    As an Ex US Forest Service Wild Land Fire Fighting Engine Crew Member I have wrestled with the complex problem of how to clean up our wild lands and forests to better control these horrible fires we are having since the Yellowstone Fire. I have proposal for a Forest Service Grant, if one comes around again, that not only would put a lot of people to work across our nation but also could play a roll in the production of local electricity through BIO-GASIFICATION TO POWER ELECTRIC PLANTS IN CONJUNTION WITH CO-GENERATION utilizing THE WASTE HEAT FOR COMUNITIES, OFFICE BUILDINGS AND FACTORIES as Europe is doing.
    Bio-gasification is what Hitler ran Germany on after we cut him off of oil in WWII. The technology today is much improved, clean burning, can be used like natural gas, very versatile and lends itself well to OUR TRANSITION TO NOT ONLY GREEN but helps us become INDEPENDENT OF THE OIL CARTEL that is rumored to have a strangle hold, from buying up patients, on even GREENER TECHNOLIGY.

    I love your Lobby Ethics Policy and think the Energy and Environmental Policy Team is definitely the answer to bring America back to the insight of what our forefathers so brilliantly established. Let’s reward the individual entrepreneur that made this country great and help them create the jobs so needed but only through them should we help the Corporate Dinosaurs out of trouble. Our forefathers had the insight to limit our presidents to two terms. It looks like it’s going to be our job to figure out to put the checks and balances on the corporate monsters that have been around to long! You are doing a great job already.

    Thanks and good luck!

    Double “D” Endevours
    Dennis Dale
    PO Box 2901
    1940 Prospector Ave
    Park City, Ut 84060