Time and time again environmentalists resort
to attacks on Big Oil or claim those opposing their tenet are funded by the
‘evil’ oil industry. More recently these same activists are claiming that
even Big Oil has given up the fight and is now on their side. It is
certainly true that the oil industry has not retaliated as one might
expect. So what has happened?
Well it is actually quite simple and as the
cliché says, “follow the money!” The oil industry comprises many of the
best minds in the world. They are far from being foolish and can see
business opportunities when they appear. Furthermore they have the ready
cash allowing rapid acquisitions and investments.
All the majors are not solely oil companies
but energy enterprises. They have portfolios and these include so called
‘sustainable’ or ‘alternative’ energy branches. Rather than stating
examples, I suggest that interested parties do their own research. It will
take about a minute on one of the main Internet search engines.
One important thing to remember is that
governments across the world are providing what can only be described as huge
financial rewards to ‘green’ energy providers. This is something that any
company would relish and chase. Of course, the oil industry sees this and
realises it can play the same cards, and essentially recover some of the gross
taxation they have been landed with over the years.
Anyway, rather than rattle on with endless
commentary, it is easier and more useful to point out and summarise the major
issues generally missed by others.
The oil companies
(majors at least) have recognised that there is profit to be made from AGW
paranoia in just the same way as any other industry. Without going into
details, here are a few bullet points to consider:
It is seen as good PR to placate both the
public and shareholders by flying the green banner. No surprise
there!
Most oil
companies have a portfolio of energy subsidiaries including electricity
generation, refining, distribution , etc. Shell has recently shed much
of its renewable holding, apparently only retaining the biofuel section on the
generation side.
To capture carbon
dioxide and sequester it uses energy. Estimates are often around 30%
extra. So there we have 30% profit immediately.
The reservoirs
where it is to be sequestered are essentially owned by these companies.
They will charge for injection and storage. This will no doubt be some
kind of arrangement requiring an on-going rental with additional costs for
monitoring.
Licensing of the
technology for CO2 separation and sequestration will raise funds.
Essentially this is oilfield technology and no doubt well patented.
CO2 has been routinely removed from gas for many
years in order to ‘sweeten’ it. The technology is relatively mature and
commercialised.
In some cases the
CO2 can be used to aid the flow of oil from the reservoir thereby reducing the
costs of extraction.
Gas and oil are
generally found together. Natural gas contains CO2 in small
concentrations, but typically much higher than atmospheric levels ,
http://www.naturalgas.org/overview/background.asp. When CO2 is used to aid extraction it may
return to the surface in the gas/oil and will not be readily discernible from
the natural so will most likely be ignored.
Estimates of
leakage appear to be about 1% per year. Therefore it can only be
regarded as a delaying action, not a permanent fix. Thus, even if it did
work and had a benefit, the oil companies have a perpetual motion machine to
milk.
There is a large
and very lucrative industry supporting the oil companies and this
is gearing up to ride the AGW bandwagon too. The largest is
Schlumberger. You will get the idea from this link: http://www.slb.com/content/careers/working/global/climate.asp
High oil prices
are good for oil companies, but politically not so. However, it is
largely politics and futures speculation that keep the price of oil
high. Reducing the amount going to market increases the price, as is the
case with any commodity. Here are a couple of examples of factors
affecting the oil price:
Supply controls
by the likes of OPEC.
Restrictions on
drilling/exploration, often as a result of environmental
concerns.
Instability in
the Middle East.
High prices
increase investment in technology and exploration which leads to more
production and lowers price. Oil companies strive for a balance but
politics and market forcing tend to cause disturbances with a time lag
and thus cyclic variations result.
There are
probably other points that I have missed, but I think the list gives an idea of
the scale and reasons why Big Oil is not complaining too loudly.
