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Shell Ditches Wind, Solar, and Hydro
thefickler writes "Shell has decided to end its investment in wind, solar and hydro projects because the company does not believe they are financially sound investments. Instead Shell is going to focus on carbon sequestration technologies and biofuels. Not surprisingly, and perhaps unfairly, bloggers have been quick to savage the company: 'Between Shell's decisions to stop its clean energy investments and to increase its debt load to pay for dividends, the company is solidifying an image of corporate greed over corporate responsibility.' Is Shell short sighted, or is it just a company trying to make its way in an uncertain world?"
i think it would be bad anyway if the companies whose primary business is selling fossil fuel also controlled a large chunk of the renewable energy market.
I mean can you say 'conflict of interests'?
Leave it to the little guys that are better (specialized/core business) at it anyway.
And at least now we truly know where they stand.
The problem is there's a conflict of interest; if they invest in solar/wind and managed to improve efficiency enough to reduce demand for oil then they lose money. They will promote whichever energy source gives them the largest profits, and don't have an incentive to invest in new energy sources when there are hugely profitable oil fields to look for.
Don't get me wrong I'm not a crackpot who thinks you can power the world with solar/wind, but I do think oil companies need a bit of government coercion to invest in research.
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if they invest in solar/wind and managed to improve efficiency enough to reduce demand for oil then they lose money
Before someone comments that they'd be selling panels/turbines instead of oil; remember oil is a commodity, panels/turbines are a technology. They would much rather deal with selling energy rather than selling energy generators.
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Personally, I am happy that they are doing this. First, Solar PV IS CURRENTLY THE MOST EXPENSIVE generator going. Solar THERMAL is a different thing. It is cheaper than coal is currently, if you do not include salt storage. They are looking at co2 sequestering. Ok. My guess is that shortly, somebody else will create a plant that uses Solar thermal for daytimes and then switches to Natural gas for cloudy/night. Mostly clean, EXCEPT for CO2. Sequester it, and things are good. The nice thing about such an approach is that it WILL lead to more AE.
Likewise, there are MANY other companies doing hydro and wind. Their pulling out will do nothing to harm them. IOW, they will continue.
That brings up the issue of bio-fuels. Far too many of you are thinking in terms of ethanol via corn, sugar cane, etc. That is a red herring (just like hydrogen production is). Skip that garbage and instead focus on converting crap (literally) to gas; ALGAE. There are several companies that are scaling up right now; Solix and Sapphire. Sapphire is doing gas production directly and they currently have it at less than 100/bl oil equivelence. BOTH of these companies need the price of oil to go up to around 80-85/bl and we are approaching that. These companies will likely get money from US and scale quickly. US MAY be a gas exporter within 4 years because of bio-fuels, combined with American cars moving towards electrical powering.
Even now, I look at the dependency that EU has on Russia for Natural Gas, and how Russia has used it. Shell can help break that. Ppl just need to think big and long term.
With that said, I am amazed that Shell, is walking away from things like hydro, and even wind. Foolish on their part. BUT, it still works out.
I prefer the "u" in honour as it seems to be missing these days.
Sure, if Shell were the only company in the world, they wouldn't have any incentive to invest in alternative energy. But if they don't, someone else will. So while a solar panel sold may be a lost oil sale, Shell would sure as hell rather be the ones profiting on the solar panel.
The problem here is that there is no profit in the alternative energy business, at least not on the scale Shell operates on. One day that will change, but there is still too much oil in the world for that to happen yet.
Another issue at play is the tragedy of the commons. The free market model relies on every transaction reflecting the true value of the good changing hands. Thats the idea behind a subsidy; one party is selling a good or service to another party, but the public as a whole also benefits from the service, so the public helps pay for it.
Thats also the idea behind the failed-as-implemented idea of carbon credits. When I buy a gallon of gasoline and burn it, I just paid a company to pump the oil out of the ground, refine it, ship it to me, etc. I even paid taxes for the roads I drive on. But I went and blew all those toxic fumes into the atmosphere, a public resource, without paying for that resource.
The only viable solution to this is to impose a tax on every gallon of gasoline equivalent to the cost of removing a gasoline-gallon's worth of exhaust from the atmosphere. By forcing consumers to pay the true cost of gasoline we will allow the free market system to eventually correct the situation and make renewable energy a viable business model that much sooner. Of course some subsidies won't hurt either, but you can't just subsidize "good" without penalizing "bad".
Wind and solar are a load of shit. They require huge upfront costs, have low reliability, and are hard to transport. Bio fuels, esp. cellulose, TDP, and algaculture are efficient, require low or lower upfront cost and can use existing infrastructure owned by the company.
PGE, Marlborough New Zeland, and some companies in Texas are working with algae. What is algae but the product of billions of years of technical development to be the most efficient solar power device on the planet. It is self replicating and can turn our shit into oil. It can also be used for carbon sequestration (if you burn the oil on site you can vent the exhust through the growing algea to speed up production and capture CO2.) Algae in a best case scenario can create 20,000 gallons of bio fuel per acre of land vs. 18 gallon per acre by corn. It doesn't use up the soil resources, it doesn't need chemical fertilizers created with fossil fuels, and it can per pumped around in pipelines that we already own. When combined with TDP you don't even need to worry about having the most efficient producer of oil or getting contaminated with other strains or bacteria. You can just run the system on whatever green goo grows and then render it down into shorter carbon chains. If another better strain that is more efficient comes along later just inoculate with that one. Don't fucking wait for perfection, just get going.
Thinking you can produce a cost efficient solar system that completes with a primary biological producer shows a painful level of hubris. Want nano-tech power? Wow mother nature already does that.
There is more free, clean energy in hot rocks 3-5km below the surface than all coal, oil and nuclear fuel combined. It cost nothing to extract other than the initial capital investment, and produces no harmful by-products other than the electricity that you an I take for granted in this modern age.
A bit more research money toward the economic construction of geothermal plants would see us free of fossil and nuclear fuel for the foreseeable future, and that is many, many generations of our species.
Dan. -- So what if it's spelt wrong, nobody's perfect
That's just plain idiotic nonsense.
Solar power can EASILY... TRIVIALLY, provide all the power we could ever want, very inexpensively, covering a tiny amount of land area, and could be in-place very soon. There just hasn't been nearly ANY investment in it, because coal and natural gas continues to provide a quicker return on the investment.
In fact, I suggest everyone look to west. In California, electric utilities are required to produce a large minority of their power from renewable energy, without loopholes. The ramping up to this rule has been over a decade in coming, and all attempts to overturn it have failed. Neither the people nor the politicians are blinking, this time around, unlike CARB with the electric vehicle mandate in the '90s.
California is either going to be getting ~ 10% of their electricity from solar in the next ten years, at grid prices, or the lights across the state will go out, and stay out. The grand experiment is in place, and the stage is set. It's simply time to sink or swim. This will either prove that power companies can make solar power increasingly profitable, at grid rates (once they have no way to get out of it) or else the 7th largest economy in the world is going to stop, for lack of energy.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
The other consideration here is that it's not the oil executives job to weigh energy cost and the damage to the environment; that's a moral choice that has to be made by society as a whole, via government. Do you really want oil companies to start taking moral stands? What if an oil company executive decides that homosexuality is a sin, and stops selling petrol to gays? Is that really the kind of world you want to live in?
All intents and purposes. Not intensive purposes.
That's a bit like saying bottled drinking-water companies would be all-over home water delivery and filtration, if it were remotely feasible...
Even if there are signs that the oil industry is slowly dying, an entrenched field, where you've got no competition is MUCH more profitable than jumping into new markets which ANYONE can compete in on an equal footing.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
You said:
If they really are thinking in the long term perhaps they should get started on a corporate army while they are at it. I wonder what they will base the bonuses on in that department? Body counts?
And then there is reality:
What is a human life worth to a foreign oil company in Nigeria? Apparently just $143.00, the amount Agip originally offered each of the families of the murdered men to compensate for their loss.
- Ref: a href ="http://acas.prairienet.org/alerts/nigeria/blood&oil.htm">http://acas.prairienet.org/alerts/nigeria/blood&oil.htm
You're forgetting that the oil industries receive MASSIVE subsidies from the government. Not necessarily in outright funds, but in other ways. For example, look at how much we spend on the military to protect the oil company's interests in the Middle East.
When we invade Iraq to "stabilize the region" (code for "keep surrounding countries producing oil"), look at how much it costs. Even without including the Iraq war, look at the cost of keeping the "regular" military bases in the region.
If you add up all of the money that is spent on protecting oil interests in the Middle East, you'll find that for the cost of about 5-10 years worth of oil protection, we could have bought wind, solar, geo, and/or hydro to entirely replace our need for oil.
Besides... let's look at the economy. Everybody is worried about it. Instead of paying truly obscene amounts of money to those in power in the Middle East for oil, giving that money to American companies to produce energy in our own country would be such a massive boost to the economy that it would make the government's bailouts pale in comparison.
Oh, you're not stuck, you're just unable to let go of the onion rings.
Can you guarantee that the area you have to spread your generators over to ensure a steady, certain minimum generating capacity (or the base load for the system) is within acceptable transmission loss levels?
You cant, and thats the problem with generation systems where you don't control the minute to minute generating capacity yourself. Wind and solar also cannot handle the increase in peak production required during certain events.
While I agree that subsidies are bad, I don't understand how you then proceed to say that the 80 billion subsidies for alternative energies are 'good'.
How can stealing MORE resources from the US economy be better than simply ending all subsidies to whatever technology, ceasing government intervention in the energy market, actually using property rights laws to allow for the pollution externals to be correctly priced and internalized, and let the market, i.e. we the people, sort out which work better.
I sincerely don't think that trying to 'over-subsidize' Green energy over Oil is a sensible solution.
Send your spendthrift head of state this
Agree with Letharion. The life expectancy of oil was 10-20 years back in the 1920s. Try reading The Age of Oil. We really don't know how much oil there is down there, but it's not running out anytime soon.
Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
Non OPEC production has certainly peaked, the only question really is Saudi and it looks like their production peaked in 2005 as well. So oil is going to keep running up against demand, hitting 150 dollars plus per barrel. Producing bio-oil is likely to be very profitable in the short to medium term.
Of course businesses can't really function at 150 per barrel so you get this massive demand destruction and a following recession. Think of it like a hammer knocking oil dependent economies back down just as soon as it gets going.
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Seriously, they are an oil company in the business of producing and refining crude oil, for a profit. That's what their entire infrastructure is built around. Thousands of miles of pipe, thousands of service stations, thousands of by-products and oil-derivatives, sea and land tanker fleets, claims to reserves, geological surveys, exploration, oil derricks, off-shore platforms, thousands of scientists, geeks, tradesmen, and explorers, and so on. None of which correlate well to Wind, Solar, or Hydro. Yes, you can use oil products to generate electricity, but Shell wants to deliver the fuel, not run the power plant.
Now that the price of crude oil has settled back to where the market dictates, instead of speculators, Shell is making far less money (along with every company/country in that sector). This isn't much more than a belt tightening and cutting projects that are not contributing to the core business.
Again, they're an oil company trying to profit. The world doesn't run on good intentions, well wishes, and fairy dust. It does run on money and oil though.
I think the other technologies show lots of promise, especially solar, but let someone who specializes in it do it. I am a realist and understand that its going to take a combination of everything to get us to whatever is next.
"The quality of life is determined by its activites."--Aristotle
Shell is an oil company. Hands down.
Now, this is where I have a problem with the vast majority of the posts on this article, including yours. Everyone is quick to make Shell out as the big bad oil company and for being shortsighted. I certainly take your comment, "future express way" and "dead end street" to mean exactly that.
Why?
I don't believe in Hydro, Wind, or Solar either. Not on a large scale. I think those technologies are perfect supplements. Point source implementations on single houses and small communities. It will just never scale to the point it can provide power for industry or transportation.
Hydro, Wind, and Solar are also being researched and developed by a heck of a lot of people. New technologies and patents are being developed at a rapid pace. There is a LOT of competition here.
Once again, Shell is an Oil Company.
They are sticking to what they know best. That is drilling and fuel. Carbon sequestration technologies are sorely needed. We have to put it somewhere. Why not a company that has a lot of experience drilling and fraccing? Sounds like a perfect match to me.
Biofuels are the other area that Shell has decided to concentrate on. Every time I pass one of their gas stations (note I said pass) they are always more than the competition. They have patented technology for fuel. These are people that have expertise in creating fuel. Why not have them work on new biofuels? Seems reasonable to me.
I am practical person and just as much a pro environment as anybody else. Let's just take a deep breath and be reasonable about it. I see no reason to make Shell out as the enemy here simply because they want to concentrate solely on two areas of environmental technology.
What they are doing is helping. So why all the hate from all the posters?
Fusion is very promising, if only because it has no proliferation worries, but other than that all of the advantages that count are already available in fission reactors.
I think you are a bit over-optimistic about fission.
The power is cheap and will scale: Many European countries get the majority of their power from it
I don't think it is cheap... at least if coal is your benchmark of cheap (which seems to be the benchmark renewables are subjected to). It is only cheap when it is a by-product of military nuclear proliferation (as in france). But pure-civilian nuclear energy is probably more expensive than, say, current wind technology (although perhaps more scalable).
We have plenty of nuclear fuel: There won't ever be a nuclear fuel crisis because before we've used the enrichable uranium ore, and then reprocessed and reused all of the nuclear waste in our breeder reactors, the sun will be dead. Think solar is renewable? Not as renewable as nuclear.
I may be wrong, but I don't think breeder reactors have been tested yet on a large scale. The current uranium-based nuclear economy has in fact an extremely limited supply of fuel. Don't have the citation, but I think I saw a report that put uranium supply for current plants to run out in some 35 year.
It's safe: If the only reason for not going for it is an accident 30 years ago when the technology was in its infancy that's great
Well.. chernobyl was the biggest accident, but there were quite a few smaller ones or near misses. The technology from 30 years ago is not so different from the current one, in the sense that chernobyl was a second generation reactor, which is what most of the installed base still is. But true, we now have a few 3rd generation, passive safety reactors already in operation that are supposed to be better.
That being said, I don't necessarily disagree with you that nuclear may be one path out of the shithole we are driving ourselves into.
http://en.wikipedia.org/wiki/EROEI
Oil was 100:1
As the quality of the oil declines (e.g. to tar sands), so does the energy return (e.g. 5:1 or 3:1) and we have to spend more of our time simply trying to generate energy.
And if 30% of our time and energy are going into producing more energy... There isn't much time and energy available to do other things, like run a civilization.
Wind seems to average approximately 20:1 over the lifetime of a turbine.
What is interesting is that in the short term because of our sunk investment in oil, it is more profitable for companies to produce bio-oil at 8:1 EROEI than it is to produce wind turbines or solar panels.
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I would say that 70,000 homes is pretty large scale, and the energy is completely free.
http://www.inhabitat.com/2008/02/25/world%E2%80%99s-largest-solar-power-plant-coming-to-arizona-in-2011/
The entire midwest is ideal for Solar. Death Valley? Thousands of acres sitting empty. Who'd want to live there? Solar...
Just because something hasn't been done doesn't mean that it can't be or shouldn't be.
The problem is that most estimatives just use the "giving the current rate of expansion", without accounting for the rise in prices and consequent dimnishing consum. If you think it that way, there will be more a gradual transition, with the ones who can jumping to the newer energies, and those who can't spending every dime to run their oil-hungry business.
It looks to me that we're already in this era. After all, we are exploring lower quality oil, and (save the current down due to reccession) the prices are steadily rising.
entropy happens
Uhhh....
everything is a pollutant when it is present in concentrations such that the current local environment can not deal with them.
Like Humans!
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An interesting article, although my first impression was how they originally said the world population would grow so fast that by the 1970's or so we'd be out of food. This is on par with the peak oil argument, in that there is a genuine cause for concern but it's virtually impossible to pinpoint when and how bad the problem will be.
One point I certainly do agree with, though, is the water issue. This is why I'd really like to see further developments in algae based biofuels, which do not require fresh water (and also promise an order of magnitude more fuel per acre).
I'm not saying food production will never be an issue, but to say "Biofuel production is starving third world countries" is still a baseless argument to make.
=Smidge=
You're modded as funny, but I'm not sure if that was your intent or not.
Companies evolve and survive. Nokia has been around since the 1800's, long before anyone ever heard of a cell phone.
Wind is VERY viable and growing. Shells exit will have no impact. Solar PV IS expensive and really is not viable at this time. BUT Solar Thermal is actually cheaper than Coal. Sadly, far too many idiots push the PV side because it is unobtrusive and ppl have delusions of being unhooked from the big bad electric company. Until storage is cheap, it will not happen. If shell and other companies are smart, they would push into geo-thermal as well as solar thermal. In Solar Thermal, back up the operation with natural gas. In this fashion, it allows for converting to AE at a very low costs (less capital), while helping to buffer against price increases. Once the price of Natural gas goes up, then start adding thermal storage to these.
I prefer the "u" in honour as it seems to be missing these days.
You know, I live in Finland, which was first Sweden's and then Russia's colony until 1917, underwent a devastating civil war right after gaining independence, and was attacked by the Soviet Union twice in World War II, and had to resettle 400,000 people and pay $300,000,000 in war preparations. And yet, after all this, we're somehow overproducing relative to our needs, despite the fact that the country sits on the Arctic Circle rather than at the equator.
At some point blaming some long-ago event for your problems becomes ridiculous. African countries have been independent for decades now, and even the Cold War ended over a decade ago; if they remain hellholes incapable of feeding their own population, the blame now rests on said population.
"Our forefathers were oppressed so we must keep on killing our farmers or at least stealing their land." Victim complex at its finest. Besides, Africa seems to be the only former colony to be having this problem...
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Then why is Shell spening large piles of cash on oil shale projects in the US? Oil shale is not economically viable right now.
Shell is the dumbest of the big oil companies. And as such, it will be the next one to disappear.