Two of Europe’s largest energy companies are transforming from green energy to core oil and gas operations, a move industry experts told the Daily Caller News Foundation said oil and gas will continue to do so. It has shown a willingness to take political blows as it is a major source of income.
British energy company BP, like Shell, recently chose to oppose further oil production cuts in a bid to restore investor confidence at a time when its renewable energy business is struggling. according to to Bloomberg. The move came under criticism from investors focused on climate change, but activist investors and protesters tried to storm the stage at Shell’s annual shareholder meeting at the end of May, but oil and Thanks to Gus’ credibility, companies are likely to stick with their policies despite criticism. Dan Kish, a senior researcher at the Institute for Energy, told DCNF that despite the emergence of green energy, it is difficult to drive profits.
“Smart energy executives with a long-term view recognize that politics is fleeting,” Kish said. “Politicians may be capricious and distracted by today’s glamor, but real business sense combined with knowledge of engineering and physics shows that real energy is what people need and want. It shows that it creates good business because it is
Shell CEO Wael Sawan called the company’s change a “fundamental cultural change,” reported The Wall Street Journal. report. After Shell underperformed in 2022 against U.S. giants ExxonMobil and Chevron, Sawan’s priority is to catch up.
BP made a similar decision, choosing to invest more in oil and gas while slowing down on greener alternatives.
“At the end of the day, we are responding to what society wants,” said BP CEO Bernard Rooney.
Ryan Yonk, a senior fellow at the U.S. Bureau of Economic Research, said many green investments and climate change initiatives are a form of “greenwashing” that companies see as “costs of doing business” rather than real costs. said it was likely. said in a statement to the DCNF. BP’s shares rose more than 15% in the days after it announced in February that it would cut hydrocarbon production by just 25%, up from an initial target of 40% cuts by 2030. according to to Reuters.
“The profitability of these types of initiatives is generally much lower than market-driven innovation and growth because they are defensive in nature and are driven by actual regulatory or regulatory action rather than consumer demand. It’s driven by the expectation that it will happen,” Yonk said. “Evidence shows that fossil fuels are, and will continue to be for the foreseeable future, an important and important part of energy production in the United States and around the world.”
Security guards clear ‘Fossil-Free London’ demonstrators outside Shell’s annual shareholder meeting at the Excel Center in London, UK, May 23, 2023.Reuters/Toby Melville
Political pressure may have pushed companies to green projects in the past, but the current political climate is far more favorable for oil and gas, says Myron Ebel, director of the Energy and Environment Center at the Institute for Competitive Enterprises. he told the DCNF. Russia’s invasion of Ukraine would set off energy crises in both the United States and Europe, giving companies “strong incentives” to pump more oil, while also giving them a “strong incentive” to speak out “more outspoken” about the need for such investments. It gave companies a cover, Mr. Ebel said.
Eber told the DCNF, “The EU oil majors will continue to produce the energy the world needs, making enough profit to satisfy their shareholders and invest in new production, while remaining politically correct.” We are in an even more difficult situation than the United States trying to keep things going.” “They are faced with the reality that renewables are expensive and produce little energy.”
Shell on Wednesday recommitted to its goal of net zero emissions by 2050. press release, The footnote also states that such changes depend on social factors. The company said that if society as a whole had not transitioned to net zero by then, there would be a “substantial risk that Shell may not achieve this goal.” (Related: Biden’s World Bank president promises to spend ‘as much as possible’ on climate change)
Shell and BP did not immediately respond to DCNF’s request for comment.
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