Exxon goes on. And on. And on. 08 February 05

Hello Mark,

The enormous off-shore profits from the oil giants have been making the news recently, but a less well publicised fact is the total absence of capital spend on new refineries, oil tankers, and other major bits of infrastructure. There can only be one reason: they know that the point of peak oil production is nearly here and there is no point in renewing plant that is progressively going to start running down. What they need now is a massive cash pool for developing ecpolration and development of the other remaining hydrocarbon reserves, methane, LNG, tar sands and oil shales. The latter two are ecological nightmares.

It would appear that the main concern of the oil companies is preserving market share, and if their main product is going to run out then they need something else to distribute.

Even if the amount of energy and effort required to extract a unit of fuel from the ground in whatever form exceeds the amount of energy in that unit of fuel, because the redundancy cost of the entire oil-burning infrastructure is too high the price per unit if energy in this form will go up and up way beyond the point of inefficiency.

Now is a prime moment to make a business aproach to the oil companies and ask them to consider looking at large-scale investment in renewables in return for long term-nationally agreed supply contracts. Principally electricity generation, as apart from oil, almost nothing else packs so much latent energy into a small fluid volume.

I doubt if the politcal will is there yet, because the US/UK seem focussed on securing access to the persian gulf and West African oil reserves. But it could be done with large NGO’s or communities of say, city scale where a joint venture development might be possible. Energy producers like a dependancy culture, and linking demand from the built environment into an ongoing supply with only maintenance and renewal costs should be attractive. Of course, it would be impossible to deliver the same energy value from renewables in the form of electricity or Hydrogen from electrolysis, but, if there was a corresponding energy efficiency drive to re-build the entire customer base to the highest levels of insulation etc. in return for a commensurate rise in the unit cost of power to achieve pay-back then it could stack up.

Now is the time to open the door to the oil companies. They are amassing the investment capital, they have the global reach, the technical resources and the political clout beyond national governments.

How can we engage them in a debate?

best wishes

Colin Keyse

Colin, you may have discovered the answer. You thoughts have great merit. They are very pragmatic and realistic. At times, we have to follow the golden rule. He who has the gold rules!

Only a win-win approach can work. Those that are motivated by greed will respond to only greed. Their world-view is totally a function of “what is in it for them”.

If global warming is a threat to profits, then it simply must not be true. If global warming would increase profits, then they would launch the greatest campaign to convince the world to avoid impending climate change and staunchly attack anyone with opposing views against global warming in an even more vigorous way than those motivated by altruistic values.

As always, if we want to change the behavior of others, then give them the economic incentive they must have. Make it profitable for the oil companies to invest in renewable energy and they will become the greatest advocates for renewable energy you have ever seen!

Then the skeptics become the advocates.

It is amazing how greed can alter one’s perceptions about everything to justify one’s own views regardless of the actual reality.

I find many philosophical byproducts from your insightful post that I can transfer to a deeper meaning of human nature.

For example, the old biblical parable about the prospects of the rich man entering into the gates of heaven takes on new meaning.

It takes special effort for someone who is rich and aspires to be rich to also remain open minded and altruistic.

It would be another form of altruism for the people who “hate greed” to promote increasing the prosperity of the affluent to simply do the right thing for the sake of the planet.

The more money the oil companies can make in renewable energy, then the better it is for the planet regardless of the fact that we are giving them another opportunity to increase their profits and have even greater economic power.

It is the form of ideas and ingenuity where we have the edge as humans. And that includes striving to employ the most advanced philosophical thoughts and values which can motivate us and others to employ the better side of our nature and do the “prudent” thing. Maybe the word is wisdom. We need to be not only smart. We need to be wise.

Colin, there is so much in your post that is relevant and I only touched on one aspect of it.

I hope your thoughts will be further explored by others on this site.

A good post via the realclimate blog. An extremely interesting site from Australia where plans are afoot for a solar powered atmospheric CO2 sequestration plant that can split water into Oxygen and Hydrogen without electrolysis, combine the Hydrogen in a reactor with the captured CO2 to make Methane, Ethanol, or even biodiesel by varying operating temp & pressure. The promoters note that this addresses the key issue of avoiding obsoloscence of existing methane storage/transport/combustion infrastructure. (no need to scrap your new condensing boiler!)

This would enable installed generating plant to be run as a base load generator to match intermittent wind/tidal/solar inputs and therefore make a mixed renewables base an investable reality. It would also complement methane produced from closed composting/ sewage treatment plant. It can be installed next to exisitng coal burning plant to capture and convert emitted CO2.

It looks at first glance to be a very elegant solution: being both atmospheric CO2 and Methane neutral. The laws of Thermodynamics apply again of course so power output is limited by solar collection but it is a much more flexible solution than just wind, hydro or tidal alone.

Again, even a large number of plants would only capture a fraction of the energy produced by ‘liberating’ fossil fuel energy, but it introduces a virtuous circle to the process. Couple this to a radical energy efficiency programme and there is the chance of maintaining something like a good standard of living at a comparable cost after the turmoil of the end of geological oil extraction.

The link is: http://www.evworld.com/view.cfm?section=article&storyid=781.

One to watch

Colin

Colin,

It is an interesting site. I read it and your description is sufficient. I caution the reader that it is very preliminary. It has not been done yet but conceptually it may be possible to achieve.

The author is not an engineer. He seems ambitious in bringing together a few different technologies that are each preliminary in a way. So, much more work needs to be done. I wish him well.

I checked out the associated references cited by the author and discovered this one about taking CO2 directly out of the air.

http://www.netl.doe.gov/publications/proceedings/01/carbon_seq/7b1.pdf

Now, the authors of this reference offer no specific way to do this other than suggest that it can be done economically and attempt to make a case to promote research in the area. I do believe researching these ideas have merit.

The authors claim (not yet proven) that a small amount of land area of 380,000 collector stations distributed around the world would be required.

I did a calculation based on their numbers and the total land area they claim which would be required to absorb all the world’s carbon output is 4,000 square kilometers or a square 63 km by 63km.

Based on this, a carbon dioxide absorbing station would be many times more efficient that the equivalent area planted in trees.

I caution the reader that this paper is only a feasibility study to promote more research since the exact process and procedure has not yet been determined.

The paper does seem to suggest that it is actually possible to invent a way to take the carbon out of the air and it suggests that it can be done economically with a much smaller footprint than nature can provide via photosynthesis.

So, it seems that nothing may be hopeless after all. We can all at least sleep better now knowing that we may have sufficient ingenuity to solve our problems. That is reassuring to me.

If our survival does ends up proving to be on the line, then I think we will find the right mix of technological ideas to insure it.

The big question now is will we be timely enough to still be within the bounds of our planetary ecology and can we restore the balance without permanent disruption to either our ecosystems or our climate systems.

Best Dan

When I see headlines about huge profits etc., I am keen to get an historical perspective. The oil business seems hugely volatile; in the 1980s the world was awash with cheap oil and the big oil companies were nursing huge losses. During the 1980s, “Houston, the once-regal centre of the oil universe, was a ghost town” (The End of Oil; Paul Roberts; 2004, p.104).

So, now the oil companies are enormously profitable. How long will it last?

I think these large oil companies must be thinking of what they should invest in.

For the sake of the planet, let’s hope they invest in renewables – but I wonder if they can really get the returns that they are used to with this business; the business model seems to be quite different to the oil business.

It looks as though different companies are following different strategies:

According to Roberts (p.348)

“There is good deal of variation in the politics and business practices of producers themselves. Companies like British Petroleum and Shell have all embraced the idea of climate change as real and are trying to position themselves as “early adopters” in hopes of profiting from any move towards a gas or hydrogen economy – and advertise themselves as renewables pioneers. By contrast, more conservative companies like ExxonMobil remain largely committed to an oil-dominated energy economy and have used their considerable political and financial resources to delay policies that put the oliocentric business model at risk.”

I hope government policies and consumer support go along with the BP/Shell strategy!

PS. I have just come across this site:

http://www.greenpeace.org.uk/climate/climatecriminals/esso/case.cfm

It includes this:

“Esso is dismissive of clean energy

Clean energy in the form of renewable energy technologies such as wind, wave and solar power is the primary solution to climate change, yet Esso has dismissed it as unprofitable. “In our view, current renewable technologies do not offer near-term promise for profitable investment relative to attractive in our core business. ” ExxonMobil A report on Energy trends, greenhouse gas emissions and alternative energy 2004

This is in contrast to BP and Shell, who each have strong renewable sections of their businesses. Instead, Esso is aggressively expanding its oil and gas production, and lobbying for access to search for new oil in pristine areas such as the Arctic National Wildlife Refuge in Alaska. Esso continues to dismiss the potential of renewable energy, suggesting that “non-petroleum sources of energy” are merely “fashionable”.”

all those profits can buy? Plenty, I guess. Maybe even those who are sticking to their guns that GW is real and dangerous. I just hope they can hold out.