For a while there has been popular speculation that utilities were in a death spiral. They have been hit with pollution regulation, clean energy mandates, higher fuel costs and disruption from clean low cost distributed renewable energy. Their primary purpose has been to “keep-the-lights-on,” and the world is changing around them. Big oil is also under pressure. The reasoning is that costs are going up, reserves are limited, EVs will replace gas cars, and carbon will be regulated. Strategic planners and consultants have been running around these entities with their hair on fire. Reinvention is the word of the day.
Not the least of anyone’s worries is how we get off fossil fuels. This begs the question can utilities and oil companies help? A couple of recent announcements indicate that they think so.
Shell New Energies, a subsidiary of a major oil company, Royal Dutch Shell, is acquiring Greenlots, an EV charging startup in the US. In 2017 Shell New Energies bought NewMotion with 30K charging stations in Europe. Seems like they want to enter the “emerging electric mobility market.”
Enbridge, a major pipeline company in Canada, is big in moving dirty tar sands from Alberta through the Keystone XL, Dakota Access Pipeline and the Minnesota Line 3 replacement. It has also dabbled in renewable energy, although with less than 5% of its capital investment. Seems like they want renewable energy too.
A number of US utilities have also declared the intention to go 100% renewable energy. Among them Xcel Energy, as well as NextEra and Florida Power and Light. They should be congratulated.
So it would seem that these fossil fuel companies can help.
Nope. Don’t believe it.
It’s not that they can’t help. It’s just that it’s likely they will slow things down, and time is not something we have a lot of when we talk about getting off carbon. We’ve been down this road before. Remember the dolphins playing in the bow wakes of Exxon oil tankers? Or BPs promises and green-washing campaigns? There is no way a small investment by Enbridge in wind energy makes them a sincere player in renewables. There is no way that utility Southern Companies proposal to add 100 MWs of solar in Georgia is a serious attempt to go green.
Watching these companies pretend to be seriously concerned is like watching tobacco companies attend health conferences on lung cancer. Remember fossil fuel companies attending the climate conference COP23? Surprisingly, it isn’t really that they don’t want to help, though this is doubtful, it’s that they can’t.
Remember that the fossil fuel industries, including utilities, have 1700 lobbyists in Washington DC and spend nearly $276 Million in 2016 getting what they want… $37 Billion in subsidies and complete destruction of reasonable regulations. Not likely these lobbyists are there asking for more subsidies for electric charging stations or help getting off coal.
There are two reasons these companies can’t change. First, it’s not part of their core competency and who they are. Sure they can redefine themselves, and I hope they do. In the history of “business,” there aren’t a lot of successful case studies. Large companies have half-lives of 30 years at most now. 88% of the 1955 Fortune 500 firms are now gone.
Second, large companies only serve two purposes. The first is to preserve their existence. They are like like bureaucracies in this sense. They will do anything; lie, cheat, steal and bribe to maintain their status quo. The second reason is they must continuously produce profits. In the US, this means short term profits. Often this is the reason they fail to innovate. Because they cut funds for longer term investments as soon as things get rocky. Where is the first place they will cut? New energy and new businesses that still need to be incubated. Their interest in the public well-being is only to the extent they can preserve their profits. For example, preserve profits or layoff people? The climate crisis and transition from fossil fuels is opposed to profits.
Sure, this seems a cynical view. Again, I hope it doesn’t happen.
When it comes to climate, we can’t rely on what fossil fuel companies and corporations tell us their good intentions are. Neoliberal economics has put us in jeopardy, both economically, socially and from the standpoint of climate. When we hear promises we must be skeptical and challenge them.
‘We are all connected. Savor the Earth!’™
L. Hobart Stocking