How Big Oil Is Preparing For A Life After Fossil Fuels

European oil companies are investing aggressively in clean energy while their North American counterparts double down on fossil fuels

Image by C Morrison on Pixabay

Not long ago, the idea that oil companies would invest heavily in clean energy seemed like a pipe dream. As the world was realizing the severity of climate change, many of the world’s largest oil companies donated millions to right wing think tanks that promoted distrust in climate science.

But as the turn towards a cleaner future became inevitable, oil companies gradually gave up on efforts to delegitimize climate science — and many started investing in clean alternatives instead.

Bloomberg New Energy Finance data shows that the major oil & gas companies spent about $4 billion on clean energy technologies in 2015. By 2019, this number had more than tripled to $14 billion, with the largest spenders being Repsol, Shell, and Total. Wind and solar energy were the recipients of the vast majority of the investment.

The increased interest from oil firms has been largely due to the fast pace at which clean technologies are moving. In their 2015 annual report, the Organization for Petroleum Exporting Countries (OPEC) — an organization representing several major oil-producing countries — projected that electric vehicles would represent less than 1% of vehicle sales by 2040. In reality, electric vehicles reached that mark in 2016. In more recent reports, OPEC has been forced to admit the impending disruption in the oil market from increased electric vehicles adoption. OPEC now predicts that oil demand will plateau by the 2030s — a major admission from an organization that is normally one of oil’s biggest proponents.

Seeing this trend, a variety of oil & gas producers have quickly pivoted towards the clean energy market. Danish firm Orsted AS, which was founded in 1972 to manage oil and gas assets in the North Sea, has been among the most aggressive. After entering the electricity market in the 2000s, Orsted saw opportunity in the burgeoning renewable industry. Today, Orsted is the world’s largest developer of offshore wind power — and the oil and gas assets that were originally the core of the business have mostly been…