Written in collaboration with Rodney Foxworth; originally published in LiP: Informed Revolt, Summer 2006
It’s good business. The economy of the future will be a low-carbon economy. —Vivienne Cox, Chief Executive of BP’s Gas, Power, and Renewables Division.
Many environmentalists find themselves at philosophical odds when the discussion turns to green capitalism; that is, whether or not sustainable energy development and environmental protection are able to coexist with capitalism. One camp suggests that capitalism and transnational corporations are ill-equipped to safeguard our environment and resources, while another supposes that sustainable development is capable and probable within the current capitalistic socio-economic model (albeit with a few modifications).
While CEOs and environmentalists might agree that renewable energy is a necessary resource to develop, it’s the only the latter group that recognizes it won’t be enough; it’s decreasing our overall energy usage, not simply replacing one type with another, that will be the key to any kind of real strategy for sustainability in the twenty-first century. And it’s not too hard to see the inherent conflict that notion has with the capitalist reliance on ever-increasing consumption.
It shouldn’t be too much of a surprise, then, to find that the motivation driving big business toward the development of alternative fuels has little to do with environmental concern. So why are the very same companies that maintain something in the neighborhood of 25 percent of the worldÍs wealth, and which have been complicit in the destruction of our environment and overconsumption of our resources, subscribing to and investing in “green technologies?” Because at its root, capitalism has only one motive—profit—and it has become clear that over the next century, relying on oil revenues will become very, very unprofitable.
Nowhere is this more evident than in the shift in advertising stsrategy by several major oil companies. The leader of the pack is British Petroleum (BP)—the world’s second largest oil company, after ExxonMobile—which began its “green” shift in 1996, when the company resigned from the anti-Kyoto and anti-climate science Global Climate Coalition. A year later, BP executive Lord John Browne publicly acknowledged climate change as a reality (and one that must be addressed), the first oil exec to speak on the subject.
The real milestone for BP—and for greenwashing everywhere—came in 2000 with the unveiling of its new $200 million rebranding campaign, “Beyond Petroleum.” The campaign boasted of BP’s “green” commitment, primarily focusing on their investments in alternative energy research: BP intends to invest $8 billion over the next ten years in alternative energy development, directed towards solar energy, as well as wind, hydrogen, and gas-fired power systems. In the first year after their rebranding, BP faced backlash both from environmentalists (especially because of BP’s prominence in Arctic oil drilling) and from within the company—after all, no other oil company at the time was even talking about peak oil, let alone investing in alternative energy.
Some six years later, BP now leads the pack of oil companies when it comes to alternative energy research—and is profiting from it. BP Solar is now the world’s third-largest solar company; they’ve announced plans to build the world’s first commercial hydrogen fuel project in Scotland; they have two existing wind farms in the Netherlands, and have their eyes on numerous potential US sites. And the profit margins stand to be high. In November 2005, BP told Reuters that the newly-created BP Alternative Energy unit “had the potential to deliver sales around $6 billion a year” within the next decade. According to BP Chief Executive Browne, BP is “now at a point where we have sufficient new technologies and sound commercial opportunities within our reach to build a significant and sustainable business in alternative and renewable energy.”
Shell, the third largest oil company, is intent on catching up to BP. In a February 2006 press release, Shell announced it had now invested over $1 billion in alternative energies, making it one of the worldÍs leading companies in the sector. At the top of their list are biofuels, which are derived from plant crops and biomass (like wood chips). Shell is also, according to company rhetoric, “one of the largest wind energy developers,” with stakes across the US as well as in the Netherlands. Shell owns half of the Mount Storm wind park in West Virginia, one of the largest projects under development in the US. Hydrogen is on their radar as well: Shell plans to open at least two hydrogen stations in 2006.
The most recent oil company to “go green” is Chevron, which launched a $50 million global ad campaign in July 2005, supposedly seeking to “raise awareness and ecnorage discussion about important issues facing the energy industry, including supply and demand, the role of alternative and renewable energy sources and the promise of technology.” According to their PR, Chevron plans to invest over $300 million every year on “clean and renewable energies.”
The crux of the cam,paign, called “Will You Join Us,” is peak oil, which Chevron has jumped on as a reality that consumers need to be concerned about. As one ad states, “The world consumes two barrels of oil for every barrel discovered. So it this something you should be worried about?” The ad goes on to argue, “The energy industry needs to get more from existing fields while continuing to search for new reserves…. Consumers must demand, and be willing to pay for, some of these solutions.”
Where BP and Shell have both jumped on the green bandwagon to make alternative energy profitable for them, Cheveron has put their own twist on “greening” the oil business. By focusing on peak oil rather than global warming, they can continue to push for the loosening of drilling restrictions and emissions standards. After all, sustainablitiy “requires us to use all resources at our disposal,” and “the challenge for the energy secotr is to optimize the development and use of all sources of energy.”
As environmental website the Green Life points out, “Peak oil deals the energy industry a strong card in the game of greenhouse gas emissions management, meant to trump regulation. Chevron is the first company to play it publicly. The card suggests that oil will solve its own environmental problems simply by disappearing. In the meantime, we need cheap, unconstrained carbon to supply the demand of development worldwide.”
But what is truly remarkable is Chevron’s explanation for why we need to create more energy, whether through oil alternatives or better (more thorough) exploitation of the crude we’ve got. According to their PR copy, “Because of surging economies in the developing world and continued growth among the industrialized nations, global energy use is soaring. Better economies mean better lives—and more demand for energy. As a result, supplies are tight. Prices are rising. And energy users are calling for viable alternatives.”
Or in other words: Over-consumption of energy isnÍt a problem—it’s the natural outcome of the steady improvement of the lives of those in “developing” nations; and just as capitalism and “economy growth” improves their lives, so too will it find new ways to supply the energy to fuel it.
Interestingly, the company at the top of the oil game—ExxonMobil, which set an all-time high profit record in 2005 (more than $36 billion) for any publicly traded company—has taken a different approach to the problem of peak oil and climate change. It simply denies that they exist. Where BP, Shell, and now Chevron have all poured money into the alternative energy sector (and into ad campaigns convincing consumers of their green values), ExxonMobil has spent more than $8 billion on think tanks, media, and consumer groups to promote the idea that climate change is a lot of bunk. They have actively campaigned to open the Arctic National Wildlife Refuge (where BP, in contrast, hems and haws over whether or not it will drill “if the refuge is opened”), and have fought the Kyoto Protocol.
But as it becomes clearer to increasingly larger segments of the population that climate change is real and the oil is going to run out, it is likely that ExxonMobil, too, will eventually dip their hand into the alternative energy pot—or just buy out the companies that are currently making it a profitable venture.
Matching supply with demand is textbook Econ 101: that’s just sound business sense. But business acumen might not be best thing for our environment. Our demand for energy will increase exponentially in a world with finite resources; that is, our supply will never match our hunger for more. As one resource (oil) dwindles, we can expect to see others (solar; wind; water; hydrogen) take its place—and the energy barons that presided over our oil drain and carbon dioxide emissions revolution will be the same people that will promote consumption, increase production, and expand markets. Just as with everything else, alternative energies—in whatever form that they might take—are at the mercy of the free market and those who worship it with the same religious fervor of fundamentalists.
Rather than curtail our demands for energy, big business will only encourage it, and to whose disadvantage? Ours—and the environment’s, of course.
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