BP CEO Bob Dudley told an audience in London that the oil giant’s renewable energy projects aren’t yet having a notable impact on the company’s profits.
“We love our wind farms in the United States and our biofuels in Brazil and we continue to invest in these businesses and they’re profitable,” he said speaking on the transition of energy demands, “but it’s fair to say they don’t, as yet, make a material difference to the bottom line”
“The evolution of the energy markets is going to take decades and decades and decades,” he added.
BP was one of the larger investors in renewables in comparison to its peers but even then Dudley was quick to reaffirm its commitment to its “oil and gas business” stating that “despite the attraction of renewables, the world can’t currently run on them.”
“Renewables are clearly coming of age and yet even with the most aggressive forecasts for renewables, the world will likely be looking elsewhere to other sources of energy for the next few decades”
Going forward BP will be investing in smaller, wider ranging renewable energy investments in order to avoid losses in the sector like those seen in the past. A comment that refers to a number of costly failed investments in solar power and wind farms in the early 2000s under the leadership of John Browne.
“We’re making smarter, in many cases, smaller bets, and making more of them across a wider range of technologies and business models,” Dudley told a crowd at the Oil Money conference this week.
These remarks were echo’d by other executives who defended the industry’s traditional source of income against growing pressure from investors to manage risks related to climate change. According to BP, renewables count for only 3% of the global energy supply but could grow to between 10% and 30% of consumption over the next 20 years.
“Today we are considered as an industry of the past by some people, but it’s not an industry of the past at all,” Total CEO Patrick Poyanne remarked, “Many wish for a quick revolutionary role reversal between the oil-and-gas industry and renewables but an ideological approach could bring great economic and social damage.”
This comment speaks to the growing trepidation that oil demand will peak in the next decade and then experience a sharp decline. Exxon Mobil and Chevron have remained publically skeptical about the potential damage of peak demand, but others like Statoil and Royal Dutch Shell have estimated it come as early as 2030.
None the less, all of the major energy companies have made public commitments to transitioning to cleaner energy. BP, Total, Shell, and Statoil have all increasingly moved towards renewable-energy technologies in the past few years. Shell is currently constructing one of the world’s largest wind farms off the Dutch coast, BP is a major investor in biofuels and onshore wind power, and Statoil launched the world’s first floating offshore wind farm on Wednesday in Scotland- a milestone in the technologies development.
Article written by HEI contributor Kevin Abbott.