Big Oil Vs. Renewable Energy - a Detrimental Conflict with Global Consequences

Big Oil vs. Renewable Energy:

A Detrimental Conflict with Global Consequences

Paul Tomesc

210932754

September 9th, 2012

IBUS3100 B

Big Oil vs. Renewable Energy:

A Detrimental Conflict with Global Consequences

Energy consumption over the years has dramatically increased. The emerging economies of India, China and South America have experienced significant growth over the past few decades, growth which requires a greater need for more energy both on a national and global scale. To put things in perspective, the rapidly increasing world population makes it clear that energy will be one of the most demanded resources for decades to come as economic growth. The growing global middle class, increasing quality of life and life expectancy all require greater energy consumption. As petroleum and natural gas production is still being a primary source of energy, the world's Big Oil companies are being proactive in placing barriers for new entrants in the industry. This is understandable from a business-sense perspective, as companies need to be proactive in maintaining their competitive advantage. In order for the oil and natural gas producers to keep their position as multi-billion dollar generating industries, it makes sense for them to fend off any new entrants or innovations which can impact diminish their market share and future potential profits. Despite the fact that such tactics are prevalent in business and rarely looked down upon by the Western Capitalistic perspective, Big Oil is deliberately endangering technological innovation, environmental sustainability and economic growth in the name of maximizing shareholder value and influence. The recklessness of this industry does not affect only a defined group of nations and their diplomatic relationships or the environmental degradation as a result of it, it affects the future of the world as we know it, politically, environmentally, technologically and most importantly economically.

In recent years, the top oil companies have been trying to integrate green mission statements into their corporate strategy, even investing a small percentage in renewable or "greener" energy. Companies such as BP and Chevron appear to be actively involved in developing renewable forms of energy in the United States, an example being BP's construction of wind farms and the thermal solar-to steam facility built by Chevron. However, such investments should be easily overlooked as they could have been artificially prompted by various financial incentives made by governmental authorities or by a rising social awareness regarding the importance of more sustainable ways to generate energy. In order to analyze the investments made by Big Oil companies, a large portion of the $71 billion invested by Big Oil companies was invested in developing existing technologies, mostly fossil-fuels, and making them more environmentally friendly. A very smart portion, a bare $9 billion was spent on renewable energy sources. When comparing the investments made in renewable energy to the huge investments made in oil and gas, Big Oil is clearly embracing the development of other sources of energy just for publicity and to increase their reputation and not to advance the technology and set grounds for a green future. Despite their arguments that more investment in such new technologies would be premature due to a niche market and unproven major power generating potential, the oil industry's involvement is actually detrimental to the "green" industry.

There is a subliminal opposition to renewable energy by the oil companies. This anti-renewable energy sentiment is not publicly expressed or covered by mainstream media, however it can be clearly noticed by closely examining Big Oil's attacks on this industry. One can reason why Big Oil feels so threatened of the possible global transition to renewable energy. This relatively new industry is a result of technological

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