In our blog post on monday,Mirella already gave a hint to today’s topic. Today we are having a closer look on efforts Exxon Mobil is making when it comes to alternative energies. Since it is clear that normal energy sources such as oil, coal and gas are not lasting forever and because our society is getting more and more conscious about our environment, alternative energies are heard and used everywhere; may it be some scientists who seek for a new innovative energy source, some politicians who seek to win the people’s vote (just think of Angela Merkel who stopped nuclear power stations immediately after Fukushima) or big companies who want to polish their image. Everybody is aware of alternative energy’s great potential,and there are many ways to use it. This potential can come in form of higher profitability, but also more prestige or better CSR ( about Exxon Mobil’s CSR check out Nici’s post). And of course big U.S. oil company Exxon Mobil is jumping on the train,too.
What is important for companies like Exxon Mobil when deciding to go for alternative energies? Economic expert Abdolreza Ghofrani tries to explain:
Of course, how the alternatives can be exploitable, while being economically cost-effective, are the key factors in coming up with conclusion and making decision on the part of consumers. Over the past several decades, the consumer countries have been weighing up the use of other resources, or substitutes, such as solar, water, wind, nuclear. Although huge research works have been done, it sounds a serious steps has not been taken yet; mainly because there have been gigantic amount of this noble energy carrier, namely the oil, and it has been rather cheap and comparing with other substitute resources being highly cost effective. So all this have made weak incentives for the use of other resources.
According to fastcompany.com, ExxonMobil has invested some resources in renewable energy.
Exxon has also given Stanford’s Global Climate and Energy project, which researches alternative fuels, $100 million over the past decade. And in an email to Herman, Exxon claimed that it has invested over $1.9 billion in activities that cut down on greenhouse gas emissions and improve energy efficiency since 2004 (out of hundreds of billions in yearly revenue). The company also noted that it contributed $235 million to communities worldwide last year.
At the same time,
Exxon Mobil CEO Rex Tillerson has derided biofuels as “moonshine” and in May 2010 he proclaimed that oil production hasn’t peaked and the world won’t move beyond coal, natural gas, and crude oil for 100 years.
Sounds very contradictory to me, doesn’t it? The actions Exxon Mobil took and the opinion of its CEO are two different things, so how do they manage to balance that? But then it is even more surprising when Exxon Mobile announced in 2009 that it would invest $600 million on algae research for liquid transportation fuels.
For a short introduction to algae as biofuel, watch this video:
Dr. Emil Jacobs, vice president of research and development at ExxonMobil Research and Engineering Company said:
To meet the growing alternative energy demand in the world should use various technologies and energy sources. We believe that biofuel produced from algae could be a significant part of the solution in the future if our efforts lead us to produce an economically viable transportation fuel, low net carbon emissions.
Algae holds more potential than traditional biofuels, and firms are starting to realize that. If some of the scale efficiency issues are resolved, then algae could become a very competitive biofuel, especially since it absorbs CO2, as well, and could be eligible for offset credits.
is RBC Capital Markets energy analyst Sandeep Ayyappan remarking.
After this announcement, many skeptics rose their voices.
Michael Webber, an energy expert and engineering professor at the University of Texas, commented:
I think they see changes to the energy system coming over the next decades.It’s pretty transparent that the energy field will be different 30 years from now. They’re an energy company, so they had better be prepared than to wait.
Brent Erickson, senior vice president for the industrial and environmental section at the Biotechnology Industry Organization trade group explains Exxon Mobil’s strategy as following:
I think the fact that Exxon – which has a history of openly opposing biofuels and saying they don’t work – is moving into algae biofuels sends a strong signal to the investment community and technology community that there is a paradigm shift going on.
Nobody really knows what Exxon Mobil’s strategy behind that is, but probably Kevin Quon has the right advice for us as observers :
Is Exxon wasting its capital when it comes to exploring photosynthetic algae research? Only time will tell. As it stands, the technological accomplishment appears far from ready let alone the logistical infrastructure needed to implement it.