Investing in the Transition is Investing in Oil and Gas

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Investing in the transition

It’s Not What You Think

Contrary to what many believe, oil and gas companies are on the front lines of funding and investing in the green movement. As the world transitions to clean energy, renewable resources, and exploring new methods of generating power, it is major oil and gas companies leading the charge and carrying the torch to light the way.

It’s a popular opinion that oil and gas oppose the clean energy movement. Nothing could be further from the truth. It may surprise you that some of the leading investors in clean energy are oil and gas companies.

While there are countless examples of oil and gas companies’ significant investment in clean energy, we’ve only highlighted a few here. These impactful investments are just the tip of the iceberg with what the majors and other oil and gas companies are currently undertaking in the energy shift.

How the Supermajors are Leading the Green Energy Transition

The world’s largest and most influential oil and gas companies have taken the helm to steer the green movement forward. Although each one of these companies has made a significant impact on the green movement individually, together, they represent an unbelievable investment force.

Major oil companies are some of the most influential money movers in the world. Because of their potential value and financial influence, major gas and oil companies have the power to make a significant impact. It may surprise you to learn that the majors and super majors are using their profits to help fund research, invest in clean energy infrastructure, and lobby to help reduce environmental footprints.

Although there are numerous ways the super majors are funding eco-friendly energy ventures, one of the most staggering Investments in recent years is the combined investment in offshore wind energy. Now that offshore wind energy is beyond its infancy stage, supermajors are heavily investing in its expansion. In many ways, the potential
for offshore wind energy is vastly untapped as of yet. However, the supermajors are making incredible steps to change that for the future.

That’s a Trillion, With a T

One of the most significant investments the supermajors make toward clean energy is offshore windmills. Over the next few years, the most influential oil and gas companies are estimated to invest upwards of $1 trillion into the renewable energy resource. That number is correct; $1 trillion. This staggering amount of money has the potential to be a game changer for renewable energy projects.

The plan is to make this massive investment over the next ten years. Naturally, one of the attractions of offshore wind energy is its potential opportunity for creating cash margins on par with a per barrel of oil equivalent (BOE). However, as a renewable energy resource, the investment in offshore wind would significantly impact the energy spectrum.

Offshore windmills present the opportunity for renewable energy that could potentially deliver up to 25% higher margins than oil. Additionally, the operating costs for offshore windmills are significantly lower than those of deepwater drilling platforms. As big oil companies continue to invest in offshore wind energy projects, the transition to renewable energy is also pushed forward.

solar panelsGas and Oil Companies Building a Cleaner World

Offshore windmills are not the only energy projects oil and gas companies are investing in. On the contrary, big oil plays a heavy role in bankrolling and supporting countless clean energy projects and endeavors. In spite of the criticism that oil and gas companies often receive, they’re responsible for a significant portion of the funding for multifaceted energy projects. British Petroleum (BP) and Shell have taken drastic and consistent steps to transition away from solely fossil fuels. The European companies are making headway toward net-zero goals by reducing their carbon outputs, investing in CO2-capturing equipment, and prioritizing clean energy investments.

Furthermore, BP representatives say the major energy company made a $1.6 billion investment in low-carbon energy in 2022. BP’s efforts alone constitute a significant step in the shift to clean power. However, other companies have been instrumental in investing in the transition on several energy frontiers.

Resilient Hydrogen

One such exciting energy investment on the horizon is further research and development of hydrogen fuel. Green Hydrogen has much fewer emissions than traditional energy sources like coal and fossil fuels. Green hydrogen can be developed through renewable resources, like solar and wind power, to separate water molecules into fuel. This process is known as electrolysis and presents exciting new possibilities for low-emission energy production.

Recently, Congress passed the Inflation Reduction Act, which could make it much easier for companies to invest in green hydrogen capabilities. This opens the door for major oil and gas companies to play a more active role in supporting the clean energy source. In fact, Congress estimates they will see $369 billion invested in renewable energy and climate change.

The movement towards hydrogen fuel represents a significant step forward for the United States’ energy production and the shift towards clean energy.

Bioenergy

Bioenergy is a relatively new frontier for eco-friendliness. The concept is derived from harnessing the potential in recently living organisms, like plants, and converting it into a viable fuel source. Typically, the waste from plants such as corn, wood, and food crops is harvested and repurposed to create biofuel or bioenergy. This is classified
as a renewable resource that could produce sustainable energy.

ExxonMobil has made a significant investment in biofuel research to advance the technology and methodology necessary for harvesting the potential of bioenergy. ExxonMobil invested $250 million in biofuel research in the last decade, making it one of the largest investors in recent years.

As the global energy demand continues to rise, the benefits of major oil companies investing in bioenergy and renewable energy re- sources cannot be understated or more timely.

Creating Lower-Emissions Fuel

The demand for personal transportation has increased dramatically since the 90s. The greater the demand for personal transportation, the more fuel is needed. So one way gas and oil companies are doing their part in the green transition is to create lower-emission fuels to meet the demand of global com- muters. In particular, ExxonMobil has made great advances in producing eFuel, an energy source that is said to reduce emissions by up to 85%.

By replacing traditional fuel with eFuel, vehicles can significantly reduce their CO2 emissions and lessen their impact on climate change. This advanced fuel system is in partnership with ExxonMobil’s biofuel research, advanced testing of lower carbon resources, and commitment to making a positive impact.

Renewable Energy

Renewable energies, like solar and wind power, have long been thought of as the first steps toward the green transition. Harnessing these forms of energy production has
been on the horizon for several major oil and gas companies for some time. In addition to making significant investments in research and development of technologies, the supers have made great strides towards utilizing renewable energy in their operations.

One such example of a major oil company utilizing renewable energy is Shell’s promotion of the Houston Dash Stadium, using nothing but renewable energy. This represents
a significant step forward in harnessing the power of renewable energy. The massive amount of power necessary for maintaining and operating an entire soccer stadium
is staggering. The fact that the Shell-powered arena as a whole utilizes clean energy
in itself is a remarkable achievement.

Shell’s contribution is just one of the many ways major oil companies are driving the transition to clean energy. Major oil and gas companies are putting their money where their mouth is and exemplifying the use of clean energy in countless projects.

clean energy

Working Together for the Benefit of Us All

One aspect to consider that is truly remarkable is the cooperation the energy world is seeing between major oil firms. When considering the fact that the majors and supermajors are putting forth a collective effort to press toward clean energy represents a greater mentality of collaboration. “Big Oil” (which, with recent events, is growing into something of a misnomer) is sending the message that together we can accomplish more, go further, and succeed beyond what any individual could.

Though there have been many difficulties on the journey, we are seeing a brighter future through the collaborative help of the supermajors.

Transition Takes Time

One of the resounding criticisms of Big Oil has been the pace at which they are making the energy transition. However, it is essential to remember that change takes time. The power demand is such that we still rely heavily on traditional fuel sources to supply our energy. However, every step to lowering emissions, helping the environment, and investing in new tech is a step toward the ultimate goal.

Gain Energy Insight With Shale Magazine

Shale Magazine remains committed to bringing you the latest, most accurate info on the energy transition. Our team of writers is dedicated to the truth and facts about what you need to know. When you need applicable intel on the rises and falls of energy investment, our keen reporters have you covered. Check out our latest blog posts to stay in the know. Or, give a listen to our award-winning podcast, In the Oil Patch, for on-the-go oil and energy updates.

Jess

About the author: Jess Henley began his career in client relations for a large manufacturer in Huntsville, Alabama. With several years of leadership under his belt, Jess made the leap to brand communications with Bizwrite, LLC. As a senior copywriter, Jess crafts compelling marketing and PR content with a particular emphasis on global energy markets and professional services.

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