[Graeme]

This thread probably follows "It’s a myth that the world’s oil is running out" because either oil companies believe oil shortages are not imminent, or they are selfish and want to make as much money from oil before absolutely nobody can afford it just before there is "an energy famine". Are oil companies being irresponsible? Should they invest in renewables and lower our carbon emmisions, or is there no money to be made in renewables?

Dawn of an energy famine

$this->bbcode_second_pass_quote('', 'T')his week the shape of the global energy crisis came into its sharpest focus yet. The world needs renewable energy fast, but as BP and Shell announced record profits, they also demonstrated that they are in essence retreating from renewables, perhaps with the exception of biofuels. They intend to focus their record billions on expanding production of what remains of traditional oil and gas, plus tar sands and liquid fuels from coal - ruinous in their effect on the climate.

The oil giants are recarbonising, wilfully choosing to forget both global warming imperatives and the need for renewables in national security terms. Shell pulled out of the biggest offshore UK windfarm yesterday and BP is losing interest in solar and investing in the tar sands - having once refused to do so on ethical grounds because of the greenhouse gas emitted in processing.

The European oil giants are behaving in this way in part because ExxonMobil became the most profitable of the big players while turning its back on the climate issue and pouring scorn on renewables investment. BP and Shell can no longer resist the calls of investors who demand short-term Exxon-type performance, whatever the final cost.

Others think differently. In New York, members of the Rockefeller clan - descendants of Exxon's founder - called yesterday for radical reform of the company because they can no longer stomach its irresponsible attitude towards the climate. They want a board that will invest in renewables. Meanwhile, in London, a big asset management house took out newspaper ads spoofing a death announcement for fossil fuels and one for the birth of renewables, in which its alternative energy fund will invest.

[cube]

$this->bbcode_second_pass_quote('Graeme', 'A')re oil companies being irresponsible? Should they invest in renewables and lower our carbon emmisions, or is there no money to be made in renewables?

[like_the_dinosaurs]

Cube wrote
"BTW is it just Americans that believe in the free market system?"

Yes, I Think So.

[dorlomin]

A company is not an sentient entity with a single controling mind directing its action. It is a composit body of divergent interests and needs with a broad mixture of shareholders, managers, executives and other forces. That a company may act for short term gain against long term interest is hardly ground breaking thinking. Many US banks made fat fat profits for a couple of years on distinctly high risk housing loans. They were happy to make short term money and 'damn the torpedo's ' .

The senior executives at the oil majors may have different long term personel outlooks about energy to that official endorsed by the board. They have to please shareholders and be re-elected. Shareholders are sometimes interested in quick profits and sometimes interested in holding a long term asset that will be a fungible store of wealth and stable growing income. A company cannot act as a rational sentient being with a clear long term plan because it is not one.

The shareholders have not bought the 'peak lite' and AGW talk of the directors and CEOs they want to be rich now. So the heads of the company keen to keep there jobs give them what they want.

It is like any animal in an enviroment responding to instinctive impulses, these often conflict and may not be in its long term interest. It simpley seeks to survive and be profitable.

[Gerben]

$this->bbcode_second_pass_quote('cube', 'A')side from obeying the law, some people act as if corporations have further responsibilities.
*a strange philosophy indeed*

[cube]

$this->bbcode_second_pass_quote('Gerben', 'S')orry, but it's not like companies are there to make profit only for the people who invest in them.

[Gerben]

$this->bbcode_second_pass_quote('cube', 'I') vaguely remember another member of this board mentioning that phrase a long time ago although I didn't think much of it at the time. I was telling myself, "what the hell is this person talking about?"
I guess it's all making sense now. It must be a cultural difference between Americans and Europeans.

[Fishman]

So Gerben, if a company sinks money into an unprofitable line or plan, how long should they do this or how much should the government bail them out? I'm thinking of the Italian airline that's loosing millions daily. Perhaps "public responsibility" as you define it was possible during cheap oil but is no longer possible ?

[ivanillich]

Cube: This is how corporations in the United States were when they were originally made legal. The first corporations were created for a limited period of time to accomplish some public service or work like digging a canal. It was thought that since these sorts of things needed to be done, the group of people behind the corporation should not have their personal fortunes put on the line.

Here's wikipedia on the transition:

$this->bbcode_second_pass_quote('', 'n') the United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature. Investors generally had to be given an equal say in corporate governance, and corporations were required to comply with the purposes expressed in their charters. Many private firms in the 19th century avoided the corporate model for these reasons (Andrew Carnegie formed his steel operation as a limited partnership, and John D. Rockefeller set up Standard Oil as a trust). Eventually, state governments began to realize the greater corporate registration revenues available by providing more permissive corporate laws. New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state.[13] Delaware followed, and soon became known as the most corporation-friendly state in the country after New Jersey raised taxes on the corporations, driving them out. New Jersey reduced these taxes after this mistake was realized, but by then it was too late; even today, most major public corporations are set up under Delaware law.

[evilgenius]

Graeme,

I think the oil companies are reluctant to put much into technologies like solar that could see huge improvements in the cost of production which their investments could wind up on the wrong side of. A company like Nanosolar comes along and prints solar cells at pennies per foot and they could be stuck trying to fab cells. That wouldn't be very good for them. When the solar industry is in a state where consolidation means something they will be interested. I suppose the same goes for wind, but not as much. The thing there is that improvements in bearings and generator windings could change a lot of things and the cost to role out the next generation might be huge. What the world needs here is government money, really, or the investment capital of a whole lot of speculators that may not really be aware of the gravity of their speculation.

[joeltrout]

$this->bbcode_second_pass_quote('Gerben', 'A')t least not in the Netherlands. The law allows investors to create corporations as it serves society. Corporations have a public responsibility.

[Gerben]

$this->bbcode_second_pass_quote('Fishman', 'S')o Gerben, if a company sinks money into an unprofitable line or plan, how long should they do this or how much should the government bail them out? I'm thinking of the Italian airline that's loosing millions daily. Perhaps "public responsibility" as you define it was possible during cheap oil but is no longer possible ?

[EnergyUnlimited]

$this->bbcode_second_pass_quote('Gerben', '')$this->bbcode_second_pass_quote('cube', 'A')side from obeying the law, some people act as if corporations have further responsibilities.
*a strange philosophy indeed*

[cube]

$this->bbcode_second_pass_quote('Gerben', 'B')ailing out companies is protection for shareholders. The shareholders will not be bailed out.