Big Oil Goes Green for Real

Remember back in 2001 when BP went “Beyond Petroleum”? It was a brilliant marketing campaign, but it had less to do with changing the company’s business model than positioning Lord John Browne as the Teflon oil executive. All but a tiny fraction of BP’s revenue came, and still comes, from oil. So how should we take the spate of new green announcements from the world’s major oil firms? In July, ExxonMobil announced big plans to grow green algae to fuel cars; last week, Chevron unveiled the world’s largest carbon-sequestration project in Australia; and in recent months, Valero, Marathon, and Sunoco carried out a series of acquisitions that resulted in Big Oil controlling 7 percent of the U.S. ethanol business.

The list goes on. And this time it’s the real deal. It’s not just that these projects involve bigger money, which will grow exponentially if new technologies work. That’s still peanuts for oil majors, which put only 4 percent of their total 2008 profits into alternative-energy investment. It’s that companies are actually beginning to think about alternatives not just as a tool for greenwashing (throw up a few solar panels here, sponsor a conference on wind energy there) but as real businesses that might one day turn real profits