Oil companies are seeing record profits as the price of crude continues its climb. Conversely, American car companies like Ford (F) and General Motors (GM) are failing due to high oil. But as Ford and GM scramble to innovate, go green and reduce their cars’ dependence on gasoline, they are actually being more forward-looking than their fat-pocketed peers.
Exxon (XOM) and company are clearly concerned about where future oil supplies might come from and are investing billions in recovering oil in tar sands and the deep sea, which used to be too expensive to extract. That’s fine. But what happens post-peak oil, when reserves start to vanish? Apparently, the oil companies still don’t get it. LA Times:
With Big Oil pumping out immense profits, you’d think cash would be available to fund renewable-energy programs. It is, and there’s plenty of it, yet the majors’ outsize earnings may be leading them back to the oil patch instead.
In February, BP said it would regard its impressive solar and wind operations strictly for their equity value and might spin them off. So much for Beyond Petroleum. More recently, Royal Dutch Shell withdrew from a landmark wind project in Britain and in 2006 sold the lion’s share of its solar interests to a German firm.
Exxon Mobil Corp., the giant among giants, remains outspoken in its belief in the enduring primacy of oil — an issue that activist shareholders challenged at the company’s annual meeting today in Dallas. Energy alternatives have gotten a bit more traction at Chevron Corp. and ConocoPhillips, but they still take a far back seat to other priorities at those premier fossil fuel marketers.
Philip Weiss, an oil analyst from Argus research, had this to say:
Oil is a depleting resource, and if I’m a shareholder, that’s something I care about…If the company does nothing to replace it, eventually that company is going to go away.
Can you imagine a world where Ford succeeds and Exxon fails? Big Oil needs to start preparing for a post-fossil fuel future, before it’s too late.