Many of Europe’s Oil Companies are Turning Electric

Many of Europe’s Oil Companies are Turning Electric

European countries have decided against drilling for oil as capital budgets are cut back. BP and Shell are both in the process of producing cleaner energies, especially with pressure from the government. Royal Dutch Shell is currently building a vast wind farm off the coast of the Netherlands while France’s Total has decided to make several investments in solar power and wind farms. Total has also purchased an electric and natural gas utility. 

While these purchases are underway, oil companies are moving their focus from drilling to investing in clean energy. The government’s concern of climate change has accelerated promotion of clean energy, like electricity and natural gas (The New York Times, 2019).

Big U.S. oil companies, like Exxon Mobil and Chevron, are slow to follow the clean energy movement without pressure from the government to do so. Renewable energy contributes only 12.2 percent to total energy consumption in the United States (Wo, 2018). Analysts believe an incentive to switch to clean energy may be what American companies need to follow suit with Europe. These companies must position themselves to be able to adjust to the changing market. “We are seeing a much bigger differentiation in corporate strategy” separating American and European oil companies “than at any point in my career,” said Jason Gammel, a veteran oil analyst. 

There are also a variety of benefits from the use of clean energy that have pushed Europe to stray away from oil. Not only does clean energy reduce greenhouse gas emissions and air pollution, but it reduces the need for imported fuels. As for the U.S, energy can be obtained directly from the U.S, securing the future of energy for America.

Furthermore, clean energy creates more jobs in manufacturing and installation than drilling for oil. In 2016 alone, the wind energy industry directly employed over 100,000 full-time-equivalent employees in a variety of capacities, including manufacturing, project development, construction and turbine installation, operations and maintenance, transportation and logistics, and financial, legal, and consulting services (American Wind Energy Association, 2017). Other clean energy industries create even more job opportunities. The hydroelectric power industry employed about 66,000 people in 2017 (Navigant Consulting, 2018). 

While prices are often unpredictable when it comes to oil, renewable energy sources provide affordable electricity across the nation and stable prices. There was a rapid increase in U.S. coal prices due to rising global demand before 2008, then a rapid fall after 2008 when global demands declined (UCS, 2009). Unlike the oil industry, renewable energy companies operate at a much lower cost, allowing for prices to remain stable. As renewable energy companies’ start-up prices begin to diminish, clean energy costs will likely decline. 

A study by Mark Z. Jacobson showed that it is economically feasible to run the U.S. economy on entirely renewable energy by 2050.  His team’s 2015 paper contains 50 such road maps, one for every state, with detailed modeling on how to get to a US energy system entirely powered by wind, water, and solar (Roberts, 2016). These road maps show how 80 to 85 percent of existing energy could be replaced by wind, water, and solar by 2030. The goal of the plan is to electrify everything, including sectors that currently run partially or entirely on liquid fossil fuels. This means shifting transportation, heating/cooling, and industry to run on electric power. Switching all energy sources to carbon-free electricity would avoid about $3.3 trillion a year in global climate change costs of US emissions by 2050. (Roberts, 2016). 

As a country, the United States must focus its energy on the transition from oil to renewable energy as Europe has.  It is our job, as citizens of a democracy, is to voice our opinions on the need for clean energy.  We need to elect officials that will promote the use of clean energy instead of investing our time and money in oil. Without a push from the government, big oil companies, like Exxon Mobil, will continue drilling. 

Ways to use your voice and vote with your money:

  • Reduce your driving time by walking, biking, carpooling or using public transportation
  • Reduce your plastic footprint – plastic is petroleum-based!
  • Invest in clean energy solutions at home
  • Cut your power usage at home
  • Choose petroleum-free beauty products
  • Buy local! Purchasing anything from local produce to locally manufactured clothes reduces the amount of transportation needed to get to you (and reducing oil usage).