From the Department of If You Can’t Beat ‘Em, Join ‘Em, energy providers around the world are being forced by economics to embrace alternative energy sources such as wind and solar. Increasing demand from government-led environmentalists set on reducing carbon emissions, falling crude oil prices, and more efficient and affordable unconventional power generation are tipping the energy balance away from non-renewable fossil fuels.
The oil industry has a long history of flexing its extensive political and financial muscle to block the development of competitive alternatives.
For example, in 2015, oil companies spent $11 million to squelch a provision in California’s Senate Bill 350 climate bill to reduce petroleum use by 50 percent by 2030.
Electric companies are also powerful opponents to transitioning to renewable energy and energy efficiency at the scale and speed climate change alarmists say needs to happen to mitigate global warming.
Coal-burning electric companies have charged their customers penalty fees for installing rooftop solar. In Europe, Shell lobbied successfully against targeted renewable energies.
At the same time, G20 governments doled out $452 billion in subsidies in 2014 directly toward fossil fuel production. Of that staggering amount, the U.S. portion amounted to more than $20 billion.
Big Oil corporations also lobby for exemptions to environmental rules, giving them an unfair advantage by lowering operational costs artificially.
Oil companies have also been waging a fatalistic propaganda campaign against consumers, policymakers, and investors. It is a foregone conclusion that fossil fuels will dominate our energy mix for future decades so why take acting on climate change?
In their seemingly objective annual energy forecasts, ExxonMobil, OPEC, BP, and Shell all predict that fossil fuels will represent between 78-81 percent of the nation’s energy mix in 2040. All the Big Oil companies minimize the potential of clean unconventionals, preferring to push their mainstay products.
Dominion, the largest electric utility in Virginia, is a powerful political adversary to renewable energy. Even though coal production in the state sheared 50 percent between 2004 and 2014, Dominion planned an aggressive buildout of natural gas power plants. The natural gas would be supplied via the Atlantic Coast Pipeline, a joint venture between profiteers Duke Energy and Dominion.
In breaking news, Dominion Energy and Duke Energy canceled their collaborative Atlantic Cost Pipeline project in early July 2020, due to swollen costs and persistent legal challenges from property owners and environmental groups.
Dominion lobbied successfully against several bills designed to expand the market for distributed (rooftop) solar and defeated a statewide cap-and-trade bill that proposed to raise $100 million annually for sea-rise and anti-flooding projects along the Virginia coast.
In Ohio, FirstEnergy spearheaded the lobbying effort that undermined a state law requiring utilities to provide a certain amount of their power from renewable energy and energy-efficient sources.
In 2014, Exelon Generation, the largest owner of U.S. nuclear power, opposed the national wind production tax credit, a major incentive for wind energy development.
Duke Energy opposed rooftop solar legislation in North Carolina. A March 2015 article in the Washington Post accused U.S. utilities and the Koch Brothers for conspiring against solar power:
“Three years ago, the nation’s top utility executives gathered at a Colorado resort to hear warnings about a grave new threat to operators of America’s electric grid: not superstorms or cyberattacks, but rooftop solar panels.”
But times are changing and so are the tunes being sung by conventional utilities.
In 2018, Xcel Energy made history as the first major U.S. utility to pledge becoming carbon-free by 2050. Not to be outdone by its Minneapolis-based competitor, Colorado’s Platte River Power Authority quickly followed suit and upped the ante (to mix two different card game metaphors), announcing a target of zero carbon emissions by 2030.
Not only are consumers tired of being slaves to the gas pump and global polluters but the energy market is reaching a tipping point where alternatives such as wind, sun, hydro, and stored battery power are becoming less expensive than fossil fuels.
Speeding the transition are decentralization, shifting demographics, and digital technologies.
Competition stimulates the market and, faced with choices, modern energy consumers want less dependency on the grid, lower prices, and reduced greenhouse gas emissions.
In October 2018, the conventional Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource, announced that it could save customers between $1.2-$2 billion by retiring its remaining coal generators, replacing them with a combination of renewable and gas generation over the next 10 years.
Today, wind and solar generation are provided with almost no variable costs with supplemental natural gas generation and emerging high-efficiency battery storage. Utilities are discovering that replacing large portions of their fossil-fueled generation fleets with renewable generation technologies allows them to operate at a lower cost.
In the future, more consumers will generate home-grown electricity to push back onto the grid. Faced with a growing and unrelenting demand for clean energy sources, Big Oil companies and their subsidiaries need to lead, follow, or get the heck out of the way.