Are the big oil companies really spending enough on developing alternative energy?

Question

Go to BP's alternative energy website and you'll notice that they plan on spending 8 billion dollars over the next 10 years on alternative energy R&D. This includes solar, wind, hydrogen and natural gas. Given the fact that we're in a state of complete disarray with the oil situation in our world with many factors contributing to refinery shortages, crude production, etc., you would think that big-oil would be spending a few more dollars on the alternatives. With that said, is BP, et al just giving us all lip service or are they serious about finding a better way. I know that they want their profits to keep rolling in based upon their current business model, but there will come a time when the old way of doing business costs too much (exploration, hurricanes, wars, etc).
Your thoughts on how we can help push them into embracing these technologies and making them viable alternatives for real world applications.

Answer 1

The word "enough" is a relative term. NASA gets $16 billion a year; is that enough? I don't think so, but I bet you think it is too much. They are spending an amount that they deem necessary to ensure future profits for the company. When their oil wells start to run dry, they will spend more.

Answer 2

BP is spending enough--although their research on natural gas is frankly, a waste. That simply amounts to creating the same CO2 emissions, just from a different source.

The other oil companies are doing almost nothing--they have not as yet followed BP's example. Which ultimately may be their ticket to extinction.

The real money is not coming from the oil companies, however--it's coming from a variet y of entrepreneurs and venture capitalists. In the "Silicon Valley" area alone, an estimated $3.5 billion in research on alternative energy is under way--and that figure is rising.

You are right abot their business model eventually failing--that's already happening. Alternative energy is competative now in most respects--particularly solar. There are ovviously some problems still to be resolved (the biggest is the high up-front costs for installlation). And electri cars are to the point that they have the power and performance that consumers want (though the range is still shorter--about 200 miles for a high-performance design, better for more modest vehicles). Cost here is not reallly a problem--that simply depends on soemone establishing a strong enough market to generate the volume needed to bring per unit costs down.

Don't assume all the oil companies will "get on the ball." Despite the common myth, they are as prone to screw-ups as anyone else. Look at the history of the railroads--inthe 1970s many wen't bankrupt after decades of operation--becase they wre too immersed in the status quo to step up and innovate, even though the warning sighs had been visible for years that the existing systems were becoming obsolete. And the automakers are another example--they've ignored the signs for years that big, inefficient cars are on the way out--and are now suffering the consequences.

Answer 3

Using alternative sources of fuel, or doing any research about them is really not there job unless they feel they can gain a competitive advantage for doing so.

Sometimes I think it's just lip service. However, many companies are trying to reposition themselves as being enviromentally friendly. The only reason to do that is to increase brand loyalty, increase revenues, or to gain some sort of advantage in the market.

Still another reason is to keep extreme evironmentalist and the government off there back. A losing battle if you ask me because extreme evironmentalist and the government are never satisfied. They'll always find a problem with something.

If you want to help them embrace it you need to convince investors to start convience stores that sell the alternative sources of fuel. The best thing about gasoline is the infrustructure, you can fill up any where in the U.S., Europe, South America, nearly the entire world. Not so with the alternatives.

The only reason to embrace such alternatives is to have a product(s) that can compete with gasoline which would give consumers choices. This would lower energy costs and produce better products.

Right now people want alternatives to replace gasoline. This is wrong. We want gasoline, and ethonal, and natural gas, and electricity, etc. Having alternatives implies choice. Something consumers don't have currently when it comes to filling up their vehicels. We want the alternatives to compete with gasoline, there by forcing gas companies (and car companies) to produce better burning efficiencey and better mpg.

When companies finally see the "green" behind such alternatives then you'll see some action. But it'll take time because there's a lack of infrustructure for the alternatives. Such enterprizes will have to start in local markets until they get big enough to expand.

Answer 4

Alternative energy research has been funded by OPEC for decades. Mercedes was one of hte first car companies funded by OPEC in the 70s to produce alternative energy automotive technology. The technology will be developed when oil prices hit a specific value which makes development economical.

Answer 5

They will never fully embrace these alternatives as long as profits are soaring to record highs...imagine the Exxon Mobile guy who gets paid 17,000.00 per minute ...Now with that kind of pay would you consider alternative energy to reduce your pay ?? Thats why they are not and probably never will.............!!!!

Answer 6

Pooring money on a problem usually only garners waste. I dont know about you but Billion with a B sounds like a lot of money to me.

Answer 7

It's their money they can do as much or as little R&D on alternatives as they want. It's not up to us.