Why doesn't Chevron see a future in renewables? In 2014 they sold Chevron Energy Solutions to OpTerra, and they also recently divested the geothermal operations. Other large players are getting into offshore wind, why not Chevron? What comes after gas the "transition fuel"?
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Not sure how "unintended consequences" got thrown in there. The use of petro itself led to the demise of the horse-drawn buggies. Who knew.
I'd say petro-economies/countries should take of themselves. That's why Saudi Aramco is trying to get an IPO going so they can have money to invest in other areas. If the others are smart and not corrupt they should start looking at diversification of their economy. Taking care of oneself and be independent is the hallmark of conservatism right? Are you worry about the plight of the people of these petro-countries and wanting to help them? Good man. Very liberal thinking.
So you say to leave it up to people like you to clean up the mess. What are you doing about air pollution due to fossil fuel exhaust? Cleaning any of that up? Contributing any good ideas to the problem or just going with the status quo and just putting up left/right diatribes?
Thanks @5pas you made some good points.
The Lazard study does include cost of ownership (Op and Maintenance etc), but doesn't include cost of transportation and costs related to intermittency so you're right there are some other costs which are not accounted for, but it was the best study I've seen to compare technologies on a reasonably like basis.
PE firms are interested in renewables and are investing, this is a pretty long magazine but has some info about investing in renewables vs oil and gas. PE were interested in shale but a lot of the good properties are gone, or there is a premium they have to pay so they are effectively priced out of the market. So the alternative is renewable projects (utility scale solar or wind). For proven technologies, PE firms are also looking at a quick turnaround to sale (5-10 years) which doesn't always match the project lifecycles. VC firms are experimenting with investing in unproven technologies, but are also have these lifecycle limitations so prefer to invest in software related technologies.
https://www.privateequityinternational.com/uploadedFiles/Private_Equity_International/PEI/Non-Pagebuilder/Aliased/News_And_Analysis/2016/July/Magazine/PEI%20147_Energy_Supp.pdf
There is a problem right now with grid intermittency, without good energy storage technologies it is hard to match the intermitent generation of wind and solar with the grid supply. The answer will be battery storage on the grid, and we don't have it now but it is coming. In the meantime, power auctions by region limit the amount of utility scale solar/wind that can be on the grid, which depresses the margin on the projects and makes it hard to enter. With battery storage this will become easier.
Anyway the change is slow but it is coming - coal is already not economic and it is just a good idea to keep eyes open at what is happening in the market.
Interesting article. If wind is so profitable, why are venture capitalists not flocking to this obvious cash cow and turning the energy world on it's head?
Answer: It's not as profitable as that article leads you to believe, if it was, you wouldn't need to beg as investors would be all over it.
One thing that I didn't see in the article was cost of ownership, that may be the determining factor
No, 5fen. They are laughing at you. They can't beleive the ignorance people like you fall for - hook, line and sinker.
Hey 5hwn, I see that "Flat Earth Society" is alive and well. That is why the rest of the world is laughing at you.
An interesting report is the Lazard levelized cost of energy (LCOE) analysis, it compares all forms of energy on an unsubsidized basis and provides ranges for $/Mwh produced.
https://www.lazard.com/media/438038/levelized-cost-of-energy-v100.pdf
Actually onshore wind and solar are now competitive on an unsubsidized basis as compared to gas combined cycle and gas generation, and offshore wind is getting there. If LNG is being used predominantly for power production, but is displaced by renewable sources, will the traditional long term LNG model be sustainable? Or maybe there will be a shift to small-scale LNG?
I can understand when people consider that CVX has a "core business" - however "core businesses" didn't stop Kodak from going out of business when it stuck to film and the rest of the world went digital, or Intel almost failing when it bet on high-end chips that people didn't need anymore. Businesses that survive change strategies as the world around them changes, and Chevron attempted to do that with LNG - but what comes after that? Chevron has said that they don't need more megaprojects - if not, then what do they think the world needs, and what will keep them in business?
Rhetoric will not magically make renewable energy economic. But you are correct in that once renewable energy is cheaper than fossil fuel, consumers will flock to the cheaper alternative..
Unintended consequences: Petro-economies, the countries that rely on fossil fuel for revenue will not sit back and watch their countries livelihood vanish without a fight (Russia, Saudi, Nigeria, Angola...etc) have you considered the unrest that moving away from fossil fuel will cause? Some of these countries will have nothing without the revenues from fossil fuel sales, will you take these people in... Are you aware of how much that will cost?
The problem with liberalism is they are never held accountable for the results, it is always the intent rather than the mayhem their misguided ideals espouse...so go feel superior in your Prius, the rest of us will clean up the mess
Damn it, 5qzz. Where did you get your asinine reasoning from? The Al Gore School of Con Theories? Boy, you have been thoroughly hoodwinked. Wake up.
@NUn6fMZ-4kup - no argument with your premise about people going for the lower or lowest cost for things. The previous writer (@NUn6fMZ-3iid mentioned "waste". Can't read his/her mind what he/she meant by "waste".)
But have you include everything that contribute to cost? You probably would not dump your used car engine oil down the storm drain or your house sink that can lead to water contamination would you? Why would you think the exhaust from your car have no cost? Add in the carbon taxes for the exhaust that all the current power sources are spewing and sooner the price for renewables will be competitive.
But meanwhile we are frogs sitting in a hot pot while the heat is getting higher. No one notices it until it is too late.
Case and point, the Chevron dividend is dragging us down.
While technically not a renewable, geothermal was modestly profitable for chevron. However, chevron needed cash due to low oil price environment and major capex project cost over-runs - hence the decision to divest geothermal.
There's one alternative fuel source that might prove effectively cheap. Hook up a hot air and gas collection unit to the Democrat side of the Congress and do the same at the major news media centers around the US. I think that alternative source of energy will warm all the homes in the Northeast and parts of California for the winter months a lot cheaper than natural gas.
@NUn6fMZ-4cgp I don't think anyone here is saying renewable are a waste, they are however, not economic. In non-college graduate speak that means you will be paying more for the same amount of energy you can get cheaper from oil/gas/coal.
If we arrive at an alternate fuel that can lets say power your car as effectively as gasoline but it cost twice as much as gasoline, would you use it? If it was the same price or even lower, people would use the alternative fuel...so why would an oil company produce an alternative fuel nobody will buy? Progress? how is it progressive to pay twice as much for the same thing?
If alternative fuel was cheaper, you would have point...until then, you do not.
@NUn6fMZ-3iid - can you cite any reliable sources that show renewables are a waste other than ethanol produced from corn? I understand that ethanol produced from corn is not efficient but what else that you know about wind and solar and hydro that may be wasteful? What part of solar, wind, and hydro use more energy than it produces over the long haul? I'm interested in learning a few new things here if that is the case.
Renewables don't pay. They actual cost more in energy expended to use. It's only a feel-good idea that most liberals like Al Gore like to talk about. But if you stop to really analyze it, renewables are really a waste.
This is not a "blog". Also, why would a recent college grad read comments at a layoff's website? They are extremely biased against all companies, not just CVX, to say the least. Not to mention college grads should generally have much better things to do with themselves.
Chevron is missing the boat. I suggest all college graduates reading this blog look at Total the French oil company. They have a vision of success while chevron is lost at sea.
Ya we should get into offshore wind, maybe the bigfoot team will design us some tendons
@2mdo, that little thing called progress has been ongoing before and more so since $140 oil. At the peak of high energy prices, many energy saving innovations have been borne and accepted in the consumer world. LED bulbs are so much cheaper now and have virtually replaced the CFL bulbs, saving consumers more energy. High oil prices only spurred on more E&P and that resulted in more oil being found, creating more oil supply than demand (a glut). At the same time the 2008 financial crash reduced economic growth around the world, further exasperating the oil glut and tumbling oil prices. The low oil prices, then spurred innovations in oil extraction technologies in order to still bring cheap oil to market. What we have today and for decades to come, is a head-on collision. A collision between abundant cheap oil and a world which now doesn't require as much of it anymore. The outcome of all this is low oil prices for a very long time. I don't foresee oil peaking over $60 for a decade, maybe 12 years. It will hover in the $40's and $50's until many of reading this retire from their job, voluntarily or otherwise.
@1iyz that's true for today, but there is the little thing called progress that tends to make things in the future a little different than the present.
The fact is: Oil, gas, and coal are CHEAPER than renewables in terms of per unit energy.
Chevron may go out of business but it wont make oil and gas any more expensive to the CONSUMER..
If oil and gas were extremely expensive >$150 BBL then and ONLY then would renewable be economically viable..
Then NEED for renewable is driven by the consumer NOT the oil and gas company....
The longer term future of oil and gas doesn't look so good:
http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html
U.S. and Europe consumption of oil peaked about 12 years ago. See details in the PDF on this page:
http://www.bp.com/en/global/corporate/media/speeches/new-economics-of-oil.html
China is going big time into renewables so their demand for oil/gas will be slowing and decreasing over time. How long of a time frame I do not know but my guess would be in the next 5 to 10 years.
Who is Chevron going to sell to and keep increasing the dividends to pay out to investors?
Just about every energy source get some sort of subsidies, such as tax breaks etc. Google up "big oil tax breaks" and you will find many interesting articles.
Renewables may not be a profitable business for Chevron now but the company will have to look at what else it can do. The buggy whip analogy is very apt. Basically Chevron can't be content with what it's doing now because the oil/gas business will not be very good going forward.
@1vsh- Are you able to make coherent comparisons? We're talking about renewable vs conventional energy. You're talking about modes of transportation. How you make the leap between the two is brain-knumbing.
"Them cars is nothing but a fad." Said every buggywhip manufacturer back in the day. How did sticking to the core business work out for them?
Renewables don't work and are more expensive without subsidies (which really is our taxpayer money). One expense (our taxes) going to shoulder an expensive energy source just to give the appearance of competing value. What a joke. For example, in Texas, we are able to choose our electric provider. Who is willing to choose a "renewable energy" provider who is 100% wind power when it costs more than a conventional electric provider? Ridiculous!
Renewable energy is a fad, fads make you look good politically, but generate no revenue.
Until oil/gas/coal costs increase, renewable will not be economic
CVX had some decent positions in renewables with geothermal operations (legacy Unocal) and Chevron Energy Solutions. The company is now trying to pay the dividend each quarter so Watson can do that home renovation project he hasn't quite been able to finance yet. He's spent too much of his cash on golfing and fancy suits.
It's hard to make money on renewables. Most of the companies that are able to make money on them rely heavily on governmental subsidies. And if Chevron accepted a lot of money from the government, then those politicians who are skeptical of "big oil" would demand that those subsidies stop.
Why no renewables? Because we are an OIL & GAS company. Let us focus on our core business and let OTHERS focus on alternatives. No need to be an all-in-one business. That's a recipe for disaster.