Major Oil Companies Researching Alternative Energy Sources
October 4, 2000
Some five years ago when oil prices were still low, a number of petroleum companies began to turn their attention to promising substitutes for fossil fuels. Today, the industry is pursuing alternative energy at a pace unmatched since the energy crisis of the 1970s.
- BP Amoco is working on solar panels that could one day cover the south-facing sides of office towers as a building material -- and it plans to expand its BP Solar subsidiary into a $1 billion business by 2007 from $200 million today..
- The Royal Dutch/Shell Group is investing $500 million in renewable energy sources -- including biomass, solar and wind power.
- Texaco Inc. is exploring, among other alternatives, fuel cells which produce electricity using hydrogen.
- In August, Exxon Mobil Corp. and General Motors Corp. announced development of a system that extracts hydrogen from gasoline to run a fuel cell.
BP and Shell predict renewable sources may satisfy up to 50 percent of the world's energy needs by the year 2050.
In some cases, deregulation is driving the alternative energy industry. When California's power market was restructured in 1998, the city of Santa Monica shifted to geothermal and solar power. While energy costs rose 5 percent, the city was willing to pay the environmental premium.
Source: Thaddeus Herrick, "Oil Companies Seek to Develop Energy Options," Wall Street Journal, October 4, 2000.
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