- Oil prices are back to where they were before they plummeted in 2020.
- But clean energy execs say that this isn’t bad news for clean energy.
- Execs from Shell and Oliver Wyman said rising oil prices could accelerate clean energy investments.
- Because of their work, Insider named these execs to our annual list of the 10 leaders transforming energy.
- Visit Insider’s Transforming Business homepage for more stories.
Oil prices have rebounded significantly since last year’s pandemic-driven plunge.
You might think that would be bad for clean energy. But contrary to expectations, energy executives say that it’s actually good news for clean-energy investments.
Oil giants like Shell have turned a close eye to clean energy and created new targets to reduce the ‘intensity’ of emissions over the next three decades.
Other corporations like Facebook are joining in by buying huge amounts of solar and wind power. Smaller startups have in the meantime made progress on breakthrough technologies like batteries that last for days – a key component to transitioning to cleaner energy.
The new administration has also signaled that clean energy is a key priority. President Joe Biden set forth an ambitious climate-change agenda, and investment in clean-tech is booming. Energy executives told Insider they’re watching closely and hope to see alignment of regulatory authorities and support to offshore wind industries among other moves from the new president.
Insider’s Benji Jones gathered four top executives in the energy industry for a live roundtable earlier this month to talk about how Big Oil can make good on its promises, how to generate returns for shareholders while pivoting into cleaner energy products, and which breakthrough technologies are needed to reach net-zero emissions by 2050.
Panelists also discussed how rising oil prices may actually benefit investments into clean energy, as contrary as that may sound. West Texas Intermediate crude trades for about $61 a barrel, around pre-pandemic levels. Crude tumbled last year as COVID-19 put a stop to travel and manufacturing, driving down demand for oil.
The panelists included: Urvi Parekh, Facebook’s head of renewable energy; Mateo Jaramillo, Form Energy’s cofounder and CEO; Shell’s EVP for renewables and energy solutions, Elisabeth Brinton; and Francois Austin partner at Oliver Wyman in the UK and head of the group’s energy practice.
Brinton told Jones that Shell – known for being a major oil and gas company – is investing in energy storage well as many other cleaner technologies.
“We’re involved in offshore wind, onshore wind, onshore solar, storage, hydrogen. So green hydrogen for industrial and transport uses,” Brinton said. “We have the largest LNG business in the world, and so we have a lot of experience moving ships and transport.”
Shell is “technology agnostic,” according to Brinton, who added that the company is really focused on use cases and how it can help various sectors reduce their carbon footprints.
Oliver Wyman’s Austin told Insider that the oil-price recovery isn’t putting the investment case for clean energy at risk. On the contrary, Austin said, the rising prices will actually “enable the Shells of this world to finance this transition” to clean energy.
“I think society has shifted. I think COVID has been a wake-up call,” he said. “Momentum is there.”
Austin said that oil and gas are going to continue to be part of the energy mix as far out as 2040 or 2050. The transition to clean energy is expected to take a long time as new technologies develop over time.
Brinton agreed, adding that she believes the near-term price of oil actually helps speed up the transition by funding it.
“That’s a really important point because a lot of people think, ‘Well, that’s bad. It’s going to slow things down,” she said. “Actually, it’s very helpful.”