2 top energy execs share why the oil-price rebound won’t derail clean-energy investment

oil derrick

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.”

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4 top energy execs share what they want Biden to do to help move the US toward cleaner energy

Wind turbines produce renewable energy outside Caledon, South Africa, May 20, 2020.  REUTERS/Mike Hutchings
Wind turbines produce renewable energy outside Caledon

Some of the biggest companies in the world have pledged to move toward cleaner energy. They say they want to see support from the US government as they move forward on their promises.

President Joe Biden has set forth the most ambitious climate-change agenda in the nation’s history, and investment in clean-tech has been booming.

But transitioning to renewable energy takes time. Though the US government and large corporations alike agree that clean energy is a key priority, making the transition would require overhauling infrastructure, some of which has been around for decades.

In the meantime, oil giants like Shell have announced new targets to reduce the ‘intensity’ of emissions over the next three decades, while corporations like Facebook are buying 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 into cleaner energy.

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 to cleaner energy, and which breakthrough technologies are needed to reach net-zero emissions by 2050.

Panelists also discussed what they would want to see from the Biden administration to help the US move toward clean energy.

The panelists were: 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.

When asked about what she would like to see from Biden, Shell’s Brinton told Insider that she wants the new administration to “continue to lean in with a commitment and a pace.”

Biden could do this, for example, by supporting investment tax credits and providing support to offshore wind to get projects up and running, Brinton said.

Bringing together different environmental agencies is also key to drawing a clear path forward and accelerating clean energy, she added.

Oliver Wyman’s Austin agreed.

“I think it’s about aligning the regulatory authorities,” Austin said, adding that everybody is on the same page about the issue.

“I think the government wants to do it. The administration wants to do it. The consumers want it. Corporates want to do it,” Austin said.

Form Energy’s Jaramillo said that he’d like to see the administration following through on the commitments laid out in its infrastructure plan, which is expected to include spending on clean energy deployment. Form Energy is aiming to build cheaper-long duration batteries.

Facebook’s Parekh said that she would like to see long-term commitments to next-generation decarbonization from the Biden administration.

“I would love to see some high voltage transmission efforts and also continuing the progress on storage,” she said.

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