By Hazel Henderson* – Editor, Ethical Markets
Ethical Markets applauds Duke historian Prof. Nancy MacLean and agrees with her thesis in her book “Democracy in Chains“. As a researcher and science policy advisor, I saw many similar efforts by orthodox, fundamentalist economists to promote these kinds of harsh policies and ideologies …parading as science. In my own books exposing economics and its ideological underpinnings and revealing the phony “Nobel Memorial Prize in Economic Science (sic)” lobbied onto the Nobel Committee by the Central Bank of Sweden, I can corroborate Prof. MacLean’s scholarship.
I joined with Alfred Nobel’s descendent, Swedish lawyer Peter Nobel in exposing that there is no Nobel Prize given in economics, because economics is not a science, but a profession, similar to law, which advocates policies based on a set of now disproved theories still taught in textbooks (see my “Mapping the Global Transition to the Solar Age: From Economism to Earth Systems Science“, Foreword by NASA Chief Scientist Bushnell, Journal of the Institute of Chartered Accountants of England & Wales (Tomorrow’s Company, London, 2014). Therefore, it is even more urgent to expose these hidden agendas, backed by powerful groups and money, documented by Jane Mayer in her “Dark Money“ ( 2017), in Prof. Adam Winkler’s “We The Corporations“ ( 2018)and many other researchers as well.
From ‘economism’ to earth systems science Sustainable Business Initiative – Outside Insights:
*HAZEL HENDERSON, D.Sc.Hon., FRSA is CEO of Ethical Markets Media Certified B. Corporation, author of “Mapping the Global Transition to the Solar Age” and other books available in 800 libraries worldwide in many languages. Producer of the global TV series “Transforming Finance”; the Green Transition Scoreboard® and other programs and services.
For Oil Majors Investigating Clean Energy, It’s About Balancing Risk and Return
By Emma Foehringer Merchant* – Greentech Media
“Most of them understand this is the future.”
Oil and gas companies are used to taking big risks, but they’ve also grown accustomed to large payoffs.
That paradigm doesn’t necessarily translate easily to the renewables market, where relatively low risk translates to low, but mostly guaranteed, returns.
“That’s the key pushback we get when we speak to companies like ExxonMobil, Total or any of the oil and gas majors,” said Tom Heggarty, a senior solar analyst at Wood Mackenzie Power & Renewables and the author of a new report assessing the place for majors in clean energy.
“Although they understand from a risk perspective the projects are a much lower risk than they would be used to in the oil and gas space, the returns are typically quite lower as well.”
Despite the pushback, Heggarty said majors are turning to WoodMac more and more to understand the challenges and opportunities in the renewables sector.
Majors have no plans to ditch their traditional business, but corporate sustainability pressures and the attractiveness of renewables are pushing many toward clean energy. Before majors will truly increase investments, though, many are concerned about negotiating the balance between risk and return — as well as a desire to not get left behind.
“Committing more capital from renewables projects would also mean leaving value on the table for their shareholders,” said Valentina Kretzschmar, director of corporate research at Wood Mackenzie. “At the same time, most of them understand this is the future, this is the way things will evolve.”
According to WoodMac’s analysis, the 22 percent return on equity investment for North American onshore projects dwarfs the 5 to 7 percent return on solar projects and the 7 to 9 percent return on wind projects with guaranteed revenue. But renewables can compete with returns on exploration, downstream projects and upstream merger and acquisition investments.
Majors own less than 2 percent of the world’s operating solar and wind projects. Though lower returns may cause hesitation, Heggarty said many majors are actively looking to translate their experience in oil and gas to the clean energy business.
That’s especially true in Europe, where majors face more external pressure from government, investors and consumers — and where they don’t have the same access to cheap oil as do their counterparts in the U.S.
But even U.S. companies have demonstrated an interest. Last week, Chevron and ExxonMobil joined a climate initiative that already includes European companies like Shell and British Petroleum as members. Though Kretzschmar said the move doesn’t indicate those companies will quickly diversify into renewables, it does indicate mounting pressures to act on climate. She does think ExxonMobil and Chevron will more earnestly move toward clean energy technologies “when the time is right.”
When that time comes, Heggarty said majors might choose to concentrate on areas where their expertise can easily be translated.
Offshore wind, for instance, makes sense for a company with in-house engineering expertise that’s already worked in offshore oil and gas exploration. Big solar projects in emerging markets like Saudi Arabia, where oil and gas companies already have working experience, could also be easier points of entry. But to see real success in the clean energy space, Heggarty said majors will have to approach it with a different mindset, rather than trying to “shoehorn” those projects into a company’s existing business.
“One of the challenges is that oil and gas companies are comparing renewables projects on a similar basis. Although they are both in the energy space, they are very different propositions — totally different risks, challenges and returns at the end of the day,” said Heggarty. “What we’re saying to some of these companies is they need to think about these investments in a totally different way.”
*Staff writer at Greentech Media. She previously covered environmental policy, politics, and climate change at Grist and the New Republic. Emma studied Environmental Analysis at Pomona College.