Monday, October 19, 2009
Some See Exxon Investments Into Alt Energy Signaling 'Paradigm Shift' for Big Oil
This article targets Big Oil as possibly undergoing a paradigm shift in the very near future, with Exxon Mobile at the forefront. Due to the scale of the oil industry and how it effects economies, it is subject to heavy regulation and governance. Exxon has announced big investments in electric cars, unconventional natural gas, and a $600 million partnership to develop next-generation biofuels from algae. Many smaller companies have made the case for alternative energy sources, but none have gained significant market share. This move by Exxon, one of the longstanding traditional oil companies, could signal an industry shift. Exxon has historically been opposed to biofuels, so news of their investment is significant for the industry. Along with fluctuating crude oil prices, political forces and climate legislation may be a key driver for oil companies to invest in alternative sources. Algae absorb CO2 and could be eligible for offset credits.
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4 comments:
Very interesting post - I think it is somewhat amusing that Exxon is just now attempting to question there stance on getting involved into the alternative-energy field. After months of pleas from environmentalists, legistlators and shareholders, Exxon is finally starting to invest in alternative-energy technologies and commit to addressing climate change. I think it is about time that Exxon joins the fight to switch to alternative-energy and decrease our ties to convential oil.
I've actually heard that Exxon has already completed other projects in finding alternatives as well as reducing pollution. Due to Exxon's sheer size, I think that their decision to invest in alternative energy will be a great thing, especially because many smaller companies are not as capable of having much of an impact.
It is good to see that Exxon is getting involved with alternative fuels. I agree with Karen that the small companies are not going to have that much of an impact. I feel that this does signal a shift in the industry due to Exxon large size and market power they are able to steer the market in what ever direction they want. I can’t see algae overtaking oil in Exxon's production levels.
I also agree that it is important to see such a large company making a commitment such as this, since it is true that smaller companies would not be able to have nearly the same effect. I was surprised to read this article, because I had heard how committed Exxon had previously been in not investing in any presently existing alternative-energy efforts. One other aspect I found interesting was the quote that said this move was as groundbreaking as Wal-Mart and GE's sustainability strategies. It's good to know that such large and well-known companies across industries are equally committed to the cause.
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