Some large oil and gas companies include the development of “alternative” energy (solar, wind, and biofuels) as part of their corporate goals.

Shell’s division — Shell WindEnergy — is involved with operating eleven wind farms, including eight joint ventures in the United States. Chevron’s Chevron Energy Solutions has an environmental focus on solar energy and other “renewable” forms of energy. Chevron’s “We Agree” campaign comprises about ten slogans stating what oil and gas companies should do differently, as if they are not doing enough already. It urges them to promote “renewable” energy, care for the planet, etc.

The Chevron campaign sums up the general attitude that just being an oil and gas company is no longer sufficient; instead, these companies are expected to carry the banner for every green movement goal as well. Finding alternatives to hydrocarbons themselves has become part of the hydrocarbon industry vision.

If these changes are an effort to broaden the scope of the industry by offering innovative products that energy consumers would actually benefit from, then oil and gas companies would make sure that their new divisions produce energy that is as valuable as what is already being produced. They would be sure to offer energy that is as efficient and cost effective as oil and gas are, or they would at least develop energy sources that use production expertise similar to that of oil and gas, so that it does not cost much more time or money to add them to the existing business.

The value of innovation itself is generally undisputed, but what counts as a valuable innovation?

Innovation is supposed to bring an advantage to the industry. Yet solar, for example, is far costlier than gas or coal for electricity generation. The Annual Energy Outlook 2013 Early Release Overview [Energy Information Administration AEO] specified the Estimated Levelized Cost of New Generation Resources, 2018 (total system levelized cost) of Solar PV to be $144.3/MwHr, and Solar thermal to be $261.5/MwHr, in the range of about 1.4 to nearly 4 times more than that of natural gas (conventional combined cycle: $67.1/MwHr, advanced combined cycle: $65.6/MwHr) or conventional coal ($100.1/MwHr).

The means of producing solar panels and wind turbines are significantly different processes from finding oil and gas. Furthermore, generating reliable electric power requires a source that is continually accessible and that stores well. Wind is an intermittent source that does not store its energy.

What special advantage do solar or wind or any other “green” energy sources offer oil and gas companies? Why do fossil fuel companies include these other forms of energy?

Their decisions are not based on engineering or economic principles; rather, they are based on an acceptance of environmentalist dogma, even though this threatens the industry itself by diverting its focus towards less effective and more costly forms of energy. This is a moral sacrifice to the green movement, a pressure group whose ideas are being pushed on the fossil fuel industry.

Instead of allowing this to happen, oil and gas companies need to have a single-minded focus on fossil fuels.