Harnessing clean technology doesn’t always seem like an obvious choice for Big Oil companies. In fact, despite having some of the most sophisticated and expensive tech in the business, many oil companies have yet to prove they can safely unleash digital technologies on the world. But thanks to a troubling new story by The Seattle Times, it’s apparent that some of the world’s largest oil companies, including Shell and ConocoPhillips, could face harsh penalties for failing to prove they’re trustworthy stewards of the environment.
While it’s not hard to grasp just how critical clean energy might be to a global climate-change solution, efforts to capture carbon dioxide emitted by burning oil are currently fraught with challenges. Because emissions from fossil fuels have become one of the biggest climate emissions challenges, oil companies have major incentive to invest in future clean technologies — and technologies such as carbon capture and storage may prove to be one of the most lucrative, if not most important, long-term investments in the industry. And if the companies fail to prove that these technologies are environmentally safe, they could soon find themselves paying a hefty price.
In 2002, the World Bank created a three-decade loan program to generate clean energy technology projects. As the loan program works its way through the pipeline today, companies like Shell and ExxonMobil have scored dozens of financing packages worth billions of dollars, giving the companies the financial foundation to take on hundreds of clean energy tech startups. If those loans turn out to be at risk, it’s bad news for these companies, both small and large, and for the world as a whole.
As anyone who watches coverage of politics in North America knows, “big money” invariably finds its way into electoral campaigns, distorting the political process in both parties. But the big money infusion into clean energy technology over the past decade is another example of just how deeply policy-making takes place behind closed doors. The world’s largest energy companies have exacted their due, and it’s now up to the government to ensure that any business that relies on fossil fuels isn’t simply told it’s safe to do so. It’s also up to governments around the world to make clear that the money will not be given back if companies fail to follow through with their commitments.
Just one major development at this week’s Congressional Budget Office hearing illustrated the scale of the concerns. While a single hydropower project did indeed represent one of many proposed projects, the potential scope of those projects goes far beyond two projects approved by Congress. The agency’s director explained that such projects may reach 3 billion barrels of oil equivalent, which is one trillion cubic feet of energy, and that a significant portion of those projects will involve oil and natural gas extraction technology.
CBO’s director warned that the bill’s massive, near-impossible-to-quantify impact on the nation’s oil and gas production would make it nearly impossible to account for the environmental and economic impacts of any given project. The agency also described the list of projects as “huge” and “massive,” and lamented that the bill is being rushed through committee ahead of a September deadline — exposing the Obama administration to “disastrous consequences.”