Potential Energy

Deciphering Big Oil's Retreat from Renewables

Big Oil has a limited attention span for renewables.

Peter Fairley 04/10/2009

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Despite its "Beyond Petroleum" logo, BP sells mostly fuel.

A New York Times article this week concludes that major oil and gas companies are, as the headline roared, "Loath to Follow Obama's Green Lead." Such stories bashing Big Oil's slim investment in renewable energy tend to fall short by failing to consider how renewables intersect with an oil company's core business, and this one is no exception.

As the Times ably demonstrates, Big Oil is freezing or cutting investment in renewable energy and doing so from a relatively small base. It notes that Shell, which has frozen spending on wind, solar, and hydrogen energy, has invested just $1.7 billion on alternative energy projects since 2004, compared to $87 billion to keep its oil and gas flowing.

That should come as little surprise, since Big Oil's insubstantial and fickle commitment to renewable energy goes back decades. Following the 1973 oil shock, for example, U.S. oil majors of the time such as Mobil and Chevron embraced photovoltaics, only to dump the projects when oil prices crashed and OPEC's power waned a decade later. British Petroleum's promise to go "Beyond Petroleum" already looked weak five years ago when it ditched production of next-generation cadmium-telluride thin-film photovoltaics--technology that Arizona-based First Solar has since ridden to the top of the world PV market.

Big Oil has a limited attention span for renewables because such firms are not, despite their marketing claims, "energy" companies. They are marketers of specific energy products--primarily petroleum refined into motor fuels and natural gas for heating. Power generation, the focus of most renewables, is but a secondary market for their natural gas.

As Christopher Flavin, president of the DC-based Worldwatch Institute, put it to me a few years ago, "There couldn't be anything more different than selling devices to make electricity on rooftops and selling gas at the pump." Flavin's comment ran in my 2005 look at GE's leap into renewables, which at the time elicited similar but unwarranted skepticism. He was among those who noted that power generation was a key market for GE's equipment, and time has proved him right as GE continues to expand investment in renewables and energy efficiency.

The exception to Big Oil's retreat from renewables--its ongoing support for biofuels developments--cements the "core markets" analysis. Biofuels are, at present, the best response to the return of battery-powered electric vehicles after a century of suffering at the hands of the internal combustion engine and Big Oil's liquid fuels. Biofuels provide a natural product for gas stations, and blending with gasoline and diesel fuels will sustain the latter for decades.

Given the practical and policy challenges arrayed against biofuels, its supporters will need all the help they can get from Big Oil. According to a report in DomesticFuel.comlast week, fuel trackers with the Department of Energy's Energy Information Agency say that the United States will likely fall short of legislated goals for cellulosic ethanol: 100 million gallons of cellulosic ethanol in 2010, rising to 4.3 billion gallons by 2015.

The Underwhelming Solar Prius

The optional solar roof on Toyota's 2010 Prius may not provide a watt of mobility.

Peter Fairley 03/19/2009

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A solar roof will simply ventilate the 2010 Prius.

The solar roof that Toyota is offering as an option on its next-generation Prius hybrid sedan may be even less useful than expected, according to a report in the specialty publication EVWorld. The solar panels, reports EVWorld, will add not a microwatt of charge to drive the Prius.

Last summer, Technology Review looked at the potential impact of adding a solar roof to the Prius when rumors of Toyota's plans first emerged. The clear conclusion of the experts was this: keep solar panels on rooftops, where they can be tilted toward the sun for maximum efficiency. A solar rooftop would be just a "marketing gimmick," said Andrew Frank, a plug-in hybrid pioneer at the University of California, Davis, and chief technology officer for UC-Davis hybrid-vehicle spinoff Efficient Drivetrains.

Toyota, it turns out, won't even bother plugging its solar rooftop panel into the 2010 Prius's nickel-metal-hydride battery. EVWorld editor Bill Moore, citing a conversation with Akihiko Otsuka, chief engineer for the Prius redesign, writes that

Toyota tried it and apparently discovered that for not-entirely-well-understood reasons, connecting the PV panels to the battery turns them into an "antenna" of sorts, which at the very least seems to disrupt the car's radio.

So Toyota left it at that. The solar roof will simply help keep the car cool when it's parked by running a fan to ventilate the car. For the average driver, that could be somewhat useful for, say, half the year.

I spoke with Otsuka while reporting from the Geneva Motor Show earlier this month, and learned that Toyota engineers are targeting a range of 20 kilometers in the EV mode for the plug-in version of the Prius. The lithium-battery-equipped vehicle is to be offered to Toyota's fleet customers by the end of this year.

That would mark a boost over the 10-to-15-kilometer range offered by the nickel-metal-hydride-powered plug-in Prius that Toyota has been testing. But it remains just a third of the 60-kilometer range that GM is promising for its Chevy Volt plug-in hybrid, which is due out next year. GM's design has already set off a debate over the cost effectiveness and efficiency of carrying the battery capacity that such range requires.

Bio

Kevin Bullis is Technology Review’s energy editor.

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