Talk about a catastrophic mismanagement of brand, company resources, and a complete misanalysis of energy systems, economics, public opinion, and... goddamnit just the reality of energy systems.

If not even energy execs get it, who does?!

Last decade or so, (low interest rate phenomenon, #1366670) ESG and "omg climate change buhu" delusions seeped all the way into energy companies. Pretty disgusting.

Anyway, here's a great FT deep dive into the failed BP and Shell green revolutions:

[Mr. Bernard Looney, CEO of BP] also sent a warning shot to any doubters within the company. “If anyone sees BP acting counter to what I say today, then I want to hear about it.”

Van Beurden says that while Shell began slowly, he believed it was essential for the company to identify what its role would be after the transition to clean energy. “For the long-term survival of the business, you have to think about the future of the energy system, which is not going to be oil and gas, let’s be honest,” he tells the FT.

"The two UK oil majors spent heavily on their plans, hiring thousands of new staff and promising to be part of the solution to climate change, rather than its cause.""The two UK oil majors spent heavily on their plans, hiring thousands of new staff and promising to be part of the solution to climate change, rather than its cause."

FORTUNATELY:

neither effort lasted beyond the tenure of the chief executive who launched it. The two companies have since dramatically scaled back several of their energy transition businesses, writing off billions of dollars of value as they shut down, or sell off underperforming units.

Stunning graph... the US majors don't fuck around with this green nonsense?

The majority of the staff they hired have now moved on and both BP and Shell have promised investors they will cut costs and focus on their core business of finding and selling oil and gas.
“Our optimism for a fast transition was misplaced and we went too far, too fast,” Murray Auchincloss, BP’s current chief executive, said in February, as he killed off Looney’s plan. “Oil and gas will be needed for decades to come.”

Beautiful to see the world healing.

The music stopped when Russia invaded Ukraine in early 2022. The ability of Shell and BP to spend freely on the energy transition was always constrained by the decision of their US rivals, ExxonMobil and Chevron, to maintain a focus on oil and gas. When the war in Europe created an energy crisis that sent prices, and oil company profits, sky high, some investors started to push Shell and BP to stop diverging from their peers and ditch their unprofitable green plans altogether.

MISTAKE #1: thinking you could change an oil and gas giant into a random electricity provider.

• wind and solar, already from the 1990s, but didn't work. Shell made a New Energies division in 2014 already
• oil prices collapsing and Paris Agreement ran the media

Embracing wind and solar power was the quickest way for Shell to reduce its overall carbon footprint, as it offset some of its oil and gas emissions with zero emission electricity.

MISTAKE #2:

• misabuse economies of scale, waste time in meetings and M&A of various solar/green-tech companies, the culture of which didn't match whatsoever.
• pull back doing the high-return thing you're good at, to do the nonsense thing you're not good at and that doesn't move the needle.

Look at this capital destruction: fuck financial markets possessed by bad ideas,

Both companies increased their spending on green technology rapidly, to a peak in 2022 of nearly a third of overall investment, or $4.9bn, for BP, and nearly a fifth, or $4.3bn, for Shell. BP promised to spend a further $55bn to $65bn between 2023 and 2030.

Low interest rate phenomenon:

Van Beurden, who stepped down at the end of 2022, says the world changed. Inflation and interest rates rose, he argues, governments moved more slowly, and the global pace of progress on climate change is currently below the bottom end of Shell’s forecasts from 2016.

God, I have no end of hatred for the greenies.God, I have no end of hatred for the greenies.

At the end of all of these, a bunch of peeps shall be behind bars/executed.

archive: https://archive.md/qEZUn