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How are our friendly oil companies faring in their (lame) attempts to go Green?

Royal Dutch Shell said last month that it would freeze its research and investments in wind, solar and hydrogen power, and focus its alternative energy efforts on biofuels. The company had already sold much of its solar business and pulled out of a project last year to build the largest offshore wind farm, near London.

BP, a company that has spent nine years saying it was moving "beyond petroleum," has been getting back to petroleum since 2007, paring back its renewable program. And American oil companies, which all along have been more skeptical of alternative energy than their European counterparts, are studiously ignoring the new messages coming from Washington.

Is it a surprise that these companies would invest in something that's not profitable? The only way these companies will pursue green energy is to make their (carbon) product more expensive through a carbon tax. It's really that simple.

John M. Deutch, a professor at the Massachusetts Institute of Technology and a former director of central intelligence, said there was little point in criticizing oil companies without first establishing federal rules that set a price on carbon dioxide emissions. Once that happens, he said, companies will adapt their strategies.

"What role will oil companies play in the future in alternatives to conventional hydrocarbon? The correct answer is nobody knows," Mr. Deutch said. "The important thing is for the government to establish a carbon policy. You can be absolutely confident that oil companies will pursue that, as will any other companies."

In fact, just follow the money and you'll see how little these oil companies are doing:

The oil companies have frequently run advertisements expressing their interest in new forms of energy, but their actual investments have belied the marketing claims. The great bulk of their investments goes to traditional petroleum resources, including carbon-intensive energy sources like tar sands and natural gas from shale, while alternative investments account for a tiny fraction of their spending. So far, that has changed little under the Obama administration.

"The scale of their alternative investments is so mind-numbingly small that it's hard to find them," said Nathanael Greene, a senior policy analyst at the Natural Resources Defense Council. "These companies don't feel they have to be on the leading edge of this stuff."

"Big Oil does not consider renewable energy to be a mainstream business," remarked Mr. Eckhart of The American Council on Renewable Energy. "It's a side business for them."

Shell, for example, said it spent $1.7 billion since 2004 on alternative projects. That amount is dwarfed by the $87 billion it spent over the same period on its oil and gas projects around the world. This year, the company's overall capital spending is set at $31 billion, most of it for the development of fossil fuels.

The problem is that the scale needed to make the change-over to a carbon-free world is enormous:

The world consumes about 85 million barrels of oil a day. The United States alone would require six times its arable land -- and 75 percent of the world's cultivated land -- to supply its needs with ethanol made from corn, according to calculations by Vaclav Smil, an energy expert at the University of Manitoba.

More realistic, and modest, targets are proving tough to reach. Congress's ethanol mandate, which requires oil companies to use 36 billion gallons of ethanol by 2020, cannot be achieved, experts say, without major technological advances that are still years away.

We are light years away from any real change unless the American public gets behind a carbon tax. Once alternative energies can compete against cheap carbon, the sky is the limit!

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