is the latest oil major that is backing away from green energy investments to focus on its traditional oil and gas business.
In a $32 billion capital spending program earlier this week — most of it going to prop up oil and gas production — the Anglo-Dutch oil company said that it would drop all new investments in wind, solar and hydrogen energy.
CEO Jeroen van der Veer justified the decision by arguing that investment returns in the wind or solar business were too small. Linda Cook, Shell’s executive director of gas and power also added: “If there aren’t investment opportunities which compete with other projects we won’t put money into it. We are businessmen and women. If there were renewable [which made money] we would put money into it.”
This is a reversal for a company that has been intensely communicating — sometimes too much, as seen — about its commitment to climate change issues and clean energy.
Shell is not the only oil company to have scaled back its green commitments. Earlier this month , blaming the tough economic conditions, announced it would cut its biofuel and solar investments to focus on its traditional oil and gas exploration and production business.
The environmental community is obviously angered by Shell’s reversal. John Sauven, the executive director of Greenpeace UK, told the that Shell had “rejoined the ranks of the dirtiest, most regressive corporations in the world … After years of proclaiming their commitment to clean power, they’re now pulling out of the technologies we need to see scaled up if we’re to slash emissions.”
Despite an intense PR effort, the reality is that Shell’s clean energy investments have been relatively modest, committing about $1.7 billion to the sector in the past five years, compared to the $32 billion it plans to invest this year. It also compares with $1.7 trillion in company sales and $126.8 billion in net profit in 2003-2008.
Also, over the past couple of years Shell has sold key solar and wind assets including in 2006 it solar business to Germany’s . In April it also backed away from the 1,000 megawatts project.
The company, which maintains about 550 megawatts of wind farm capacity around the world, says that it will maintain its biofuel investments, which includes an upcoming investment at biofuel maker Codexis.