"Oil, energy, the environment. It is the story of our time."
Those are the words that begin the now-famous Chevron (NYSE: CVX) commercial alerting the public that an oil company can be a part of the solution.
I'll get to the semantics of why that doesn't work in a moment. For now, let's deal with the opening quote.
Oil, energy and the environment are indeed the stories of our time. Just on my way to the office this morning I listened to:
- An NPR Climate Connections story about urban sprawl and the associated rise in fuel and energy consumption,
- A radio blurb about rising energy costs, and
- A story about the local utility (BGE, a unit of Constellation Energy) being forced to give its customers a rebate per a settlement reached with the state of Maryland.
With the issues so prevalent, there are certainly numerous ways to profit. Let's delve into a few, using the Chevron commercial as a catalyst.
Oil and Energy
Although many think so, oil and energy are not synonymous. This is a point I recently argued in a piece about cleantech's correlation to oil prices.
You see, as ubiquitous as oil is, its primary uses are for transportation fuels, chemicals and plastics. Of course, those uses are extremely important and--at least for now--they're things we've become critically dependent on.
Yet narrowly defining oil as energy only causes convolution. Imagining--as the commercial suggests--an oil company as part of the solution does more to foster confusion than to provide any real insight.
By definition, a company that is touting its activities in solar and geothermal isn't an oil company at all. It's an energy company.
The Chevron Spin Factory
Basically, what Chevron is telling us is that the oil era is coming to an end, though Peak Oil and climate change are never mentioned. The company is not saying it's pursuing clean energy because it's the right thing to do. They're doing so just to stay relevant in a rapidly evolving energy economy.
The question then becomes: will Chevron (and other "oil companies") be able to evolve fast enough? Or will they be leap-frogged by other, pure renewable energy companies?
Well, as many will tell you, it's hard to say. But the sheer notion that an oil company has to drop millions to tout its clean credentials tells us that they know the world is headed down the clean-tech road.
And while they drag their feet in getting there, trying to squeeze out every last barrel of profit (and they'll be successful, at least in the short term), the energy market will eventually pass them by.
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