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Some have legitimately questioned whether it would be a good idea or not for oil companies to participate in wind or solar.

My view is that we call Exxon and Chevron and BP and Shell, "oil companies" because that is what their primary business is. However, I think that starting perhaps 30 years ago after the first "oil crisis" when everyone believed that the end of the era for oil had come, they began calling themselves "energy companies".

For those that are not aware, Exxon wasted hundred of millions of dollars, at one point in time, by going into the solar energy and other alternate energy business in the early eighties. They also went into the nuclear fuels business, and lost about $600 million dollars in early 1980's dollars (which would be equivalent to more than $1 billion or 2 in today's currency), going into Shale Oil and buying such businesses as Reliance electric -- a producer of electrical equipment.

Exxon lost money not because it lacked technical or management know-how, but rather because the underlying business assumptions and value bases were not there as had been presumed.

Everyone at the time was under the impression that crude prices were going to hit $100/B in 1980 dollars, imagine. So everyone went on a panic believing the end of the oil era (something akin to what is happening today in many sectors that believe in "peak oil" scenario).

The reason Exxon is not participating in solar, or wind, or the production of "renewables" such as ethanol and the like is because the economics are not there --these business are not economic. And if there is some economic merit to investing in these sectors it is only because of subsidies, not because of its economic merits.

If there were any economic merit to bio-diesel, or to ethanol production, would it not be far easier for Exxon to buy ADM or other such producer, and make it a subsidiary or Division of the corporation ratter than having to deal with the pesky issues of Middle East politics and risks?

As for BP and Shell, one has to realize that these are European companies that have to react to environmental pressure groups in Europe.

These companies reflect their European cultural milieu.

Therefore, I am not surprised they are being true to their spineless, politically correct, "diversity oriented", everything is permitted, "touchy-feely" environment. A corporate environment that reflects the culture of the continent (let's remember again that for more than 100 years they have been this way -- with the Brits being somewhat of an exception at times -- is it any wonder that my Father's and grandfather's generation (including some brave Canadians of the time) had to go over there to save their collective assess from bullies because the general population and the European elite did not know how to stand-up for right or wrong and defend themselves),these companies have no choice but to reflect this wishy washy culture and submit to their home grown agitators

Memo: Did we not see Paris burning last year while I was on assignment in our Chemical Plant in Belgium? Did we not see a mini-replay of the same burning in Paris this past week-end to celebrate the anniversary of the incident last year?).

The greenies and enviro fanatics in Europe are much more abundant, and some are much less civilized than here in America, althoug lately in America the guy who invented the internet, Al Gore, has now stirred all the environmental loonies into a frenzy with its fantasy work called "Inconvenient Truth" ... which it may be "inconvenient" but truthful it "ain't".

So in a triumph of superficiality over substance, BP promotes its image of an environmentally responsible company -- and projects itsefl as "beyond petroleum (while it lets its refinery operate under unsafe conditions, exploding and killing people, as well as hiding the "inconvenient truth" that its pipeline gathering system in Alaska are suffering from massive corrosion).

At the same time, another paradigm of European Corporatism, Shell Oil, pompously promotes the idiocy of a hydrogen economy and builds a showy service station in the heart of Washington, D.C. in order to fool every idiotic politician that visits the site to convince him/her to believe this is the "ultimate solution" to our "oil addiction".

In the mean time, hidden from the public its top two Senior Managers are hiding from shareholders the "inconvenient truth" that the oil reserve numbers they have been publishing for the last 10 years are, simply, bogus.

Investing in alternate energies today of the sort that requires Nanny State subsidies is a PR ruse that helps minimize and expiate corporate incompetence ... while creating the political illusion, favored by our elected officials, that we can short-circuit the makets and aggressively tackle our long term energy problems through "mandates" and "subsidies" ... this is indeed the real "inconvenient truth" or should I say ... "ruse".

In summary, "alternate energies", "renewable energies" of whatever anyone wants to call it, is not economic in general at today's crude prices. It can only work in the majority of cases through massive subsidies by our Nanny state. And in the selected places it may work stand-alone, as are in some remote places for wind and/or solar energy, it is of limited application, and thus it is a "niche" activity. I theorize that for that reason Exxon has very smartly elected no to waste shareholders monies and pursue for now what it does best, and that is oil and gas.

When the time comes, Exxon will likely buy out some of its weaker competitors that knowingly or unknowingly have elected to mismanage shareholder wealth by investing for years in these uneconomic sectors. All you have to do, by the way is too look at the Ballards of the world and all of these alternate energy start-ups and see the frenzy with which investors pour monies into them, and say to yourself, are we living now an alternate energy bubble? Do we have the same suckers again investing and burning money away as they did in pursuit of the tech illusions of the 90's? There are indeed many fools everywhere!!!

I am sure I will not endear myself to many of our readers for expousing an "inconvenient truth".

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