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<<During a Speech Last October, Director and Executive VP Rene Dahn said that XOM had spent half a billion on renewables research. Does anyone know what the money went towards, or when it was spent? What went wrong? futuregain2030>>

I don't think anything went wrong in terms of research. What went wrong were the economics.

XOM bought a solar energy company back in the mid-70's (Exxon Solar, which was part of Exxon Enterprises, and sold it at the end of the 80's when it disolved Exxon Enterprises.

XOM also spent money in biomass research and in studying the chlorophylic process (which in one of the intermediate reaction of the chlorophylic process hydrogen is generated).

xom also spent a lot of money in the nuclear business --talk about clean air power. However, the politics in the U.S. has essentially killed this clean air business of nuclear power generation and the politics made xom get rid of its nuclear business -- a pitty. Exxon Nuclear was alo part of Exxon Enterprises.

So all in all, it was economics and politics which did in all that money that was invested in alternate energy sources.

BP and RD (Shell) have begun spending again monies in solar and wind power. However, most of these investment are not money makers and are really focused towards public affairs and the green parties in Europe, where this movement is very strong. Some stockholders have expressed doubt as to the wisdom of these "green" investments since they believe the returns are very low or negative. Actually, their stock price and p/e ratios have not been rewarded at all by these measures.

In any event, Exxon and U.S. companies have elected to apply economics to all of this alternate energy business, and thus have stayed away from making such investments as BP and RD in the near term; this despite some fierce political pressures from the Europeans.

Exxon has said that when it becomes economic again, they will switch to these alternate energy sources. However, when you look at any reputable energy forecast, alternate energies will still maintain the same puny contribution to total world energy demand 20 years down the road than they have today. So as far as making a dent, perhaps our great grand children will see them.

Let's face it, when you read the xom annual report and you see that the cost of finding oil in the year 2000 was just $0.65/B (1.5 Cents per gallon) and while this is a snapshot for only one year, and it is not representative of xom's average finding cost of a little less than $4/B (or 10 cents per gallon) over the past 5 years, what hope is there for alternate energy sources at such low cost of finding oil? --not much for now!

So it is not so much the research as the economics that have killed the alternate energy pursuit -- some ignorant people, and some not so ignorant people who make claims for the sake of their own political aims, have threaded this vast conspiracy of the oil companies and accused them of blocking new energy development of alternate energy sources --- this is pure balloney. As someone would have said during the Clinton years ... "it is the economics, stupid!"

Even the fuel cell car research in which xom is involved with toyota and GM is not going to make any significant dent in the next 10 years.

Surely there is a lot of fanfare and hype, and some of the automakers have announced fuel cell cars in a few years, but that is mostly hype. It is far from being economic, and the issue of hydrogen storage and hydrogen production is yet to be solved in a satisfactory and cost effective fashion.

Let's face it, I am told by people who know, that hydrogen production is very expensive unless cheap nuclear power or hydropower is used to split the water atom (H2O) into its constitutive parts --H2 and Oxygen.

So while people tout the fuel cell car as being efficient, people tend to forget that the fuel that goes into moving those fuel cell cars, that is --hydrogen, is extremely expensive and difficult to produce and to store safely.

So both economic and technical issue are still a big stumbling block to many of these alternate energy sources, and not this "vast conspiracy" that many people claim is arresting progress.

If there is any conspiracy to be had, it is that of the environmental extremist that will stop at nothing, not even at massive federal subsidies (which will come out of higher taxes from you and me)just to see there vaunted zero emission white elephant vehicle be jammed down the throat of the mostly ignorant and pliable american consumer.

The Eclectic Fool
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