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The coronavirus pandemic has accelerated the oil industry’s move to invest in green energy. French power giant Total became the latest energy company to increase its commitment to renewables at the end of September – to the tune of $3 billion extra (an increase of 50 percent).
BP announced back in June they plan to cut 10,000 jobs, while rival Shell is set to cut 9,000 staff. Both are looking to shift their focus to producing low-carbon energy and expanding their renewable businesses.
A sign that companies disproportionately contributing to the apparently impending climate crisis recognise they need to do more? Possibly. The three companies have also suffered big losses because of the coronavirus pandemic. Government-imposed restrictions meant demand virtually disappeared.
Total saw profits fall 96 percent in the second quarter, BP is aiming to recover an almost $7 billion quarterly loss, while Shell reported an $18 billion loss during the same period. These are unprecedented times for oil – Shell cut its dividend for the first time since World War II back in April. Ethics and morals are one thing – cold, hard cash flow is another.
There is disagreement as to how long it will take for oil to recover and whether it ever will. The lockdowns and other restrictions may have changed patterns of behaviour for the foreseeable future, although we will only know once we’re on the other side of the pandemic. Energy companies, it would appear, are not waiting to find out.
