Big Oil Goes Green for Real

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". . .large integrated oil firms will eventually become major players—perhaps even the dominant players—in alternative energy."

Remember back in 2001 when BP went "Beyond Petroleum"? It was a brilliant marketing campaign, but all but a tiny fraction of BP's revenue came, and still comes, from oil. So how should we take the spate of new green announcements from the world's major oil firms? In July, ExxonMobil announced big plans to grow green algae to fuel cars; last week, Chevron unveiled the world's largest carbon-sequestration project in Australia; and recently, Valero, Marathon, and Sunoco carried out a series of acquisitions that resulted in Big Oil controlling 7% of the U.S. ethanol business.

The list goes on. And this time it's the real deal. It's not just that these projects involve bigger money, which will grow exponentially if new technologies work, it's that companies are actually beginning to think about alternatives not just as a tool for greenwashing (throw up solar panels here, sponsor a conference on wind energy there) but as real businesses that might one day turn real profits—or at least help make fossil-fuel production more profitable. The catalyst is that governments are moving to force industry to cut carbon emissions, creating a new "long-term regulatory reality" that favors alternative energy, says PFC Energy chairman J. Robinson West. Meanwhile, President Obama's green-stimulus efforts and China's massive investment in alternatives have created a serious market for green technologies.

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