Quote:
Originally Posted by MattyC
What if an energy company (a big one, like Shell or BP. Not a new start up) just went "F*** it. Were taking all funds out of oil R&D and putting it into renewals. All profit will be dedicated to this."
Their stock would plummet, no one would invest, and the company would crumble. But with the resources they have on hand, they may be able to actually do something meaningful in this area, and be a pioneer, and thus potentially profit BIG TIME as everyone else lags behind. Just continuing to pour resources into oil extraction (with minute resources going to alt R&D) seems crazy to me, even from a long-term profit perspective.
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Such a company would be dead before it came close to producing anything useful. (Assuming the entire board and senior management team weren't fired by shareholders before such a press conference was over.) And dead with it would be other companies that rely on BP or Shell to survive. And a lot of people's investments - not just the shareholder whales people like to complain about, but your parents and their RRSPs - would be decimated. The assured failure of a company like that would shock the economy. You might suggest that is a good or necessary thing, except the increased need for government support of people crushed by the fallout could very well come at the expense of government funding/subsidies of the very clean tech you are promoting.
As far as "minute resources going to alt R&D", that is largely naive, but not completely so. Shell, for instance, has an R&D budget well over $1.3 billion US and a good percentage of that is in biofuels, wind, etc. Other companies - especially in the downturn - have either reduced such R&D or sold their alt tech holdings off. Those new companies will be the ones to succeed. And I've already noted TransAlta - though a much,
much smaller company in the grand scale, has subsidiaries dedicated to renewables. Some companies that fail to adapt will fail themselves. Others will succeed. Such is the way of the world.