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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There is more to capital than just stock prices. If Shell were to do this, they would have to produce something very valueble, very quickly, or they would be destroyed as soon as their next debt payment/maturity was due, because they would no longer have access to debt capital markets and would not be able to refinance.