Environmental Engineering Reference
In-Depth Information
renewable activities are not represented at the
Executive Board level, which decides of the invest-
ment choices. This emphasises the fact that Total
remains very much focused on the development
of fossil fuel energies as its core-business and
its innovation and diversification choices: more
efficient petroleum products is a win-win option,
whereas biofuels promotion is not a revolution in
the business apprehension.
As regards its innovation and diversification
strategy, the oil industry has a natural role to play
in CCS development as it has used CO
2
injection
in dwells to improve oil recovery yields. Moving
to power production is however another busi-
ness; It means mastering new competences. For
instance, Total has chosen to invest some capital
to buy existing renewable energies companies that
have the knowledge of equipments development
and operation. The amounts of investments in the
renewable are however marginal compared with
the billions invested in the core-business activities;
The company remains reactive to new technolo-
gies options, however is not envisaging a serious
inflexion to more diversified energy activities.
The fact that E&P activities are located up-
stream in the energy chain creates a loose link with
the final market. The civil society seems however
very concerned by possible environmental impacts
of oil industry activities, as a consequence of
environmental disasters that occurred in the past.
However, this contestation rather pushed for the
integration of more responsible behaviours in the
practices than for a revision of the core-business.
As a matter of fact, it seems that citizens do not
apprehend all the interrelations between their
consumption patterns and the oil industry devel-
opment. So far, it has triggered the need for oil
companies to become greener and they did it by
investing in low carbon energies, first the ones
substituting to their core-products, biofuels, and
second by investing in new processes, power
production. A rupture seems however not cred-
ible independently of a profound revision of the
market, as the core-business is tributary to a double
inertia: huge fixed assets and the impossibility to
redeploy them on the very short term; extremely
profitable environment of the oil industry on the
mid and longer term.
Towards a Radical Transition?
This overview provides contrasting examples on
how oil companies conceive the transition to a
low carbon pathway:
•
Reactively:
manifested by Exxon, denying
the recognition of climate change effects
(at least until the 2000s).
•
Conservatively:
Total illustrates a case
of a company that acknowledges the need
for diversification but does not envision a
radical shift of the business model in the
mid term. It is rather a follower, investing
to acquire capital in renewable power pro-
duction, which is indeed another business,
to ensure it will catch up if these emerging
trends strengthened.
• Proactively:
BP adopted a first mover at-
titude, as the company envisioned that al-
ternative energies might become a second
pillar of its core business. It is now down-
sizing its ambition. It has reduced its port-
folio to focus on alternative energies clos-
est to its core business.
The more proactive strategies (e.g. BP) were
driven fist by a strong involvement of leaders with
the firm stances of the CEO and the personifica-
tion of the challenges through the declination of
low carbon strategies by unit's leaders. It was
also founded on the mobilisation of significant
resources, a proper organisational structure and
the deployment of investments in energy diver-
sification. However, the diversification was not
fully anchored yet as temporary difficulties have
played as pullback forces. The company decided
