Opinion: oil companies need to invest in the electric future

If the oil companies had their way, you’d be bamboozled into thinking there were no such thing as oil companies. On their website homepages they style themselves ‘energy companies'. Their headlines are all about ‘the energy transition’, ‘sustainability’, ‘decarbonisation targets’ and the like. You’ve got to dig two or three links deep to find any mention of ‘oil’, ‘gas’ or ‘petroleum’. Crikey, what have they got to be ashamed of?

This is what. All around the world, net zero targets mean their main product is being legislated out of existence, but rather than lift their eyes to the future and invest in renewables, they keep guzzling on profits that literally pour out of the ground.

As the world plunges into fuel poverty, several of them announced quarterly results little short of spectacular. Obviously these are international firms but still, I don’t see why they can’t pay a little windfall tax. It could usefully pay much of the energy subsidy for households strapped by the price spike.

This really isn’t me being political or lefty. You can’t say windfall taxes – which have been levied in the past by governments of the left and right – are somehow contrary to capitalism, because capitalism isn’t what we have. When banks, utilities and rail companies go bust through force majeure or management ineptitude, we, the taxpayers, bail them out. Which isn’t capitalism. Why shouldn’t they repay the favour when, through no skill of their own, they stumble into colossal profits?

Perhaps a well-framed policy would allow them to swerve the tax if they undertake to invest in green energy. Which they aren’t much. I did some digging in some of their annual reports, and asked some directly, and they won’t say what proportion of their turnover or investment is non-petroleum. The Economist newspaper puts it at about 10 per cent of their investments. A tiny figure given they claim to be all about ‘the energy transition’.

BP tells me that by 2030 it’s aiming for half its investments to be into “transition growth”. Which means even eight years from now, the other half will still be oil and gas. If it’s still investing in petroleum in 2030, it must be expecting to be getting huge turnover out of those petroleum investments to 2050 and beyond.

This concerns Top Gear because it’s also about cars. It’s not just energy for homes and public buildings and offices and industry. The oil companies are dragging their feet in switching to powering electric cars. Indeed most big carmakers have felt the need to invest in charging networks to be sure we’ll actually be able to drive the electric cars they’re selling us. Car companies never needed to buy into oil extraction, refining or distribution, did they? That’s what the oil companies were for.

Yes, despite protests to the contrary, the same oil companies have shied away from the need to become ‘energy companies’ to put energy into our electric cars. Their business model remains to hook us on their oily product, while operating in the shadows.