The US government may be intent upon building a new energy economy, handing out the first ever federal leases for offshore wind energy development, promising stimulus funds to the sector and so on. But Big Oil has continued marching to its own drummer.
Two big announcements by ExxonMobil, the world’s biggest oil company, and Chevron, the world’s third biggest, bring home the fact that conventional oil and natural gas are still the key commodities of the energy sector.
Exxon said it had just completed building new field processing capacity at its Piceance Project on the western slope of the Rocky Mountains. It can handle up to 200m cubic feet per day of natural gas. Exxon has been producing natural gas at the site for 50 years and now produces about 100m cubic feet per day, so its plans to expand that are clear.
Chevron announced first oil at the Frade project offshore Brazil, where it estimates there is 200m to 300m barrels of recoverable oil. The project inclues 12 subsea production horizontal wells and seven water injection wells.
And the European majors, BP and Royal Dutch Shell, who made names for themselves in leading the oil majors into renewables, now seem to be backtracking in those areas.
BP’s capital spending on alternatives was $1.4bn last year and is expected to be just $500m-$1bn this year, even though it insists its long-term commitment remains. Shell will not give precise numbers but said in March it had spent about $1.7bn developing one material alternative energy business, investing in in wind, solar, biofuels, hydrogen and carbon capture in the last five years as it tried to narrow down its prospects. Earlier this year Linda Cook, then head of gas and power, said the company was moving away from wind and solar investments and focusing its renewables efforts on biofuels.
Rich Kruger, ExxonMobil Production Company president, said the Piceance project represents a long-term commitment to energy development.
The key to unlocking the potential of this large, technically challenging resource is increasing production and recovery rates from each well at lower cost. ExxonMobil scientists and engineers are working hard to improve the enabling technologies and processes to do just that.
Whether that is the best use of its resources as the world turns increasingly against fossil fuels remains to be seen. But as the oil majors like to point out, the world’s heavy dependence on oil and gas is not likely to end very soon.
That is not to say Big Oil does not have its feelers out there for the Next Big Thing. Indeed, Exxon’s announcement it was sponsoring an all-electric car-sharing and rental program, called AltCar, at the Maryland Science Center in Baltimore, Maryland, underlines that.
The new electric vehicles, called the Maya-300, are powered by enhanced lithium ion battery technology. Exxon’s battery separator film enables the use of Electrovaya’s Lithium Ion SuperPolymer® battery in the vehicle. And Baltimore residents and tourists can rent these vehicles during the day to experience first hand driving an electric vehicle.
Jim Harris, senior vice president, polymers, for ExxonMobil Chemical Company, put it this way:
Through innovations like these showcased in this innovative program and world-class exhibit, ExxonMobil is helping make vehicles more efficient. We believe that advances in technology are the solution to many of the toughest energy challenges. Our scientists and researchers are committed to finding and applying those technologies where we can, including on the car you drive.
It’s interesting that electric cars are one of the areas in which Exxon, which long ago denounced wind and solar as being unfeasible, is maintaining a little exposure to a low-carbon future.
Exxon and Chevron shareholders focus on returns, not issues (FT Energy Source, 27/05/09)