Last Updated May 29, 2008 6:56 PM EDT
Although the Board recognized a need to reduce greenhouse gas emissions, it remained steadfast that the primary mission of the company -- to shareholders and customers alike -- was to invest its resources in its traditional oil and gas development projects. The board cited evidence from the International Energy Agency (IEA), which estimated that global oil and gas demand growth through 2030 would be close to 10 times the combined amount of growth in biofuels, wind, solar, and geothermal.
Is the world's largest energy company, however, sacrificing its longer-term competitive advantage by ignoring the growing demand for renewable energies and technologies?
All 27 European Union countries, 29 U.S. states, and China now plan to source 15-20 percent of their energy needs from renewables by 2020, according to the Renewables 2007 Global Status Report.
Then again -- despite boasts to the contrary -- none of the majors is doing much to invest resources in renewable energies.
- In 2008, UK oil group BP will invest $1.8 billion, or about seven percent of its total capital spending across the renewable group;
- Shell is investing about $1 billion in new energy technologies over a five-year period (the company earned $31.3 billion in FY 2007 net profits);
- ConocoPhillips plans to spend less than one percent, or $150 million, of its 2008 total capital budget of $15.3 billion on the development of new energy sources, such as alternatives and renewables. (The company will, however, buyback about $10 billion in stock.)
Instead, in 2007, Exxon increased compensation for its top five executives by $29.2 million to $69.2 million.