Kiss off Keystone, oil ought to give clean energy a shot
Imagine the public goodwill such a move would engender. It also offers strategic investment diversity. Communications teams could play up the green angle, talk up the environmental benefits and start referring to their employer as a full-spectrum energy company.
The ex-journalists in the press office could start firing off straight-forward missives. Something like: "We support clean energy but realize we must pursue a balanced approach. Oil will be with us for generations, but we must use it wisely, taking advantage of energy efficiency and renewables whenever possible."
Is it far-fetched? Certainly. But who better? BP had 2011 third quarter earnings of $5.33 billion, a decline of 3.7 percent from the previous year. Royal Dutch Shell earned $7 billion in the same period, double from a year earlier. And Chevron topped them both with $7.8 billion, more than double from a year earlier.
A Chevron allocation of half its earnings to solar and wind would rock Wall Street.
Oil for renewables
Clean energy won't happen by itself. Like many of the up-and-coming energy sources that came before, it needs favorable government policy, investment and dedicated research and development.
The oil industry can relate. Heck, listen to any politician talk about curtailing regulation and opening up opportunity for exploratory drilling or shale oil extraction. "Everybody needs a little help," or so says the grime-encrusted sign the homeless guy holds up near the mall.
The oil industry could easily reframe the good science/bad science debate regarding climate change now raging in political circles. Major investment into solar like the deal by Google and Kohlberg Kravis Roberts to buy four photovoltaic power plants near Sacramento from Recurrent Energy could make a substantive dent.
It's unlikely. Probably too risky. Oil industry types like to stick to a business model with a certain payoff.
Soviet-era parable
Big Oil's unwillingness to bend reminds me of a parable I heard in the former Soviet Union a couple years after the fall of the Berlin Wall.
In June 1991 while working for the now-defunct Anchorage Times, photographer Doug Van Reeth and I hire an older woman in Khabarovsk, Russia as a translator. Our editor wanted a story on entrepreneurs to reflect the region's emergence from decades under the repressive centrally controlled regime.
Our translator, who I'll call Olga and was one of the very few in her once-closed city to speak English, explains that yes, indeed, her city did have some entrepreneurs but they would be difficult to find.
We ask why. Olga sighs and looks at Doug and I like we are a little slow.
"This is Russia," she says. "For years, everybody earned the same salary. Nothing. A doctor was paid the same as a janitor. We all had small apartments. We stood in the same lines to get fresh meat."
Ugly American journalists
OK, Doug and I say, still not getting it. We have just two days to pull together interviews chronicling the new capitalists, and we feel a little desperate. Our Alaska Airlines flight is the first on a new international route, and my stories and Doug's photos would unveil to our state the once mysterious Cold War foe.
But we come up with nothing. We had just gone through a bustling open-air market, where people sold everything from pirated compact discs, electronics, produce and baked goods. Nobody would talk to us. One grizzled character even raised his arms and shouted what I believe were expletives at Olga while pointing in our direction. Even the shoppers gave us the evil eye after that.
We sit on a park bench nearby and Olga says, "This is a communist country. If one man has more than his neighbor, it is considered wrong."
Then Olga tells us this little story. I'm a little foggy on the details but here's the gist: A man works hard on a little garden he maintains in the country, earning enough to buy a goat. This goat produces milk that feeds his family, making his children strong. Food is rationed then and hard to come by. People stand in long lines for hours just to get a chunk of cheese or loaf of bread. He sells the extra milk to supplement his salary at the factory.
Soviet entrepreneur
The man lives in a tiny apartment but keeps the goat on his dacha, a postage stamp of land just outside the city. He must visit the goat in the morning and night. She soon gives him two kids. In a couple years, he has four goats and is making good money off milk and vegetables. His children are healthy, and his wife is happy.
However, his neighbors don't like his changing fortunes. They want what he has. But rather than starting their own gardens and getting their own goats, the solve it Soviet style.
They beat the guy up, burn his garden and kill his goats. "You're no better than we are," they say.
The parable is roughly the same as Nickolai Gogol's "The Overcoat," which I devoured as a grade-schooler. I mention this to Olga and she smiles and nods.
Sticking with the status quo
The neighbors in the story remind me of the oil industry. They're secure with the status quo and wary of change. Rather than encourage the pursuit of other sources of industry, they'd prefer to stick with the familiar.
That short-sightedness didn't do much for the Union of Soviet Socialist Republics. When President Reagan said, "Tear down that wall," he knew it was already full of cracks.
Lobbyists for the fossil-fuel industry aren't looking too far beyond the next election. That short-term view may hamstring Big Oil and Big Coal at some point, especially as the international cry for curbs on carbon dioxide production increases and weather patterns continue to change.
Cracks are forming in our fossil-fuel economy, too. Added costs of extraction for oil, natural gas and coal boost viability of renewable energy. And people generally are getting sick of polluted air and the illness it brings.
Rather than kill the goat, the oil industry could buy a flock of them and maybe convince its friends in Congress that favorable policy for his new green ventures would be beneficial economically and -- heaven forbid -- environmentally.
Two decades to clean air
In fact, a new study by Stanford professor Mark Z. Jacobson and University of California, Davis researcher Mark A. Delucchi says the world can be fully powered by alternative energy in 20 to 40 years with existing technology and at about the same cost as conventional energy.
"We're really looking at trying to power the entire world, eliminating the 2.5 million to 3 million air pollution deaths every year and all global warming," Jacobson says.
The researchers acknowledge it will be a massive undertaking, requiring "the societal and political will to make it happen."
Others also say it can be done. So let's tear down that wall between new and conventional energy sources.
Loren Steffy, a business columnist at the Houston Chronicle, puts it this way: "We need to actively conserve and boost energy efficiency, develop renewables and promote domestic production of conventional fuels." He says if the United States enacts policies to encourage that, we wouldn’t become energy independent, but "might prevent ourselves from being held hostage by rising prices and dwindling available supply."
Back in the USSR
Doug and I finally find our entrepreneurs the day before we were to leave. We meet them quietly and promise nobody in the city would learn their names. Olga introduces us to an attorney who sets up joint ventures. He meets us at his small apartment, introduces us to his wife and young son and talks with us for about an hour after making sure we are OK. He serves vodka flavored with some sort of super-hot pepper.
The attorney gives us the name of a "businessman," who we meet the next day. "Be careful," he says. Olga translates, frowning.
Our businessman turns out to be a great guy, personable and self-deprecating. I hit it off with him immediately. Olga declines our offer to translate. We find another who couldn't speak English as well. The businessman introduces us to artists, craftsmen, restaurateurs and small-time manufacturers. With his introduction, they treat us like long-lost relatives.
Doug shoots pictures. I collect interviews for a half dozen stories that would run for a week in the paper.
"An offer he can't refuse"
Our businessman then gives us an intricately carved piece of ivory about 18 inches long of a native man and sled dog team. We figure it is walrus tusk and respectfully decline. It was about then we deduce that our friend runs the rather large contingent of hookers at the Intourist Hotel and travels in a three-car caravan. His Mercedes stand out in a city where the other nice cars are shiny Ladas, a Russian staple based on an old Fiat platform.
We figure he's the Don Corleone of Khabarovsk. Twice his representatives bring the ivory back, trying in Russian to convince us to take it, the last time right after we clear customs and are about to board the plane.
We ask an ivory dealer in Anchorage the next week how much the piece would be worth. She says about $12,000.