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This is likely very short-sighted as a pure business decision, you’re ignoring the trends and growth, and CEOs that ignore trends tend to drive companies down,
by dahart 3y ago
This is likely very short-sighted as a pure business decision, you’re ignoring the trends and growth, and CEOs that ignore trends tend to drive companies down, regardless of how much clarity they provide. While oil might be profitable today because it’s an older, entrenched business, the trends for renewables are going up much, much faster than fossil fuels. Global sentiment is shifting, electric vehicle production growth looks to be on the order of 10x yoy what fossil fueled vehicles are doing and accelerating, not even counting the hybrid market. This is to say nothing about the looming environmental crisis that has already begun, the negative PR Shell gets from being callous, and the possibility that regulations could swing hard against fossil fuels very swiftly. Even if money and nothing else is the bottom line, being clearly focused on fossil fuels and staying out of the future markets while other companies race to win them seems like a bad long term strategy.
- tempusalaria 3y agoIt’s probably better for shell investors if shell focuses on what they are good at and returns the profits to shareholders who can then invest in whatever they want. The goal of a corporation from a shareholder pov is not to maximise total enterprise value but rather to maximise the time value of money that shareholders receive. Shell should only be investing in renewables if they have a durable competitive advantage in doing so over the other investment options of their shareholders. Renewables have generally been horrible investments for these energy companies btw which is one reason they have been reversing course.
- whall6 3y ago1. > the trends for renewables are going up much, much faster than fossil fuels What are these trends? 2. Electric Vehicles should never be considered an energy transition effort. You’re just shifting commodities. Instead of burning pentane in your car you’re burning coal and natural gas in a plant. If you want to invest in energy transition, invest in an energy transition company. If you want to work for a company that prioritizes energy transition, work at a company that prioritizes energy transition. Shell is not an energy transition company.
- linsomniac 3y ago>you're burning coal and natural gas in a plant" Where do you live that you don't have access to nuclear, solar, and wind? It's been a couple years since solar started being cheaper to produce than coal.
- whall6 3y agoI live in Texas where a majority of the fuel mix is fossil fuels (~40% natural gas and ~15% coal). https://www.ercot.com/gridmktinfo/dashboards/fuelmix https://www.ercot.com/gridmktinfo/dashboards/fuelmix
- linsomniac 3y agoThat's a slim majority, making the statement about a car running on coal a half-truth, and increasingly incorrect. Don't get me wrong, I think it's good to know where your power comes from, I just want to make don't dismiss the technology because of half-truths.