Oil giants are ditching green pledges faster than a bad date. BP, Shell, and Equinor have all scaled back renewable investments while raking in 11% returns from fossil fuels. Meanwhile, Energy Secretary Granholm backs a mixed approach rather than renewables-only fantasies. Ukraine’s invasion changed everything. Oil execs point to hard truths: we still need petroleum for planes, plastics, and heavy industry. The changeover? Messier than advertised.
Why are the world’s oil majors backing away from their much-touted green energy plans? The answer isn’t complicated. Money. BP slashed renewable investments by $5 billion annually. Shell ditched its 2035 net zero target without blinking. Equinor downsized its renewables unit. Only TotalEnergies seems to be sticking with their clean energy expansion—for now.
The cold, hard numbers tell the story. Oil companies saw median returns of 11% in 2023. Renewable energy firms? A measly 2%. Not exactly thrilling for shareholders demanding fatter dividends. BP had to write off $1.1 billion from its offshore wind business. Ouch.
Meanwhile, fossil fuels are making a comeback. ExxonMobil plans to pump 18% more oil and gas by 2030. BP, despite its former “Beyond Petroleum” slogan, is targeting up to 2.5 million barrels daily. Shell’s refocusing on what they know best—drilling holes and making money. Funny how principles fade when profits beckon.
The Ukraine invasion changed everything. High oil prices, slowing clean energy policies, and shareholder pressure created the perfect storm. Institutional investors clearly prefer the high returns from fossil fuels over lower-yielding renewable investments. These companies are missing opportunities for risk diversification that renewable investments could provide to their energy portfolios. Carbon pricing initiatives aren’t moving fast enough to change the calculus. Oil executives are looking at their spreadsheets and shrugging.
Still, the bigger picture shows renewables gaining ground. Global investment in clean energy nearly doubles that of fossil fuels. Companies like Iberdrola and NextEra are doubling down on wind and solar, capturing market share while oil giants retreat. With 13.7 million jobs worldwide, the renewable energy sector represents significant economic opportunity that oil companies are increasingly sidelining.
The hard truth? We can’t flip a switch to renewables overnight. Oil and gas remain essential for petrochemicals, aviation, and heavy industry. The shift will be gradual, messy, and full of corporate U-turns.
For oil majors, going green was always a balancing act. Now they’re dropping the pretense and focusing on their fossil-fueled cash cows. Shareholders are happy. The planet? Not so much.
