Big Oil's Big Problem: Time is Running Out 10 comments
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Big Oil is having a hard time replenishing their reserves and Wall Street is concerned. The concern is obvious, but playing devil’s advocate, does it really matter?
The WSJ’s recent article on Exxon’s (XOM) lack of new reserves states that XOM will run out of oil in a generation. That is about 40 years or so.
The last, and most recent, big oil find is controlled by Petroleo Brasileiro (PBR). Where does this level the reset of the industry… other than crying that Peak Oil has arrived, and the easy life is slowing ending? IMO, Big Oil will be forced to reinvent themselves. They should not be viewed as Oil companies, but instead, they need to view themselves as Energy companies, and attack all aspets of Energy.
That means a huge push into alternative energies, specifically to what oil is used for. By ignoring innovation, along with the lack of reserves, they are running down a dangerous course. Big Oil will fall victim to innovation the same way TV networks lost out to the internet.
Car makers are in no position to stop innovating. They see how well hybrids are selling in a crappy market, and they will keep pushing. If Big Oil does not step up, and change with the times, arrogance will kill them.
Too many former hippies have too much money, and their money is forcing disruptive innovation in all aspects of life. There is no more room for lobbiests and tax breaks.
A slogan that should be reinforced in every company should be ‘innovate or die’. Ultimately, that path has already started, but a generation is a good amount of time for Big Oil to get crack-a-lacking to redefine itself.
The U.S Governement should be concerned about this as well, as it threatens our way of life. (Unless politicians enjoyed the oil shocks of the 70s.) Legislation should be passed to force Big Oil to throw money at innovative technologies. For instance, give XOM a $50 million tax credit only if they truly spent $50 million toward alternative energy.
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This article has 10 comments:
Put rewards out there, and companies will innovate. Those can be government rewards like tax credits, or market rewards like "not driving your stock to the ground because you aren't growing your company". If the tax credit is related to drilling, I have no problem with companies getting the credit if they drill. But right now, the credits aren't tied to alternative energy, they are tied to other investments.
You don't seem like an idiot, but...........
Why doesn't anyone ever mention the FACT that the brightest minds in this country/world are armed with billions of dollars to make sure this crap never happens? And what is the motivation besides the obvious? Whomever makes the multitude of tactics and schemes work, will make Google look like a rounding error... Once again market forces will prevail -- as they are currently doing.
I'm a die hard capitalist, with libertarian leanings, to a point...but is it off topic to mention that the US Governments preoccupation with the Iraqi war, the Afgahistan war, the War on Terror, and whatever the next war may be...has extracted an incredible opportunity cost on the American taxpayer. Let me explain: we blew a chance to have a Manhattan Project for Energy--because we are spending 1 or 2 or 3 trillion dollars for decades into the future.
We've boxed ourselves in a corner...
They are doing the right thing by buying back stock. They should get out of the way and let their investors put money into new companies that have a better chance at solving our energy problems.
The government solving our energy problems? Be serious. Obama proposed the government spending $15 billion (big number!) a year for 10 years on alternative energy. What a joke. We probably should be spending $300 billion just in this country, $1 trillion per year world-wide.
The government should set a national energy plan and maybe seed some new technologies, otherwise get out of the way.
Your message is received loud and clear, and I think we all agree that something must be done, but having the government do anything effectively or efficiently is probably not possible. Second, look at the unintended consequences of the Bush Ethanol plan - what a screw up! Groceries, feedstocks, and everything else are up and no one is saying a thing.