They are among the few companies able to achieve the economies of scale required to bring down the price of expensive new technologies, such as solar power and hydrogen fuel cells. The problem is that they are developing these new capacities not in order to replace their production of oil, but in order to supplement it. Their share price depends on the current and future value of their assets. To sustain the future value, they aim for a “reserve replacement rate” of 100%. In other words, however much oil they produce, they seek to replace it with new discoveries. BP has – so far – managed to meet this target(4). Shell’s desperation to do the same led to the scandal two years ago over the mis-stating of its reserves. The impression they have created in some of their adverts – that they are seeking to move out of petroleum and into other products – is misleading.
Plausible alternative from Mr Monbiot.
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