How much research and development big oil companies are putting into cleantech is one of the few concrete metrics to gauge the industry’s varying shifts toward cleaner energy, Axios' Amy Harder reports.
Between the lines: Pinning that figure down is tricky. Many companies don’t disclose, and the ones that do lack a uniform definition of clean or low-carbon energy.
The big picture: Just 2 out of 8 of the world’s biggest publicly traded oil companies (ExxonMobil and Total) are spending more on overall R&D today than nearly a decade ago, according to the research firm BloombergNEF.
- The R&D spending of all 8 companies analyzed (the 5 companies shown above plus Equinor, Repsol and Eni) dropped in 2015, likely due to the drop in global oil prices that squeezed the industry.
- Exxon consistently spends the most on R&D, surpassing $1 billion in most years.
One level deeper: The Oil and Gas Climate Initiative, an industry-led coalition of 13 of the world’s biggest oil companies, says in a new report that R&D spending on low-carbon energy rose by 38% in 2018, reaching $1 billion.
That figure represents only 9 companies that disclosed their spending to OGCI, and OGCI does not publicly identify them.
- As for what constitutes low carbon, OGCI writes that “low carbon energy technologies include but are not limited to: energy efficiency, wind, solar and other renewables, [carbon capture], hydrogen, biofuels, energy storage and sustainable mobility.”
- The caveat “but are not limited to” gives companies plenty of discretion. But it does appear that natural gas is excluded from this definition.
The intrigue: I just spoke with Bill Farris, an associate laboratory director at the U.S. Energy Department’s National Renewable Energy Laboratory, for my recent column on Exxon’s expanding external research funding, including with NREL.
He said NREL works with other oil companies too, albeit with distinct focuses, illustrating their differing approaches.
“Whether it’s biofuels for Exxon or smart grids for Shell or offshore wind for Equinor, we try to make the R&D capabilities available.” — NREL's Farris
What I’m watching: BloombergNEF analyst David Doherty said he expects oil companies' R&D spending on low-carbon energy to rise again this year.