Oil incentives for negatives (By Mihai Tripp)

By Matthew L. Wald (April 30,2007) New York Times
Venture Capital Rushes Into Alternative Energy

1. Matthew M. Nordan, president of Lux, said that the amount of venture capital put into clean energy investments last year was $1.5 billion, up 141 percent from the $623 million of 2005, and that in the same period, initial public offerings by companies in this sector rose to $4.1 billion, from $1.6 billion in 2005.

2.The investment is driven by fear that the peak of oil production is approaching, he said, and by the possibility of new taxes or other restraints in an effort to curb global warming gases, principally the carbon dioxide that is given off by burning fossil fuels.

3. Money is “sitting on the shelf” waiting to be invested, and investors are now chasing entrepreneurs, he said, rather than the other way around.

4. The investors, and the companies they finance, are chasing an enormous market. Mr. Nordan pointed out that China planned to derive 10 percent of its electricity from renewable sources, not counting large hydro projects, by 2010. Meeting that goal would require six gigawatts of electricity, which if produced by solar cells would represent more than two years’ output of all of the solar cell factories in the world today.

5. ...even some alternative energy companies using established technologies may be on shaky financial ground, according to the report. For example, the profit margin for ethanol made from corn was once a dollar a gallon, but now it is about 3 cents, according to the report. And environmentalists have objected to the approaches of some companies, like those making new bioengineered products. Still, the promise seems enormous. “The secular trends are in place, and that’s what’s driving the investor,” Mr. Nordan said.

Big Oil cautious about clean-energy spending

Critics want more from firms earning billions

David R. Baker, Chronicle Staff Writer Friday, February 9, 2007 San Francisco CA

6. BP, in addition to the new Energy Biosciences Institute at Berkeley, plans to spend $8 billion over 10 years on its own alternative energy effort, which includes building solar cells and wind farms.

7. BP's earnings hit $22 billion in 2006. The company spent $15.5 billion during the year buying back its own stock, almost twice what it may spend on renewable power and alternative fuels in a decade.

8. Donald Paul, who oversees alternative energy programs at Chevron Corp., said the infrastructure needed to mass produce and distribute any type of fuel takes years to develop, and millions, if not billions, of dollars to build. The San Ramon oil company has invested in hydrogen fueling stations and a biodiesel plant, among other things. It plans to spend about $2.5 billion on alternative energy in the next three years.
9. The federal government is the biggest single investor in alternative energy research. President Bush's 2008 budget, for example, proposes that the Department of Energy spend $2.7 billion to devise cleaner ways to generate electricity, $179 million to develop biofuels and $395 million for research into recycling spent nuclear fuel.

10. Venture capitalists also are funneling money into energy research. The Cleantech Venture Network, which encourages and tracks private funding in the field, counted $2.9 billion invested in 2006 in "clean-tech" companies, whose products are designed to help the environment. Of that, $740 million went to biofuel companies, $378 million to solar businesses and $380 million to wind energy research.

11. BP created a division in 2005 called BP Alternative Energy that plans to invest $8 billion in solar, wind, hydrogen and natural gas technologies. BP designs and builds solar electric systems. The company also plans to build a Los Angeles County power plant that will take petroleum coke -- a byproduct from refineries -- separate it into carbon dioxide and hydrogen, burn the hydrogen as fuel and store the carbon dioxide in oil reservoirs, deep underground.

12. Chevron spent about $2 billion during the last five years and will spend $2.5 billion in the next three, Paul said. The company established a biofuels unit last year and is investing in a large-scale biodiesel plant in Texas. The company has a subsidiary, Chevron Technology Ventures, that invests in early-stage energy technologies. Chevron also agreed last year to give UC Davis up to $25 million for research into renewable fuels.

13. Some of the money the company says its spends on alternative energy, however, doesn't pay for research. Chevron is the world's largest generator of geothermal power, and it counts money spent on those operations as part of its alternative energy portfolio. Paul said the company does not reveal how much of its alternative energy budget goes to research and development.

14. ConocoPhillips spent $80 million in 2006 on technology for alternative and unconventional energy sources, although some of those sources include oil sands. The company also started producing renewable diesel derived from soybean oil in Ireland last year.

15. Exxon Mobil Corp., the largest publicly owned oil company, plans to invest up to $100 million in Stanford University's Global Climate and Energy Project, which studies energy sources that have low carbon dioxide emissions. A report posted on Exxon's Web site also says the company is researching such alternative energy sources as hydrogen, but it gives no financial details.

16. Exxon spent $19.9 billion in 2006 on capital expenses and the hunt for more oil. It also paid $29.6 billion to buy back some of its own stock, a move meant to reward investors by increasing the value of outstanding shares. The company's annual profit hit $39.5 billion, the most ever for an American company.

17. Chevron spent $16.6 billion in 2006 on exploration and capital expenses, which include maintaining refineries, pipelines and other facilities worldwide. The company spent $5 billion on buying back stock. Chevron made a $17.1 billion profit for the year.

18. ConocoPhillips spent $16.3 billion on exploration and capital expenses, and $925 million on buying back stock. The company's 2006 profit topped $15.5 billion.

19. ...General Electric, a long-time supplier to the fossil-fuel energy industry that is now delving into solar, wind, biogas and other forms of renewable power.

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