Oil giants like BP and Shell often groom themselves through marketing campaigns as being very interested in alternative energies like biofuels, solar and wind power. And they are investing in these areas. But when earnings time comes around, it becomes clear just how puny these initiatives are when measured against their oil and natural gas businesses.
On Tuesday, BP and Shell reported earnings for the March quarter. Unsurprisingly, record oil prices led to record profits at both. BP’s revenue grew 43 percent to $88 billion from the year-ago quarter, while profit rose 63 percent to $7.6 billion. At Shell, revenue grew 56 percent to $114 billion, and profit rose by 25 percent to $9.1 billion.
And yet eight years after BP launched its “beyond petroleum” campaign, backed up with lots of big speeches about hydrogen and other alternative energies, its alternative energy unit is dwarfed by the petroleum business. BP doesn’t break down revenue by operations, but the division to which alternative energies belongs posted a loss of $193 million in the latest three-month period, twice as large as a year earlier.
That division, dubbed simply “other businesses,” also includes BP’s shipping and aluminum subsidiaries. So it’s hard to see exactly how much money is made from all the solar, wind, biofuel, clean coal and hydrogen energy that BP is involved in.
Shell’s report offered even less insight. Although the company describes itself on its home page as “a worldwide group of oil, gas and petrochemical companies with interests in biofuels, wind and solar power and hydrogen,” those interests aren’t mentioned in its earnings release.