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European Oil Companies Look to Offshore Wind as American Firms Double Down on Oil

  • European oil companies take the lead in American offshore wind projects as American firms take different tack to try to reduce carbon emissions
  • Wind investments part of efforts to have net zero carbon emissions by 2050
  • Large-scale engineering expertise and other experience helps prepare oil companies for pivot to wind farms

European energy companies have adopted a strategy of investing more heavily in offshore wind and other renewable energy bets in response to low oil prices brought on by the COVID-19 pandemic, as well as concerns about addressing climate change. Meanwhile, American companies are continuing to rely on fossil fuels while looking into innovations that might help decarbonize their operations.

Several European energy companies have set a target of being net neutral on their greenhouse gas emissions by 2050. BP is looking to cut its oil and gas production by 40 percent over the next decade and pour $5 billion into renewables, including a partnership with the Norwegian energy company Equinor to develop wind farms off the cost of New York and Massachusetts.

The move has raised some skepticism and been compared to BP’s unsuccessful attempt at increasing its renewables share at the turn of the century. Yet offshore wind has shown great potential for growth. It currently generates 18,000 megawatts of energy in European waters, is under consideration in several countries, and has a projected 2,000 gigawatt capacity in U.S. waters (currently a 30-megawatt collection of turbines off Block Island is the only offshore wind development in the nation). Energy companies usually have the engineering and surveying expertise necessary to pivot to offshore wind, and the investment can also provide a more stable investment in a diversified portfolio.

American oil companies such as Chevron and Exxon Mobil have shown little willingness to reconfigure their business models to focus more on renewable energy. Instead, they are looking to decarbonize their operations through improved methods of carbon sequestration and reducing the production of other greenhouse gases such as methane.

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