Chevron is stepping away from its renewable energy holdings. According to a report from Bloomberg Businessweek, the energy giant is quickly abandoning an eight-year-old plan to generate significant amounts of energy and profits from renewables.
While Chevron’s wind, solar and geothermal projects generated profits for the energy company; those profits apparently weren’t large enough. Staffers in Chevron's green energy group were reportedly told in January that the company would scale back investment in solar and geothermal projects.
Since Chevron's pivot towards more diversified energy holdings, the renewable power group launched about a half-dozen green energy projects around the United States that generated enough energy to power some 65,000 homes. Those projects also produced enviable returns on investment of up to 20 percent.
Now, it appears the pivot is back in the other direction. While Chevron's renewable projects were generating good returns by most standards, those returns pale in comparison to some oil and gas projects, which can generate up to 35 percent. A spokesperson told Bloomberg in a release that the company was "pursuing technologies that leverage our strengths and can be deployed with competitive economic returns."
Those projects likely include a number of significant oil and gas developments in western Canada. Perhaps most significantly, Chevron has partnered with Apache Energy to export LNG from northeast British Columbia through terminals at Kitimat. That potentially multibillion-dollar project is still awaiting a final investment decision, but would likely be completed within the decade, according to the Financial Post.
Chevron also has significant holdings in the Athabasca oil sands, as well as a refinery in Burnaby, BC. The move away from renewable energy has confused some analysts, who say the move is short sighted. At its peak, Chevron was spending $150 million on renewable projects—less than half a percent of the company's total annual expenditures.
Renewable Energy Not Profitable Enough for Chevron