Don’t hold your breath for Imperial Oil to invest in renewable energy projects, CEO Rich Kruger told the company’s annual general meeting Friday.
“We periodically look at alternatives. The vast majority of alternatives today, renewables, have a pretty heavy subsidy requirement to make them commercial,” Kruger said, in response to a shareholder’s question.
“I’ll never say never, but our efforts are focused on what we have and our view of the world, the strength of our assets, their long-term value.” And “those efforts are indeed focused on oil and gas,” particularly on boosting plant efficiency and reducing production emissions.
The Q&A began when 91-year-old shareholder Eric Wicherts asked why Imperial’s presentation to shareholders had nothing to say about green energy research and development. “I may suggest solar or wind possibly,” he said. “I know if the wind doesn’t blow you don’t get energy, the sun doesn’t shine you don’t get energy. But after all, it is a very much developing situation all over the world. Maybe Imperial could take part in this.”
Wicherts is in good company. In a mid-April presentation at the World Bank in New York City, Environment and Climate Change Minister Catherine McKenna described the clean energy transition as a $3-trillion business opportunity. “As I say to business, ‘You’re crazy if you’re not thinking about this,’” she said. “If you’re in oil and gas, you should be thinking about renewables. That’s a huge opportunity for you, for your shareholders.”
But Imperial is owned by ExxonMobil, where CEO Rex Tillerson told last year’s annual meeting he didn’t want to “lose money on purpose” by investing in renewables. At the time, Politico reported that low oil prices had pulled Exxon’s share price down by 16%. Last week, Standard & Poor’s dropped Exxon’s credit rating from AAA to AA+, the company’s first downgrade in at least 67 years.