The year 2016 was a big one in the fight against climate change. That year, two highly influential groups each launched a $1 billion fund to accelerate our transition to clean energy.
The first, the Oil and Gas Climate Initiative (OGCI), united 10 oil companies from around the world with the goal of investing $1 billion in “innovative low-emissions technologies” over the next 10 years. The second, Breakthrough Energy Ventures (BEV), was created by Bill Gates with support from a billionaires’ club including Reliance Industries’ Mukesh Ambani, Amazon’s Jeff Bezos, Virgin’s Richard Branson, Alibaba’s Jack Ma, and SoftBank’s Masayoshi Son.
Two years on, Gates’s initiative has been widely celebrated. The oil companies’ group, by contrast, is primarily criticized or ignored altogether. That makes some level of intuitive sense: Why should we believe the oil companies, which denied climate change for decades, really want to do good?
But if we’re going to beat climate change, we need to learn to question our instinctive reactions—and maybe even learn to look beyond Big Oil’s sordid past.
The OGCI launched with the goal of finding ways to reduce methane leaks and capture carbon dioxide from the fossil fuels we continue to burn. This, rather than renewable energy, is what the collective oil industry needs.
Right from the start, it faced plenty of criticism. Greenpeace said that with each member company giving $10 million per year to the fund, an annual contribution amounted to less than BP CEO’s yearly pay. Others criticized the group’s initial inability to convince (paywall) American oil companies to join the initiative. OGCI countered the criticism by saying that $1 billion is just a start, particularly as the fund is on top of the other money each individual company is spending on reducing emissions.
In the last two years, OGCI invested in seven startups. Clarke Valve has developed a low-cost valve that eliminates methane leaks. GHGSat and Kairos Aerospace help with monitoring methane leaks. Solidia Technologies makes low-emissions cement. Inventys has a technology that cuts the cost of capturing carbon dioxide. Econic makes plastic from carbon dioxide. And Achates Power is building more efficient gasoline engines.
India’s Reliance Industries quietly left the initiative, and has yet to be replaced by another Indian oil company. But four new members have joined, including American oil giants—ExxonMobil, Chevron, and Occidental Petroleum—that had previously held out.
Right from the start, Gates announced that BEV was open to “anything that leads to cheap, clean, reliable energy.” Counter to OGCI’s experience, BEV received positive reviews for its approach to investing in the space. Gates brings his own experience from having invested in at least four energy startups (of which two have already failed).
Gates also acknowledged that $1 billion is not much money in the energy world. That is why, learning from his philanthropic efforts, he created the Breakthrough Energy Coalition, building out a network of institutions, corporations, and influential individuals to draw from when he needs expertise and funds. The coalition has also created partnerships with 20 countries that have committed to doubling their spend on clean-energy research.
This week, Quartz reported a list of nine startups that BEV has chosen as its first investments. Quidnet Energy and Form Energy are working on energy-storage technologies for weeks- and months-long storage, respectively. QuantumScape has solid-state batteries for electric cars. Fervo Energy wants to make geothermal power cheaper. Commonwealth Fusion Systems aims to be the first to produce power from nuclear fusion. Pivot Bio sells replacements for polluting nitrogen fertilizers. CarbonCure cuts emissions in concrete use. DMC Biotechnologies hopes to make biofuels cheaper. And Zero Mass Water is pulling water from thin air.
Beyond that, BEV is already starting to hit its goal of leveraging others’ money for the ideas it chooses. Form and Quidnet have recently won more than $3 million each from the US Department of Energy.
If the praise showered on BEV seems fair to us, then the criticism lobbed against OGCI ought to feel unjust. That’s because, while BEV no doubt has an excellent team looking for and supporting ideas that could have a big impact on our fight against climate change, collectively the members of OGCI have much more experience investing in and executing on clean-energy technologies.
Consider just three examples. Equinor (previously Statoil) knows that oil is not the future and has gone on to develop floating wind turbines, which is one of the most exciting developments in wind power. Shell has been running a competition to fund low-carbon technologies for nearly 15 years. BP burned its fingers in biofuel, but learned from the experience and got better at it.
The difficulty a lot of us face in lauding oil companies for doing the right thing on the climate is understandable, given their long-running disinformation campaign about climate change. But most of those companies have since turned a corner, acknowledging the reality of climate change and taking steps to address it. And the executives that ran the companies during this dark period of history have mostly been replaced by new people.
There is no doubt some element of greenwashing in the oil companies’ marketing campaigns today. And yet it is also important to recognize that oil and gas are going to be part of the energy mix for a very long time to come. The world needs new energy startups, yes, but it also needs oil companies to help us solve the greenhouse-gas puzzle. Startups bring new ideas, but oil companies bring expertise in working at a giant scale.
Take the example of the Hebron Ben Nevis oil field in Newfoundland. ExxonMobil, along with Chevron, Equinor, and Suncor, will spend $14 billion and employ hundreds of people over 15 years to extract 700 million barrels of oil. At current consumption, that’s only seven days of worth of oil production. If we don’t work to reduce emissions soon, it is oil companies like these that will need to build equally giant machines that capture carbon dioxide from the air and store it underground.
It’s not easy to forgive corporations for their misdeeds and welcome them into the effort to save our planet. But the truth is that we need more people creating billion-dollar funds to build a clean-energy future. At the moment, we cannot afford to refuse the help of anyone who is ready to offer it.