Here's how Big Oil might enter clean energy; plus, Egypt's climate summit draws protests

Welcome to Callaway Climate Insights. We have a special pre-COP27 report coming Thursday.

In today’s issue:

— Big oil smells profit in offshore wind

— Is Egypt the best place for a climate summit right now?

— General Motors takes aim at EV mass market with a $30,000 electric vehicle

— Clean energy job hiring rises above pre-pandemic levels

Copernicus EU reports that during the wildfire crisis of this summer, Europe saw more than 1.2 million acres burned. Related carbon emissions from wildfires in the EU and UK were the highest since 2007, driven by emissions from devastating wildfires in southwestern France and the Iberian Peninsula. The Amazon region has also seen the highest number of fires in a decade, according to reports. Image: Copernicus.

We wrote last month about how oil companies, flush with cash, were eyeing renewable energy companies in Europe as part of a way to diversify into clean energy without having to build it themselves. Now we’re getting some more insight into what they’re looking at, courtesy of Wood Mackenzie.

In a report, summarized by Oilprice.com, analyst Akif Chaudhry uses a new metric to show that the cash margins for offshore wind energy can exceed those of deep-water drilling, which are traditionally the highest margins for oil production.

The theory goes that big oil companies can use their existing offshore facilities to more cheaply transition to wind energy in a way that would hedge against declines in oil production and help Big Oil diversify into clean energy. Many climate activists are skeptical that Big Oil is serious about clean energy, but we have always maintained that when the costs of renewables get to the point where there is more profit in them, then even the biggest polluters will stand up and take notice.

As we wrote last month, with market values down on some of the biggest European renewable energy companies, and oil profits up, the typical mergers and acquisition cycle favors takeover bids sooner rather than later in the sector. True, there are many political considerations, especially in regulation-crazed Europe.

But as more offshore wind leases are offered by governments in Europe, and in the U.S., they are attracting more offers, even from big oil companies. At some point perhaps soon, consolidation in this industry will become a trending strategy.

A special invitation

Techonomy and Worth join together the Health + Wealth of Our Planet conference on Sept. 20 at City Winery NYC, focused on climate tech, conscious consumption, geopolitics, business strategy, and much more. 

As a member of the Callaway Climate Insights community, you can register for $199 (normally $299). This exclusive deal includes breakfast, lunch, and access to all sessions. We’re bringing together stellar speakers including Seth Godin, editor of the just-published The Carbon Almanac: It’s Not Too Late; Eileen Fisher, founder of Eileen Fisher Inc. and many more.

More insights below . . . .

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.