DAVID BLACKMON: There’s A Reason Why Oil Giants Are Still Investing In Wind And Solar

British oil giant BP announced Monday that it is selling the business unit that manages its suite of U.S. onshore wind-power operations as part of its ongoing efforts to simplify its overall business and become more competitive with peer companies like ExxonMobil, TotalEnergies and Chevron.

In its release, the company said it will continue to invest in both solar and wind ventures through Lightsource BP, a joint venture in which it currently holds a 50% interest but plans to become 100% owner later this year.

When I published an analysis of this announcement by BP at the Substack I maintain, one reader asked: “Why in God’s name is an oil company spending billions of shareholder dollars on expensive, inefficient and intermittent energy sources? Who runs these companies?”

It is a good question, one that I and others who write about energy in the current rather bizarre societal atmosphere are asked quite often. It is also a question often asked of the executives themselves, in many instances by shareholders and investors who are disappointed at the poor returns such intermittent energy projects tend to generate in comparison to the companies’ core oil-and-gas business investments.

For the executives, it is a hard one to answer directly, mainly because somebody is going to be angry regardless of how they respond. So, they will typically rely on their investor relations, legal and communications teams to provide them with a non-answer answer that tries to please everyone without really saying anything of substance. This is what is known as “bridging” the question.