Goodbye Big Oil, Hello Big Solar

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Bloomberg contributor David Fickling has an interesting perspective on the world of energy. He writes that the seven largest solar companies today are already supplying more total energy to power human civilization than the seven largest oil and gas companies. That is probably a surprise to most CleanTechnica readers, so let’s unpack his findings to see how he arrived at that conclusion.

Oil, Solar, & Energy

What oil companies ultimately provide to the world is not crude oil or natural gas but the vital ingredient locked up in the chemical bonds of those hydrocarbons — energy. The manufacturers of solar equipment are not providing us with panels of silicon and glass but machines that can harvest power from the sun. The activities of each group of companies provide a fresh flow of useful energy to the world every year, and by many measures, the solar companies have already overtaken Big Oil.

Every discussion must begin with a definition of terms, otherwise we just wind up talking past each other and getting nowhere. Fickling bases his analysis on the exajoule. A joule is a unit of electrical energy equal to the work done when a current of one ampere is passed through a resistance of one ohm for one second. It is also a unit of energy equal to the work done when a force of one newton acts through a distance of one meter. One joule is pretty small potatoes, but an exajoule is one joule to the 18th power — enough electricity to power Australia, Italy, or Taiwan for a year. The big oil companies — ExxonMobil, Chevron, Shell, BP, TotalEnergies, ConocoPhillips, and Eni — are known as the Seven Sisters. ExxonMobil supplies about 8.3 exajoules of energy annually, Chevron 6.9, Shell 6.2, TotalEnergies 5.5, BP 5.1, ConocoPhillips 4.1, and Eni 3.7.

Wasted Energy

That sounds like a lot, but as Fickling points out, the vast majority of it is wasted, mostly as heat. A decade ago, Joe Romm estimated burning fossil fuels adds the heat equivalent of 400,000 atomic bombs a day to the environment. Only about a fifth of the chemical energy in freshly pumped crude ends up being turned into kinetic energy moving cars and trucks because oil refineries and vehicle engines fritter most of it away as useless heat and noise, Fickling says. Gas turbines are a bit more efficient at turning methane into power but still end up operating at about one third efficiency once you account for losses from gas well to electrical socket. As a rough estimate, only about a quarter of the energy coming out of an oil company’s wells gets turned into useful power.

Readers will identify a common theme between energy and vehicles. We know that the most efficient mass produced gasoline engine in the world is the one found in the Toyota Prius and it is barely able to convert 30 percent of the energy in a gallon of gasoline into forward motion. The MPGe standard developed by the EPA may be flawed, but it makes it crystal clear that the average electric car is two to three times as efficient as the average conventional car with an internal combustion engine. As the climate crisis accelerates, what possible reason can there be for continuing to waste two thirds of the energy the Seven Sisters extract from the Earth?

Chinese Solar Companies Outpower Big Oil

Fickling’s analysis comes to a rather starling conclusion. He says right now the biggest solar power companies in the world — all of which are in China — are supplying more usable energy to the world than the major oil and gas corporations. Who are these companies? Not household names, that’s for sure — Tongwei, GCL Technology Holdings, Xinte Energy, Longi Green Energy Technology, Trina Solar, JA Solar Technology, and Jinko Solar.

The biggest polysilicon producers right now can go head to head with some of the biggest oil companies, such as BP, Eni, and ConocoPhillips, and panel makers aren’t far behind. Should Tongwei proceed with plans announced in December to build a 400,000 ton polysilicon plant in Inner Mongolia, nearly doubling its current output, it might overtake even ExxonMobil. Bloomberg estimates that soon Tonwei will provide over 9 exajoules of energy annually, with GCL at 6.5 — both more than ExxonMobil. Xinte and Jinki will be ahead of Chevron, Longi and Trina will be ahead of Total, and JA Solar will be even with Shell.

Long Term vs. Short Term Energy

That still understates things, Fickling says. An oil company is ultimately developing reserves of petroleum that can keep producing for a decade or so into the future. A solar manufacturer is building a factory that can churn out similar volumes year in, year out, until the equipment is worn out or obsolete. If you consider what each group of companies can produce without major additional investments — comparing the volumes in oil firms’ geological reserves to what solar companies will be able to produce before depreciation wears out their plant — clean power moves clearly into the lead.

Bloomberg notes that to determine the amount of exajoules for oil companies, it based its calculations on the barrels of oil equivalent energy content of their developed reserves. For solar companies, its calculations were based on electricity that could be produced at current capacity levels, multiplied by 7.5 to account for the useful life of capital equipment before it’s worn out by depreciation.

 Time Is A Critical Factor

That’s still forgetting one more crucial factor, Fickling says. A solar panel sold by Longi in 2024 will be generating electricity for decades. Most carry 25-year warranties. Oil and gas sold this year, however, will almost all be used up in a matter of months. If you look at the long-term flow of energy into the global economy with each solar cell produced, it is many times the energy being provided by Big Oil. In the long term, the energy that solar companies are providing each year is well above what is available in Big Oil’s geological reserves.

Any comparison between oil and solar can be criticized for comparing apples with oranges, but if you buy apples and oranges, you often get a label telling you how many kilojoules they contain. We should be doing the same for the exajoules provided by oil and solar businesses. Fruit, fuel, and electricity all ultimately provide a measurable flow of energy.

The Takeaway

Fickling wraps up his analysis with a peek behind the curtain of global geopolitics. The first industrial revolution raised coal-rich nations like Britain, Germany, and the US to dominance, and the rise of crude oil brought power and wealth to Russia and the Middle East while extending America’s global lead. The nations that controlled the headwaters of these energy flows have been the hegemons of each succeeding century, he says.

Right now, seven Chinese companies have a bigger stake in the power source of the 21st century than the Seven Sisters of oil that dominated the 20th. If you want to understand the roots of the geopolitical angst driving Washington’s crackdown on China’s clean technology, it’s impossible to ignore that fact.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new." You can follow him on Substack and LinkedIn but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

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