One of the most obvious criticisms to be made about BP in the wake of the Macondo/Deepwater Horizon disaster was that for an oil company, they certainly seemed to expend a lot of resources on government lobbying and green energy projects which had zero to do with their core business. The company even ran out these laughable ads all over the world…
(this was the Australian version; below is the American)…
Naturally, all that solar power was sponsored in part by your tax dollars, thanks to millions spent lobbying for government subsidies.
But a funny thing happened on the way to the green utopia BP eyed as it was compiling the worst safety record in the oil patch.
From Bloomberg today…
BP Plc, Europe’s second-largest oil company, will shut its solar power unit and quit the business entirely after 40 years because it’s become unprofitable.
“The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company,” Mike Petrucci, the unit’s chief executive officer, told staff in an internal letter last week.
The company will wind down the unit, BP Solar, over several months, he said. About 100 employees will be affected.
BP Solar is the latest victim in a solar market that is facing oversupply and price pressures since Asian manufacturers started ramping up. Crashing module prices helped tip three U.S. makers including Solyndra LLC into bankruptcy this year, and Solon SE, Germany’s first listed solar company, filed for insolvency last week.
BP Solar stopped most of its manufacturing in early 2009, closing several factories in Spain and shedding 480 jobs after the Spanish market froze, triggering the industry’s first period of strong oversupply. The company decided in July it would quit manufacturing entirely to focus on large projects. It no longer has manufacturing plants, Robert Wine, a spokesman for the London-based parent, said today by telephone.
The company plans to sell its stakes in the more than 158 megawatts in projects it has developed along with local partners in countries including Italy, Spain, Germany, Britain and the U.S.
The decision will not affect BP’s other alternative energy units, which include wind power and biofuels, Wine said.
The Obama administration will say that China is beating us on solar power. Know why that’s happening? Because the Chinese recognize Western governments are giving away free money for solar manufacturers, so they’re undercutting the world on price in an effort to get at the free cash.
Best thing you can do to stick it to China? Stop subsidizing solar energy. Let the market route itself to energy that makes sense.
BP’s “Beyond Petroleum” branding was a disaster. It was a disaster because it implied that there was something wrong with oil, and it destroyed its own pride in its core mission. And it was a disaster because it took a company that had established itself as an industry leader and turned it into a rent-seeking, capital-destroying monstrosity.
It’s good that BP is eliminating its solar division. Maybe now BP will get serious about being an oil company again, and then get serious about drilling for oil according to industry best practices.