A recent article from MSN titled “Oil majors cut energy transition spending in 2025 for first time in eight years,” discusses a recent report that found the largest oil and gas companies are decreasing spending on net zero projects due to a lack of political support and a disinterested customer base. [some emphasis, links added]
This is great news, and hopefully it is just a precursor of the energy realism boom to come.
The post says that the “world’s largest oil and gas companies ratcheted back investment in the energy transition in 2025, marking the first annual decline in eight years, according to BloombergNEF (BNEF).”
Oil major spending on “low-carbon technologies” dropped by more than a third over the past year from over $38 billion in 2024 to $25.7 billion, according to a report published Wednesday.
The report was written by two BNEF analysts, Claudio Lubis and David Doherty. They said that “policy volatility” under the Trump administration, especially concerning permitting for offshore wind, has “materially increased execution risk for capital-intensive offshore wind projects,” and investment in renewables is expected to continue to slack off.
This is ironic, since it was hostile politics and permitting delays under both the Obama and Biden administrations that destroyed the Keystone XL pipeline project, among other important oil and gas pipelines.
Industrial wind and solar power, being creatures of and by big government mandates, subsidies, and grants of competitive advantage, show how ineffective they are. When government support wanes, private investment wanes as well.
The article also says that Exxon Mobil plans to “pace” spending on low-carbon projects because there were not enough customers willing to buy products such as hydrogen and biofuels, and that climate policies designed to support decarbonization “frankly aren’t working.”
It is not the first time Exxon Mobil has thrown cold water on alarmists’ decarbonization dreams.
Three years ago, a company spokesman said that net-zero efforts would result in “degradation in global standard of living” and that people would not put up with or accept it.
Similarly, last year the company said oil and gas would be needed for decades to come, citing growing global demand despite international efforts to phase out fossil fuel use to fight climate change.
Exxon is right, with the truth of their comments being reflected in the growth of all fossil fuels as a primary energy source. (See figure below)
Widespread rejection of “green” projects like biofuels and offshore wind shows that top-down government enforcement of these projects only works as long as the government keeps the support in place.
Once that government support dries up, the projects fall apart, showing just how unpopular and/or uneconomic they were all along. If these products were in demand and really the future of energy, the government would not need to foist them on us.
As Exxon said, and as Climate Realism has likewise pointed out, green products are less efficient, less reliable, and increase electricity costs and energy costs in general.
Once they learn the truth, the general public will not accept higher costs and less effective technologies.
It is a good thing that these massive multinational companies are reducing their investment in green boondoggles, even if that divestment is only by a third or so.
More money being put toward stable and dependable energy will benefit consumers over the long-term. It’s a shame the funding isn’t drying up entirely. Every dollar spent on net-zero programs and technologies carries high opportunity costs.
Read more at Climate Realism
This was a step in the right direction by the fossil fuel companies but they still wasted $25B last year. Unfortunately the Obama/Biden nonsense will return when (not if) Democrats take control again and we’ll see the wasting of billions of dollars chasing Net Zero nonsense.
Great work, Linnea.