The energy transition
These big companies, who have been oil and gas companies for decades, are usually backed by investors who like to have their money tied to fossil fuels. Hypothetically, if an energy company focused 50% of their budget on green energy, they would have to be owned by a totally different set of shareholders and there is almost no overlap between traditional and newer, pro-green shareholders. This is because the current shareholders would sell their shares when the company reaches a 20% ‘green’ mark, but the new shareholders would not buy until the company becomes 50% green and more likely a profitable venture (the so-called ‘valley of death’: Moore and Millard, 2024). This is a situation all oil and gas companies will face if they are to become a majority green company, which most of them seek to become, as it will be extremely difficult to find the funding for green projects. As a result of the scepticism over crossing this ‘valley of death’, BP has scaled back its ambitious sustainable energy plans and is preparing to increase its investment in oil and gas in 2025 by 20% to $10 billion a year, while decreasing previously planned funding for renewables by 70% to $1.5billion per year (The Economist 2025). This evidences a huge U-turn for BP, and they are among several other firms in the energy industry to return their focus to oil and gas production, as it delivers more reliable profits to its shareholders, especially following the covid pandemic where energy companies were hitting record lows (Watson, 2023). Following Donald’s Trump’s ‘drill baby, drill’ comments which have further encouraged a fall back to relying on fossil fuels, BP, Shell and Equinor (to name a few) have scaled back renewable investments. The CEO of BP, Murray Auchincloss, said BP had gone ‘too far, too fast’ in the transition away from fossil fuels and instead BP is focusing on plans to increase its oil production to ‘2.5 million barrels per day by 2030, with hopes of major oil and gas projects starting by the end of 2027’ (Jack, 2025). This shift in outlook is mainly due to Mr Auchincloss being under intense pressure to boost profits from some of his shareholders, as he aims to more than double the market value of the company to $200billion (Mourselas, 2025). Helge Lund, chair of BP, added that the new direction of the firm had ‘cash flow growth’ at its heart, and moreover, Alexander Kirk from Global Witness added BP ‘cannot be trusted to deliver the clean energy transition’, stating that it was ‘focusing on short-term profits to shareholders while energy prices are high, with the rest of the world picking up the tab from its climate-wrecking products’ (Jack, 2025). Just over five years ago in 2019, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas to 40% by 2030 (Jack, 2025), and to significantly ramp up investment in renewables. However, now, given the research, we can determine that these ambitious plans seem unlikely to happen. This major reversal in policy from BP, may reflect the thinking of many of the major energy companies, who, rather than transitioning to cleaner energy, are taking the easier and safer option – like falling back into an old, bad habit – to prioritize short-term profits over long term sustainability. Trump’s impact on the energy transition The political landscape will also shape the energy transition, and with Trump in the early stages of his second term, he has already made some huge changes to the US economy, in his aim to unpick Biden’s climate agenda, which has sent shockwaves through the clean energy sector, as his decisions trigger global domino effects. In his first few weeks in office, Trump signed several documents, including one which halted more than $300 billion in US green infrastructure loans, according to the Financial Times (Chu and Smyth, 2025). Trump has also stopped a total $280 billion worth of loans from the department of energy to renewable energy projects and has promised to end Biden’s ‘Green New Deal’ and boost
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