BP oil in californiaBP (BP), Chevron (CVX), Exxon Mobil (XOM), ConocoPhillips (COP) and Total S.A. (TOT) are some of the largest names in the vertically integrated oil industry. And all of them have faced criticism from environmental watchdogs at some point over the impact of their operations. However, the oil industry is taking note and embracing alternative technologies -- including biofuels, geothermal, wind and solar -- and hopes to make them an integral part of its future. While green technologies currently contribute only a small fraction of the revenues of these multibillion dollar energy businesses, they are expected to be major sources of growth over the future.

We have a $55.30 price estimate for BP, about 25% higher than its market value. Our target price for Chevron is at $104, roughly in line with the market price, and we have a $93 target price for Exxon Mobil, which implies a 12% premium over the current market price.

Placing Big Bets on Biofuels


According to BP, renewable sources will constitute the fastest growing sources of primary energy through 2030. It forecasts that renewables will contribute to 18% of the growth in the overall energy supply, and predicts biofuels will make a sizable contribution towards this growth. Biofuels' contribution to the world's oil supply is expected to increase from the present 3% (on an energy basis) to 9% by 2030.

In March, BP acquired a majority stake in Brazilian ethanol producer Companhia Nacional de Açúcar e Álcool, boosting its ethanol production in the country to 9 million barrels of ethanol equivalent production per annum. Exxon Mobil announced a collaboration with Synthetic Genomics to invest up to $600 million in research on algae-based biofuels. ConocoPhillips and Total also have similar research partnerships with industry and academic institutions to develop technology in the field.

Geothermal, Wind and Solar


With large projects in the Philippines and Indonesia, Chevron is currently the world's largest producer of geothermal energy, generating more than 1,200 megawatts. The company is also actively scouting for new projects in Indonesia to expand in the segment. BP arguably has the most extensive portfolio in renewables and is making sizable forays into solar, wind and hydrogen power, and aims to invest around $8 billion in alternative energy ventures by 2015.

Total, Europe's third largest oil producer announced in April that it would purchase a 60% stake in SunPower (SPWRA) to ramp up its efforts to gain traction in the solar industry. It's also looking to expand in nuclear energy to diversify its portfolio.

We expect renewable sources -- especially biofuels -- to become important sources of value for these companies in the long term.

Click here for our full analysis of BP | Exxon Mobil | Chevron | ConocoPhillips

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Gumby

Big Oil , Gas, and Coal are supposed to do MUCH more on alternate energy instead of just token efforts ... The reason is that they are protecting their prices of oil, gas, and coal by keeping them high by doing as little as possible with alternate energy.. You can not really COUNT on Big Oil , Gas, and Coal to do much about alternate energy , SILLY ENVIRONMENTALISTS!!.. If environmentalists are really serious about alternate energy, they should know that aluminium will be very critical to alternate energy , especially solar energy . But I keep on hearing about how environmentalists still lambasts against aluminium producers about too much electricity they used to make new aluminium. This is nothing new to me...It is still worth it Aluminium can pay back big with big growth in solar energy that can give Big Oil, Gas, and Coal the run for the money!! Most of people just dont get it about alumnium!

July 20 2011 at 11:25 AM Report abuse rate up rate down Reply
mossypond

More progress toward renewable energy - GOOD!!!

July 20 2011 at 11:22 AM Report abuse rate up rate down Reply
sevenv

Energy Companies,(BIG OIL),oil based HEDGE FUNDS ,run by MIDDLE EASTERN potentates ,and unsaid OTHERS,(who also OWN most of the WORLDS oil companies in one way or the other),AIN'T gonna let their stranglehold go!!!.........So until they have the alternative fuels industry FULLY is in their slimey grip......We will see continued high fuel prices .. AND an obstacle laden path to "other" fuels and energry..... for the forseeable future............................Lee Raymond got that 400 million plus severance package from Exxon for a very good reason!!!

July 20 2011 at 10:18 AM Report abuse rate up rate down Reply
tbbikerdad

PEOPLE , ,...DO NOT BELEIVE EVERYTHING YOU READ .....DO YOUR OWN RESEARCH , I HAVE WORKED THESE MARKETS IN MY CAREER . BROUGHT THE FUEL IN , SOLD IT RETAIL . 1 st JOB I EVERY HAD IN HIGH SCHOOL WAS FULL SERVICE GAS STATION . I SOLD GAS FOR $ . 1 1 cents , I said eleven cents , a gallon . I filled my full size pick up truck for three dollars . My motorcycle took twenty five cents . .....O P E C DOES NOT SET THE PRICE AMERICA PAYS FOR OIL . AMERICAN COMMERCE DOES ALL THAT . HERE IS ANOTHER NEON LIGHT YOU CAN BELEIVE . THIS IS FACT . A BARREL USED TO MEASURE 5 5 GALLON . TODAY IT IS 4 2 gallon . HOW MUCH MORE TAXES DOES GOVERNMENT GET OFF THAT ...........PRICE AT THE PUMP HAS NOTHING TO DO WITH GASOLINE ....IT IS MOSTLY TAXES . ...another fact no one wants . COST OF LIVING HAS NOTHING TO DO WITH TRANSPORTATION COST . COST OF GAS , COST OF FOOD , .......COST OF ANYTHING YOU CONSUME IS ALL OUR OWN AMERICAN COMMERCE DEPARTMENT . ....IT HAS NOTHING TO DO WITH ANYTHING ELSE . I bought some lumber last week , milled in Canada , ten foot wood stud , almost two dollars and seventy five cents . 3 years ago , that same board cost $ 1 . 2 5 cents . ....CONGRESS GIVES US ALL THESE REASONS , PRICES GO UP ..............DO NOT BELEIVE ANY OF IT ..........PRICES GO UP BECAUSE CONGRESS WANTS MORE TAX REVENUE .............NOTHING ELSE .............. WHEN ARE WE GONA STOP PUSHING THE CART AND START DRIVING IT ............................. WAKE UP PEOPLE . STOP BELEIVING EVERYTHING YOU READ AND HEAR. .......... THERE IS A SIMPLE SOLUTION TO AMERICAN ECONOMY , YOU ARE WEARING IT .....READ THE TAG ........ AMERICA HAS HAD THE TECHNOLOGY FOR DECADES TO GET 5 0 , to 7 5 miles to the gallon from gas ..... IT IS NOT ABOUT THE ENGINE ... AMERICA HAS HAD THE TECHNOLOGY FOR DECADES TO KILL THE TOP KILLERS OF DISEASE . WHERE IS IT . DEARLY BELOVED RONALD REAGAN SIGNED THE DE REGULATION OF COMMERCE INDUSTRY , AFTER CARTER DE REGULATED THE RAILROAD , DECADES AGO . THEY WORK TOGETHER . ...THAT IS A MAJOR REASON , WE ARE WHERE WE ARE TODAY ........ WE THE PEOPLE GOT TO BE WILLING TO JUMP THE FENCE TO DICTATE TO GOVERNMENT TO STOP MESSING WITH US . ....I AM NOT ABLE , ....ARE YOU ......... IF ALL WE GONA DO IS COMPLAIN ............ DON'T BOTHER , my name is T i m

July 20 2011 at 9:18 AM Report abuse +1 rate up rate down Reply
jeviga

The answer to America's energy independence is Natural Gas. With the development and drilling in unconventional shales we have a 50 yr supply within our borders. There are still 10's of thousands of wells to be drilled in these shales which could make us independent for 100 years or more. Only 27% of electricity is generated using natural gas and virtually nothing is used as automobile fuel. All of these renewable energies such as solar, wind, biofuels and geothermal will never amount to more than 2-3% of our energy needs.
The sad fact is we have an impotent congress and a more impotent president that will not or cannot mandate an energy policy that will require automobile companies to gradually develop natural gas cars. If this was done today within 5 years we could have 30-40% of our cars running on natural gas. We could also mandate that natural gas will replace at least 50% of the coal used in generating electricity. Coal now accounts for 50% of electricity generation.
Despite the coal lobbys tv ads about using clean coal there is NO SUCH THING AS CLEAN COAL.
One company, Chesapeake Energy Corp. has recently announced plans to spend $150 million to build out a system of natural gas filling stations. T Boone Pickens has recommended the buildout of 1000's of these stations nationwide to fuel trucks.
Until natural gas is put on the congressional agenda as described above we will continue to spend $30 billion every month importing oil from most countries unfriendly to America. This has go to stop.

July 20 2011 at 9:16 AM Report abuse rate up rate down Reply
eteeuwe

The Democrat Sheeple seem to have forgot that its called the "Energy Industry". Oil, Coal, Natural Gas, Wind, Wave, Solar. I work for an engineering firm vested in both the Offshore Oil industry and the Offshore Wind industry. We are working on developing the Offshore Wave Generation industry. And, ultimately like all structured systems, its going to be developed and owned for profitability by Conservative builders and businessmen rather than the Liberal Leftist-Socialists and Government Regulation driven Eco-Weenie types with their "pie in the sky" dreams of Pixie Dust Mines and Unicorn Ranches.

July 20 2011 at 6:09 AM Report abuse +1 rate up rate down Reply
sheriff508

And this is ALL bad- HOW?? Is this NOT what BHO wanted- Green energy and all that claptrap?? Now, there are folks that are PO'd because PRIVATE enterprise is going to PROFIT from it!!! No pleasing the DIMS!!!

July 19 2011 at 10:54 PM Report abuse -2 rate up rate down Reply
travelergtoo

It's so nice that BP is thinking of the environment.
Not only does BIG OIL continually overcharge us; now they've poisoned the ocean. This is one result of 'Christians' driving those big GAS HOG SUV'S. They enrich the Muslims more than anyone. Reagan's deregulation has had many consequences. The *hores Bush and Cheney were also in bed with big bank and big oil.

July 19 2011 at 10:32 PM Report abuse +2 rate up rate down Reply
darinw40@mail.com

Go away you aholes...the American public doesn't need you manipulating the next source of energy to the point of raping the consumer ( like you currently do)....

July 19 2011 at 9:30 PM Report abuse +3 rate up rate down Reply
ladn4b

Hang on to your wallets, all this worthless Green Liberal Political bologna is gonna kill your monthly income.

July 19 2011 at 7:48 PM Report abuse -2 rate up rate down Reply
1 reply to ladn4b's comment
bushsnitemare2

ARE THOSE FOX FACTS?

July 19 2011 at 9:05 PM Report abuse +1 rate up rate down Reply