Easily the Best Way to Invest in Renewable Energy
Oct 27th 2012 12:00PM
Updated Oct 27th 2012 12:02PM
Another one bites the dust. You, of course, recognize Solyndra as the de facto catchword for taxpayers' funding of ill-conceived, ill-managed, or competitively underpowered green energy companies. In Solyndra's case, the company managed to fritter away $535 million of U.S. Energy Department (i.e., taxpayers') funding.
By now you may also have heard that Massachusetts-based A123 Systems (NAS: AONE) , formerly a leader in lithium-ion battery technology and the recipient of $249 million in DOE funding, appears also to have gone dead. The company, which had an 11-year run, declared bankruptcy last week.
Never the energy twain shall meet?
It's generally assumed that we have two distinct types of energy companies extant: greedy, malevolent, polluting, and tax-dodging fossil fuels companies on the one hand, and struggling, but promising, green companies that merit taxpayer largesse, on the other. That, at least, was the implied message from our president's State of the Union message earlier this year. In that speech, President Obama maintained, "It's time to end taxpayer giveaways to an industry that rarely has been more profitable and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs."
Unfortunately, however, even many the savviest of investors don't realize that perhaps our nation's most successful green energy company just happens to also be a member in good standing of the Big Oil contingent. I'm referring to Chevron (NYS: CVX) , the second-largest of the U.S.-based integrated oil companies. Indeed, as you'll discover from this recent piece aired by CNBC, Chevron truly gives added meaning to the term "integrated."
In a very real sense, Chevron has become what Harvard Business School's longtime marketing professor Theodore Levitt was touting as ideal when he wrote his now classic article, "Marketing Myopia," in the Harvard Business Review more than a half-century ago. It was Leavitt's contention that managements frequently view their companies' missions too narrowly, thereby missing out on participating in new -- but related -- growth areas. For instance, according to Leavitt:
As new forms of transportation -- airplanes, trucks, etc. -- began to haul freight, railroad managements failed to view their companies as broadly based transporters, thereby shutting themselves out of participation in the emerging changes. The Hollywood film studios were established long before the spread of television in the late 1940s and 1950s. But because their managements failed to see their companies as potentially wide-ranging entertainment providers, and accordingly natural participants in the advent of the new medium, the studios barely escaped being totally ravished by the emergence of TV.
Energy in all its forms
Unbeknownst to many, however, Chevron -- and to some extent ExxonMobil (NYS: XOM) and Royal Dutch Shell (NYS: RDS.B) -- is being managed as a thoroughly diversified company, producing both traditional and green energy. In addition to drilling for and producing oil and gas in such global locations as the deepwater U.S. Gulf of Mexico, Australia, Canada, Africa, Poland, and Ukraine, the company has been unusually successful in a number of renewable energy programs -- without expecting or accepting a penny of taxpayer funding.
In the world of solar, for instance, just this month, Chevron announced that in California's Temple City Unified School District, its Chevron Energy Solutions has completed "a transformative solar and energy efficiency program expected to reduce energy costs at seven school sites and save the District more than $3.8 million." And last month the same Chevron unit announced that it had completed a project in Concord, California whereby "upgrades to street and park lighting, retrofitting the boiler and pump at the community pool, and replacing outdated air conditioners at City facilities" will save Concord taxpayers approximately $18 million.
But the company doesn't stop there. In addition to its solar advancements, Chevron is the world's largest producer of environmentally advantageous geothermal energy. And in Wyoming, the company has converted the site of a former Texaco refinery into the Casper Wind Farm, which produces emissions-free electricity that powers about 4,400 homes.
The Foolish takeaway
In announcing its quarterly results earlier this week, Dow Chemical (NYS: DOW) stated that it was "dialing back" spending and programs in certain areas, "such as alternative energy ... where positive returns are in the far distant future." That's clearly not the case for Chevron, where successes in a host of alternative energy projects are bearing fruit today. I suggest that you add innovative and fully integrated Chevron to your individualized version of My Watchlist.
The article Easily the Best Way to Invest in Renewable Energy originally appeared on Fool.com.David Lee Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of ExxonMobil. Motley Fool newsletter services recommend Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.