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Why the Rockefellers are Betting on Renewable Energy

The name Rockefeller is deeply synonymous with turning oil into gold. Familial patriarch John D. Rockefeller founded Standard Oil in 1870 and bought up most of the oil refineries in the United States, eventually controlling over 90 percent of the American oil business. “Competition,” he said, “is a sin.”

That empire, in inflation-adjusted terms, made him the richest man in history with a fortune estimated at $336 billion in 2010 dollars. The Standard Oil monopoly, meanwhile, was broken up and evolved into the global oil brands Exxon-Mobil, Amoco, and Chevron.

But the times they are a-changin’, and you don’t need to be a weatherman to know which way the wind blows.

Rockefeller’s descendants — who still control a cool $860 million through the family philanthropy, the Rockefeller Brothers fund — are dumping the endowment’s investments in the oil business and reinvesting at least a portion of that wealth into renewable energy.

And the Rockefeller fund is not the only big name fund divesting from fossil fuels and moving into renewables. The Divest-Invest movement — which the Rockefeller fund has joined — consists of 800 global investors, and has now moved $50 billion away from coal, oil, and gas and into renewable energy as part of a broader push to battle climate change and promote economic and energy sustainability.

Now, the Rockefellers’ $860 million isn’t much in the grand scale of the global energy business. The global energy trade is a $5 trillion a year business, so even the larger $50 billion divestment equates to merely 1 percent of the size of the global energy trade. And renewables today are merely 11 percent of the global energy business. Plus, the Rockfeller Brothers fund has a philanthropic purpose, not an amoral money-making one, and the primary goal of the divestment seems mission driven.

But this is still an important symbol because the global energy business is on the cusp of a dramatic transformation. As Stephen Heintz, president of the Rockefeller Brothers Fund, said in a statement:

“John D Rockefeller, the founder of Standard Oil, moved America out of whale oil and into petroleum. We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy.” [The Guardian]

Why? Renewable energy and particularly solar are on a very steep price trend downward thanks to a continued spurt of technological innovations that have reduced the cost of manufacturing. If the trend of falling prices continues for another 10 years, solar-generated electricity in the U.S. will descend to a point where it’s competitive with coal and nuclear — by 2020, or even 2015 for the sunniest parts of America. And if the trend continues for the next 20 years, solar costs will be half that of the price of coal today.

Meanwhile, as fossil fuel stocks have been gradually burned away, the costs of drilling are rising as the easy-to-extract stuff near the surface is exhausted. Today, complex extraction practices such as fracking are unleashing new fossil fuel supplies onto global markets but at a vastly higher cost than in John D. Rockefeller’s day. That makes the renewable energy revolution low hanging fruit for the next generation of energy tycoons.

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What Will It Take To Go Green?

By: Thom Hartmann

In the wake of the 2011 earthquake and tsunami that devastated the Fukushima nuclear power plant in Japan, that nation embraced more solar and wind and took a hard look at nuclear power. Apparently, it’s going to take a similar disaster in our nation to get the United States to make the switch to green energy.

Not only did our regulators decide to keep building more nuclear power plants, but many local lawmakers are blocking residents from going green. And, several states are actually preventing voters from regulating fossil fuels in their communities.

Voters in Fort Collins, Colorado approved a five-year ban on fracking within their city limits, but District Judge Gregory Lammons overturned that ban because it “would substantially impede the state’s interest in oil and gas production”. Meanwhile, some homeowners in Plano, Texas are being told that they can’t install solar panels in new subdivisions, because the developers think that panels are ugly and bad for business. And, don’t forget about the Nuclear Regulatory Commission’s recent decision to allow nuclear waste to be stored above ground, which opened the door for new plants to be constructed.

It couldn’t be more obvious that developers and lawmakers would rather do the bidding of the fossil fuel industry than fight for what’s important. When it comes to saving our environment, it’s hard enough to fight against the massive Oil Lobby. Our lawmakers and regulators should not be making it harder to go green. It took a massive disaster to wake Japan up to the dangers of dirty fuel, and it’s not like we haven’t had our own horrible events here in the states.

It shouldn’t take another BP Spill or Fukushima to get lawmakers on board with making the switch to green energy. If they won’t help us move to the energy of the future, come this November, it’s time to replace them with lawmakers and regulators who will.

A Journey Into Deeper Understanding

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