Two articles in the Guardian today:
- Shell makes £2 million profit an hour
- Shell says it can not ‘justify’ investing in wind farms in the north sea.
Shell’s profits increased 11% in first-quarter of 2012 to $7.3bn (Annual profit of around $29bn)
“Our profits pay for Shell’s dividends and substantial investments in new energy projects, to ensure affordable, reliable energy supplies for our customers, which create value for our shareholders.”
But, should that appease customers paying record prices at the petrol pumps?
- Shell paid $1.2bn in income tax to the British government. Through the sale of Shell petrol, $17.7bn was collected for the Treasury.
- North Sea oil companies won tax concessions from the government in the March budget but last year faced a £2bn windfall tax.
- Shell claim they are spending $6bn on “alternative” energy including biofuels. (though it doesn’t mention over how many years that $6bn will be spent.
Impact of Oil prices at $120
With oil prices at $120 it makes oil extraction very profitable. By contrast it makes renewable energy less profitable in comparison. Yet, the rising price of oil and gas, is an indication of how market forces are pushing up prices due to growing shortages.
Is the reluctance to invest in more renewable energy sources now, an example of market failure?
Should we nationalise companies like Shell who fail to consider wider public interests?