Autos, 'Big Oil' Get Earth-Friendly

Bottom Line Is Green

William Clay Ford Jr., new chairman of Ford Motor Co., drives a snappy little battery-powered pickup and vows to promote a "new environmental ethic" in the company that bears his family name. He warns fellow automakers not to dismiss the possibility of global warming.

British Petroleum, the international oil giant, plans to cut its greenhouse-gas emissions 10 percent below 1990 levels by 2010 - double the target agreed to by the world's industrialized nations in Kyoto, Japan, last December. In the process, it links up with the Environmental Defense Fund (EDF), one of the United States' largest environmental groups.

And Royal Dutch/Shell, another multinational firm whose name personifies "Big Oil," announces it will spend more than half a billion dollars on renewable-energy technology over five years. Shell also pulls out of an industry lobbying group fighting the Kyoto treaty.

Oil execs consorting with green activists, extolling the virtues of solar panels and windmills? What's going on?

Congress and the Clinton administration may be at loggerheads over global warming. Developed and developing countries may be stymied over the specifics of the Kyoto agreement. But some major energy producers - including big oil companies - are preparing for the day when greenhouse gases will be reduced substantially.

To skeptics who doubt the reality of man-induced climate change, British Petroleum's chief executive officer John Browne says, "We've moved - as the psychologists would say - beyond denial."

"Of course, the science of climate change is not proven," Mr. Browne said recently. "But there is mounting evidence that the concentration of carbon dioxide in the atmosphere is rising and the temperature of the earth's surface is increasing."

BP is focusing its initial carbon-reduction plan, worked out with the EDF, on 12 business units that account for one-quarter of the company's global emission of greenhouse gases. These include refineries, chemical plants, and oil-production facilities.

For example, new "drag reducing" technology will allow BP to have fewer pumping stations along the Alaska pipeline. Net result: an annual reduction of 236,000 tons of carbon dioxide. In the North Sea, BP is cutting "flaring" (the burning of waste gases), which means a reduction of 200,000 tons of CO2 emissions.

Like Shell, BP is also increasing its investment in solar energy. And both companies have broken ranks with the Global Climate Coalition, which opposes the Kyoto treaty.

SUCH actions, says EDF executive director Fred Krupp, set "a powerful new standard for corporate responsibility."

"There's no conflict between doing the right thing and the bottom line," says Ford's board chairman. "I don't see a conflict between shareholder value, customer value, and social value."

Critics point out that Ford sells more trucks and sport utility vehicles - top greenhouse-gas emitters - than its competitors.

But the No. 2 automaker says technological developments soon will allow its minivans and sport utes to qualify as low-emission vehicles. Ford also has formed a partnership with Canadian and German companies to develop fuel cells that combine hydrogen and oxygen to produce electricity. A fuel-cell-powered car will be tested early next year, Ford recently announced.

Those who advocate a move away from fossil fuels see efforts to green up such industries as more than window dressing. "It's a real trend," says Rhys Roth, executive director of the Atmosphere Alliance in Olympia, Wash., a private organization that addresses global warming.

Or as Mr. Ford says, "preserving the environment is not only the right thing to do, it's the best thing to do from a long-term business perspective."

In the Pacific Northwest, notes Mr. Roth, companies are scrambling to become the next Intel or Microsoft of renewable energy. The world's largest manufacturer of solar-panel electronics and the top producer of silicon for solar systems are both in Washington State. Oregon has three electric-vehicle companies.

Shell researchers estimate that renewable-energy sources such as wind, solar, and biomass could supply half the world's energy by the middle of the next century. Company officials say it's only prudent to plan for that kind of future. BP reported last month that it would increase its solar business tenfold by 2010.

"Fossil-fuel companies are looking at themselves as energy companies - more than just oil companies," says Roth.

The same apparently is true of those involved in automaking, Roth notes. Robert Stemple and Lee Iacocca, former chairmen of General Motors and Chrysler, respectively, now are involved in producing electric-powered vehicles.

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