Big Oil is backing EVs: What is going on?

Source: By Edward Klump, E&E News reporter • Posted: Sunday, February 7, 2021

An oil giant is readying a plan to help the U.S. oil capital charge electric vehicles.

London-based BP PLC is headlining a new program with Uber Technologies Inc., the ride-hailing company, to explore the placement of rapid EV charging hubs in Houston. Details remain elusive, including how many chargers may get built and at what cost. But the scope and timeline could firm up later this year, and the plan may include charging hubs in parking lots and other locations.

“Looking back, you see an oil capital with an oil company,” Damian Bilbao, vice president for U.S. integrated solutions at BP, told E&E News. “Looking forward, you see a city and a company that are on the journey of greening.”

The electric proposal for Houston reflects a growing evolution at major oil and gas companies, including BP’s work with Uber on EV charging in the United Kingdom. Royal Dutch Shell PLC, another European oil company, announced the purchase in 2019 of Greenlots, which provides software and services related to EV charging (Energywire, Feb. 1, 2019). And while U.S. oil majors may be more reserved in talking about a clean energy pivot, Chevron Technology Ventures has invested in ChargePoint Inc., a major EV charging infrastructure company (Energywire, Aug. 6, 2020).

The Houston program, which was announced this week, also shines a light on the opportunities — and challenges — of ramping up electric vehicles in a large city, a dynamic that is likely to play out elsewhere.

The plan is the latest move for BP as it expands beyond traditional oil and gas in the era of decarbonization. It aims to be a net-zero-carbon company by at least 2050, while the city of Houston intends to be carbon neutral by 2050 or sooner. EVs are key to both goals, even though using oil to power cars remains an important economic engine for Houston and BP.

BP, in a recent presentation, said it has about 10,000 charge points globally — with the aim of having at least 70,000 by 2030. BP has worked on EV charging in China, but Houston marks a new effort in the United States. The company doesn’t currently have BP-branded charging stations in this country.

Last year, BP said it would provide $2 million to help implement Houston’s climate action plan and raise awareness. The new EV proposal is the next step in support of that, Bilbao said. BP also has about 4,000 employees in the Houston area.

There’s no public price tag for the new Houston EV plan, but Bilbao said BP and Uber would listen to residents’ priorities. One factor: Houston has battled flooding issues in recent years, especially in the wake of Hurricane Harvey in 2017. BP’s examination is expected to include looking in-house at technology options.

But Bilbao, while citing charging success overseas, said that “what works in the U.K. is likely not to be exactly what works in Houston.”

The company may face other EV challenges.

Bloomberg News quoted an electrification director at BP this week as saying all of the company’s car-charging stations aren’t yet profitable.

Ed Hirs, an energy fellow at the University of Houston and a co-founder of a renewable fuels company, said BP still depends on oil and gas revenue at it looks at new areas. It’s early in any clean energy pivot for BP, he said, and there’s not necessarily a clear path for Big Oil to change.

“Somebody needs to start these discussions, and that’s what’s happening here,” Hirs said.

He noted that financing details of the proposed EV charging project in Houston aren’t yet known. Oil companies do have the capital ability to move in a new direction, Hirs said. But that could mean shifting into activities with lower returns.

“The question for the oil companies is: What sort of rates of return are they going to give their shareholders?” he said. “Lately, those haven’t been very good.”

Bilbao said it’s a bit early to tell about specific margins and economics of certain projects. But he said it’s time to understand that the world is moving toward decarbonization.

“And you can either participate and figure out how to make it work commercially, or you can sit back,” he said, and “not have a voice at the table. We’re choosing to participate and find a way of making it work.”

A ‘natural collaboration’

BP is seeking to provide a “one-stop shop” for sustainability and solutions for cities and companies, according to Bilbao. And partnerships are possible in U.S. locations besides Texas’ largest city.

For Houston, ideas may include a group of chargers in a parking lot, Bilbao said, and a dedicated area for charging. The goal is to tie charging stations to 100% renewable energy.

While electricity delivered on the grid comes from any number of places, companies can ink deals to buy power from certain sources. And the Lightsource BP affiliate is focused on renewable projects, meaning it could come into play.

Bilbao said drivers who come to charge at a Houston site would pay for that service. Chargers could serve members of the general public, Uber drivers and city vehicles.

“We are on a journey very similar to the city of Houston,” Bilbao said. “And that’s what makes the partnership such a natural collaboration.”

Houston Mayor Sylvester Turner, a longtime Democrat, said collaboration is an essential aspect of meeting the city’s climate goals. In a statement, he praised BP and Uber’s partnership to help Houston’s goal of boosting the accessibility and affordability of EVs.

“Transitioning to EVs is one of the fastest steps we can take to improve air quality and community health in Houston,” Turner said. “Rideshare — with its high popularity and diverse customer base — is a perfect place to start.”

The city continues to tout the EVolve Houston coalition, which is pushing electrification of transportation. It’s aiming for 30% of annual new vehicle sales to be electric by 2030 in the Houston area (Energywire, Oct. 16, 2019).

“It will take collaborations like these to continue improving air quality, exceeding emissions reduction targets, and working towards Houston’s 30 by 30 EV goal,” Chris George, executive director of EVolve Houston, said in a statement.

California-based Uber, meanwhile, plans to be a zero-emissions platform by 2040. The company has said it’s committing over $800 million of resources to help drivers switch to battery EVs by 2025.

When asked about Houston via email, Uber said: “We’ll be looking at historical trip data to ensure charging hubs will be placed at locations beneficial for drivers on Uber’s platform, as well as EV owners across the socioeconomic spectrum.”

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