The headlines would have us believe that there is an enormous chasm between the oil and gas business and the renewables business. The truth is a little less sensational. Not only are oil and gas companies taking a serious look at renewables as part of their portfolios, but many of them helped the fledgling renewables business get off the ground several years ago.

Terry Jester is uniquely positioned to discuss this evolution. She’s the CEO of Silicor Materials, a company that provides a lower cost form of silicon to companies that make solar panels, but she also worked at companies like Atlantic Richfield (ARCO) and Shell early in her career when those companies had startup solar businesses. E&P talked to Jester about those early efforts as well as current initiatives.

E&P: Companies like Total and Enbridge are putting more money into renewable energy development. What is the rationale for these developments?

Jester: I think that’s the right question. My own initial experience in the solar business was with companies like ARCO, BP, Siemens and Shell. At the time ARCO and BP Solar were big. They did a lot of the seminal work on why solar modules even work today and are reliable. All of that work was financed through these large energy companies in the late 1970s and early 1980s, and I think that’s something that’s kind of been lost as the solar business has grown. That was really important because these solar modules need to be long-lived for cost-effective energy production.

I will tell you that we were under the watch, or maybe scrutiny, of the top levels of the company. It was interesting as a young engineer being able to present to boardlevel folks about what was going on. It wasn’t like we were something hidden away in a corner, and I’m guessing as people step back into it from the oil companies that will continue to be the case. They’ll review and acknowledge the fact that this will be important in the future, but also how it fits in a meaningful way will continue to be under the purview of the top levels of these organizations.

I always tip my hat to the early days where these large oil firms played a big role in creating a foundation for the industry. I think then they exited because it took a long time for solar to mature and start to take hold in terms of providing significant energy. They’re oil companies in the end, right? They’re not solar companies, so when things contract or expand, they’re making decisions based on their own profit and loss.

I remember when I worked for ARCO and Shell, they’d have 50-year looks at energy, not only needs but sources, and renewables were always a part of that. I think that now that the industry has grown big enough and diverse enough, the oil companies can see a role again for them. Total is a good example of a company that has stepped in by acquiring a majority portion of SunPower. I think they’re looking at system deployments and seeing where they can play a role in not only the growth of solar but also in specific companies that have business plans that can merge well with what they do.

Renewables aren’t going away. If you look at the capital cost to install renewables, it’s less expensive and more timely when compared to large-scale power plants or chemical plants. There’s a capex efficiency and speed that I think is being recognized in renewables. I think it’s approaching a scale that these large companies can understand. Now the renewable companies are getting big enough and their balance sheets are strong enough that they start to feel more comfortable with the fact that they’ve matured and maybe have a little more business savvy under their belts. The oil companies can imagine them being a portion of their portfolio in a way that’s not only meaningful but would fit well.

E&P: In addition to Total and Enbridge, what are some other companies that you are aware of that really seem to be taking a keener interest in incorporating renewables into their portfolios?

Jester: Shell has been looking at getting back into some of the wind activity. They have the New Energies division and are looking at low-carbon ways of making electricity. A lot of these big names are starting to look at how they can participate, and again I think wind will be a piece of it because the scale of wind, particularly offshore, seems to fit well with the kind of scale that these large companies do.

I might add, too, that the fact that investors are starting to pay more attention to climate-friendly investments is something that companies are aware of. These large companies are going to be held accountable.

E&P: I know the industry already is availing itself of renewable energy to power its operations.

Jester: The truth is the oil and gas business had some of the early applications for solar panels. I remember in the late 1970s and early 1980s we were installing panels on long-run pipelines for cathodic protection. It’s a beautiful fit for that. Oil and gas companies were one of the first adopters of solar panels for that kind of use.

E&P: The oil industry has such a terrible reputation, at least in the U.S. What will it take to change the public perception of them as these horrible polluting, don’t-care-about-the-environment kinds of companies?

Jester: Some of these steps they are taking will help as long as they’re serious about it. And I believe they are—that investing in the growth of these renewable businesses in a serious way will help their profile. It would be silly to think that they would switch from a carbon-based company to a noncarbon- based company anytime soon, but I think it’s an evolution, and there will be continued looks and actual investments in the capital needs of the renewables businesses. In that way they can show that they are sincere about looking at the future. To think that the world can survive without a carbon-based energy source anytime soon is just not realistic. It’s going to be a portfolio of solutions, one of which is going to continue to be carbon-based. Meanwhile, providing capital is a great way for them to improve their image and their ability to convince the world that they’re serious about being in the energy business in the long run.

E&P: I just worry that with the downturn in oil prices, investing in a renewables company may not be at the top of their agenda.

Jester: That’s true. It’s always about timing. But a lot of times the kind of capital these companies need is small compared to the other things the oil companies do.

As this industry stands on its own two feet without big subsidies and as the oil industry gets healthier, these companies will have money to put into diverse portfolios in energy. I think there will continue to be recognition of the growth of renewables within these large oil firms. Renewables will be an augmentation to the oil companies’ portfolios, not a replacement.

E&P: So time will tell, won’t it?

Jester: Yes, it’ll be interesting to watch.

Contact the author, Rhonda Duey, at rduey@hartenergy.com.