Oil and gas major BP recently announced a significant recalibration of its net-zero targets, initially set in 2020, citing that the company had moved 'too far, too fast'. This decision, revealed in February 2025, includes a plan to reduce its budget for renewable projects by $5 billion while simultaneously increasing investment in fossil fuels to $10 billion per year. This strategic shift is projected to result in BP producing 2.4 million barrels of oil per day by 2030, a move with substantial implications given that a limited number of fossil fuel companies contribute over half of global emissions.

BP's pivot is part of a broader, concerning trend among major energy providers. It follows Shell's earlier decision to dial back its 2030 target for cutting net carbon intensity, adjusting its goal from 20 percent to a range of 15 to 20 percent from 2016 levels. This collective backtracking raises questions about the underlying drivers behind these companies' sustainability strategy reversals.

A primary factor is the stark difference in profitability between fossil fuel and renewable energy projects. According to 2023 figures, U.S. oil and gas companies could anticipate a return on investment (ROI) of 20 to 50 percent on capital, whereas solar and wind projects yielded an estimated 5 to 10 percent. This disparity directly impacts investor interest; New York Times data from late 2019 to late 2024 shows BP's stock price falling by 19 percent and Shell's growing by only 15 percent, while Exxon Mobil, which largely avoided significant renewable investments, saw its stock price surge over 70 percent.

Several barriers contribute to the lower profitability of renewables for these incumbents. Oil companies often lack the specialized experience required for successful wind and solar project execution. Exxon Mobil, for instance, opted to invest in hydrogen and lithium extraction, leveraging existing expertise in resource extraction. Additionally, the high initial capital expenditure for renewable projects, coupled with the often-low wholesale prices of solar and wind power, extends the payback period for investors, sometimes spanning years or even decades.

Furthermore, grid infrastructure limitations pose a significant challenge. Renewable energy sources like wind and solar often produce power concurrently, leading to supply surpluses that can depress prices and necessitate curtailment, where turbines are idled due to insufficient grid capacity. A crucial solution involves enhancing grid interconnectivity through High-Voltage Direct Current (HVDC) cables, which enable efficient, long-distance transmission of renewable energy to markets with higher demand. Within HVDC systems, resistor technology plays a vital safety role by dissipating excess energy during faults, stabilizing the grid, and protecting critical components like converter transformers.

Ultimately, privately owned oil and gas companies are primarily driven by shareholder interests and profitability. However, by strategically investing in and deploying robust infrastructure, such as advanced grid technologies and energy storage solutions, it is possible to improve the economic viability of renewable resources, thereby aligning both sustainability objectives and financial returns.