Shell says its withdrawal isn't an indictment of clean energy, and points to its on-going investment in wind energy in the U.S. But British newspapers take a more skeptical line. The Times of London called the departure a "huge blow" to Britain's ambitious plans to harness offshore wind to meet growing energy needs. ...Actually, Shell's departure raises the question-is it pulling out renewables in favor of good, old, pricey oil? Or is it just pulling out of the dysfunctional renewable-energy market in the U.K.? Britain has ambitious plans for clean energy, and theoretically plenty of renewable-energy resources, but has made little progress so far.

We've mentioned before the belief that high oil prices will inevitably spur more alternative energy. But as always-be careful what you wish for. Sometimes high oil prices make other things more attractive-like more oil.

Royal Dutch Shell said it is pulling out of the "London Array," which-if it ever gets built-will be one of the world's largest wind farms. Shell says it will put its one-third stake in the $4 billion project up for sale, part of its regular review of investments. Shell's departure leaves the other two partners, Germany's E.On and Denmark's DONG, holding the bag on an increasingly expensive and complex project.

Shell says its withdrawal isn't an indictment of clean energy, and points to its on-going investment in wind energy in the U.S. But British newspapers take a more skeptical line. The Times of London called the departure a "huge blow" to Britain's ambitious plans to harness offshore wind to meet growing energy needs. The Guardian is harsher:

[E]nvironmentalists will see the decision to drop one of only two renewable schemes being worked on by Shell in Britain as a further sign that the company is retreating back to hydrocarbons at a time when the price of oil has risen to about $120 a barrel. Shell, which earlier this week reported first quarter profits of £4bn, has been selling off much of its solar business while moving more into Canada's carbon-heavy tar sands.

Actually, Shell's departure raises the question-is it pulling out renewables in favor of good, old, pricey oil? Or is it just pulling out of the dysfunctional renewable-energy market in the U.K.?

Britain has ambitious plans for clean energy, and theoretically plenty of renewable-energy resources, but has made little progress so far. Last week, a signature wind farm in Scotland was scuppered over environmental concerns. Other offshore wind farm projects have languished for years on technical and cost concerns.

Britain's lag in clean-energy development-it has less wind power than the state of California or Texas-contrasts sharply with government goals, and has led to plenty of soul-searching. The Labor government wants 30,000 megawatts of offshore wind power built in the next two decades; today, Britain has 400 megawatts installed.

The U.S., by contrast, has been the fastest-growing wind-power market in the world for two years running. That's the case, by the way, even though the U.S. famously never ratified the Kyoto Protocol. The real-world result: Even though it isn't clear if or when U.S. federal clean-energy subsidies will be renewed, European utilities are champing at the bit to enter the U.S. wind market.

Web link: http://blogs.wsj.com/environmentalcapital/2008/05/...