Why Greenbacks Aren't Going Toward Green Energy

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article:

Coal-fired power in the United States should start to ebb as regulations targeting pollution come into effect. More power, in turn, is coming online in the form of green energy resources, but so far, the money isn't backing that momentum.

U.S. coal production during the first quarter of 2014 was down 1.1 percent year-on-year and should continue that trend into 2015. For the first three months of the year, however, coal consumption was 9.3 percent higher than last year, the U.S. Energy Information Administration (EIA) said in its most recent monthly market report.

Last week, the Environmental Protection Agency (EPA) unveiled new regulations aimed at cutting carbon emissions by 30 percent from a 2005 baseline by 2030. The regulation in part targets emissions from the more than 600 coal-fired power plants in the country.

EIA said that as older coal power plants shut down in response to stricter pollution standards, consumption should decline by 3.1 percent in 2015. Energy generated from renewable resources like wind a solar, meanwhile, should grow by 4.1 percent.

Wind power capacity is expected to lead the way in the U.S. renewable energy sector and should account for 4.5 percent of the electricity generated in the country by next year.

But that trend masks part of the story. Chevron  (NYSE: CVX  ) , which said in an ad campaign that it was investing "millions [of dollars]" on renewable energy resources, has shied away from the renewable energy industry to focus on its highly profitable oil and gas business.

BP, which has tried to rebrand itself as a company moving "beyond petroleum," said in a March sustainability report it wasn't making "a public commitment on future spending for alternative energy."

That means two of the largest energy companies in the world are out of the game. The problem, as Chevron's profits indicate, may lie in the costs.

According to estimates from British multinational banking firm Barclays, the EPA's new rules could add as much as 10 percent to utility rates by 2013. That means it could cost more than $8 billion to follow the new rules.

More than 1,000 U.S. respondents taking part in a June survey from Bloomberg News said they'd be willing to pay higher utility bills if it would lead to a corresponding decrease in pollution. But that can only happen if energy companies switch to cleaner-burning fuels.

The International Energy Agency (IEA) said in a global investment outlook that the international community needs to spend trillions of dollars to keep the lights on through 2035. While 15 percent of the annual investments target renewable energy, the IEA said more than half, or more than $1 trillion, will be spent on fossil fuels.

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