New reports by Investment Bank Kepler Chevreux have shown that big oil is going to be eaten by renewable energies and they should change their models now and invest in wind and solar energies.

The report shows that money invested in oil will not reap the same rewards as the identical amount of money invested in wind and solar energy. Analyst Mark Lewis says that when compared, renewables will have a significantly superior ‘energy return on capital invested’ (EROCI) than oil and that, “It is almost impolite to compare the net EROCI of oil with that of renewables by 2035.” With oil prices already dropping, the report suggests that soon it will be too costly for companies to find oil and they will get less money for it when they do.

The report’s figures mainly focuses on oil and renewable energy used for light and commercial vehicles – as we see big oil users such as China rapidly taking up electric vehicles.

With the global push to reduce climate change ever increasing the report suggests that big oil companies should already be investing in renewable energy projects in order to stay in the energy mix of the future. Lewis says, “As a result, we think they should already start directing much more of their future capital investments to renewable projects. This would enable them to become the energy majors of the future rather than ending up as the oil majors of the past.”

“It is the aim of this report to explain why the majors should be thinking much more seriously about the risk of stranded assets even under a scenario of rising and sustained high oil prices, and hence why they should be very cautious in particular about new investments in high-cost, high-carbon projects.”

RenewEconomy has more.