What Benefit Does CCS Present To Investors?
One thing that oil and gas investors have had to worry about over the past years is how oil companies handle their corporate responsibilities, which directly affects human lives. And this singular factor has often times determined the performance of oil and gas stocks.
You’d understand exactly what I’m talking about if you take a look at ExxonMobil’s Ecuadorian lawsuit, which, in reality, has to do with how Exxon handles its corporate responsibility. Thus, with oil and gas companies showing interest in the CCS project, we can now say that they’re not absolutely about oil money anymore. They now have compassion for human lives and the ecosystem at large. Such positive image would always make oil companies do well both in business and in the stock market.
In addition, the CCS project may present oil companies an extra source of revenue. Most oil companies are only funding other institutions’ CCS projects at the moment. I see this as a gamble they’re taking to see how the project would work out. I’m certain that if the project proves worthwhile, many oil companies would soon venture into this space.
In my opinion, they’re taking this approach because of the capital intensive nature of the project. They don’t want to waste billions on what they’re not sure would work out fine. In the end, however, if the initiative is successful, oil and gas companies will have the largest share of the financial benefit since they have the capital to invest into it.
EV makers, on the other hand, are also trying to up their game by trying, first, to convince everybody that EVs are the answer to reducing the contribution of autos to global warming. Tesla Motors Inc (NASDAQ:TSLA) is leading the race in this industry with its recentannouncementof a battery swap system that is aimed at making drivers more comfortable driving Tesla Motors Inc (NASDAQ:TSLA) EVs. This is an addition to the company’s supercharger system. This system is a strategic move to drive EV adoption.
These sorts of developments would only nurture the competition that I’m advocating. And as an investor, I hope you understand that increased adoption of EVs (increased sales) is a sign that this industry is investable.
Like I argued in one of my posts, Tesla Motors Inc (NASDAQ:TSLA) is a company you want to invest in. The fact that Tesla Motors Inc (NASDAQ:TSLA) is making efforts to improve its battery services shows that it’s committed to solving the range anxiety challenge, which has been a major roadblock to the adoption of EVs. The truth is, no EV is worth buying the most other than that which assures me that I’ll get to my destination without any glitch. This assurance is what Tesla Motors Inc (NASDAQ:TSLA) has been giving to consumers. And with this development, in addition to the ones it already has in place, I project that Tesla Motors Inc (NASDAQ:TSLA)‘s sales will reach a new landmark by the year.
My Foolish Take
For investors that are a little skeptical about the idea of a gas station versus charging station competition, I’d like to remind you of the revolution in the PC space, where it used to be all about Microsoft. Then, we were not enjoying our gadgets as we do today because the right competition didn’t exist. But then, Apple came and everything changed. At that point, Microsoft realized that if it wanted to remain at the top, where it has always been, there needs to be a change. That competition didn’t push Microsoft out of business; it only made it stronger.
In the same stead, a gas station versus charging station competition won’t push oil and gas companies out of business. And down the chain would be investors who would enjoy the benefits from cleaner oil and gas operations and a fully-grown EV space.
The article Gas Stations Versus Charging Stations originally appeared on Fool.com and is written by Criag Adeyanju.
Criag Adeyanju has no position in any stocks mentioned. The Motley Fool recommends Chevron and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Criag is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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