Shell boss Shell insists it can achieve net zero by 2050. But it will still need to have the oil and gas industry’s cash to make it happen.
Ben van Beurden rejected the idea of separating its legacy oil-and gas business and its renewables investments, as suggested by Third Point activist shareholder.
Exclusively speaking to BBC, he stated that the company’s efforts for greener energy would only be possible if oil and gas were used as funding.
“At that point in time [the cash]He said that the legacy business is what gave rise to this idea.
Speaking at Europe’s largest oil refinery Pernis in Rotterdam, Mr van Beurden said that he intends to convert the plant from making petrol and diesel to producing biofuels as well as hydrogen within the next decade.
These things are possible only if there is a Pernis facility to use and the money.
He stated that if we need to construct a hydrogen plant out of a windfar that was built in the North Sea, it is unlikely that a hydrogen company will fund the project. Instead, the oil and natural gas industry would finance the construction.
Oil and gas are not a dying business. Shell plans to build new oilfields, including Cambo in North Sea. It hopes that this will allow it to produce 170,000,000 barrels per year.
Is that possible?
According to Mr van Beurden, the Cambo oilfield decision will ultimately be made by the government. However, it is not sensible to use UK resources to supplement domestic imports.
He stated, “Why would I say: We don’t need to get oil from our own resources. Let us import it from some other country with a greater carbon footprint.
“I do not believe it will contribute to the UK balance of payment and won’t help reduce the carbon footprint around the globe.”
Shell has an estimated global carbon footprint that is twice as large as Russia, if you take into account the emission from Shell customers.
Next year, it plans to spend four-times as much money on oil and gas exploration as on renewables. Shell cannot meet either its own emissions reduction targets, or the Dutch court’s requirements that it reduce net carbon dioxide by 50% by 2030 and completely eliminate them by 2050. Shell plans to appeal a portion of this ruling.
Shell will also make every effort to lower the carbon emissions from its customers, which account for 90% of Shell’s total carbon footprint. Shell plans to appeal the court decision.
Shiu Laew, from Climate Insights consultancy has looked at Shell’s expenditure plans. He estimates that Shell would be producing greater emissions in 2030 than what it currently is because of its plan to increase its gas-business.
“Even though you are very generous with your expectations and suppose they receive all of the carbon capture, storage, offsets and credits that they need, they could just miss their 2030 targets. They won’t be able deliver on 2050.”
He says, “In reality, they will increase emissions until 2030 and continue to produce significant amounts of emission in 2050.”
These estimates, Mr van Beurden claims, are speculation. Shell insists that they’re on the right track and has cut its carbon intensity by 17% in 2016 – Mr van Beurden.
Shell is an important component of the UK’s most popular share index. You are most likely a part-owner of Shell, BP or other oil and natural gas companies if you have a retirement.
Many pension scheme trustees are urging their members and other fund managers to sell or divest from shares in fossil fuel companies to save them capital. According to Blackrock, the largest asset manager in the world which oversees 13 trillion dollars worth of pensions and savings, this would be a mistake.
“You cannot divest yourself from the rest of the world. Better to interact with companies and make your voice heard as a shareholder. Sandy Boss (head of investment stewardship) said, “If you divest you lose this influence.”
Some others point out that Shell could sell its oil and natural gas businesses to acquire those assets. This would happen even if Shell were less transparent or less willing to take the decarbonisation effort.
As was exposed by the current energy crisis, Britain and the rest are still heavily dependent upon fossil fuel. Van Beurden says that this dependence needs to be decreased over the long-term. If not, we may see price shocks which will prove counterproductive.
This energy transition could be achieved, I think. But it will need a lot orchestration and trust from the society. You can read more at
“If your goal is to undermine faith, drive up energy prices or create market failures by creating scarcity, then I believe politicians will lose the societal acceptance of this being possible.”
Shell may not be as powerful as its customers, but they might be even more powerful.
There will always be a demand for fossil fuels. Shell, or anyone else who can supply it. While government can influence demand, financial institutions can squeeze companies but it is ultimately the consumer who will decide if there are any net zeros in the future.
- Why the COP26 Climate Summit is Important
- Climate change: A guideline for the everyday
- Is climate change something you can see?
- Is the UK on track to meet its climate goals?
- Climate change and extreme weather
Share Your Comment Below