Shell can help the energy transition, but does not

energy

There is a huge global movement towards renewable energy. Climate change disasters already cause grieve to millions around the world. This stimulates initiatives that will change the world in unpredictable ways. The directors of the oil and gas companies can not deny the changes.

Oil and gas companies such as Shell have the unique expertise to help with the construction of the future energy supplies.

Yet they do not. According to Kamp – former Shell manager – the strategy of oil and gas companies is doomed to fail.

“Like the bank, oil and gas companies won’t change their strategies. They are earning still too much money with fossil fuels.”

Doomed to fail

The growth strategy of oil and gas is still based on a growing trade in oil and gas. Shell is focussing on liquefied natural gas. But this strategy is doomed to fail. The current energy system can not continue as it is now.

Industry professionals work in a strange environment: the less they do, the more the prices of oil and gas are increasing. That is a very perverse incentive.

20 years ago, Shell invested a lot in advanced biofuels, solar power, offshore wind, nuclear energy and the coal industry. However, these investigations failed. Why? Because Shell’s highest shareholder values are still oil and gas. Second, Shell managers don’t show leadership. They were excited about shale (oil and gas from rocks) and payed no attention to electric cars.

Wrong strategy

Shell’s strategy is focused on liquid gas. They have made the choice to produce liquid gas. They think this gas can help to solve some climate change problems like: lowering CO2 emissions and – if you replace coal by gas – gas is less polluting.

Lobby

Shell spends billions on their lobby. They know every policy maker that counts. But how did they use their influence? What did they say? Can you tell decision makers that gas is better for our climate than coal? Can you simply tell them that offshore wind is too expensive? These statements only tell part of the story.

Climate Change

Oil companies like Shell seems to be focussed on two things, to combat climate change:

  1. capture and storage of CO2 (CCS)
  2. trading in CO2 emission rights

Both methods are delaying tactics. CCS is not really profitable and emissions trading is problematic.

CEO

Shell’s CEO – Ben van Beurden – told in an interview not to be worried about the departure of universities and churches as investors in Shell:

“There are a lot of other organizations interested to take their place.”

On 12 February in London, Van Beurden stressed the importance of fossil fuels. Develop sustainable solutions is beyond Shell’s interest.

And Shell will drill in the Arctic for oil and gas in the Arctic. And others will follow. But do we want the North Pole filled with drilling rigs? This is one of the last unexplored regions of the world!

New infrastructure

We need more renewables and we need to develop new “energy architecture,” or infrastructures that supports the energy supply of the future, according to Kamp.
In Europe, we need to build a new energy infrastructure near large-scale offshore wind farms and hydroelectric power plants, combined with small-scale, decentralized energy production, storage and distributions.

Shell can do this

Shell and other major oil companies such as Statoil are specialized in executing large projects.

They are used to work 10/15 years on projects like gas-to-luiquids (GTL) and the marketing of liquefied gas in the chain. They are used to spend another 10/15 years in building installations. This is their unique expertise.

Would it not be great if Shell uses this experience to build the energy system of the future? ”

Deny

If companies like Shell does not change the energy system, the market will force them.

There is a huge global movement towards renewable energy. Climate change disasters already cause grieve to millions around the world.

This stimulates initiatives that will change the world in unpredictable ways. The directors of the oil and gas companies can not deny the changes.

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