Shell and Equinor are guiding us through the climate crisis. Or are they?
Klassekampen, 13 April 2018
What is going on with the oil companies? Don't they want to sell oil anymore? Just before Easter, Shell presented a vision of how the world could use little to no oil in the future. Last month, Statoil announced that they will throw outt the word "oil" from their name and continue as "Equinor". For decades, Statoil and Shell have only made climate change worse. Now these companies are going to ensure that the Paris climate goals will be met. At least, if we can believe their sales pitch. But does that pitch make sense?
In its recent "Sky scenario", Shell presents a future in which our consumption of oil, gas and coal will eventually be reduced to a minimum, and where sun, wind and nuclear energy dominate. But a distant goal is not enough: emissions from fossil fuels needs to be reduced as soon as possible, since the remaining carbon budget to keep global warming under two degrees Celsius is rapidly diminishing. Within a few years, this limit will be out of reach unless we reach a turning point in global emissions. The question is whether the Sky scenario meets that requirement.
Glen Peters, research director at the climate institute CICERO in Oslo, looked into this by comparing the Sky scenario with various scenarios from the IPCC that also keep global warming under two degrees. Shell's scenario appears realistic: it falls within the margins of many of the IPCC scenarios, with emissions peaking in the near future and steadily decreasing afterwards.
But the devil is in the details: Shell expects global energy consumption to increase significantly, more so than in most IPCC models. This is surprising, but they also think that a lot of this extra demand will be picked up by an unprecedented growth in solar energy – much higher than what the IPCC deems possible. The strategy of Shell looks clear: in an oil-free world, their focus will be on solar panels, even though previous efforts by Shell on this topic have been minimal.
Shell's future looks bright, according to their own report. But that's also where the problem lies: this future only exists on paper. The scenarios by Shell, Statoil, and even the IPCC, rely on the large-scale application of CO2 capture and storage (CCS). The hope is that, within a few decades, we will be able to extract immense amounts of CO2 from the air with this technology and store this carbon underground. A successful large-scale implementation of CCS in the future means that we can emit more fossil fuels in the present. The problem is that investments in CCS lag far behind what is needed to make that future happen. When the government, Statoil, and Shell claim that we will have to rely on oil for the coming decades, they are betting that someone else will solve this CCS-problem for them. Their own actions on this matter are grossly insufficient, while we continue to emit CO2 regardless.
This explains, among other things, why Shell anticipates that oil consumption will remain at or above current consumption in the next two decades. Statoil uses similar scenarios. But these are scenarios in which the goal is to keep global warming below 2 degrees. In Paris it was agreed that a serious attempt should be made to stay below 1.5 degrees. Shell's Sky scenario easily crosses that limit – even with CCS.
Shell's future looks bright. But that future only exists on paper
In other words, Shell is trying to sell as much oil as possible, while using a clever marketing story to claim that they are acting within the margins of "Paris". That statement can best be taken with a grain of salt. In fact, the American website Climate Files showed last week that Shell, as early as 30 years ago, admitted internally that they were co-responsible for causing climate change. Knowing that, it is indefencible that they, like Statoil, for decades continued to search for oil and gas, drilled for it, and sold it for a large profit.
We must not forget that fossil fuels are at the heart of Shell and Statoil. We cannot rely on them for the unprecedented change in energy consumption that is so badly needed. Certainly not while they search for even more oil and gas in the vulnerable polar region. To be able to believe the green hype by these companies, they have to turn their words into action: to set up large-scale capture and storage of CO2, and more investments in sun and wind than in new oil wells.
The big risk for Shell and Statoil/Equinor is that they will soon miss out. In the new 2050 climate strategy of The European Union, some major adjustments to the projections of renewable power had to be made. In the seven years since the previous report, the costs for solar and wind energy dropped by more than what they previously considered possible by 2050. Despite all the scenarios, the greening of our economy could actually go faster than the marketing men of the oil companies want to make you believe. If the energy giants Shell and Statoil do not have a plan for this, and do not take the lead now, there is a risk that they will become irrelevant ghosts of the past in an oil-free future.
This text originally appeared in Klassekampen on 13 April 2018