Shell: "Oil Supply Will Struggle to Keep Pace" and "Environmental (CO2) Stresses are Increasing"

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Shell released this month two new scenarios about the future of energy and global climate change, and they are quite sobering. To the credit of Shell's scenario team, they did not pull any punches, nor did its executives water down the results.

The global oil giant, based in The Netherlands, has been developing scenarios since the late 1970s as a way of informing its medium to long-term business strategy. Peter Schwartz, who now heads the scenario consultancy Global Business Network, was credited as the main innovator behind scenario planning, which takes a future launch point and asks: "What if?"

Schwartz and Doug Randall were the authors of a prescient 2003 scenario on the potential political, security and economic impacts of global climate change that was commissioned by the US Department of Defense. 

Shell's two new scenarios "Blueprints" and "Scramble" represent two differing visions of the next 50 years. Both project that, "by 2015, growth in the production of easily accessible oil and gas will not match the projected rate of demand growth" and that, "remaining within desirable levels of CO2 concentration in the atmosphere will become increasingly difficult." 

Each scenario also sets the expectation for the increased growth of coal as an energy source in providing both dirty and carbon sequestered power for electricity generation. 

From this point, the two scenarios diverge.

Scramble offers up a world where nations refuse to agree on climate change mitigation treaties and efforts, instead focusing on getting energy to meet their economic needs without minding future political, environmental, climatic and corresponding economic consequences.

Under Scramble:

  • nations will only focus on getting more energy supply rather than curbing demand because "it is too unpopular for politicians to undertake."
  • Developing nations get hit with food shortages as a result of first generation (ethanol from corn) biofuel production.
  • Coal production doubles by 2025 and dirty fuel sources such as oil sands and shale are heavily tapped, despite the exponential extra greenhouse gas emissions that result. 
  • Greenhouse levels subsequently rise to a level on a path to being "well above 550 ppmv" (what some scientists call a climatic "point of no return") and the world hits an economic slowdown by 2020. Only then are major actions taken, but at much greater cost than if they had been taken earlier. 

The more hopeful scenario, Blueprints, presents an emerging network of government, business and NGO coalitions from the local level up to the international level that collectively reduce global energy consumption and CO2 emissions.

This passage from Blueprints was especially relevant:

In the early part of the 21st century, progressive cities across the globe share good practices in efficient infrastructure development, congestion management and integrated heat and power supply. A number of cities invest in green energy as sources for their own needs and energy efficiency...In an increasingly transparent world, high-profile local actors soon influence the national stage...Perceptions begin to shift about the dilemma that continued economic growth contributes to climate change...In addition, successful regions in the developing world stimulate their local economy by attracting investments in clean facilities made possible by the clean development provisions of the international treaties that replace the Kyoto Protocol which expires in 2012. (p. 27)

I've seen evidence of this emerging approach through our firm Common Current's recent work with nations and the State of California that is based on my book How Green is Your City? In How Green is Your City? I describe how some cities such as Portland, Oregon; San Francisco; New York; Chicago; and Seattle are setting the agenda for the future of our nation in their climate change mitigation policies and practices.

Now other nations are trying to develop policy based on international urban best practices. In Korea last month I met with national and local leaders on plans for developing potential green city metrics and approaches. The trip was sponsored by the US Department of State. Next month I will be meeting with European Union officials from the Environment Agency and the EU agency for Sustainability and Information Technology, ACIDD, in Brussels and Paris, where I will be presenting on U.S. city metrics and approaches.

Shell in its Blueprints scenario credits the EU as the key enabler of future international green energy systems through its CO2 pricing mechanism and carbon emissions trading scheme, which it speculates will be adopted by other countries, including the U.S. and even China. "This trading regime gives a new boost to new industries emerging around clean alternative and renewable fuels."

Blueprints depicts an international network of zero emission vehicles, wind and solar power and electric transport, even in developing nations. It suggests that 60% of global electricity will be generated by non fossil-fuel sources by 2050. Moderated consumption of oil, meanwhile, allows "most nations to reach a plateau of oil production without the (oil) shocks that they would have otherwise experienced."

The scenario concludes:

By 2055, the U.S. and the EU are using an average of 33% less energy per capita than today. Chinese energy use has also peaked....in Blueprints, in a critical mass of countries, people support national leaders who promise not only energy security but also a sustainable future. Initial pain has reduced uncertainty and prepared the way for long-term gain. (p.36)

 

 

 

 

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2 Comments

Scramble is a nice euphemism for "all out resource wars" over water, oil, food, coal etc. Of course it also includes diplomacy or war with money instead of butter and guns. The main winners in that scenario are of course the enlarging military-industrial-banking complex.

Blueprint is great but as the United Nations shows, there is no international blueprint that all governments will agree upon, even when resources were not yet near "peak" depletion. Still, definitely worth our while to help organizations become "sustainable."

Shell's scenarios remind me of the Club of Rome's Limits to Growth, which as a 100 year scenario from baseline of 1970, looks very intelligent and right-on as of now, 38 years later. (still 68 years to go)

I'm working with the Shell Energy Scenarios team, and given your in-depth post on this (above) we would like to invite you and your blog's readers to participate in an event which we hope you might find interesting.

On May 15, the team behind the 'Shell Energy Scenarios to 2050' report is inviting senior decision makers from the worlds of business, politics, science and the environment to watch the 'Scenarios' webcast and join in the live Q&A session with Jeremy Bentham, VP, Global Business Environment, Shell. And we would like you to join us, if you can.

If you would like to participate, you will need to register in advance at http://www.shelldialogues.com/shell-energy-scenarios-to-2050 - registration only takes 30 seconds.

We do hope you will join us on 15 May [10:00 New York EDT; 15:00 London BST; 16:00 Netherlands CEST] to participate in this global discussion.

Kind regards,
The Shell Energy Scenarios Team

(p.s. sorry I couldn't see an email to send this to, hence the comment. hope you don't mind. Also, For some reason I couldn't log in to movable type to post this comment, hence using my person openid. If you want to contact me direct, it's chris.reed@fishburn-hedges.com)


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About the Author

    Warren Karlenzig
Warren
Warren Karlenzig, Common Current founder and president, has worked with the United Nations Department of Economic and Social Affairs (lead co-author United Nations Shanghai Manual: A Guide to Sustainable Urban Development in the 21st Century, 2011); United Nations Center for Regional Development (training of mayors from 13 Asian nations on city sustainable economic development and technology); provinces of Guizhou and Guangdong, China (urban sustainability master planning and green city standards); the United States White House and Environmental Protection Agency (Eco-Industrial Park planning and Industrial Ecology primer); the nation of South Korea ("New Cities Green Metrics"); The European Union ("Green and Connected Cities Initiative"); the State of California ("Comprehensive Recycling Communities" and "Sustainable Community Plans"); major cities; and the world's largest corporations developing policy, strategy, financing and critical operational capacities for 20 years.

Present and recent clients include the Guangzhou Planning Agency; the Global Forum on Human Settlements; the Shanghai 2010 World Expo Bureau; the US Department of State; the Asian Institute for Energy, Environment and Sustainability; the David and Lucile Packard Foundation; the non-governmental organization Ecocity Builders; a major mixed-use real estate development corporation; an educational sustainability non-profit; and global corporations. Read more here.

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About this Entry

This page contains a single entry by Warren Karlenzig published on April 22, 2008 8:52 AM.

California's AB 32 Climate Change Legislation Update was the previous entry in this blog.

Burma: What Climate Change Devastation Looks Like is the next entry in this blog.

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