Forecasts of future oil demand and oil prices made by Royal Dutch Shell CEO Ben van Beurden have been widely reported.
See syndicated Reuters article.
He is not exactly a disinterested independent observer, as his personal income and the well-being and profitability of the oil company he leads, depends on these issues.
Some might consider his forecasts to be wishful thinking.
It is an appropriate moment to look back on directly related forecasts made 7 years ago by one of his predecessors.
In January 2008, the then CEO Jeroen van der Veer forecast that demand for oil and gas would outstrip supply within 7 years. The prediction was based on an assessment from the Shell Scenarios team. No doubt many of the same geniuses advising Ben van Beurden.
The article (above right) published by the Times 7 years ago, stemmed from a Jeroen van der Veer email leaked to me, which I passed to the newspaper.
The whole article is published below.
I will leave it to the reader to decide if the overall picture it forecasts for oil demand now, 7 years later, bears any resemblance to the current situation.
Carl Mortished, World Business Editor
January 25, 2008
World demand for oil and gas will outstrip supply within seven years, according to Royal Dutch Shell.
The oil multinational is predicting that conventional supplies will not keep pace with soaring population growth and the rapid pace of economic development.
Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the company’s staff this week that output of conventional oil and gas was close to peaking. He wrote: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”
The boss of the world’s second-largest oil company forecast that, regardless of government policy initiatives and investment in renewables, the world would need more nuclear power and unconventional fossil fuels, such as oil sands.
“Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue,” he wrote.
Mr van der Veer is expected to discuss Shell’s energy outlook today at the World Economic Forum in Davos.
In his e-mail, which was reported on RoyalDutchShellplc.com, an independent website that monitors the company, Shell’s chief set out two scenarios for the world’s energy future.
The first scenario, “Scramble”, envisages a mad dash by nations to secure resources. With policymakers viewing energy as “a zero-sum game,” use of domestic coal and biofuels accelerates.
It is a world, said the Shell chief, where “policymakers pay little attention to energy consumption â€“ until supplies run short.”
The alternative scenario, “Blue-prints”, envisages a world of political cooperation between governments on efficiency standards and taxes, a convergence of policies on emissions trading and local initiatives to improve environmental performance of buildings.
Shell has not committed to either scenario. The oil company regularly uses scenario-planning to test the likely impact of widely divergent economic and political scenarios on its long-term strategy.
Unsurprisingly, Mr van der Veer indicated that Shell preferred the Blueprints scenario but he expressed caution over the likelihood of it coming to pass without a global approach to emissions trading.
The Blueprints scenario assumes that 90 per cent of CO2 is captured by coal and gas power plants in developed countries by 2050, and at least half of the CO2 emitted by power stations in the developing world. No such plants are in operation today, noted the Shell chief. “It will be hard work and there is little time,” he said.
Mr van der Veer’s comments emerged in the same week that the European Commission launched reforms to its carbon trading system, with plans to force power stations to buy permits to emit CO2.
In an acknowledgement of the challenge of securing global acceptance of the need to curb carbon emissions, the Commission President, JosÃ© Manuel Barroso, said that the Commission would consider the possibility of taxing imports into the EU by countries that failed to take equivalent measures to curb carbon emissions.
Mr van der Veer’s prediction that the oil industry would soon struggle to deliver sufficient conventional oil and gas to meet demand echoes growing concern from other oil bosses.
RELATED: We’ll begin to run out of oil within 7 years: Daily Express 26 Jan 2008