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No credibility in Shell Peak Oil Forecasts, says John Donovan

screen-shot-2016-11-03-at-15-15-17

screen-shot-2016-11-03-at-14-50-16A number of articles have been published today reporting a forecast by Shell CFO Simon Henry, that “Peak Oil” could be just 5 years away. e.g.

Oil Demand Peak Could Be Just 5 Years Away: Shell

Oil falls after Shell warns peak demand ‘five years off’

Shell makes a jaw-dropping statement on peak oil

It is, therefore, an appropriate moment to look back on a directly related forecast made in January 2008, by the then Shell CEO Jeroen van der Veer. He forecast that demand for oil and gas would outstrip supply within 7 years, meaning by 2015. The hopelessly inaccurate prediction was based on an assessment from the Shell Scenarios team. No doubt many of the same geniuses now advising Simon Henry.

A related article (right) published by the Times 8 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.

Since that prediction turned out to be wrong, why should we have any faith in the latest, similarly self-serving prediction?

TIMES NEWSPAPER ARTICLE JAN FROM 2008.

Carl Mortished, World Business Editor

January 25, 2008

Demand for oil and gas will outstrip supply within 7 years, says Shell chief

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 – 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, José 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

1 Comment on “No credibility in Shell Peak Oil Forecasts, says John Donovan”

  1. #1 Christopher Ives
    on Nov 3rd, 2016 at 21:21

    John – please see Robyn Allan’s article below – Chris

    Opinion:
    NEB’s oil forecast is not reliable, new pipelines are not needed
    By Robyn Allan in Opinion, Energy, Politics | November 2nd 2016

    http://www.nationalobserver.com/2016/11/02/opinion/opinion-nebs-oil-forecast-not-reliable-new-pipelines-are-not-needed

    – New forecast from Canada’s energy regulator is based on exaggerated oil prices, inflated production estimates

    – NEB seems incapable of forecasting a future where we deal with climate change

    – Forecast excludes federal and provincial climate/energy policies

    – New pipelines not needed

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