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Shell’s defence of big oil is too hopeful

Despite growing evidence that the oil era is grinding to an ugly and disruptive halt, Shell remains optimistic. On Sept. 8, the company updated its two core strategic models – labeled Mountains and Oceans – which both come to similar conclusions about the future of crude and liquid hydrocarbon fuels. Although peak demand will happen sometime after 2030, and governments will keep intervening to cut carbon emissions, oil could still account for more than a fifth of all energy even by 2060. This matters to Shell investors. Its $50 billion takeover of BG Group in January 2016 made it the largest shipper of gas amongst its peers. However, oil remains core to its profitability. If oil has a future, it makes sense for Shell to keep investing in it. The problem is that Shell’s projections could easily be proven wrong. FULL ARTICLE

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