Posts under ‘Green’

FIRST PUBLISHED IN JUNE 2010

Shell’s latest corporate advertisement followed by candid commentary/analysis by Paddy Briggs (right)…

LET’S DELIVER ENERGY
FOR A CHANGING WORLD.
LET’S GO

Today’s consumers are smarter than ever about energy. Naturally they want it to heat, cool and light their homes, get them to work, and power their mobile phones. But they are also keen to help build an energy system that sustains the lives of future generations. They want their energy to come from cleaner sources. They want to get the most out of every drop. And they want to see positive results now.

At Shell, we’re listening. Consumers’ raised expectations inspire us to come up with ever more innovative products and services.

Take the quest for cleaner air in our cities. We have created a fuel oil, which can cut soot emissions from factories by up to 75%. That should help people breathe a little easier.

Customers at our service stations want to play their part, too. They want fuels that are more efficient. We’ve responded with new blends that help drivers save fuel with every fill-up. And we’re working with transport companies, combining the latest fuels and lubricants with satellite technology to reduce fuel consumption.

Low-carbon biofuels are another way to meet rising expectations. They can help reduce emissions from road transport right now. We’re already the world’s largest distributor of biofuels and are pursuing plans for large-scale production.

We’re also working with technical partners to develop future biofuels from non-food sources, like crop residue and even algae.

Of course, our customers’ horizons stretch beyond transport to more responsible living, whether through cleaner electricity or more energy-efficient homes and offices.

That’s why we are boosting production of cleaner-burning natural gas, which emits less than half the carbon dioxide of coal when used to generate electricity. And why we are investing in vital technology to capture emissions from power plants and other industrial sites and store it safely underground.

Despite all this change, one thing remains the same. After more than a century, our customers still expect reliable and affordable energy every day. With global energy demand set to double by mid-century, that will be a challenge. But together with our partners we will continue unlocking energy from hard-to-reach places like frozen Siberia and delivering it to customers around the world.

At Shell, we’re grateful to have millions of customers asking for better energy. They demand as much of us as we ask of ourselves.

Commentary

In its latest corporate advertisement (above), expensively placed in some influential publications like “The Economist”, Shell claims to be “listening”. We have heard this claim before of course and we should treat it with some scepticism – Shell pulled its online feedback forum “Tell Shell” some years ago – presumably because of the virulence of the criticism on it. But no matter – let’s take this latest request for feedback at face value and offer some.

The dark arts of advertising are notoriously ” economical with the actualite” – but I would guess that nobody really minds a bit of hype and “accentuating the positive” – where would copywriting be without the need to put a brand’s products or services in the most favourable light? But there are limits – the need to be “Legal, decent, honest and truthful” is required of any advertiser and the rules say that your ads shouldn’t mislead, lie or even tell half-truths.

So in the context of the need to be at least credible in your ads, and at best transparently truthful, how should we judge Shell’s latest offering? Remember we are talking big bucks here – not principally to the ad agency for preparing the ad and writing the copy but definitely to the media for running it. A few hundred thousand dollars at least – and possibly much more. Has Shell’s budget been wisely spent?

The first paragraph claims that “Today’s consumers are smarter than ever about energy”. It goes on to say that these consumers are “also keen to help build an energy system that sustains the lives of future generations”. How many consumers (that’s you and me folks) speak in anything like these terms? I don’t know what an “energy system” is – and I worked in the industry for nearly forty years. I doubt that my neighbours would have a clue what it is either. Presumably somebody can define the term “energy system” – but there’s little point in using such opaque language in an ad – even in “The Economist”!

So that first paragraph is at best patronising and trite and at worst gobbledegook. But the second paragraph is far worse. The claim is that “Consumers’ raised expectations inspire us to come up with ever more innovative products and services”. The conceit of this statement is breathtaking. It purports to suggest (a) That Shell is innovative and (b) That innovation is consumer led. Now lets be charitable and agree that Shell can indeed be innovative. Virtually all of this innovation comes from the upstream – and impressive some of it is as well. But there is no way that this highly technological activity can be seen as consumer driven. Then in the following paragraph we get mention of a low soot fuel oil for factories. In Britain, which is where this ad appears, a tiny minority of factories burn fuel oil – most of them switched to cheaper and more environmentally friendly natural gas years ago. Not too many people will be breathing any easier as a result of this innovation!

So what about the “service stations” (paragraph 4) – a curious and old-fashioned term by the way. They mean petrol stations I think. Here we are told that customers want “fuels that are more efficient”. Well yes – but not if they have to pay through the nose for them. The “new blends” that are referred to (presumably like V-Power) cost a premium, which negates any efficiency savings. Most motorists want cheap petrol – and there’s not much of a promise about this in the ad. If V-Power and its like really saved money through efficiency don’t you think that Shell would give us the data to prove the case?

The statements about “Low carbon biofuels” (paragraph 5 and 6) are another utterly misleading bit of hype. It is no doubt true that Shell is a big player in these products – but there is nothing much new about them. The Brazilians have run some of their cars on biofuels for a generation or more but in the UK they are virtually non-existent – and will remain so unless governments create a tax regime which make them viable. Some chance!

The seventh paragraph about “customers’ horizons” is just poor copywriting and is virtually meaningless. It’s an unsubstantiated claim – hardly surprising as it is hollow and patronising. It leads on to the next paragraph where the implicit claim is that Shell’s driver for the expansion of its Gas sector is in some way environmental and that it is driven by these “customer horizons”. The real reason for Shell’s drive to boost its production of natural gas is because this sector is growing and is profitable – good business in other words. Yes it is cleaner than coal – but Shell has no influence at all on utilities’ decisions to build Power stations that run on Gas rather than coal. True Shell can supply the gas, at a price, if the utility makes that decision but the determiners of the decision are primarily governments and local authorities – they are the ones one should thank for the resultant cleaner air – not Shell!

The penultimate paragraph is platitudinous and one again trite. If you asked them my guess is that many consumers would be very disturbed about some of the side effects of Shell’s ambition to “…continue unlocking energy from hard-to-reach places”. The Tar Sands of Canada is just one example of where this ambition is, to say the least, controversial!

Shell is not a bad company – although it does some indefensible things at times. But it does itself no service by running advertisements which claim distinctiveness when little exists, claim to have a unique understanding of consumers without any evidence being provided and lapse into self-congratulatory and highly selective hype.

ENDS

Paddy Briggs worked for Shell for 37 years during the last fifteen of which he was responsible for Brand management in a number of appointments. He was the winner of the “Shell/Economist” writing prize (internal) in 2001. In October 2009 Paddy was elected by the 33,000 Shell Pensioners in the UK to be one of the two Pensioner elected Trustees of the Shell Contributory Pension Fund. Paddy runs the brand consultancy BrandAware ™ .and writes and speaks on brand and reputation matters. He is active as a director of training courses on brand and reputation management.

Paddy’s website: http://brandaware.co.uk/

ARTICLE FIRST PUBLISHED IN 2010.

The Associated Press June 8, 2010, 11:51AM ET

AMSTERDAM

Royal Dutch Shell PLC said Tuesday it has purchased a stake in U.S. biotech startup Virent Energy Systems Inc., a company that turns plant sugars into fuel closely resembling gasoline.

Shell declined to disclose terms of the deal. It will receive a seat on the board of directors of Virent, based in Madison, Wisconsin.

Virent, with around 70 employees, has previously received $10 million (euro6.4 million) in U.S. government aid and $40 million ((euro25.5 million) in venture capital backing.

Shell and Virent announced a five-year test partnership in 2008 and said they hoped one day to move to large scale production.

Virent says its technology has advantages over better-known processes that turn plant matter into ethanol. The fuel that Virent makes is a substitute for normal gasoline, potentially eliminating the need for gasoline-biofuel blends, or the specialized infrastructure needed to use pure ethanol.

It also works on grasses, which would make it easier to employ in different parts of the world and not compete with food crops.

Shell, Europe’s largest oil company, said in 2009 it would focus future renewable investment efforts mostly on biofuels, rather than wind or solar energy.

In February it announced a $12 billion ethanol joint venture with Brazil’s Cosan SA.

SOURCE ARTICLE

The Deepwater Horizon spill, which is threatening swaths of the Gulf of Mexico’s coast, again raises questions about how rigorously safety and environmental regulations are enforced

• 
• • Tim Webb
  • The Observer, Sunday 2 May 2010

Washington, 5am, Tuesday: a tired Tony Hayward, chief executive of BP, was finally patched on to the conference call. At the other end, a dozen journalists sat around a boardroom table at its plush headquarters in St James’s Square, London and leant in towards the squawkbox. BP had just announced a 135% increase in profits for the first quarter, but all that anyone wanted to discuss was the Deepwater Horizon disaster.

A sombre Hayward, who had spent the weekend co-ordinating the operation to contain the slick off the coast of Louisiana, recognised as much when he began the call: “Clearly a good set of results has been overshadowed by events.”

Serious as the disaster was at that stage, he would not have known just how much of an understatement that was. By the end of the week, BP admitted that more than five times as much oil – 5,000 barrels – was leaking from the sunken rig each day and the slick had hit the Louisana coast. BP’s shares had fallen by more than 6%, wiping £12bn off its market value as the environmental – and legal – repercussions hit home.

BP’s safety record is once again under the spotlight, particularly in the US. It was only in 2005 that 15 workers died when its Texas refinery exploded, and a year later a major leak occurred at one its pipelines in Alaska. The disasters hastened the departure of former chief executive Lord Browne. Hayward, who took over three years ago, promised a zero-tolerance approach on safety. Even some industry critics, such as Jake Molloy, general secretary of the Offshore Industry Liaison Committee, a major trade union for offshore workers, report that there has been a noticeable improvement in its approach in the North Sea, for example. The Deepwater Horizon disaster – even though the rig was operated by another company on BP’s behalf – has come as a hammer blow.

The disaster has also focused attention on the industry’s safety record. Companies are struggling to maintain production – and oil reserves – as “conventional” production from mature fields including the North Sea declines. This means the industry has to use new technologies and explore often environmentally sensitive regions. As Manouchehr Takin of the Centre for Global Energy Studies says: “Companies are constantly pushing the technological boundaries, and this can increase the risk [of accidents occurring].”

Not surprisingly, the oil industry – not just BP – is mounting a PR offensive in the US to reassure the public – and politicians – that offshore drilling is safe. The Deepwater Horizon accident comes at a critical time for the industry. After years of lobbying, a month ago Barack Obama agreed to open up new areas to offshore drilling, including in Alaska. Companies including Shell said they planned to start drilling in the region this summer. But this weekend, Obama announced that new no licences would be issued until an investigation into the disaster was completed.

On the face of it, the statistics on the global industry’s safety and environmental record are impressive. The American Petroleum Institute reports the amount of oil spilled in the US in the decade up to 2007 was over two-thirds less than 30 years before. According to BP, it spilt 1.2m litres of oil last year, compared with 4.4m litres in 2005. Shell’s figures show a similar improvement.

On safety too, the official data appears to indicate steady improvement. According to the International Association of Oil and Gas Producers (OGP), in 2008 the total amount of hours lost as a result of injury was the lowest on record. However, it admitted that the fatality rate increased by 4% as the number of severe cases rose, though it said the long-term trend was downwards. Certainly, most executives take environmental and safety performance much more seriously than before, knowing they face huge financial and reputational damage if they fail to do so. As one oil company executive says: “People are generally pretty careful now. They know there are plenty of regulators out there willing to chase them if they screw up.”

But the headline statistics do not tell the whole story. Molloy says that the oil companies often mask the extent of less serious accidents by assigning injured workers to office duties. This way, such incidents do not show up in the key “lost time injury frequency”.

Oil spillages are also not the only indicator of environmental damage caused by the industry. Shell’s figures show a steady increase in the amount of hazardous and non-hazardous waste it creates each year – 1.7m tonnes in total in 2008. This is in large part due to its growing oil sands business in Canada, where vast amounts of energy, water and chemicals are required to process the tar deposits. Even excluding oil sands, Shell is using a quarter more energy to find and produce each barrel of oil than it did a decade ago.

The industry’s performance outside North America is significantly worse, although the official statistics are patchy and those that are published are often of dubious quality. According to the OGP, in 2008 the fatality rate in Africa was about 50% higher than the global average; in South America, it is even higher. Russia is not much better. However, it says that over the past decade the overall trend is again downwards.

But it is highly questionable whether the industry can be relied on to provide accurate statistics, particularly on the environmental impact of its operations. Two years ago, when the Observer visited Fort McMurray, a bustling, Wild West town in Alberta at the heart of Canada’s oil sands boom, George Poitras, a former chief of the Mikisew Cree First Nation, was scathing about the industry’s claims. Oil sands operators clear vast tracts of forest to mine the tar deposits, creating deep scars on pristine land. Companies promise to “reclaim” the land, returning it to its former state by filling in the quarries and reintroducing native flora and fauna.

“Our elders back home laugh when the industry says this,” he says. “Who do they think they are – are they God or the creator? They destroy the boreal forest and they are going to put back the land to as good as it used to be? It’s impossible.”

The industry also claims that the huge toxic ponds created by the projects – made up of a mixture of chemicals and water used to process the tar deposits – are contained and do not pollute local rivers or wildlife.

Poitras disagrees: “We think that the water is poisoning our people and giving us cancer. The fish taste different and are sometimes deformed, with two jaws.” Cancer rates or deformed fish do not show up in oil sands companies’ glossy sustainability reports or figures.

In many cases, governments cannot be relied on to provide independent rigorous oversight. The Albertan government in large part relies part on Ramp, an industry-funded body that monitors the impact of oil sands operations on the aquatic environment and which is mistrusted by most environmentalists.

“It’s all self-monitoring by the industry,” according to Joyce Hildebrand from the campaign group Alberta Wilderness. In Alberta, there are only a dozen officials to make sure that operators comply with environmental regulations in a province bigger than Spain.

Because governments such as Alberta’s want to attract oil companies and taxes, it’s not surprising that many are anxious not to scare them away with tough environmental regulations. But even supposedly tough independent environmental regulators are frequently politically motivated and lack credibility.

In 2007, Shell was forced to dilute its stake in the $20bn Sakhalin II project in Russia’s far east, ostensibly over its environmental record. Rosprirodnadzor, the government environmental regulator, had claimed that Shell and its Japanese partners had broken the law by damaging forests and driving grey whales from their breeding grounds off Sakhalin island. But industry observers said that the claims were a pretext to allow the Kremlin to wrest back control of its natural resources.

Lack of thorough, independent oversight of the oil industry’s environmental impact is worrying. In many cases the damage being done to fragile ecosystems is going unnoticed. Deepwater Horizon notwithstanding, it is true that the oil industry has made significant improvements on its record on safety and oil spills compared with 30 years ago at the time of the Exxon Valdez disaster. But companies cannot be relied on to monitor the more indirect environmental impact of their operations, particularly as they move into increasingly sensitive regions such as Sakhalin and the Arctic.

Greenpeace scientist Paul Horseman says: “Companies are good at publishing glossy reports with nice pictures of smiling people in different countries. But it’s just another public relations exercise with which they try to produce the image that they doing something of value and doing it safely. It’s pure greenwash.”

SOURCE ARTICLE

28 March 2010 – Issue : 879

The Anglo-Dutch oil major Royal Dutch Shell Plc look set to be grilled again by environmental group Greenpeace.

The latest action by Greenpeace would focus on their exploitation of Canadian oil sands, according to local media reports.

Greenpeace reportedly plans to launch more short-term actions to disrupt production in the Canadian oil sands over frustration with government handling of the industry.

Last year, Greenpeace actions temporarily disrupted crude production at Suncor Energy Inc’s Alberta oil sands operation and production at two of Royal Dutch Shell’s facilities in the western Canadian province.

Royal Dutch Shell has however said it plans to produce oil from Canada’s oil sands for 40 years and that the earnings on their Alberta operations yielded 67% more from than from projects elsewhere between 2005 and 2009.

According to industry observers, the monetary incentive appears to be too great for the company to back down to Greenpeace. Shell earned $20 a barrel from oilsand mining on average between 2005 and 2009, more than the $12 a barrel it gained from extraction projects excluding oilseeds. Oilsands contributed $3.1 billion to Shell’s earnings in the period. Greenpeace says extraction of oil from Canada’s oil sands is damaging to the environment and nearby communities.

Canada is the largest foreign oil supplier to the United States, and about half the country’s crude oil supplies are derived from the oil sands.

SOURCE ARTICLE

Besides ExxonMobil’s big bet, Royal Dutch Shell and China’s biggest oil company are spending billions of dollars buying shale and coal seam companies in Australia with a view toward converting it into LNG and shipping to China.

THE WALL STREET JOURNAL

MARCH 8, 2010

Peter Voser of Royal Dutch Shell talks about the kind of energy legislation he’d like to see

These days, giant oil companies find themselves trying to balance two big pressures on their business. Governments are trying to slash carbon emissions—but the world’s thirst for oil is growing by leaps and bounds. Peter Voser, chief executive officer of Royal Dutch Shell PLC, is navigating the situation by joining a business-backed effort to push for global-warming laws, and making sure Shell has a strong exposure to natural gas and alternative fuels.

Mr. Voser sat down with The Wall Street Journal’s Alan Murray and Kimberley Strassel to talk about the future of climate-change legislation, the company’s push beyond oil, the prospects for electric vehicles and more.

Here are edited excerpts of their discussion.

Chief Executive of Royal Dutch Shell, Peter Voser talks about what kind of a future oil based energy can have in an environmentally conscious world.

ALAN MURRAY: I’d like to start by asking you about U.S. CAP [the U.S. Climate Action Partnership], the business effort to push for global-warming legislation. You are the last oil company there. Many of the other majors never joined to begin with. BP joined and then pulled out because it didn’t like the direction that it was going in. Why is Shell alone among the oil companies in continuing to push for this?

PETER VOSER: We have a belief that we need a market-based energy legislation in this country. And by the way, in all the other countries as well. We feel that we can do more by being inside U.S. CAP together with the other stakeholders represented there in order to actually achieve the right outcome.

KIMBERLEY STRASSEL: What kind of bill could you want or expect that would actually be good for your industry?

MR. VOSER: What we want is energy legislation that drives supply security in this country, which drives the country to lower fuel emissions, which generates new jobs but also preserves old jobs.

To then go further down, we are a keen proponent of market-based energy legislation. We will quite clearly look out for natural-gas developments, which we see as a long-term source of energy that has a lot of positives.

And in general, I think our industry is facing an interesting challenge that the demand in the world will double, but we have to provide that energy at a much lower cost to the environment. This will drive technology developments, innovation developments, etc., and that’s normally where our industry has always been in a leading position. And that’s what we want to see in the legislation so that we have certainty on the carbon price, certainty on, let’s say, legislation that will stay for a while so that we can operate.

MS. STRASSEL: What odds do you give passage of a cap-and-trade bill this year?

MR. VOSER: I’m still hopeful that we get something passed. I know the timing will be longer than what we expected maybe 12 months ago, but we will do our part in order to make sure that we get something that the industry and the country can take forward. But I think we are in for a longer period before we get something.

New in the Pipeline

MR. MURRAY: We talk about Shell as an oil company, but you’re very close to becoming a predominantly natural-gas company, aren’t you?

MR. VOSER: That’s absolutely correct. Shell started quite a while back, actually, to put a lot of emphasis on gas. And by 2012, we will have more gas production world-wide than we have oil.

So this has been a journey of 20, 30 years that we have used our technology and innovation in order to drive the gas development on a world-wide basis because, let’s face it, it has 50%, 70% less CO2 than coal, for example, and that’s exactly where we see the long-term benefit.

MR. MURRAY: And in your view, is that the big answer to our environmental problems for the next 50-plus years?

MR. VOSER: I don’t think there is one answer.

On a global perspective, the energy demand will double—this is pretty much proved now—by 2050. So we will need most of the energy forms that we know today.

MR. MURRAY: What percentage of your capital spending goes to renewable energy sources, roughly?

MR. VOSER: It is not the capital intensity that drives renewable energies and alternative energies. It’s what you spend in technologies and in innovation. Roughly 25% of our budget at this stage goes into what we call alternative energies from an R&D point of view.

MR. MURRAY: And of the 25% of your R&D budget that you spend on renewables, what in that portfolio do you personally think is the most promising?

MR. VOSER: We are focusing a lot on biofuels at this stage. We just announced a few weeks ago a big joint venture in Brazil where we are bringing our first- and second-generation biofuels technologies together with Cosan, a sugar ethanol producer there, in order to speed up the second-generation capabilities because we need to speed up that process. So biofuels is one.

We are in wind. We have gone out of solar. We tried both silicon and thin-film solar, but we can’t see that as being something that we can scale up globally and get the economies of scale. So we leave that. It’s a technology that will be developed, no doubt, but we leave that to a smaller, medium-sized players.

Driving Ahead

MR. MURRAY: For your oil business, transportation is obviously a key to the future. How long do you think it will take for electric cars to become a significant part of the vehicle fleet?

MR. VOSER: We think between now and 2050 we will go from one billion cars to two billion cars world-wide. So it’s quite a growth there. We think by 2050 that roughly 40% of those two billion cars will be electric cars.

But there is a but to this. Which means in the meantime we will need all [types of environmentally friendly cars]. So we will need low-carbon-fuels cars, more-efficient engines. We will need the hybrids. There will be more electrical cars coming in. There will be fuel cells, there will be hydrogen. So I think there will be room and space to develop all of them.

Looking to the Market

MS. STRASSEL: You talked about how you wanted legislation here in the U.S. to help with the certainty. But as a global company you already operate in regions that do have climate restrictions. How has that affected your business?

MR. VOSER: I would like to have a market-based system that actually works on the global environment. Because the world, the trade flow today, is a global trade flow, so you cannot cut between frontiers, boundaries, countries, etc.

So while I think it is OK to start country or regionally, we need governments working together, and that’s where I think Copenhagen would have been a good way to achieve a global agreement. We didn’t get it. I’m not too disappointed because I think this is a journey. We will need more time.

The politicians or the governments also have to learn to bring some reality into the discussion from time to time. So we get biofuels legislation, for example, and two years later they change because they realize technically it’s not possible. I think that’s where governments, companies, NGOs can work together to set the right frames.

MS. STRASSEL: Some people say instead of all the negotiations and the offsets and the carbon trading, just put a carbon tax, in particular a gas tax, and see where that goes.

MR. VOSER: I would say you need a market-based system where you can actually give the right incentives for those industries that are affected to make sure that they can lower the CO2 over time and they can lower the costs to achieve that over time. You need an incentive there, and I just struggle to see that a tax is an incentive.

WSJ ARTICLE

THE WALL STREET JOURNAL

March 4, 2010, 12:55 PM ET

By Jim Carlton and Neal Lipschultz

Despite recent defections of two other oil majors, Royal Dutch Shell PLC has opted to stay in an influential lobbying group that has focused on shaping climate-change legislation, Chief Executive Officer Peter Voser said.

Mr. Voser, speaking Thursday at the Wall Street Journal’s ECO:nomics conference in Santa Barbara, Calif., was asked why Shell remained in the three-year-old U.S. Climate Action Partnership (USCAP) after two of its peers, BP PLC and ConocoPhillips, pulled out last month. The partnership is a broad business-environmental coalition that had been instrumental in building support in Washington for capping emissions of greenhouse gases, and the defections came amid growing debate over climate change.

“We feel we can actually do more being inside USCAP to achieve the right outcome,” Mr. Voser said.

But Mr. Voser agreed with a growing number of skeptics who don’t believe a climate change bill will be passed on Capital Hill this year. Asked how much money he would put betting on such an outcome, the CEO smiled wanly and said: “I think I can spend my money somewhere else.” Earlier at the conference, Michael Morris, chairman, president and CEO of utility giant American Electric Power, had pegged the chances of a climate bill’s passage in 2010 as “less than 50%.”

“The timing will be longer than we expected, but we will do our part” in influencing the bill, Mr. Voser said. He added Shell favors a market-based system of controlling carbon emissions, and that “I would like to have a marketplace that works on a global scale.” Mr. Voser said he believed eventually there would be carbon legislation in the U.S. and many other parts of the world, despite the failure of the Copenhagen climate talks to achieve a consensus.

“I think this is a journey,” Mr. Voser said. “We need more time.”

When asked about the theory of “peak” oil in the world and whether that theory was now dead, Mr. Voser said “I think what is dead is cheap oil.”

You need more technology, innovation and will find oil further away from markets, Mr. Voser said. More will be spent to get oil and consumers will pay, both for oil and gas.

Mr. Voser also said oil price volatility is here to stay. More money is flowing into commodities and there are more players in the market.

Shell, meanwhile, has been moving to become more of a natural gas supplier and continues to invest in alternative energies like biofuels, he said. With global energy demand expected to double by 2050, Mr. Voser said the world will need many sources of fuel, including oil. He predicted electricity would be needed to power 40% of  the world’s automobile fleet by 2050, when he predicted it would double to two billion vehicles from one billion.

WSJ ARTICLE

REUTERS

By Poornima Gupta

SANTA BARBARA, Calif., March 4 (Reuters) – Royal Dutch Shell Plc (RDSa.L) expects electricity-powered vehicles to account for as much as 40 percent of the worldwide car market by 2050, Chief Executive Peter Voser said on Thursday.

Voser, speaking at The Wall Street Journal’s ECO:nomics conference in Santa Barbara, said technological improvements and increases in the cost of producing gasoline will give a boost to vehicles that run on alternative power.

“We think between now and 2050, we will go from 1 billion cars to 2 billion cars worldwide,” he said. “We think by 2050, roughly 40 percent of those 2 billion cars will be electric.”

In the next 40 years, the market needs low-carbon fuels, more efficient engines and hybrid vehicles, Voser said.

“I think there will be room and space to develop all of them,” he added.

Gasoline demand in developed countries like the United States has started to decline, partly as vehicles running on alternative fuels have entered the market. Companies such as Shell and BP (BP.L) are spending more money on those newer technologies, including for next-generation biofuels.

Automakers such as Ford Motor Co (F.N) and Nissan Motor Co Ltd (7201.T) are racing to launch electric cars, betting these will be the environmentally friendly transportation of the future. Small players like Tesla Motors already sell electric vehicles.

Voser said Shell was investing 25 percent of its research and development budget into renewables, including wind power and biofuels.

Shell has bet big on ethanol by striking a deal with Brazil’s Cosan (CSAN3.SA) to create a $21 billion a year ethanol joint venture.

The 50-50 joint venture, with almost 4,500 filling stations nationwide, will better position Cosan and Shell to compete with the two top players in the market, state oil giant Petrobras (PETR4.SA) and Ipiranga, a unit of Brazil’s Grupo Ultra (UGPA4.SA).

(Reporting by Poornima Gupta. Editing by Robert MacMillan)

REUTERS ARTICLE

Eric Wesoff 03 04 10

“It’s fun to be an oil and gas CEO.”

Santa Barbara, CA — Peter Voser, CEO of Royal Dutch Shell, traveled a long way to speak at the Wall Street Journal ECO:nomics show this morning.  To give you an idea of the mindset of this particular audience, when polled on their expectations of future fuels, the winning response was nuclear, followed by natural gas.  Which is probably accurate but not the response you’d get from a bunch of enviros.

Shell expects global demand for energy to double by 2050.

Take note: Shell has transformed into a natural gas company.  Since 2004, the oil giant has invested more than $15 billion in natural gas in the United States.  By 2012, they will have more gas production than other fuels, in what he referred to as a twenty- to thirty-year journey.  This is a telling trend.  Wind and solar are nice, but natural gas is what is going to keep the world powered.

Voser reminded the crowd that natural gas produces 50 percent to 70 percent less CO2 than coal and that Shell has been somewhat surprised by the volume of natural gas deposits in the U.S.

In Voser’s words, “We need gas, conventional oil, and all other sources.”  He added that we need coal with carbon capture and sequestration and electromobility.

Shell knows about automobiles and the CEO quoted a few facts, the scariest of which was that his firm expects the number of automobiles to double to two billion by 2050.  He shocked the crowd with his forecast on electric vehicles — Voser said that 40 percent of automobiles will be electric by 2050.   But if EV electromobility is powered by coal, “then we are shooting ourselves in the foot.”

When it comes to renewables, Shell is focused on biofuels and trying to get second-generation biofuels to be economical as well as working on wind power.

Not solar, though.  They have gotten out of solar, both in silicon and CIGS thin film.  Shell can’t see solar as something that they can scale up.  They are “leaving it to smaller and medium size players.”

They are also doing work in tar sands — although he likes the term “oil sands” — which accounts for 2.5 percent of their production.  He thinks of it as a technology of last resort.  They’ve waited 40 years to go after this resource and expect that oil sands can have the footprint of traditional oil.

Voser said, “We need a CO2 price, not a tax,” although he is “skeptical” about energy legislation passing in the U.S. this year.  He added, “What we want is energy legislation which drives supply security and which generates new jobs but also preserves old jobs.”

Voser was in full agreement with T. Boone Pickens on focusing on the U.S.’ own reserves of natural gas “instead of buying oil from our enemies.”

SOURCE ARTICLE

Posting by former Shell Executive Paddy Briggs on the article “Shell defends continued focus on fossil fuel-paper“: Mar 2nd, 2010 at 11:20 am