Royal Dutch Shell Plc  .com Rotating Header Image Shell sees coal still a key energy source over coming decades

February 14, 2008: 10:47 AM EST

LONDON, Feb. 14, 2008 (Thomson Financial delivered by Newstex) — Coal will remain one of the world’s main sources of energy over the next 40 years, even replacing oil as the dominant fuel once supply ‘plateaus’ after 2015, said Jeremy Bentham, vice president of Royal Dutch Shell PLC. (NYSE:RDS A)

He told reporters in a news conference coal demand will continue to grow but oil and gas supply is likely to peak sometime between 2015 and 2020. This will occur even at the back of mounting pressure to reduce the use of coal as a measure to curb carbon emissions.

Bentham, the architect of Shell’s Energy Scenarios to 2050, said one of the ‘hard truths’ the industry is facing is that ‘easy oil and gas will struggle to keep pace with the underlying rate of demand’.

Coal, on the other hand, will keep on growing, though not at rates seen over the past decade, because it is cheap and simple to produce, he added.

‘Coal’s widespread availability in places like China and India which are large (energy) consumers’ will also help underpin growth, Bentham said.

Around 80 pct of the world energy consumption currently come from fossil fuels such as oil, gas and coal.

Nuclear is not playing a key role in Shell’s energy scenarios which predict a doubling in demand through 2050 from 2000 levels of around 400 exajoules a year.

‘The nuclear industry was almost wiped out in the last 20 years,’ Bentham said, adding there will be a ‘massive amount of decommissioning over the next decade’.

Rebuilding capacity and ‘recreating the industry will just take time,’ he noted.

He declined to specify the oil price assumptions in the company’s energy scenarios, though he did point out a less volatile oil market is a situation it prefers.

‘For us, a more anticipatory outlook is a better outlook for the industry,’ he said.

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