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Shell serious about ethanol and other biofuels, says CEO

By NALIN VIBOONCHART
THE NATION
KUALA LUMPUR
Published on July 9, 2011

Royal Dutch Shell is heavily focused on investing in the exploration and production of gas and biofuels in promising countries, including China and Brazil, as it foresees that these sources of energy will play an important role over the next four decades as the demand for energy, particularly from Asian countries, will grow much faster than supply.

Chief executive officer Peter Voser yesterday said in Malaysia that Shell was focusing on four areas for future energy development: natural gas, biofuels, reduction of carbon-dioxide (CO2) emission and energy-efficiency products.

The company is collaborating with Cosan, Brazil’s biggest ethanol producer, to produce ethanol from sugar cane.

This is an important step, demonstrating that Shell is seriously engaged in biofuels.

Ethanol emits 70 per cent less CO2 than fossil fuels. Meanwhile, CO2 emissions from gas-fired power plants are also lower than those generating electricity from coal by 50-70 per cent.

Shell last year announced an agreement with China National Petroleum Corporation (CNPC) to co-explore for natural gas to serve the demand in the second-biggest economy in the world. This year, it committed to spending US$100 billion (Bt3 trillion) through 2014 to explore and produce oil and gas elsewhere in the world as well as to increase capacity at existing sites. The company is also investing many billions of dollars to develop the Cardamom oil and gas field in the Gulf of Mexico.

Voser said it was too early to conclude which sources of energy will replace nuclear power plants after the Fukushima accident, but coal and natural gas would be the major sources for the short and medium terms. Shell expects half of its production worldwide to be natural gas by 2012.

He said that the underlying reason driving Shell into its aggressive push towards gas and biofuels exploration and production was energy demand, which will grow faster than supply.

By 2050, the world’s population is forecast to grow to 9 billion from 6.8 billion currently, and the number of vehicles is predicted to triple to 2 billion, of which 90 million will be in Southeast Asian countries. So energy consumption in 2050 may be double the 2000 level.

The International Energy Agency has also said that developing countries will experience 64-per-cent growth in energy consumption, while the figure for developed countries is only 3 per cent.

Voser said the key driver for biofuel consumption was the joint commitments among communities, governments and non-governmental organisations to create a long-term framework for this kind of energy.

Many countries in Southeast Asia – Thailand, Malaysia and Indonesia among them – have plenty of resources for making biofuels. These countries can grow sugar cane, cassava and oil palm.

Although Shell is aggressively investing in exploring for and producing gas and biofuels, it has committed to invest many billions of dollars for technology to prevent accidents during oil and gas exploration and production activities.

Voser delivered this message in the wake of a report by The Guardian that said there were oil and gas spills on North Sea platforms once a week on average. Shell and Total had the most leaks the report said.

In a separate matter, the Thailand team has won the championship for Shell’s FuelSave 1 Litre Challenge in the Shell Eco Marathon held at the Sepang International Circuit in Malaysia on Thursday. This was the second time that the team from Thailand won the prize.

The average distance that the team was able to make on 1 litre was 15.952 kilometres, followed by the Singapore team with 15.856km and Malaysia with 15.749km.

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