Shell thinks that the likelihood of Shell having the same fate as photo company Kodak is small. “We are thinking a lot about Kodak moments.” Kodak, a long-time powerhouse in photography, proved unable to adequately respond to the rapid development of digital photography and went bankrupt.

Printed below is an English translation of an article published today by the Dutch Financial Times, Financieele Dagblad. 

‘I have to make sure that Shell does not become a dodo’

‘We are also a marketing company that serves customers from 45,000 branches. These are more branches than McDonald’s. “Photo: Peter Boer

Bert van Dijk

Shell invests $ 1 billion a year to $ 2 billion in clean energy, but still more than ten times in oil and gas. Does not the mega-concern cope with the same fate as Kodak, the photo company that went bankrupt because it reacted too late to changes in the environment?

A conversation with Jeremy Bentham, head of Shells scenario department.

Bentham (60) is the proud owner of the Dodo. A drawing of the extinct bird is framed in the room of the Shell driver. The internal ‘award’ has been passed on to Shell drivers since 1976 as ‘a warning to us all’, as is shown in the drawing.

Bentham is the eighth ‘custodian’ of the Dodo. ‘It is my responsibility to ensure that Shell does not become a dodo that reacts too late to changes in its environment.’

Shell thinks that the likelihood of Shell having the same fate as photo company Kodak is small. “We are thinking a lot about Kodak moments.” Kodak, a long-time powerhouse in photography, proved unable to adequately respond to the rapid development of digital photography and went bankrupt.

But according to Bentham, Shell is closer to its customers. ‘We are also a marketing company that serves customers from 45,000 branches. These are more branches than McDonald’s. We have also really thought very carefully about the energy transition and given a lot of support to developments that contribute to the transition, such as the Paris Agreement. At the end of the eighties we were already talking about climate change. We even made a film about it. ”

The film Climate of Concern was shown worldwide at schools and universities. But making a film about the consequences of climate change is one thing, acting on it is something else. If Shell knew that the use of its products is harmful to the climate, does the company itself have no responsibility to do anything about it? ‘We understand climate change and are talking about it with our customers. But we can not do what they do not want. ”

The Brit Bentham ─ son, grandson and great-grandson of coal miners from the English town of Wigan ─ went to work in 1980 at Shell. There, among other things, he led the hydrogen activities at the beginning of this century. For twelve years he has been at the head of Shells Global Business Environment, the department that develops scenarios that help with the strategy determination of Shell. ‘If you are in an organization that makes investments in projects that sometimes last for decades and that also have consequences for the environment for decades, you have to have a good understanding of what the future might look like,’ Bentham explains.

Some projections are pretty certain, like the growth of the world population of seven billion people now to ten billion in 2055, there are also what Bentham calls ‘critical uncertainties’, or things you absolutely do not know.

Electric aircraft

In order to detect these uncertainties, Bentham and his team talk a lot with internal and external experts. ‘Last week in Kenya. There we held a workshop on perceptions around the concept of “common prosperity”. We have also been working with the State Council of China for seven years on their prospects for the energy sector. Then they learn from us, but we also learn from them. ”

By stopping the antennae in all facets of society and governments, possible future scenarios develop. For example, discussions with Boeing and Airbus provide insights into the pace of the development of electric aircraft. ‘A Jumbo jet will not be able to fly on batteries for the time being. And so it is more likely that the reduction of CO₂ will take place here via cleaner jet fuel such as hydrogen and biofuels. ‘

Even for heavy industries, such as steel production and chemicals, or for heavy truck traffic by road, full electrification according to Bentham is not feasible for the time being.

Socio-political populism

The UN climate control panel, IPCC, wrote in a recent major report that techniques for capturing and storing CO₂ or even removing CO₂ are essential in almost all conceivable scenarios to achieve the climate goals.

Nevertheless, nature and environmental organizations reject CO₂ storage. According to Greenpeace, scenarios are conceivable in which no use has to be made of CO₂ storage. In these scenarios, energy consumption in the world will decline sharply in the coming decades, despite the expected growth of the world’s population.

‘Anyone who makes serious analyzes knows that you have to redesign the entire world economy within fifty years. That is not possible without CO₂ capture. One of the dangers is that from the point of view of socio-political populism, Greenpeace promotes a vision that undermines the achievement of the objectives that they themselves claim to pursue. ‘

In the latest Shell scenario, called Sky, the company assumes that 50 million barrels of oil will still be used per day in 2070. The question is whether that is real. According to Bentham, the Sky scenario only determines what fossil fuel infrastructure is at present, what the current government policy is and what needs to be done to achieve the goals of the Paris Agreement. ‘It is aimed at achieving the ambition of Paris, but starts from the reality of today.’

Bentham states that many people underestimate the task of reducing CO₂, because they only look at their personal privacy such as their car or the light in the house. ‘But that is low-hanging fruit. Electricity accounts for 20% of global energy consumption. The remaining 80% is a lot harder to make CO₂-free. ‘

 

‘We have been working with the State Council of China for seven years on their prospects for the energy sector. Then they learn from us, but we also learn from them. “• Jeremy Bentham, Shell

Sky scenario

Earlier this year, Shell published a new scenario: Sky. It is the sequel to Mountains and Oceans, the scenarios that the company published five years ago.

Mountains stood for a world with moderate economic growth and energy-efficient cities. Oceans meant greater prosperity but still an important role for coal in the energy supply.

Sky looks at what it takes to achieve the goals of the Paris agreement. Only with a ‘complex combination of mutually reinforcing factors’, supported by society, markets and governments, can the world be climate-neutral by 2070, that is the message.

Governments are going to stick a price on CO₂ rights (sometime in the next decade), intercontinental flights will start on hydrogen (after 2040), CO₂ will be stored and there will be an end to deforestation (after 2060).

Consequence: in just over fifty years the world will no longer emit CO₂. After 2030, the difference must really be made, according to Shell. With electric cars, with solar and wind energy, but above all with policy. Nevertheless, in the last fifty years a lot of oil will still be used: 50 million to 60 million barrels per day. These are necessary because parts of the economy (heavy industry, chemicals, heavy transport) are difficult to keep running on electricity.

“A Jumbo jet will not be able to fly on batteries for the time being.” Photo: Peter Boer

‘Electricity accounts for 20% of global energy consumption. That is low-hanging fruit. The remaining 80% is a lot harder to make CO₂-free ‘. • Jeremy Bentham, Shell

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