Shell and Equinor are helping us through the climate crisis. Or not?
Klassekampen, 13 April 2018
What is going on with the oil companies? Don't they want to sell oil anymore? Just before Easter, Shell presented a vision of how the world could use little or no oil in the future. Last month, Statoil announced that they are going to throw the word "oil" out of their name and want to continue as "Equinor". For decades, Statoil and Shell have made climate change only worse. Now these companies are going to ensure that the Paris climate goals will be met. At least, if we can believe their sales pitch. But does that pitch make sense?
In its "Sky scenario", Shell does present a future in which our consumption of oil, gas and coal is reduced to a minimum, and where sun, wind and nuclear energy have the upper hand. But the rate at which we reduce our fossil emissions also needs to be fast enough. The limit of two degrees of warming will be out of reach if there isn't a turning point in our emissions within a few years, since the remaining amount of CO2 that we can still emit is rapidly diminishing. The question is whether the Sky scenario meets that requirement.
Shell's future looks bright. But that future only exists on paper
Glen Peters, research director at the climate institute CICERO in Oslo, looked into this by comparing the Sky scenario with various scenarios from the IPCC that also keep global warming under two degrees. Shell's scenario appears realistic: it falls within the margins of many of the IPCC scenarios, with emissions peaking in the near future and steadily decreasing afterwards.
But if you look at the details, there are a couple of distinct differences. Shell expects global energy consumption to increase significantly, more so than in most IPCC models. This is surprising, but they also think that a lot of this extra demand will be picked up by an unprecedented growth in solar energy - much higher than what the IPCC deems possible. The strategy of Shell looks clear: in an oil-free world, their focus will be on solar panels, even though previous efforts by Shell on this topic did not pan out.
Shell's future looks bright, according to their report. That is exactly where the problem lies: this future only exists on paper. The scenarios of Shell, Statoil and even the IPCC are based on the large-scale application of CO2 capture and storage (CCS). The hope is that, within a few decades, we will be able to extract immense amounts of CO2 from the air with the use of this technology and then store it back under the ground. A successful future implementation of CCS means that we can emit more fossil fuels in the present. The problem is that investments in the field of CCS lag far behind with what is needed. When the government, Statoil, and Shell claim that we will still rely on oil for the coming decades, they bet that someone else will solve this problem with CCS for them. They do not do enough themselves. In the meantime, we continue to emit CO2 just like before.
This explains, among other things, why Shell anticipates that oil consumption will remain around or above current consumption in the next two decades. Statoil uses similar scenarios. But these are scenarios in which we aim to keep global warming below 2 degrees. In Paris it was agreed upon that a serious attempt should be made to stay below 1.5 degrees. The Sky scenario exceeds that easily - even with CCS.
In other words, Shell is trying to sell as much oil as possible, while using a clever marketing story to claim that they remain within the margins of "Paris". That statement can best be taken with a grain of salt. In fact, the American website Climate Files showed last week that Shell as early as 30 years ago admitted internally that they were co-responsible for causing climate change. Knowing that, it is all the worse that they, as well as Statoil, have continued to search for oil and gas for decades, drilled for it, and sold it with a large profit.
We must not forget that fossil fuels are at the heart of Shell and Statoil. We cannot rely on them for the unprecedented change in energy consumption that is so badly needed. Certainly not as long as they search for even more oil and gas in the vulnerable polar region. To be able to believe the green hype from these companies they have to turn their words into action: to set up large-scale capture and storage of CO2, and more investments in sun and wind than in new oil wells.
The big risk for Shell and Statoil/Equinor is that they will soon miss out. In the new 2050 climate strategy of The European Union, some major adjustments to the projections of renewable power had to be made. In the seven years since the previous report, the costs for solar and wind energy dropped by more than what was previously considered possible by 2050. Despite all the scenarios, the greening of our economy could also go faster than the marketing men of the oil companies want to make you think. If the energy giants Shell and Statoil do not plan for this, and do not take the lead now, there is a risk that in an oil-free future they will become irrelevant ghosts of the past.
This text originally appeared in Klassekampen on 13 April 2018